UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.
20549



FORM 20-F



| ̈                                                  |  | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|-------------------------------------------------- |  | ----------------------------------------------------------------------------------------------
|OR                                                
|x                                                  |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934          
|For fiscal year ended November 30, 2013           
|OR                                                
| ̈                                                  |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934      
|For the transition period from ____ to ______     
|OR                                                
| ̈                                                  |  | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   
|Date of event requiring this shell company report:





|Commission file number: 0-31172
|-------------------------------







|ALBERTA STAR DEVELOPMENT CORP.                                                         
|---------------------------------------------------------------------------------------
|(Exact name of Registrant as specified in its charter)                                 
|                                                                                       
|Province of Alberta, Canada                                                            
|(Jurisdiction of incorporation or organization)                                        
|                                                                                       
|2300 – 1066 West Hastings Street, Vancouver, British Columbia V6E 3X2 Canada           
|(Address of principal executive offices)                                               
|                                                                                       
|Stuart Rogers, CEO                                                                     
|Alberta Star Development Corp.                                                         
|2300 – 1066 West Hastings Street                                                       
|Vancouver, British Columbia V6E 3X2 Canada                                             
|Tel: (604) 689-1749                                                                    
|Facsimile: (604) 648-8665                                                              
|(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)



|Securities registered pursuant to Section 12(b) of the Act:None
|---------------------------------------------------------------



|Securities registered pursuant to Section 12(g) of the Act:  Common Shares, no par value
|----------------------------------------------------------------------------------------
|(Title of Class)                                                                        



Securities for which there is a reporting obligation pursuant
to Section 15(d) of the Act: None










Indicate the number of outstanding
shares of each of the Registrant’s classes of capital or common stock as of the close of the period covered by the annual
report: 21,788,979 common shares as at November 30, 2013













Indicate by check mark if
the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No x



If this report is an
annual or transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934. Yes  ̈ No x



Indicate by check mark whether
the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes x No  ̈



Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes  ̈No  ̈



Indicate by check mark whether the Registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer”
in Rule 12b-2 of the Exchange Act. (Check one)



|Large accelerated filer   ̈ | Accelerated filer   ̈ | Non-accelerated filer  x
|-------------------------- | -------------------- | ------------------------



Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing:



|U.S. GAAP   ̈ | International Reporting Standards as issued  
by the International Accounting Standards Board | x | Other   ̈
|------------ | --------------------------------------------------------------------------------------------- | - | --------



If “Other” has been checked in response to the previous
question, indicate by check mark which financial statement item the registrant has elected to follow:



|Item 17   ̈ |  | Item 18   ̈
|---------- |  | ----------



|If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ̈ No x
|--------------------------------------------------------------------------------------------------------------------------------------------------------











TABLE OF CONTENTS



|CAUTIONARY NOTE TO u.S. INVESTORS REGARDING RESOURCE AND RESERVE ESTIMATES – MINING PROPERTIES | 4 
|---------------------------------------------------------------------------------------------- | --
|GLOSSARY OF MINING TERMS                                                                       | 4 
|Conversion Table                                                                               | 10
|CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS                                           | 10
|PART I                                                                                         | 12
|ITEM 1.  Identity of Directors, Senior Management and Advisers                                 | 12
|ITEM 2. Offer Statistics and Expected Timetable                                                | 12
|ITEM 3. Key Information                                                                        | 12
|ITEM 4. Information on the Company                                                             | 23
|ITEM 4A - Unresolved Staff Comments                                                            | 52
|ITEM 5 - Operating and Financial Review and Prospects                                          | 52
|ITEM 6. Directors, Senior Management and Employees                                             | 62
|ITEM 7. Major Shareholders and Related Party Transactions                                      | 68
|ITEM 8. Financial Information                                                                  | 72
|ITEM 9. The Offer and Listing                                                                  | 72
|ITEM 10. Additional Information                                                                | 74
|ITEM 11. Quantitative and Qualitative Disclosures About Market Risk                            | 83
|ITEM 12. Descriptions of Securities Other than Equity Securities                               | 84
|PART II                                                                                        | 85
|ITEM 13. Defaults, Dividend Arrearages and Delinquencies                                       | 85
|ITEM 14. Material Modifications to the Rights of Security Holders and Use of Proceeds          | 85
|ITEM 15. Controls and Procedures                                                               | 85
|ITEM 16A. Audit Committee Financial Expert                                                     | 86
|ITEM 16B. Code of Ethics                                                                       | 86
|ITEM 16C - Principal Accountant Fees and Services                                              | 86
|ITEM 16D. Exemptions from the Listing Standards for Audit Committees                           | 87
|ITEM 16E. Purchases of Equity Securities by the Issuers and Affiliated Purchasers              | 87
|ITEM 16F. CHANGE IN CERTIFYING ACCOUNTANT                                                      | 87
|ITEM 16G. CORPORATE GOVERNANCE                                                                 | 87
|ITEM 16H. MINE SAFETY DISCLOSURE                                                               | 87
|PART III                                                                                       | 88
|ITEM 17 - Financial Statements                                                                 | 88
|ITEM 18 - Financial Statements                                                                 | 88
|ITEM 19 - Exhibits                                                                             | 89
|SIGNATURE                                                                                      | 91











CAUTIONARY
NOTE TO u.S. INVESTORS REGARDING RESOURCE AND RESERVE ESTIMATES – MINING PROPERTIES



This Annual Report on Form 20-F has been
prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of
United States securities laws. The terms “mineral reserve”, “proven mineral reserve” and “probable
mineral reserve” are Canadian mining terms as defined in accordance with Canadian National Instrument 43-101 – Standards
of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the
“CIM”) - CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as
amended. These definitions differ from the definitions in United States Securities and Exchange Commission (“SEC”)
Industry Guide 7 under the United States Securities Act of 1993, as amended (the “Securities Act”). Under SEC Industry
Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves, the three-year
historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis
or report must be filed with the appropriate governmental authority.



In addition, the terms “mineral resource”,
“measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are
defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and
are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to
assume that any part or all of mineral deposits in these categories will ever be converted into reserves. “Inferred mineral
resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category.
Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies,
except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically
or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations;
however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC
Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.



Accordingly, information contained in this
Annual Report on Form 20-F and the documents incorporated by reference herein contain descriptions of our mineral deposits that
may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements
under the United States federal securities laws and the rules and regulations thereunder.



GLOSSARY
OF MINING TERMS



The following are abbreviations and definitions
of terms commonly used in the mining industry and this Annual Report on Form 20-F:



|Aeromagnetic survey          |  | A geophysical survey using a magnetometer aboard, or towed behind, an aircraft.                                                 
|---------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------
|Ag                           |  | The chemical symbol for silver.                                                                                                 
|Au                           |  | The chemical symbol for gold.                                                                                                   
|Andesite                     |  | Fine-grain generally volcanic rock composed of feldspar, hornblende and other minor minerals.                                   
|Anomaly                      |  | Any departure from the norm which may indicate the presence of mineralization in the underlying bedrock.                        
|Anorthosite                  |  | Light grey to almost black rock, composed chiefly of calcium feldspar.                                                          
|Aphebian                     |  | Period of time in the Earth’s history between 2.5 and 1.8 billion years ago.                                                    
|Archean                      |  | Period of time in the Earth’s history between 3.8 and 2.5 billion years ago.                                                    
|Assay                        |  | A chemical test performed on a sample of ores or core to determine the amount of valuable metals contained.                     
|Assessment Work              |  | The amount of work, specified by mining law, that must be performed each year in order to retain legal control of mining claims.
|Audio-Magnetotellurics (AMT) |  | A geophysical method that measures the
        Earth’s varying electric and magnetic fields.                                    



4







|Basin                     |  | A round or oval depression in the Earth's surface, containing the youngest section of rock in its lowest, central part.                                                                                                                                                                                                                                                                                                         
|------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Batholith                 |  | A large mass of igneous rock extending to great depth with its upper portion dome-like in shape. Similar, smaller masses of igneous rocks are known as bosses or plugs.                                                                                                                                                                                                                                                         
|Breccia                   |  | A rock in which angular fragments are surrounded by a mass of fine-grained minerals.                                                                                                                                                                                                                                                                                                                                            
|Chalcopyrite              |  | A sulphide mineral of copper and iron; the most important ore mineral of copper.                                                                                                                                                                                                                                                                                                                                                
|Channel Sample            |  | A sample composed of pieces of vein or mineral deposit that have been cut out of a small trench or channel, usually about 10 cm wide and 2 cm deep.                                                                                                                                                                                                                                                                             
|Chip Sample               |  | A method of sampling a rock exposure whereby a regular series of small chips of rock is broken off along a line across the face.                                                                                                                                                                                                                                                                                                
|Claim                     |  | Holder usually has the right to carry out mineral exploration and apply to mine on the located area.                                                                                                                                                                                                                                                                                                                            
|Cretaceous                |  | The third and latest of the periods in the Mesozoic Era.                                                                                                                                                                                                                                                                                                                                                                        
|Diamond Drill             |  | A rotary type of rock drill that cuts a core of rock that is recovered in long cylindrical sections, 2 cm or more in diameter.                                                                                                                                                                                                                                                                                                  
|Dickite                   |  | Dickite is a polymorphic alumino-silicate clay that is formed from hydrothermal environments.                                                                                                                                                                                                                                                                                                                                   
|Diorite                   |  | An intrusive igneous rock composed chiefly of plagioclase, hornblende, biotite or pyroxene.                                                                                                                                                                                                                                                                                                                                     
|EM Survey                 |  | A geophysical survey method which measures the electromagnetic properties of rocks.                                                                                                                                                                                                                                                                                                                                             
|Exploration               |  | Prospecting, sampling, mapping, diamond drilling and other work involved in searching for ore.                                                                                                                                                                                                                                                                                                                                  
|Fault                     |  | Fracture in the Earth’s crust, along which there has been displacement of the sides relative to one another parallel to the fracture.                                                                                                                                                                                                                                                                                           
|Gabbro                    |  | A dark, coarse-grained intrusive igneous rock composed chiefly of feldspar and pyroxene.                                                                                                                                                                                                                                                                                                                                        
|Geophysical Surveys       |  | The use of one or more geophysical techniques in geophysical exploration.                                                                                                                                                                                                                                                                                                                                                       
|Grab Samples              |  | A sample of rock or sediment taken more or less indiscriminately at any place.                                                                                                                                                                                                                                                                                                                                                  
|Gravity Gradient Survey   |  | A geophysical method used to map and mathematically model underground fault structures based on measurements of the gravity of rocks.                                                                                                                                                                                                                                                                                           
|Gneiss                    |  | Layered granite-like rock.                                                                                                                                                                                                                                                                                                                                                                                                      
|Gossan                    |  | An iron-oxide rich weathered product overlying a sulphide deposit.                                                                                                                                                                                                                                                                                                                                                              
|Granite                   |  | A coarse-grained intrusive igneous rock consisting of quartz, feldspar and mica.                                                                                                                                                                                                                                                                                                                                                
|g/t                       |  | Grams per tonne.                                                                                                                                                                                                                                                                                                                                                                                                                
|Hydrothermal Alteration   |  | Rock alteration simply means changing the mineralogy of the rock.  The old minerals are replaced by new ones because there has been a change in the conditions.  These changes could be changes in temperature, pressure, or chemical conditions or any combination of these.  Hydrothermal alteration is a change in the mineralogy as a result of interaction of the rock with hot water fluids, called “hydrothermal fluids”.
|Hydrothermal Fluids       |  | Fluids that cause hydrothermal alteration of rocks by passing hot water fluids through the rocks and changing their composition by adding or removing or redistributing components.  Temperatures can range from weakly elevated to boiling.  Fluid composition is extremely variable.  They may contain various types of gases, salts (briney fluids), water, and metals.                                                      
|Igneous Rock              |  | A type of rock formed through the cooling and solidification of magma or lava. It can be formed below the surface as intrusive rocks or on the surface as extrusive rocks.                                                                                                                                                                                                                                                      
|Illite                    |  | Illite is a layered alumino-silicate clay that is formed from hydrothermal environments.                                                                                                                                                                                                                                                                                                                                        
|Induced Polarization (IP) |  | A geophysical survey method which measures the electrochemical properties of rocks.  Time domain IP methods measure the voltage decay or chargeability over a specified time interval after the induced voltage is removed.  Frequency domain IP methods use alternating currents (AC) to induce electric charges in the subsurface, and the apparent resistivity is measured at different AC frequencies.                      
|IOCG                      |  | Iron-Oxide Copper Gold style mineralization.                                                                                                                                                                                                                                                                                                                                                                                    



5







|Km                 |  | A measure of distance known as a kilometre.                                                                                                                                                                                                         
|------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Leach              |  | To dissolve from a rock. For example, when acidic water passes through fractured rocks, soluble minerals leach or dissolve from the rocks.                                                                                                          
|Lode               |  | Zone of  mineralization (or ore) in rock, as opposed to placer.                                                                                                                                                                                     
|Mo                 |  | The chemical symbol for molybdenum.                                                                                                                                                                                                                 
|Mg                 |  | The chemical symbol for magnesium.                                                                                                                                                                                                                  
|Mafic              |  | Igneous rocks with dark minerals.                                                                                                                                                                                                                   
|Mesozoic Era       |  | Period of time in the Earth’s history between 250 to 65 million years ago.                                                                                                                                                                          
|Metallurgy         |  | The study of extracting metals from their ores.                                                                                                                                                                                                     
|Mineralization     |  | The concentration of metals and their chemical compounds within a body of rock.                                                                                                                                                                     
|Monzonite          |  | Coarse grain igneous rock composed of feldspar, hornblende, biotite and often quartz.                                                                                                                                                               
|Ni                 |  | The chemical symbol for nickel.                                                                                                                                                                                                                     
|NSR                |  | Net Smelter Returns.  A royalty paid from the sale of mined minerals.                                                                                                                                                                               
|NT                 |  | Northwest Territories, Canada.                                                                                                                                                                                                                      
|Opt                |  | Ounce per short ton.                                                                                                                                                                                                                                
|Ore                |  | A natural aggregate of one or more minerals, which at a specified time and place, may be mined and sold at a profit, or which from some part may be profitably separated.                                                                           
|Oz                 |  | A measure of weight known as an ounce.  Precious metals are generally reported in ounces troy weight.  One troy ounce equals about 31.1 grams.                                                                                                      
|Paleozoic          |  | Period of time in the Earth’s history between 580 to 360 million years ago.                                                                                                                                                                         
|Phanerozoic        |  | Period of time in Earth’s history between 544 million year ago and present.                                                                                                                                                                         
|Placer             |  | A deposit of sand and gravel containing valuable metals such as gold, tin or diamonds.                                                                                                                                                              
|Proterozoic        |  | Period of time in Earth’s history between 2.5 billion years ago and 544 million years ago.                                                                                                                                                          
|Ppm                |  | Parts per million. Most often reported by weight which is then equivalent to grams per metric ton.                                                                                                                                                  
|Pyrite             |  | A yellow iron sulphide mineral, normally of little value. It is sometimes referred to as "fool's gold".                                                                                                                                             
|Radiometric dating |  | The calculation of an age in years of geologic materials by any one of several age determination methods based on nuclear decay of natural radioactive elements contained in the material.                                                          
|Sample             |  | A small portion of rock or a mineral deposit taken so that the metal content can be determined by assaying.                                                                                                                                         
|Sampling           |  | Selecting a fractional but representative part of a mineral deposit for analysis.                                                                                                                                                                   
|Shear or shearing  |  | The deformation of rocks by lateral movement along innumerable parallel planes, generally resulting from pressure and producing such metamorphic structures as cleavage and schistosity.                                                            
|Strike             |  | The coarse or bearing of a bed or layer of rock.                                                                                                                                                                                                    
|Tailings           |  | Material rejected from a mill after most of the recoverable valuable minerals have been extracted.                                                                                                                                                  
|Th                 |  | The chemical symbol for thorium.                                                                                                                                                                                                                    
|Tonne              |  | Metric ton equals 1,000 kilograms or approximately 2,204 pounds.                                                                                                                                                                                    
|Ton                |  | Short ton (or standard ton) equals 2,000 pounds.                                                                                                                                                                                                    
|U                  |  | The chemical symbol for uranium.                                                                                                                                                                                                                    
|U3O8               |  | Uranium oxide. The mixture of uranium oxides produced after milling uranium ore from a mine.  Sometimes loosely called “yellowcake”.  It is yellow in colour and is usually represented by the empirical formula U3O8. Uranium is sold in this form.
|Unconformity       |  | A boundary separating two or more rocks of markedly different ages, marking a gap in the geologic record.                                                                                                                                           
|                   |  |                                                                                                                                                                                                                                                     
|Uraninite          |  | A mineral consisting of uranium oxide and trace amounts of radium, thorium, polonium, lead and helium; uraninite in massive form is called pitchblende which is the chief uranium ore.                                                              



6







|V2O5           |  | Vanadium oxide. It is usually represented by the empirical formula V2O5.                                 
|-------------- |  | ---------------------------------------------------------------------------------------------------------
|Vein           |  | A fissure, fault or crack in a rock filled by minerals that have travelled upwards from some deep source.
|Volcanic rocks |  | Igneous rocks formed from magma that has flowed out or has been violently ejected from a volcano.        
|VTEM           |  | Variable time-domain electro-magnetics.  A geophysical survey method.                                    



We estimate and report our mineral resources
and we will estimate and report our reserves according to the definitions set forth in NI 43-101. We will modify and reconcile
the reserves as appropriate to conform to SEC Industry Guide 7 for reporting in the U.S. The definitions for each reporting standard
are presented below with supplementary explanation and descriptions of the parallels and differences.



|NI 43-101 Definitions:     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|indicated mineral resource |  | The term “indicated mineral resource” refers to that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be established with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.                                                              
|                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|inferred mineral resource  |  | The term “inferred mineral resource” refers to that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.                                                                                                                                                                                                                                                                                                 
|                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|measured mineral resource  |  | The term “measured mineral resource”
        refers to that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are
        so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and
        economic parameters to support production planning and evaluation of the economic viability of the deposit. The estimate is based
        on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such
        as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.
|                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|mineral reserve            |  | The term “mineral reserve”
        refers to the economically mineable part of a measured or indicated mineral resource demonstrated by at least a preliminary feasibility
        study. The study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that
        demonstrate, at the time of reporting, that economic extraction can be justified. A mineral reserve includes diluting materials
        and allowances for losses that might occur when the material is mined.                                                                                                                                                                                                             
|mineral resource           |  | The term “mineral resource” refers to a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge.                                                                                                                                                                                                                                                                                        



7







|probable mineral reserve |  | The term “probable mineral reserve” refers to the economically mineable part of an indicated, and in some circumstances a measured mineral resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.
|------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                             
|proven mineral reserve1  |  | The term “proven mineral reserve” refers to the economically mineable part of a measured mineral resource demonstrated by at least a preliminary feasibility study.                                                                                                                                                                                                                                                         



|qualified person2                 |  | The term “qualified person” refers to an individual who is an engineer or geoscientist with at least five years of experience in mineral exploration, mine development, production activities and project assessment, or any combination thereof, including experience relevant to the subject matter of the project or report and is a member in good standing of a self-regulating organization.
|--------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                 
|SEC Industry Guide 7 Definitions:



|exploration stage    |  | An “exploration stage” prospect is one which is not in either the development or production stage.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|development stage    |  | A “development stage” project is one which is undergoing preparation of an established commercially mineable deposit for its extraction but which is not yet in production. This stage occurs after completion of a feasibility study.                                                                                                                                                                                                                                                                                                                                                                                                                    
|                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|mineralized material |  | The term “mineralized material” refers to material that is not included in the reserve as it does not meet all of the criteria for adequate demonstration for economic or legal extraction.                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|probable reserve     |  | The term “probable reserve” refers to reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling, and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation.                                                                                                                                                                                                                
|                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|production stage     |  | A “production stage” project
        is actively engaged in the process of extraction and beneficiation of mineral reserves to produce a marketable metal or mineral
        product.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|proven reserve       |  | The term “proven reserve” refers to reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.                                                                                                                                                                                                             
|                     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|reserve              |  | The term “reserve” refers to that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. Reserves must be supported by a feasibility study done to bankable standards that demonstrates the economic extraction. (“Bankable standards” implies that the confidence attached to the costs and achievements developed in the study is sufficient for the project to be eligible for external debt financing.) A reserve includes adjustments to the in-situ tonnes and grade to include diluting materials and allowances for losses that might occur when the material is mined.



8







1SEC Industry Guide
7 requires a final or “bankable” feasibility study that must include adequate information on mining, processing, metallurgical,
economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified. Further,
all necessary permits must have been filed with the appropriate regulatory authorities including the primary environmental analysis
or report.



2SEC Industry Guide
7 does not require designation of a qualified person.



9







Conversion
Table



In this Annual Report on Form 20-F a combination
of Imperial and Metric measures are used. Conversions from Imperial to Metric and from Metric to Imperial are provided below:



|Imperial Measure          = | Metric Unit    | Metric Measure       = | Imperial Unit     
|--------------------------- | -------------- | ---------------------- | ------------------
|2.47 acres                  | 1 hectare      | 0.4047 hectares        | 1 acre            
|3.28 feet                   | 1 meter        | 0.3048 meters          | 1 foot            
|0.62 miles                  | 1 kilometer    | 1.609 kilometers       | 1 mile            
|0.032 ounces (troy)         | 1 gram         | 31.1 grams             | 1 ounce (troy)    
|1.102 tons (short)          | 1 tonne        | 0.907 tonnes           | 1 ton             
|0.029 ounces (troy)/ton     | 1 gram/tonne   | 34.28 grams/tonne      | 1 ounce (troy/ton)
|6.29 Barrels (Bbl)          | 1 Cubic meters | 0.159 cubic metres     | 1 barrel (Bbl)    
|3.281 feet                  | 1 metre        | 0.3048 metres          | 1 foot            
|0.035 Mcf                   | 1 cubic metre  | 28.2 cubic metres      | 1 Mcf             
|0.949 MMbtu                 | 1 GJ           | 1.054 GJ               | 1 MMbtu           



CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS



This Annual Report on Form 20-F and the
exhibits attached hereto contain “forward-looking statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements concern our anticipated results and developments in our operations in future
periods, planned exploration and development of its properties, plans related to its business and other matters that may occur
in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates
of amounts not yet determinable and assumptions of management. Statements concerning reserves and mineral resource estimates may
also be deemed to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will
be encountered if the property is developed, and in the case of mineral reserves, such statements reflect the conclusion based
on certain assumptions that the mineral deposit can be economically exploited. Any statements that express or involve discussions
with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance
(often, but not always, using words or phrases such as “expects” or “does not expect”, “is expected”,
“anticipates” or “does not anticipate”, “plans”, “estimates” or “intends”,
or stating that certain actions, events or results “may”, “could”, “would”, “might”
or “will” (or the negative and grammatical variations of any of these terms and similar expressions) be taken, occur
or be achieved,) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject
to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from
those expressed or implied by the forward-looking statements, including, without limitation:



| | · | risks related to our history of losses;
| | - | ---------------------------------------

| | · | risks related to our limited financial resources;
| | - | -------------------------------------------------

| | · | risks related to our need for additional financing;
| | - | ---------------------------------------------------

| | · | risks related to our lack of mineral production history;
| | - | --------------------------------------------------------

| | · | risks related to competition in the mining industry
| | - | ---------------------------------------------------

| | · | risks related to increased costs;
| | - | ---------------------------------

| | · | risks related to possible shortages in equipment;
| | - | -------------------------------------------------

| | · | risks related to mineral exploration activities;
| | - | ------------------------------------------------

| | · | risks related to our lack of insurance for certain activities;
| | - | --------------------------------------------------------------

| | · | risks related to all our properties being in the exploration stage;
| | - | -------------------------------------------------------------------

| | · | risks related to uncertainty that our properties will ultimately be developed;
| | - | ------------------------------------------------------------------------------

| | · | risks regarding resource estimates;
| | - | -----------------------------------

| | · | risks related to possible changes in resource estimates;
| | - | --------------------------------------------------------

| | · | risks related to differences between U.S. and Canadian practices for reporting resources and reserves;
| | - | ------------------------------------------------------------------------------------------------------

| | · | risks related to our management’s limited experience in mineral exploration;
| | - | ----------------------------------------------------------------------------

| | · | risks related to fluctuations in precious and base metal prices;
| | - | ----------------------------------------------------------------

| | · | risk related to defects in title to our mineral properties;
| | - | -----------------------------------------------------------

| | · | risks related to our mineral properties being subject to prior unregistered agreements, transfers,
or claims;
| | - | -------------------------------------------------------------------------------------------------------------

| | · | risks related to aboriginal claims to our properties;
| | - | -----------------------------------------------------

| | · | risks related to government and environmental regulations;
| | - | ----------------------------------------------------------

| | · | risks related to regulations and legislation regarding climate change;
| | - | ----------------------------------------------------------------------

| | · | risks related to obtaining required permits and licenses;
| | - | ---------------------------------------------------------



10







| | · | risks related to land reclamation requirements;
| | - | -----------------------------------------------

| | · | risks related to possible joint venture operations;
| | - | ---------------------------------------------------

| | · | risks related to the possible loss of key management personnel;
| | - | ---------------------------------------------------------------

| | · | risks related to possible conflicts of interest;
| | - | ------------------------------------------------

| | · | risks related to ours status as a foreign corporation;
| | - | ------------------------------------------------------

| | · | risks related to our status as a passive foreign investment company under United States federal
tax laws;
| | - | ---------------------------------------------------------------------------------------------------------

| | · | risks related to recent market events;
| | - | --------------------------------------

| | · | risks related to financing of future acquisitions through debt
| | - | --------------------------------------------------------------

| | · | risks related to our ability to manage growth; and
| | - | --------------------------------------------------

| | · | other risks related to our securities.
| | - | --------------------------------------



This list is not exhaustive of the factors
that may affect our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking
statements are described further in the sections entitled “Risk Factors”, “Information on the Company”
and “Operating and Financial Review and Prospects” and in the exhibits attached to this Annual Report on Form 20-F.
Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results
may vary materially from those described in the forward-looking statements. Our forward-looking statements are based on beliefs,
expectations and opinions of management on the date the statements are made and the Company does not assume any obligation to update
forward-looking statements if circumstances or management’s beliefs, expectations or opinions change, except as required
by law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.



11







PART I



All references in this Annual Report on
Form 20-F (“Annual Report”) to the terms “we”, “our”, “us”, “the Company”
and “Alberta Star” refer to Alberta Star Development Corp.



ITEM 1. Identity
of Directors, Senior Management and Advisers.



Not Applicable.



ITEM 2. Offer
Statistics and Expected Timetable.



Not Applicable.



ITEM 3. Key
Information.



| | A. | Selected Financial Data.
| | -- | ------------------------



The following information has been extracted
from our financial statements for the years indicated and is expressed in Canadian dollars. The information should be read in conjunction
with “Item 5. Operating and Financial Review and Prospects – A. Operating Results and B. Liquidity and Capital Resources”
and the audited annual financial statements of the Company filed herewith.



The following table summarizes selected
financial data pertaining to operations of the Company for each of the three most recently completed fiscal years ended November
30. The 2013, 2012 and 2011 information set forth below should be read in conjunction with the audited financial statements, prepared
in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards
Board (“IASB”), and related notes. These audited financial statements have been prepared in accordance with IFRS which
differ in certain respects from the principles the Company would have followed had its audited financial statements been prepared
in accordance with generally accepted accounting principles in the United States. The 2011 information has been adjusted in accordance
with IFRS, and therefore, may differ from the 2011 information previously published in accordance with Canadian generally accepted
accounting principles.



All amounts within this Annual Report are
in Canadian dollars, unless otherwise indicated.



|Fiscal Year Ended November 30                          
|-------------------------------------------------------
|                                                       
|                                                       
|Petroleum revenue                                      
|Total (loss) from continuing operations                
|Total Earnings (loss) from discontinuing operations    
|Comprehensive earnings (loss) for the year             
|Loss from continuing operations per share              
|Earnings (loss) from discontinuing operations per share
|Earnings (loss) from comprehensive earnings per share  
|Total assets                                           
|Net assets                                             
|Capital stock, contributed surplus and warrants        
|Number of shares                                       
|Return of capital declared per common share            



12







CHANGES IN ACCOUNTING POLICIES



The Company adopted IAS 1 (Amendment) ‘Presentation
of Financial Statements’ effective December 1, 2012, which includes amendments of items and other comprehensive income. The
adoption of IAS 1 did not result in a significant impact on the Company’s financial statements.



International Financial Reporting Standards



In February 2008, the Canadian Accounting
Standards Board adopted a strategic plan, which includes the decision to move financial reporting for Canadian publicly accountable
enterprises to a single set of globally accepted standards, IFRS, as issued by the International Accounting Standards Board. The
effective implementation date of the conversion from Canadian GAAP to IFRS is December 1, 2011, with an effective transition date
of December 1, 2010 for financial statements prepared on a comparative basis. The Company has prepared its financial statements
in accordance with IFRS issued by the International Accounting Standards Board and interpretations of the International Financial
Reporting Interpretations Committee.



Currency and Exchange Rates



Since June 1, 1970, the Government of
Canada adopted a floating exchange rate to determine the value of the Canadian dollar as compared to the US dollar. On March 18,
2014, the exchange rate in effect for US dollars exchanged for Canadian dollars was $1.1179. This exchange rate is based on the
noon buying rates of the Bank of Canada, as obtained from the website www.bankofcanada.ca.



For the past five fiscal years ended November
30, 2013, and for the six month period between September 1, 2013 and February 28, 2014, the following exchange rates were in effect
for US dollars exchanged for Canadian dollars, calculated in the same manner as above:



|Period                       |  | Average |       
|---------------------------- |  | ------- | ------
|Year ended November 30, 2009 |  | $       | 1.1565
|Year ended November 30, 2010 |  | $       | 1.0345
|Year ended November 30, 2011 |  | $       | 0.9879
|Year ended November 30, 2012 |  | $       | 1.0023
|Year ended November 30, 2013 |  | $       | 1.0241



|Period                         |  | Low |        |  | High |  
|------------------------------ |  | --- | ------ |  | ---- | -
|Month ended September 30, 2013 |  | $   | 1.0237 |  |      | $
|Month ended October 31, 2013   |  | $   | 1.0284 |  |      | $
|Month ended November 30, 2013  |  | $   | 1.0415 |  |      | $
|Month ended December 31, 2013  |  | $   | 1.0577 |  |      | $
|Month ended January 31, 2014   |  | $   | 1.0614 |  |      | $
|Month ended February 28, 2014  |  | $   | 1.0953 |  |      | $



| | B. | Capitalization and Indebtedness.
| | -- | --------------------------------



Not Applicable.



| | C. | Reasons for the Offer and Use of Proceeds.
| | -- | ------------------------------------------



Not Applicable.



| | D. | Risk Factors.
| | -- | -------------



An investment in our common shares is highly
speculative and subject to a number of known and unknown risks. Only those persons who can bear the risk of the entire loss of
their investment should purchase our securities. An investor should carefully consider the risks described below and the other
information that we file with the SEC and with Canadian securities regulators before investing in our common shares. The risks
described below are not a comprehensive list of all the risks we face. There may also be additional risks that we are not currently
aware of or that we currently believe are immaterial may become important factors that affect our business. If any of these risks
occur, operating results and financial conditions could be seriously harmed, the market price of our common shares could decline
and the investor may lose all of their investment. The risk factors set forth below and elsewhere in this Annual Report, and the
risks discussed in our other filings with the SEC and Canadian securities regulators may have a significant impact on our business,
operating results and financial condition and could cause actual results to differ materially from those projected in any forward-looking
statements. See “Cautionary Note Regarding Forward-Looking Statements”.



13







In addition to other information in this
Annual Report, you should carefully consider the following risk factors in evaluating our business.



Risks Related to our Business



We have a history of losses.



We have incurred losses in our business
operations since inception, and we expect that we will continue to lose money for the foreseeable future. Since our incorporation
on September 6, 1996 to November 30, 2013, we incurred losses determined under IFRS totalling $53,464,816. Failure to achieve and
maintain profitability may adversely affect the market price of our common stock. There can be no assurance that we will achieve
profitability in the future or at all.



We have not identified any commercially
viable mineral deposits. We have not commenced development or commercial production on any of our properties. We have no history
or earnings or cash flow from operations. We do not have a line of credit and our only present source of funds available may be
through the sale of our equity shares or assets. Even if the results of exploration are encouraging, we may not have the ability
to raise sufficient funds to conduct further explorations to determine whether a commercially mineable deposit exists on any of
our properties. While additional working capital may be generated through the issuance of equity or debt, the sale of properties
or possible joint venturing of the properties, we cannot assure you that any such funds will be available for operations on acceptable
terms, if at all.



In addition, should we be unable to continue
as a going concern, realization of assets and settlement of liabilities in other than the normal course of business may be at amounts
significantly different from those contained in our financial statements.



We generally have limited financial
resources and no source of cash flow.



Although
we believe we have sufficient funds to meet our current obligations, we currently have no external sources of liquidity, and all
additional funding required for our activities for the foreseeable future will be obtained from the sale of our securities. Should
we elect to satisfy our cash commitments through the issuance of securities, by way of either private placement or public offering,
there can be no assurance that our efforts to raise such funding will be successful, or achieved on terms favourable to us or our
shareholders. Such financings, to the extent they are available may result in substantial dilution to our existing shareholders.



Failure
to obtain additional financing on a timely basis could cause us to forfeit all or a portion of our interests in the assets or
rights now held by us and our ability to continue as a going concern. As described in Note 1 to our financial statements, our
financial statements have been prepared on the assumption that we will continue as a going concern, meaning that we will continue
in operation for the foreseeable future, and will be able to realize assets and discharge our liabilities in the ordinary course
of operations. There can be no assurance that we will be able to continue as a going concern.



If we do not obtain additional
financing, our business will fail.



Our current operating funds are less than
necessary to complete exploration and begin production of our mineral claims, and therefore we will need to obtain additional financing
in order to complete our business plan. As of November 30, 2013, we had $6,700,938 in cash on hand. Cash on hand at the date of
filing this Annual Report is approximately $6,000,000.



Our business plan calls for significant
expenses in connection with the exploration and development of our mineral claims. We will require additional financing in order
to complete these activities. In addition, we will require additional financing to sustain our business operations if we are not
successful in earning revenues once exploration is complete. We do not currently have any arrangements for financing and we can
provide no assurance to investors that we will be able to find such financing if required.



14







We have no production history
from our mineral properties.



We have no history of producing metals
from any of our properties as each of our properties is in the exploration stage. Advancing properties from exploration into the
development stage requires significant capital and time, and successful commercial production from a property, if any, will be
subject to completing positive feasibility studies, permitting and construction of the mine, processing plants and roads and other
related works and infrastructure. As a result, we are subject to all the risks associated with developing and establishing new
mining operations and business enterprises including:



| | · | Completion of feasibility studies to define reserves and commercial viability, including the ability
to find sufficient mineral reserves to support a commercial mining operation;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | The timing and cost,
which can be considerable, of further exploration, preparing feasibility studies, permitting and construction of infrastructure,
mining and processing facilities;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | The availability
and costs of drill equipment, qualified exploration personnel, skilled and reliable labour and mining and processing equipment,
if required;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | The availability
and cost of appropriate smelting and/or refining arrangements, if required;
| | - | --------------------------------------------------------------------------------------------

| | · | Compliance with environmental
and other governmental approval and permit requirements;
| | - | --------------------------------------------------------------------------------------

| | · | The availability
of funds to finance exploration, development and construction activities, as warranted;
| | - | --------------------------------------------------------------------------------------------------------

| | · | Potential opposition
from non-governmental organizations, environmental groups, local groups or local inhabitants which may delay or prevent development
activities; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Potential increases
in exploration, construction and operating costs due to changes in the cost of fuel, power, materials and supplies.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------



The costs,
timing and complexities of exploration, development and construction activities may be increased by the location of our properties
and demand by other mineral exploration and mining companies. It is common in exploration programs to experience unexpected problems
and delays during drill programs and, if warranted, development, construction and mine start-up. Accordingly, our activities may
not result in profitable mining operations and we may not succeed in establishing mining operations or profitability producing
metals at any of our properties.



The business of mineral exploration
is highly competitive and there is no assurance we can compete with other competitors for financing, qualified personnel and other
resources related to the operation of our business.



Significant competition exists for the
limited number of property acquisition opportunities available. As a result of this competition, some of which is with large, established
mining companies with substantial capabilities and greater financial and technical resources than us, we may be unable to acquire
attractive mining properties on terms we consider acceptable. Competition in the precious metals mining industry is primarily for
mineral rich properties which can be developed and exploited economically; the technical expertise to find, develop, and produce
such properties; the labour to operate the properties; and the capital for the purpose of funding such properties. Many competitors
not only explore for and mine precious metals and minerals but conduct refining and marketing operations on a worldwide basis.
Such competition may result in our being unable to acquire desired properties, to recruit or retain qualified employees, to obtain
necessary exploration, development or production equipment or to acquire the capital necessary to fund our operations and develop
our properties. Our inability to compete with other mining companies for these resources may have a material adverse effect on
our results of operation and business. There can be no assurance that our exploration and acquisition programs will yield any reserves
or result in any commercial mining operation.



Increased costs could affect
our financial condition.



We anticipate that costs at our projects
that we may explore or develop, will frequently be subject to variation from one year to the next due to a number of factors, such
as changing ore grade, metallurgy and revisions to mine plans, if any, in response to the physical shape and location of the ore
body. In addition, costs are affected by the price of commodities such as fuel, rubber and electricity. Such commodities are at
times subject to volatile price movements, including increases that could make production at certain operations less profitable.
A material increase in costs at any significant location could have a significant effect on our profitability.



A shortage of equipment and
supplies could adversely affect our ability to operate our business.



We are dependent on various supplies and
equipment to carry out our mining exploration and, if warranted, development operations. The shortage of such supplies, equipment
and parts could have a material adverse effect on our ability to carry out our operations and therefore limit or increase the cost
of production.





15







Our operations are subject
to the inherent risk associated with mineral exploration activities.



Mineral exploration activities and, if
warranted, development activities generally involve a high degree of risk, which even a combination of experience, knowledge and
careful evaluation may not be able to overcome. Environmental hazards, industrial accidents, unusual or unexpected geological formations,
fires, power outages, labour disruptions, flooding, explosions, cave-ins, land-slides and the inability to obtain suitable or adequate
machinery, equipment or labour are other risks involved in the operation of mines and the conduct of exploration programs. Operations
and activities in which we have a direct or indirect interest will be subject to all the hazards and risks normally incidental
to exploration, development and production of precious and base metals, any of which could result in work stoppages, damage to
or destruction of mines, if any, and other producing facilities, damage to life and property, environmental damage and possible
legal liability for any or all damage. We plan to obtain insurance, in amounts that we consider to be adequate, to protect ourselves
against certain of these mining risks once we commence mining operations. However, we may become subject to liability for certain
hazards which we cannot insure against or which we may elect not to insure against because of premium costs or other reasons. The
payment of such liabilities may have a material, adverse effect on our financial position. At the present time, we do not conduct
any mining operations and none of our properties are under development, and, therefore, we do not carry insurance to protect us
against certain inherent risks associated with mining. Reclamation requirements vary depending on the location and the managing
regulatory agency, but they are similar in that they aim to minimize long term effects of exploration and mining disturbance by
requiring the operating company to control possible deleterious effluents and to re-establish to some degree pre-disturbance landforms
and vegetation.



Mineral exploration involves
a high degree of risk against which we are not currently insured.



Our exploration activities are subject
to the hazards and risks normally incident to the exploration for and development and production of precious minerals, any of which
could result in damage for which we may be held responsible. Hazards such as unusual or unexpected weather, rock formations, formation
pressures, fires, power outages, landslides, flooding cave-ins or other adverse conditions such as the inability to obtain suitable
or adequate machinery, equipment or labour may be encountered in the drilling and removal of material.  While we may obtain
insurance against certain risks in such amounts as we consider adequate, the nature of these risks is such that liabilities could
exceed policy limits or could be excluded from coverage.  There are also risks against which we cannot insure or against which
we may decide not to insure.



It is not always possible to fully insure
against such risks and we may decide to forego insuring against such risks as a result of high premiums or other reasons. Should
such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in
the value of our common shares. We do not currently maintain insurance against environmental risks relating to our mineral property
interests, though we have obtained third party liability insurance, to counter the effects of these risks.



All of our properties are in
the exploration stage and are highly speculative in nature, which means there can be no assurance that our programs will result
in the discovery of any economically feasible mineral deposit.



At present, none of our properties have
a known body of ore and all our proposed exploration programs are an exploratory search for ore. We will only develop our mineral
properties if we obtain satisfactory results from our exploration programs. The development of uranium, cobalt, gold, silver, copper,
zinc and other mineral properties is affected by many factors, including the cost of operations, variations in the grade of ore
mined, fluctuations in metal markets, costs of processing equipment and other factors such as government regulations, including
regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection. We have
relied and may continue to rely upon consultants and others for exploration expertise. Substantial expenditures are required to
establish reserves through drilling, to develop metallurgical processes to extract the metal from the ore and, in the case of new
properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining. We cannot assure
you that any mineral deposits will be discovered in sufficient quantities to justify commercial operations or that funds required
for development can be obtained on a timely basis. Depending on the price of uranium or other minerals produced, if any, we may
determine that it is impractical to commence or, if commenced, continue commercial production.



The marketability of any minerals acquired
or discovered may be affected by numerous factors which are beyond our control and which cannot be accurately predicted, such as
market fluctuations, the global marketing conditions for uranium and other metals, the proximity and capacity of milling facilities,
mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties,
allowable production, importing and exporting minerals and environmental protection. Our properties are located in the Northwest
Territories, Canada. This jurisdiction imposes certain requirements and obligations on the owners of exploratory properties which
includes, among other things, certain application and permit requirements, certain limitations on mining and exploration activities,
periodic reporting requirements, limited terms and certain fees and royalty payments.





16







Very few mineral properties
are ultimately developed into producing mines.



The business of exploration for minerals
and mining involves a high degree of risk such as unusual or unexpected geological formations and the inability to obtain suitable
or adequate machinery, equipment or labor and is highly speculative in nature. Few properties that are explored are ultimately
developed into commercially viable mining operations. At present, our existing properties have no known significant body of commercial
ore. Most exploration projects do not result in the discovery of commercially mineable deposits of ore. The occurrence of unsuccessful
exploration efforts may eventually lead to us needing to cease operations in the exploration and development of certain ores.



The success of commodity exploration is
determined in part by the following factors:



| | · | Identification of potential mineralization
based on superficial analysis;
| | - | -------------------------------------------------------------------------

| | · | Exploration permits, as granted by the
various government bodies;
| | - | -----------------------------------------------------------------

| | · | Experience and quality of management and
geological consultants; and
| | - | --------------------------------------------------------------------

| | · | Capital available for exploration activity.
| | - | -------------------------------------------



Substantial expenditures are required for
us to establish proven and probable ore reserves through drilling and analysis, to develop metallurgical processes, to extract
the metal from the ore and, in the case of new properties, to develop the mining and processing facilities and infrastructure at
any site chosen for mining. In making the determination as to the commercial viability of a mineral deposit, a number of factors
are considered, which include, without limitation, the particular attributes of the deposit, such as size, grade, and proximity
to infrastructure; metal prices, which fluctuate widely; and government regulations, including, without limitation, regulations
relating to prices, taxes, royalties, land tenure, and use importing and exporting or minerals and environmental protection.



Although substantial benefits may be derived
from the discovery of a major mineral deposit, no assurance can be given that we will discover minerals in sufficient quantities
to justify commercial operations or that we can obtain the funds required for development on a timely basis.



We may invest significant capital and resources
in exploration activities and abandon such investments if we are unable to identify commercially exploitable mineral reserves.
The decision to abandon a project may have an adverse effect on the market value of our securities and the ability to raise future
financing.



We have no producing mines at this time.



Calculations of mineral reserves
and of mineralized material are estimates only, subject to uncertainty due to factors including metal prices, inherent variability
of the ore, and recoverability of metal in the mining process.



There is a degree of uncertainty attributable
to the calculation of reserves and corresponding grades dedicated to future production. Until mineral reserves are actually mined
and processed, the quantity of ore and grades must be considered as an estimate only. In addition, the quantity of mineral reserves
and ore may vary depending on metal prices. Estimates of mineral resources under Canadian guidelines are subject to uncertainty
as well. The estimating of mineral reserves and mineral resources under Canadian guidelines is a subjective process and the accuracy
of such estimates is a function of the quantity and quality of available data and the assumptions used and judgments made in interpreting
engineering and geological information. There is significant uncertainty in any reserve or estimate of mineral resources under
Canadian guidelines, and the actual deposits encountered and the economic viability of mining a deposit may differ materially from
our estimates. Estimated mineral reserves or mineral resources under Canadian guidelines may have to be recalculated based on changes
in metal prices, further exploration or development activity or actual production experience. This could materially and adversely
affect estimates of the volume or grade of mineralization, estimated recovery rates or other important factors that influence estimates
of mineral reserves or mineral resources under Canadian guidelines. Any material change in the quantity of mineral reserves, mineralization,
grade or stripping ratio may affect the economic viability of our properties. In addition, there can be no assurance that metal
recoveries in small-scale laboratory tests will be duplicated in larger scale tests under on-site conditions or during production.



Any material changes in mineral resource
estimates and grades of mineralization will affect the economic viability of placing a property into production and a property’s
return on capital.



As
we have not completed feasibility studies on all of our properties and have not commenced actual production; mineralization resource
estimates may require adjustments or downward revisions. In addition, the grade of ore ultimately mined, if any, may differ from
that indicated by our feasibility studies and drill results. Minerals recovered in small scale tests may not be duplicated in large
scale tests under on-site conditions or in production scale.





17







The
resource estimates contained in this annual report have been determined and valued based on assumed future prices, cut-off grades
and operating costs that may prove to be inaccurate. Extended declines in market prices for gold, silver or other commodities may
render portions of our mineralization and resource estimates uneconomic and result in reduced reported mineralization or adversely
affect the commercial viability determinations we reach. Any material reductions in estimates of mineralization, or of our ability
to extract this mineralization, could have a material adverse effect on our share price and the value of our properties.



Differences in U.S. and Canadian
reporting of reserves and resources



Our reserve and resource estimates are
not directly comparable to those made in filings subject to SEC reporting and disclosure requirements, as we generally report reserves
and resources in accordance with Canadian practices. These practices are different from those used to report reserve and resource
estimates in reports and other materials filed with the SEC. It is Canadian practice to report measured, indicated and inferred
resources, which are not permitted in disclosure filed with the SEC by United States issuers. In the United States, mineralization
may not be classified as a "reserve" unless the determination has been made that the mineralization could be economically
and legally produced or extracted at the time the reserve determination is made. United States investors are cautioned not to assume
that all or any part of measured or indicated resources will ever be converted into reserves.



Further, "inferred resources"
have a great amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Disclosure
of "contained ounces" is permitted disclosure under Canadian regulations; however, the SEC permits issuers to report
"resources" only as in-place tonnage and grade without reference to unit of metal measures.



Accordingly, information concerning descriptions
of mineralization, reserves and resources contained in this Annual Report, or in the documents incorporated herein by reference,
may not be comparable to information made public by United States companies subject to the reporting and disclosure requirements
of the SEC.



Our management has only limited
experience in resource exploration and our business has a higher risk of failure.



Our management, while experienced in business
operations, has only limited experience in resource exploration. During the 2008 fiscal year, we retained, on a consulting basis,
the full-time services of a qualified geologist, Dr. Michael Bersch to act as our Chief Geologist for a period of 2 years. While
we try to hire and retain management with proper expertise, only one of our directors has any significant technical training or
experience in resource exploration or mining. Management may not be fully aware of the specific requirements related to working
in mineral exploration, whether technical or operational. Therefore, our managerial decisions and choices may not always reflect
standard engineering or mineral exploration practices commonly used. We rely on the opinions of consulting geologists and mining
experts that we retain from time to time for specific exploration projects or property reviews.



We cannot be certain that the measures
we take will ensure that we implement and maintain adequate financial resources or profitability. Management’s lack of experience
may cause failure to implement appropriate financial decisions, or cause difficulties in implementing proper decisions, ultimately
harming our operating results.



The prices of precious metal
and base metal fluctuate and directly impact on our business activities.



Our business activities are significantly
affected by the prices of uranium, precious metals and base metals on international markets. The price of minerals affects our
ability to raise financing, the commercial feasibility of our properties, the future profitability of our properties should they
be developed and our future business prospects. The prices of uranium, precious metals and base metals fluctuate widely and are
affected by numerous factors beyond our control, including expectations with respect to the rate of inflation, the strength of
the U.S. dollar and of other currencies, interest rates, and global or regional political or economic crisis.



Uranium, precious metals and base metals
prices are also affected by numerous industry factors, such as demand for precious metals, forward selling by producers, central
bank sales and purchases of gold and production and cost levels in major mineral-producing regions.  Moreover, mineral prices
are also affected by macro-economic factors that are beyond our control, including international economic and political trends,
expectations of inflation, currency exchange fluctuations (specifically, the Canadian dollar relative to other currencies), interest
rates and global or regional consumption patterns, speculative activities and increased production due to improved mining and production
methods.  We cannot assure you that the price of such minerals will remain stable or that such prices will be at a level that
will prove feasible to continue our exploration activities, or, if applicable, begin development of our properties. Depending on
the price of such minerals, we may determine that it is impractical to continue our exploration activities or, if warranted, to
commence commercial development or production of our properties, if a mineral deposit is identified.





18







The current demand for and supply of uranium,
precious metals and base metals affects their respective prices, but not necessarily in the same manner as current demand and supply
affect the prices of other commodities.  If prices of such minerals should decline for a sustained period, we could determine
that it is not economically feasible to continue our exploration activities and such decision will have a material adverse effect
on our business and results of operations.



There may be defects in the
title to our properties.



In accordance with mining industry practice,
we attempt to acquire satisfactory title to our properties but have not obtained title insurance with the attendant risk that some
titles, particularly titles to undeveloped properties, may be defective. In accordance with mining industry practice, we have not
obtained title insurance on the mineral claims held by us. We carry out all normal procedures to obtain title and make a conscientious
search of mining records to confirm that we have satisfactory title to the properties we have acquired by staking, purchase or
option, and/or that satisfactory title is held by the optionor/owner of properties we may acquire pursuant to an option agreement,
and/or that satisfactory title is held by the owner of properties in which we have earned a percentage interest in the property
pursuant to a joint venture or other type of agreement. However, the possibility exists that title to one or more of the claims
held by us, or an optionor/owner, or the owner of properties in which we have earned a percentage interest, might be defective
for various reasons. We will take all reasonable steps to perfect title to any particular claims found to be in question or deficient.



There is no assurance of the
title to or boundaries of our resource properties.



Our mineral property interests may be subject
to prior unregistered agreements of transfers or native land claims and title may be affected by undetected defects. We have not
conducted surveys on the property and there is a risk that the boundaries could be challenged.



We may be subject to aboriginal claims
on our properties.



Aboriginal peoples have claimed aboriginal
title and rights to portions of Canada.  We are not aware that any claims have been made in respect of our properties
and assets; however, if a claim arose and was successful such claim may have a material adverse effect on our business, financial
condition, results of operations and prospects.



Our operations may be adversely
affected by government and environmental regulations.



Each phase of our operations are subject
to government and environmental regulations promulgated by government agencies from time to time. Environmental legislation provides
for restrictions and prohibitions on spills, release or emissions of various substances produced in association with certain mining
industry operations, such as seepage from tailings disposal areas, which would result in environmental pollution. A breach of such
legislation may result in the imposition of fines and penalties. In addition, certain types of operations require the submission
and approval of environmental impact assessments.



Environmental legislation is evolving in
a manner which means that standards, enforcements, fines and penalties for non-compliance are more stringent. Environmental assessments
of proposed projects carry a heightened degree of responsibility for our directors, officers, consultants and us. The cost of compliance
with changes in governmental regulations has a potential to reduce the profitability of our operations. We do not maintain environmental
liability insurance.



Our activities are subject to extensive
regulations governing various matters, including management and use of toxic substances and explosives, management of natural resources,
exploration, development of mines, production and post-closure reclamation, exports, price controls, taxation, regulations concerning
business dealings with indigenous peoples, labour standards on occupational health and safety, including mine safety, and historic
and cultural preservation.



Failure to comply with applicable laws
and regulations may result in civil or criminal fines or penalties, enforcement actions thereunder, including orders issued by
regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital
expenditures, installation of additional equipment, or remedial actions, any of which could result in our incurring significant
expenditures.  We may also be required to compensate those suffering loss or damage by reason of a breach of such laws, regulations
or permitting requirements.  It is also possible that future laws and regulations, or more stringent enforcement of current
laws and regulations by governmental authorities, could cause additional expense, capital expenditures, restrictions on or suspension
of our operations and delays in the exploration and development of our mineral properties.





19







Regulations and pending legislation
governing issues involving climate change could result in increased operating costs, which could have a material adverse effect
on our business.



A number of governments or governmental
bodies have introduced or are contemplating regulatory changes in response to various climate change interest groups and the potential
impact of climate change. Legislation and increased regulation regarding climate change could impose significant costs on us, our
venture partners and our suppliers, including costs related to increased energy requirements, capital equipment, environmental
monitoring and reporting and other costs to comply with such regulations. Any adopted future climate change regulations could also
negatively impact our ability to compete with companies situated in areas not subject to such limitations. Given the emotion, political
significance and uncertainty around the impact of climate change and how it should be dealt with, we cannot predict how legislation
and regulation will affect our financial condition, operating performance and ability to compete. Furthermore, even without such
regulation, increased awareness and any adverse publicity in the global marketplace about potential impacts on climate change by
us or other companies in our industry could harm our reputation. The potential physical impacts of climate change on our operations
are highly uncertain, and would be particular to the geographic circumstances in areas in which we operate. These may include changes
in rainfall and storm patterns and intensities, water shortages, changing sea levels and changing temperatures. These impacts may
adversely impact the cost, production and financial performance of our operations.



We may require permits and
licenses that we may not be able to obtain.



Our operations may require licenses and
permits from various governmental authorities. There can be no assurance that we will be able to obtain all of the necessary licenses
and permits that may be required to conduct exploration, development and mining operations at our projects on certain properties
in the Northwest Territories.



Land reclamation requirements for
our properties may be burdensome and expensive.



Although
variable depending on location and the governing authority, land reclamation requirements are generally imposed on mineral exploration
companies (as well as companies with mining operations) in order to minimize long term effects of land disturbance.



Reclamation
may include requirements to:



| | · | control dispersion of potentially deleterious
effluents;
| | - | --------------------------------------------------------

| | · | treat ground and surface water to drinking
water standards; and
| | - | ---------------------------------------------------------------

| | · | reasonably re-establish pre-disturbance
land forms and vegetation.
| | - | ------------------------------------------------------------------



In
order to carry out reclamation obligations imposed on us in connection with our potential development activities, we must allocate
financial resources that might otherwise be spent on further exploration and development programs. We plan to set up a provision
for our reclamation obligations on our properties, as appropriate, but this provision may not be adequate. If we are required to
carry out unanticipated reclamation work, our financial position could be adversely affected.



Joint ventures and other partnerships
may expose us to risks.



In the future, we may enter into joint
ventures or other partnership arrangements with other parties in relation to the exploration, development and production of certain
of the properties in which we have an interest. Joint ventures can often require unanimous approval of the parties to the joint
venture or their representatives for certain fundamental decisions such as an increase or reduction of registered capital, merger,
division, dissolution, amendments of constating documents, and the pledge of joint venture assets, which means that each joint
venture party may have a veto right with respect to such decisions which could lead to a deadlock in the operations of the joint
venture or partnership. Further, we may be unable to exert control over strategic decisions made in respect of such properties.
Any failure of such other companies to meet their obligations to us or to third parties, or any disputes with respect to the parties’
respective rights and obligations, could have a material adverse effect on the joint ventures or their properties and therefore
could have a material adverse effect on our results of operations, financial performance, cash flows and the price of our common
shares.



The loss of key management
personnel may adversely affect our business and results of operations.



The success of our operations and activities
is dependent to a significant extent on the efforts and abilities of our management team, particularly our Chief Executive Officer
(“CEO”), Stuart Rogers and Chairman, Guido Cloetens. Investors must be willing to rely to a significant extent on their
discretion and judgment.





20







Certain directors may be in
a position of conflicts of interest.



Certain members of our board also serve
as directors of other companies involved in natural resource exploration and development. Consequently, there exists the possibility
that those directors may be in a position of conflict. Any decision made by those directors will be made in accordance with their
duties and obligations to deal fairly and in good faith of our company and such other companies. In addition, such directors will
declare, and refrain from voting on, any matter in which such directors may have a conflict of interest.



We are a foreign corporation
and most of our directors and officers are outside of the United States, which may make enforcement of civil liabilities difficult.



We are incorporated under the laws of the
Province of Alberta, Canada. All of our directors and officers are residents of Canada, Belgium and Costa Rica, and all of our
assets are located outside of the United States. Consequently, it may be difficult for United States investors to effect service
of process within the United States upon those directors or officers who are not residents of the United States, or to realize
in the United States upon judgments of United States courts predicated upon civil liabilities under the United States Securities
Exchange Act of 1934, as amended (the “Exchange Act”).



As a foreign private issuer,
our shareholders may have less complete and timely data.



The Company is a “foreign private
issuer” as defined in Rule 3b-4 under the Exchange Act. Equity securities of the Company are accordingly exempt from
Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3 of the Exchange Act. Therefore,
the Company is not required to file a Schedule 14A proxy statement in relation to the annual meeting of shareholders. The submission
of proxy and annual meeting of shareholder information on Form 6-K may result in shareholders having less complete and timely information
in connection with shareholder actions. The exemption from Section 16 rules regarding reports of beneficial ownership and purchases
and sales of common shares by insiders and restrictions on insider trading in our securities may result in shareholders having
less data and there being fewer restrictions on insiders’ activities in our securities.



Passive Foreign Investment Company
(“PFIC”) Status Has Possible Adverse Tax Consequences for U.S. Investors



Current
holders of and potentialinvestors in
our common shareswho are U.S. taxpayers should be aware that Alberta Star believes that it qualified as a passive foreign
investment company (“PFIC”) for the tax year ended November 30, 2009 and during prior tax years and that no determination
has been made regarding Alberta Star’s PFIC status for the tax years ended November 30, 2010, 2011, 2012 and 2013. If we
are a PFIC for any year during a U.S. taxpayer’s holding period, then such U.S. taxpayers generally will be required to
treat any so-called “excess distribution” received on our common shares, or any gain realized upon a disposition of
common shares, as ordinary income and to pay an interest charge on a portion of such distributions or gain, unless the taxpayer
makes a qualified electing fund (“QEF”) election or a mark-to-market election with respect to the shares of Alberta
Star. In certain circumstances, the sum of the tax and the interest charge may exceed the amount of the excess distribution received,
or the amount of proceeds of disposition realized, by the taxpayer. A U.S. taxpayer who makes a QEF election generally must report
on a current basis its share of Alberta Star’s net capital gain and ordinary earnings for any year in which Alberta Star
is a PFIC, whether or not we distribute any amounts to its shareholders. However, U.S. shareholders should be aware that there
can be no assurance that Alberta Star will satisfy record keeping requirements that apply to a qualified electing fund, or that
Alberta Star will supply U.S. shareholders with information that such U.S. shareholders require to report under the QEF election
rules, in the event that Alberta Star is a PFIC and a U.S. shareholder wishes to make a QEF election. Thus, U.S. shareholders
may not be able to make a QEF election with respect to their common shares. A U.S. taxpayer who makes the mark-to-market election
generally must include as ordinary income each year the excess of the fair market value of the common shares over the taxpayer’s
basis therein. This paragraph is qualified in its entirety by the discussion below
under the heading “Taxation—Certain United States Federal Income Tax Considerations.” Each U.S. taxpayer should
consult his or her own tax advisor regarding the U.S. federal, U.S. state and local, and foreign tax consequences of the PFIC
rules and the acquisition, ownership, and disposition of our common shares.



We are subject to the volatility
and uncertainty of recent market events and conditions



The recent unprecedented events in global
financial markets have had a profound impact on the global economy. Many industries, including the mining industry, are impacted
by these market conditions. Some of the key impacts of the current financial market turmoil include contraction in credit markets
resulting in a widening of credit risk, devaluations and high volatility in global equity, commodity, foreign exchange and precious
metal markets, and a lack of market liquidity. A continued or worsened slowdown in the financial markets or other economic conditions,
including but not limited to, consumer spending, employment rates, business conditions, inflation, fuel and energy costs, consumer
debt levels, lack of available credit, the state of the financial markets, interest rates, and tax rates may adversely affect our
growth and profitability. Specifically:





21







| | · | The global credit/liquidity crisis could impact the cost and availability of financing and our
overall liquidity;
| | - | -----------------------------------------------------------------------------------------------------------------



| | · | The volatility prices of base and precious metals may impact our potential revenues, profits and
cash flow;
| | - | -----------------------------------------------------------------------------------------------------------



| | · | Volatile energy prices, commodity and consumables prices and currency exchange rates may impact
potential production costs; and
| | - | -------------------------------------------------------------------------------------------------------------------------------



| | · | The devaluation and volatility of global stock markets may impact the valuation of our equity securities.
| | - | ---------------------------------------------------------------------------------------------------------



These disruptions in the current credit
and financial markets have had a significant material adverse impact on a number of financial institutions and have limited access
to capital and credit for many companies, including junior mining and oil and gas companies. These disruptions could, among other
things, make it more difficult for the Company to obtain, or increase its cost of obtaining, capital and financing for its operations.
Access to additional capital may not be available to the Company on terms acceptable to it, or at all. These factors could also
have a material adverse effect on our financial condition and results of operations.



Further, as a result of on-going global
financial conditions, numerous financial institutions have gone into bankruptcy or have been rescued by government authorities.
As such, the Company is subject to the risk of loss of its deposits with financial institutions that hold the Company’s cash.



We may finance acquisitions through
the issuance of debt.



From time to time we may enter into transactions
to acquire assets or the shares of other organizations.  These transactions may be financed in whole or in part with
debt, which may increase our debt levels above industry standards for oil and natural gas companies of similar size.  Depending
on future exploration and development plans, we may require additional equity and/or debt financing that may not be available or,
if available, may not be available on favourable terms.  Neither our articles nor our by-laws limit the amount of indebtedness
that we may incur.  The level of our indebtedness from time to time, could impair our ability to obtain additional financing
on a timely basis to take advantage of business opportunities that may arise.



We may not be able to manage our
growth.



We may be subject to growth-related risks
including capacity constraints and pressure on our internal systems and controls.  Our ability to manage growth effectively
will require us to continue to implement and improve our operational and financial systems and to expand, train and manage our
employee base.  Our inability to deal with this growth may have a material adverse effect on our business, financial
condition, results of operations and prospects.



Risks Related to Our Common Stock



We do not intend to pay cash
dividends.



We do not have any intention of paying
cash dividends in the foreseeable future. In particular, there can be no assurance that our Board of Director’s will ever
declare cash dividends in the future, which action is completely within their discretion.



Economic conditions and fluctuation
and volatility of stock price may negatively impact shareholder value



The market price of our common shares is
highly volatile. If investors’ interest in the sector in which we operate declines, the price for our common shares would
likely also decline. In addition, trading volumes in our common shares can be volatile and if the trading volume of our common
shares experiences significant changes, the price of our common shares could be adversely affected. The price of our common shares
could also be significantly affected by other factors, many of which are beyond our control.



Fluctuations in economic conditions, such
as the continuing downturn in the global economy, may also significantly affect our ability to meet our objectives which could
adversely affect our share price.





22







Broker-dealers may be discouraged
from effecting transactions in our shares because they are considered a penny stock and are subject to the penny stock rules.



Our stock is a penny stock. The SEC has
adopted Rule 15g-9 which generally defines "penny stock" to be any equity security that has a market price (as defined)
less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are
covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other
than established customers and "accredited investors". The term "accredited investor" refers generally to the
categories of investors that satisfies Rule 501(a) under the Securities Act. The penny stock rules require a broker-dealer, prior
to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a
form prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stock market.
The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of
the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny
stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information,
must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing
before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock
not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may
have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny
stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe
that the penny stock rules discourage investor interest in and limit the marketability of our common stock.



If we raise additional funding
through equity financings, then our current shareholders will suffer dilution.



We believe the only realistic source of
future funds presently available to us is through the sale of equity capital. Any sale of equity capital will result in dilution
to existing shareholders. The only other alternative for the financing of further exploration would be the offering by us of an
interest in our properties to be earned by another party or parties carrying out further exploration thereof.



Dilution through contractor,
director and consultant options could adversely affect our stockholders.



Because our success is highly dependent
on our contractors, we grant some or all of our key contractors, officers, directors and consultants options to purchase common
shares, as non-cash incentives. If significant numbers of these options are granted and exercised, the interests of other stockholders
may be diluted.



As at March 31, 2014, there are currently
options outstanding to purchase an additional 1,795,000 common shares which upon exercise would result in a total of 23,450,979common shares being issued and outstanding.



Our common stock is thinly traded.



The trading market for our shares is not
always liquid. The market price of Alberta Star’s common shares has ranged from a high of $0.27 and a low of $0.13 during
the twelve month period ended November 30, 2013. Although our shares trade on the TSX Venture Exchange (“TSX-V”), FINRA
Over-the-Counter Bulletin Board (“OTCBB”) and the Frankfurt Exchange (“QLD”), the volume of shares traded
at any one time can be limited, and, as a result, there may not be a liquid trading market for our shares.



ITEM 4.
Information on the Company.



| | A. | History and Development of the Company.
| | -- | ---------------------------------------



We were incorporated under the name “Alberta
Star Mining Corp.” pursuant to the Business Corporations Actin the Province of Alberta, Canada by registration of
our articles of incorporation and the issuance by the Registrar of Companies of a Certificate of Incorporation on September 6,
1996. On September 20, 2001, we consolidated our share capital such that every five common shares in our capital stock pre-consolidation
were exchanged for one post-consolidation common share. Concurrently, we changed our name to “Alberta Star Development Corp.”
On March 11, 2010, we consolidated our share capital such that every five common shares in our capital stock pre-consolidation
were exchanged for one post-consolidation common share with no change to the Company name.



Our head office is located at 2300 –
1066 West Hastings Street, Vancouver, British Columbia, Canada, V6E 3X2. Our telephone number is (604) 689 – 1749.



23







We have not been involved in any bankruptcy,
receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase
or sale of a significant amount of assets.



On or about August 9, 2010, we entered
into an asset purchase agreement with Western Plains Petroleum Ltd. (“Western Plains”) under which we acquired an undivided
50% interest in the Lloydminster Alberta (“Lloydminster”) properties and the Landrose Saskatchewan (“Landrose”)
properties. We further entered into a joint operating agreement with Nordic Oil & Gas Ltd. with respect to the Lloydminster
Alberta property and a sub-participation agreement with Arctic Hunter Energy Inc. On or about August 26, 2010, we entered into
a further oil and gas asset purchase with Western Plains pursuant to which we acquired an undivided 33.33% interest in thirteen
(13) crown leases located in the Lloydminster heavy oil area of Alberta for a cash purchase price of $1.467 million, subject to
usual industry adjustments.



On April 8, 2013, the Company entered into
an agreement with Petrocapita Oil and Gas L.P. (“Petrocapita”) of Calgary, Alberta for the sale of its petroleum and
natural gas properties in Alberta and Saskatchewan for cash consideration of $1,875,000. The sale to Petrocapita was completed
on April 23, 2013 for total net cash consideration of $1,900,513 after taking into account initial industry standard adjustments
to the agreed purchase price of $1,875,000. The effective date of this transaction was March 1, 2013. The Company decided to sell
its petroleum and natural gas assets because of continued decline in netbacks for heavy oil in Western Canada.



As part of the transaction, Alberta Star
terminated a sub-participation agreement it had entered into with Arctic Hunter Energy Inc. (“Arctic Hunter”) in respect
of certain of the petroleum and natural gas properties which were sold to Petrocapita. Alberta Star paid Arctic Hunter cash consideration
of $102,000 for the termination. In accordance with the policies of the TSX Venture Exchange, Alberta Star and Arctic Hunter are
considered Non-Arm’s Length Party’s by virtue of having certain common directors and officers.



As a result of this transaction, Alberta
Star has increased its cash position by in excess of $1.8 Million and reduced its liabilities by $602,889 as a result of the elimination
of the decommissioning liability that was associated with these petroleum and natural gas properties.



As a result of the above transactions,
we are no longer in the oil and natural gas industry. We are solely a mineral exploration company.



We did not expend any significant amounts
during the year ended November 2013 exploring or developing our mineral properties, and intend to maintain but not further explore
or develop these properties at the present time.



Our mineral properties have no known significant
body of commercial ore, nor are any such properties at the commercial development or production stage. No assurance can be given
that commercially viable mineral deposits exist on any of our properties. Further, our interest in joint ventures which own properties
will be subject to dilution if we fail to expend further funds on the projects. These facts increase the uncertainty and risks
faced by investors in our Company. For more information see Item 3D – Risk Factors.



| | B. | Business Overview.
| | -- | ------------------



We are a Canadian mineral resource exploration
company that has mineral exploration projects in North America. At present, our mineral properties are in the exploration stage
and further exploration will be required before final evaluations as to the economic and legal feasibility can be determined.



In the fiscal year ended November 30, 2013,
the Company sold its petroleum and natural gas assets, eliminated the associated decommissioning liability and paid a special cash
distribution. As a result of these primary transactions and operating results, our November 30, 2013 financial position includes
working capital of $5,600,849 inclusive of $6,700,938 of cash. As of March 31, 2014, the Company has approximately $6,000,000 in
cash and $1,000,000 in short term investments.



MINERAL EXPLORATION
INDUSTRY CONDITIONS



Background



We are engaged in the exploration and acquisition
of mineral properties in Canada, and specifically hold most of our interests in the Northwest Territories.



We are a junior mining company in the exploration
stage and none of our mineral properties are currently beyond the initial exploration stage. There is no assurance that a commercially
viable mineral deposit exists on any of our properties and further exploration work will be required before a final evaluation
as to the economic and legal feasibility is determined. For further information, see “Item 3D – Risk Factors.”





24







We have conducted acquisitions and initial
surveys for the purpose of determining the viability of exploration work on properties located in the Northwest Territories, Canada.
The equity markets for junior mineral exploration companies are unpredictable. We may also and have historically entered into cost
sharing arrangements through joint venture agreements and interest agreements in the form of letters of intent. For detailed property
descriptions please refer to “Item 4D – Property, Plant and Equipment.”



At present, none of our mineral properties
have significant reserves nor are in production. Our ability to finance the future acquisition, exploration and development, if
warranted, of our mineral properties, to make concession payments and to fund general and administrative expenses is therefore
dependent upon our ability to secure additional financing.



Competition



The mineral property exploration business,
in general, is intensively competitive and there is not any assurance that even if commercial quantities of ore are discovered,
a ready market will exist for sale of same. Numerous factors beyond our control may affect the marketability of any substances
discovered. These factors include market fluctuations; the proximity and capacity of natural resource markets and processing equipment;
and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting
of mineral and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination
of these factors may make it difficult for us to receive an adequate return on investment.



We compete with many companies possessing
greater financial resources and technical facilities for the acquisition of mineral concessions, claims, leases and other mineral
interests as well as for the recruitment and retention of qualified employees.



Environmental Regulations



Mineral exploration in the Northwest Territories
is governed by Indian and Northern Affairs Canada, a Federal Government office which is responsible for negotiating the development
of healthy and sustainable communities on behalf of the First Nation and Inuit peoples. Applicable statutes are the Canadian Environmental
Assessment Act (1992) and the Canadian Environmental Protection Act (1999).



In order to conduct exploration on any
of our properties, we obtain land use permits. When exploration ceases on a Northwest Territories property, the land affected needs
to be reclaimed in order to protect public health and safety, to reduce or prevent environmental degradation and to allow future
productive land use of the property.



The reclamation plan for any property is
site specific. In general, the reclamation plan consists of ensuring that the physical structures that remain do not impose a long-term
hazard to public health and safety and the environment, which includes ensuring that the land and watercourses are returned to
a safe and environmentally sound state. We do not anticipate incurring any significant reclamation costs in connection with our
other mineral property interests.



Seasonality



The prevailing climate in the Northwest
Territories is severe, with extremely cold and dark winters and short warm summers. Programs typically are completed between the
end of spring thaw and fall/winter freeze-up. Programs are suspended throughout the winter due to harsh conditions and remote locations.



| | C. | Organizational Structure.
| | -- | -------------------------



We are not part of a group, nor do we hold
any subsidiary companies.



| | D. | Property, Plant and Equipment.
| | -- | ------------------------------



Office
Space



We share office space with several other
companies in Vancouver, British Columbia. We are currently renting on a month to month basis, with a minimum commitment of approximately
$800 per month





25







Oil and Gas Properties (Former Business)



During the year ended November 30, 2010,
we made two strategic heavy oil & gas acquisitions in Lloydminster, Alberta and Saskatchewan which expanded our operations
from mineral exploration into the oil and natural gas resource sector.



We acquired most of our property interests
under two agreements. The first was an asset purchase agreement with Western Plains we entered into on or about August 9, 2010
(the "Western Plains Agreement"). Under this agreement, we acquired an undivided 50% interest in properties near the
town of Lloydminster, which straddles the Alberta/Saskatchewan border (see map “Property Locations”) including our
Western Plains Lloydminster properties in Alberta and our Landrose, Maidstone, Dee Valley and Hillmond properties in the Province
of Saskatchewan, for a cash purchase price of $1.7 million.



The second agreement was an asset purchase
agreement with Western Plains we entered into on or about August 26, 2010, with an effective date of July 1, 2010 (the "Western
Plains Nordic Blackfoot Agreement"). Under this agreement, we acquired an undivided 33.33% interest in thirteen (13) crown
leases located in the Lloydminster area of Alberta (the "Western Plains Nordic - Blackfoot Properties") for a cash purchase
price of $1.467 million.



We subsequently participated with our partners
in the drilling and completion of certain wells on the properties.



On April 8, 2013, the Company entered into
an agreement with Petrocapita for the sale of its petroleum and natural gas properties in Alberta and Saskatchewan for cash consideration
of $1,875,000. The sale to Petrocapita was completed on April 23, 2013 for total net cash consideration of $1,900,513 after taking
into account initial industry standard adjustments to the agreed purchase price of $1,875,000. The effective date of this transaction
was March 1, 2013. The Company decided to sell its petroleum and natural gas assets because of continued decline in netbacks for
heavy oil in Western Canada.



Mineral Properties



We are engaged in the acquisition and exploration
of mineral property interests in Canada, and specifically hold most of our current mineral property interests within the Northwest
Territories, Canada (Figure 1). We also have an option to earn a 60% interest in a mineral property near Thunder Bay, Ontario,
in Central Canada. What follows is a description of our current properties, including information on expenses for the years ended
November 30, 2013, and, if applicable, November 30, 2012 and 2011. We are not planning to complete any exploration work on our
mineral properties in the Northwest Territories during the upcoming fiscal year, but plan to spend at least $100,000 on our newly
acquired Central Canada gold project.



We are an exploration stage company
and have no mineral producing properties at this time. All of our properties are exploration projects, and we receive no revenues
from production. All work presently planned by us is directed at defining mineralization and increasing understanding of the characteristics
and economics of that mineralization. There is no assurance that a commercially viable mineral deposit exists in any of our properties
nor do we anticipate same until after completion of further exploration work and a comprehensive evaluation based upon unit cost,
grade, recoveries and other factors conclude economic feasibility.



26







Figure 1







27







Eldorado-Contact
Lake Project



Eldorado-Contact Lake Area
Geological Setting



Regional Geology



Adapted from Hildebrand, 1981; Hildebrand
et al.1987; and Hoffman and Hall, 1993



The Eldorado-Echo Bay Project is located
in the northern portion of the Great Bear Magmatic Zone (GBMZ), part of the Bear Structural Province of the Canadian Shield (Figure
2). The Bear province covers some 40,000 square kilometres (100 x 400 km) and consists of the gneissic Coronation Geosyncline
to the east, and the GBMZ to the west, with the long-lived, polyphase Wopmay Deformation Zone (WDZ) separating the two terranes
(Hildebrand, 1986) (Figure 3). This orogenic zone developed on the western side of the Archean Slave craton between 2.1
and 1.8 Ga. Hoffman (1980a) divided the Wopmay Deformation Zone into four distinct tectonic zones: (1) a thin autochthonous cratonic
cover and foreland basal sequence overlies the northwestern area of the Slave Craton (2) the Asiak fold and thrust belt of continental
shelf and carbonate sequences overthrust on the Craton (3) the Hepburn orthotectonic zone of deformed rift sediment-volcanic sequences
intruded by post tectonic S-type plutons (4) the little deformed GBMZ, of subgreenschist facies volcano-sedimentary sequences intruded
by I-type plutons. The GBMZ is on lapped by platformal Paleozoic cover sequences to the west. The Eldorado-Echo Bay Property is
situated in the western part of the GBMZ.



The Hottah Terrane is a basement continental
calc-alkaline volcano-plutonic arc and associated sedimentary rocks which formed above an eastward subducting plate along the western
margin of the Slave Province (Hildebrand et al. 1987; Clowes, 1997). The volcano-sedimentary rocks of this terrane were cut by
calc-alkaline biotite-hornblende bearing plutons with ages ranging from 1.914 Ga to 1.902 Ga. A depositional prism of geosynclinal
shelf and slope sediments (Epworth, Snare and Akaitcho Groups) of the Coronation Supergroup formed at the edge of the continental
margin and at about 1.90 Ga, arc magmatism stopped and a bimodal suite of submarine volcanic rocks erupted onto the block faulted
and subsided sediments of the margin. This tectono-magmatic episode lasted only 5-10 Ma, related to intra-arc extension which also
generated a marginal basin originally to the east of the Hottah arc. The basin filled with siliciclastic and carbonate rocks overlying
the volcanic succession and lapping on to the Slave Craton to the east.



Within 5-10 Ma, the sedimentary basin was
simultaneously shortened and intruded by peraluminous to metalumious plutons of the Hepburn intrusive suite (1.896-1.879 Ma). The
shortening resulted in detachment and eastward thrusting of the imbricated basinal sediments into the Calderian accretionary wedge
forming the Asiak Fold belt in the east and the Hepburn plutonic and metamorphic zone (Turmoil Klippe) in the west part of the
former basin. As the hot plutons of the Hepburn suite were emplaced over the colder authochton of the western Slave Craton, inverted
metamorphic isograds developed.



The 1.878 Ga closure of the marginal basin
resulted in the initiation and growth of the 1.876 -1.850 Ga continental, arc complex of the GBMZ at the suture between the Hottah
arc to the west and the Hepburn suite to the east. The Great Bear Magmatic Zone is a 100 x 400 km wide corridor which is the product
of the final stages of continental volcanism and related plutonic activity.



It consists of low titanium/high aluminum
calc-alkaline volcano-plutonic rocks which have been intruded by a suite of hornblende and biotite bearing plutons of similar age
(Hoffman and Bowring, 1984; Hildebrand and Bowring, 1084). The thick supracrustal sequences are referred to as the McTavish Supergroup,
and consist of sub-greenschist facies, calc-alkaline andesitic to rhyolitic volcanic, volcaniclastic and sedimentary rocks, which
have been interpreted as remnants of ancient stratovolcanoes and the products of caldera collapse (Hildebrand, 1984).



The occurrence of these sequences as isolated
roof pendants within larger batholiths of the GBMZ hinders regional stratigraphic correlations between widely spaced regions. The
northern part of the GBMZ is underlain by a 10 km thick section of supracrustal rocks of the MacTavish Supergroup, which comprises
three Groups: the Labine, Dumas and Sloan, in ascending order. The southern part of the GBMZ is underlain by a 5 km thick section
of the Faber Group, which has been interpreted as broadly correlatable with the Sloan Group. These units occupy the central core
of the GBMZ, and are flanked to the west and east, by rocks of the Labine and Dumas Groups, respectively. Cannuli (1989) also suggested
that the Labine and Dumas may be broadly correlative and that the distribution of supracrustal sequences define a regional scale
syncline within the GBMZ volcano-plutonic complex. Ghandi (1994) noted that synvolcanic quartz monzonitic plutons within the stratigraphy
of both the Labine and Faber Groups were closely coeval; however, the predominantly basaltic and less andesitic strata of the Labine
Group contrasts with the more felsic strata of the Faber and Sloan Groups. The Faber Group volcanic sequences were suggested to
be texturally and chemically similar to products formed in anorogenic extensional settings, such as in the Missouri granite-rhyolite
terrane and the Gawler ranges of South Australia, rather than a subduction setting (Ghandi, 1994).





28







The Labine Group, which represents the
main magmatic arc in the western part of the GBMZ, consists of a 7 km thick section of volcanic-derived rocks which is exposed
in the Port Radium-Echo Bay area. The Labine Group consists of the lower Port Radium Formation and the overlying Echo Bay and Cameron
Bay Formations, which collectively define a minimum of two caldera collapse sequences. The rocks of the Labine Group have been
intruded along a minimum of two stratigraphic levels, by intermediate plutons and largely concordant sills of the Mystery Island
Intrusive Complex. The lower sheet includes the Bertrand and Mystery Island plutons and the upper sheet includes the Contact Lake
and Glacier/Tut plutons. These intrusive typically have pronounced zoned alteration haloes within the intrusions and/or their flanking
host rocks. Large, felsic syn- to post-volcanic, granite to monzonite plutons of the Great Bear batholith also intrude this sequence.
These intrusions have locally developed hornfels aureoles but lack the strong alteration associated with the earlier intermediate
sills.



The cessation of volcanism in the GBMZ
may have been the result of subduction of an oceanic spreading ridge or other high topographic features such as remnant arcs. Gravity
studies have suggested the presence of another arc further to the west (Fort Simpson arc) existed on the western side of the ocean,
and now under Paleozoic cover. The cessation of arc magmatism due to ridge subduction is common to Mesozoic-Cenozoic volcanic arcs
worldwide, such as in South America, where the Chile Rise and Nazca Ridge were subducted into the Peru-Chile Trench and in California,
where the East Pacific Rise was subducted under North America (Hildebrand, et al. 1987). Such an event may also have resulted in
a change in plate motion in the GBMZ, to transpression (dextral wrenching) and folding oblique to the original subduction direction
(Bowring, 1984). As a result, the concordant plutons and their host rocks were folded around northwest trending axes at about 1.843
Ga (Bowring, 1984), exposing the plutons and their altered wall rocks in oblique cross-section.



Post-dating the development of the northwest
trending folds, large, discordant, epizonal, biotite bearing granites and quartz diorites were emplaced between about 1.858 and
1.843 Ga (Bowring and van Schmus, 1987), formed as a result of melting due to crustal thickening from folding (Hildebrand et al,
1987). Bodies of this syenogranitic suite are also offset by continued movement on a swarm of later transcurrent, predominantly
north to northeast trending faults. These structures were developed as a result of east-west shortening which generated the northeast
trending, dextral strike-slip structures (Hoffman, 1980; Hildebrand et al., 1987). Evidence of plutonism in this setting is noted
as swarms of related northeast trending dykes.



Movement on these northeast faults is related
to displacement on north-south, transcurrent fault zones, parallel to the Wopmay Deformation Zone. Displacement along these structures
continued after the development of the igneous and sedimentary rock assemblages in the GBMZ, commonly resulting in kilometre scale
offset of units.



The northeast trending faults are also
cut by Cleaver diabase (Hoffman, 1984; Hildebrand, 1982), and both are unconformably overlain by the sedimentary basin of the 1.663
Ga Hornby Bay Group (McGrath and Hildebrand, 1984; Bowring and Ross, 1985). Hildebrand (1988) noted that many of the northeasterly
faults were reactivated during a period of normal faulting which occurred during the late stages of, or after, the deposition of
the Hornby Bay Group (Hildebrand, 1988). Gabbro sills known as Western Channel diabase are considered to be the youngest rocks
in the area (Hildebrand, 1982).



29







Figure 2







30







Figure 3







31







Local Geology



Adapted from Hoffman & McGlynn, 1977;
Hildebrand, 1981; Reardon, 1992; Robinson & Ohmoto, 1971. The geology of the Eldorada-Contact Lake area, as shown in Figure
4, has been compiled from mapping completed by Hildebrand, 1981, and Reardon, 1992.



Figure 4







32







Stratigraphy



The Port Radium-Echo Bay area is underlain
by volcano-sedimentary rocks of the Labine Group, which is subdivided into 3 main formations: Port Radium, Echo Bay, Cameron Bay.
These are further subdivided into members which represent two main eruptive caldera phases: an early phase characterized by relatively
gas-poor eruptions of andesitic lavas (Port Radium and Echo Bay Formations) and a younger, more gas-charged phase of voluminous
siliceous volcanics and volcaniclastics (within the Cameron Bay and Feniak Formations) (Hildebrand, 1981). The stratigraphy can
be locally isolated into distinct calderas, 3 to 5 km in diameter. The two cycles of caldera collapse, resurgence and intermediate
plutonism are characterized by cone facies andesite, marr diatreme breccias and caldera fill sediments.



Lithogeochemical studies indicate that
the Labine sequence is high in potassium (K), calc-alkaline belt of stratavolcanoes similar to Andean continental arc sequences
(Ewart and LeMaitre, 1980). The sequence has only been subjected to low grade metamorphism (zeolite facies), with local contact
metamorphic effects (i.e. hornfels) noted in supracrustal rocks flanking large plutons of the Great Bear Batholith series.



The Eldorado & Contact
Lake IOCG & Uranium Projects 2013 Explorations Program



Management has determined that due to the
remote location of the projects, high cost of exploration in Canada’s far north and other factors, no work was done in 2013
and no further work is planned for the 2013 field season.



Mineral Claim and Lease Claim
Payments in the Northwest Territories



In order to retain property title or mineral
claims in the Northwest Territories, we must complete and file assessment work of at least $4 per acre during the two-year period
immediately following the date the claim is recorded. In respect to the representation of work, the types of undertakings on the
claims are as follows:



| | · | Drilling
| | - | --------



| | · | Trenching
| | - | ---------



| | · | Sinking shafts
| | - | --------------



| | · | Geochemical and geophysical investigation made on the ground or by aircraft
| | - | ---------------------------------------------------------------------------



| | · | Surveyor claims must be proved by the surveyor general
| | - | ------------------------------------------------------



| | · | Work done in constructing roads and airstrips
| | - | ---------------------------------------------



We must pay annual payments to the federal
government in order to maintain lease claims.



There is no electricity available at the
Northwest Territories property sites, with surface water abundant within the property boundaries.



Accessibility,
LocalResourcesand Infrastructure



The best access to the area is from Yellowknife,
NT, using charter fixed wing aircraft which can land at the 900 meter long unmaintained gravel airstrip at the western shore of
Glacier Lake, which lies in the centre of the Eldorado-Contact Lake Project area. A road extends west from the airstrip to the
area of the Echo Bay and Eldorado Mines. Bulk freight has also previously been mobilized by seasonal barging along the Mackenzie
River, from Alberta to Tulita (Fort Norman), NT, on the western shore of Great Bear Lake. When mining was active in the area, a
barge service also operated along the Bear River from Tulita to Deline, and across Great Bear Lake to the various mining operations.
Lake barging service is in limited operation.



Currently, the Northwest Territories Department
of Transport maintains a winter road from Yellowknife to Rae-Edzo and beyond, to Rae Lakes which is approximately 100 km south
of the property. Recent records indicate that local conditions have allowed this road to be open for a period of approximately
6 weeks, from mid- February to late March/early April. During operation of the silver mines at Camsell River and Echo Bay prior
to 1984, the winter road was extended to Port Radium, via Marian Lake and Camsell River.



Although the area immediately surrounding
the property lacks any significant infrastructure, logistical support and supplies are available from Yellowknife. There is no
electricity available at the property site, but surface water is abundant within the property boundaries. Established fishing camps
on the eastern side of Great Bear Lake also provide some support. The town of Yellowknife has a long history of mining, where the
services of many experienced explorers can be obtained. As well, personnel may be available from several smaller communities within
the Great Bear Lake area.





33







Contact Lake Mineral Claims
– Contact Lake, NT (Eldorado-Contact Lake Project)



During the year ended November 30, 2005,
we acquired a 100% undivided right, title and interest, subject to a 1% net smelter return royalty (“NSR”), in five
(5) mineral claims, totalling 1,801.82 ha (4,450.50 acres) located five miles southeast of Port Radium on Great Bear Lake, NT for
cash payments of $60,000 (paid) and 60,000 of our common shares (issued and valued at $72,000). We may purchase the NSR for a one-time
payment of $1,000,000. We completed additional staking in the area in order to increase the project size to sixteen (16) contiguous
claims, totalling 10,563.78 ha (26,103.57 acres). Collectively, the properties are known as the Contact Lake Mineral Claims. (Figure
5).



The area has traditionally been underexplored,
but encompasses a mineral rich portion of the Great Bear Magmatic Zone, and includes the Contact Lake Mineral Belt itself, approximately
15 km long.



A summary of our claims can be found below:



|Name         |  | Tag Number |  | Size (ha) |          
|------------ |  | ---------- |  | --------- | ---------
|BEN 1        |  | F91861     |  |           | 1,003.30 
|BEN 2        |  | F91862     |  |           | 752.47   
|BON 1        |  | F91863     |  |           | 1,003.30 
|BON 2        |  | F91864     |  |           | 1,003.30 
|BON 3        |  | F91865     |  |           | 1,003.30 
|COBALT 1     |  | F91852     |  |           | 1,045.10 
|COBALT 2     |  | F91853     |  |           | 1,045.10 
|COBALT 3     |  | F91854     |  |           | 418.04   
|COBALT 4     |  | F91855     |  |           | 250.82   
|COBALT 5     |  | F91856     |  |           | 752.47   
|COBALT 6     |  | F91857     |  |           | 522.55   
|Lease # 4748 |  |            |  |           | 554.82   
|Lease # 4749 |  |            |  |           | 533.38   
|Lease # 4750 |  |            |  |           | 346.01   
|Lease # 4751 |  |            |  |           | 227.03   
|Lease # 4752 |  |            |  |           | 102.79   
|             |  |            |  |           |          
|             |  |            |  |           | 10,563.78



34







Figure 5







35







Our expenditures related to the Contact Lake
Mineral Claims can be summarized as follows:



|                               |  | For the year 
ended
November 30,
 2013 |        |  | For the year 
ended
November 30,
 2012 |  |       | For the year 
ended
November 30,
 2011 | 
|------------------------------ |  | -------------------------------------- | ------ |  | -------------------------------------- |  | ----- | -------------------------------------- | 
|                               |  | $                                      |        |  | $                                      |  |       | $                                      | 
|                               |  |                                        |        |  |                                        |  |       |                                        | 
|Exploration operating expenses |  |                                        |        |  |                                        |  |       |                                        | 
|Camp costs and field supplies  |  |                                        | -      |  |                                        |  | 1,575 |                                        | 
|Claim maintenance              |  |                                        | 10,120 |  |                                        |  | 5,134 |                                        | 
|                               |  |                                        |        |  |                                        |  |       |                                        | 
|                               |  |                                        | 10,120 |  |                                        |  | 6,709 |                                        | 



In
2006, we undertook a successful exploratory drill program (Phase 1) on our Eldorado & Contact Lake Projects. From June to October
2006, 14,475 metres of NQ drill core was recovered, and 6,470 samples including 289 standards were assayed. The 2006 drill program
targeted seven areas, 1) the K2 area in which there is a low-grade Cu+ Co, Au and Ag mineralized breccia system that has
strong affinities to an IOCG system, 2) the Echo Bay gossan at the end of the southeast arm of Echo Bay which marks the location
of a newly discovered silver zone; 3) a high-grade Cu-Ag-Mo-Zn-Pb-W mineralized hydrothermal breccia at Mile Lake, 4) uranium,
nickel, cobalt and silver mineralized zones adjacent to the past producing Eldorado mine site, 5) uranium, nickel, cobalt and silver
mineralized zones adjacent to the past producing Echo Bay mine site, 6) an area centered on a strong VTEM plus magnetic anomaly
near the southeast end of Echo Bay; and 7) the Thompson Showing of a high-grade Cu-Ag-Co-Ni-Au-U polymetallic vein.



In 2007, we completed Phase 2 of the exploratory
drill program based on the preliminary investigations from the 2006 drill program at the Eldorado & Contact Lake Project areas.
Our two base exploration camps, personnel and supporting infrastructures were fully operational from May to October, 2007. We completed
almost 20,000 meters of drilling in 72 drill holes and collected over 10,000 surface samples. The 2007 drill program targeted ten
areas; K2, Echo Bay South, Mag Hill, Glacier Creek, Breccia Island, Camelback, Skinny Lake and Contact Lake, located on the Contact
Lake Mineral Claims and Eldorado and Echo Bay, located on the Glacier Lake Mineral Claims.



In 2008, we targeted five areas on our
Eldorado-Contact Lake Project for further exploration drilling: K2, Skinny Lake, K4, Long Bay, and Gossan Island.



In 2009, because of the significant decline
in the price of uranium, coupled with the very high cost of exploration in the Northwest Territories, we carried out no on-site
exploration activities, demobilized the field camp and placed it in storage and completed a review and summary report.



No work is planned for this property in
2014.



Port Radium – Glacier Lake Mineral Leases,
NT (Eldorado-Contact Lake Project)



In 2005, we acquired a 100% undivided right,
title and interest, subject to a 2% NSR in four (4) mineral leases, totalling 2,520.78 ha (6,228.85 acres) (the “Glacier
Lake Mineral Leases”) (Figure 6) located one mile east of Port Radium on Great Bear Lake, NT for cash payments of
$30,000 (paid) and 72,000 of our common shares (issued and valued at $72,000). We may purchase one-half of the NSR for a one-time
payment of $1,000,000.



The Echo Bay lease (produced 23,779,178
ounces of silver) and the Port Radium – Eldorado lease (produced 15 million pounds of uranium and 8 million ounces of silver).
The Port Radium uranium belt was formerly one of Canada’s principal producers of Pitchblende uranium during the 1930s and
1940s.



No work is planned on this property in
2014.



A summary of our claims can be found below:



|Name         |  | Size (ha) |         
|------------ |  | --------- | --------
|Lease # 4815 |  |           | 843.77  
|Lease # 4816 |  |           | 104.81  
|Lease # 4817 |  |           | 872.50  
|Lease # 4818 |  |           | 699.70  
|             |  |           |         
|             |  |           | 2,520.78





36







Figure 6





37







Our expenditures related to the Port Radium – Glacier
Lake Mineral Leases can be summarized as follows:



|                               |  | For the year
 ended 
November 30,
 2013 |       |  | For the year
 ended 
November 30,
 2012 |  |       | For the year
 ended 
November 30,
 2011 | 
|------------------------------ |  | --------------------------------------- | ----- |  | --------------------------------------- |  | ----- | --------------------------------------- | 
|                               |  | $                                       |       |  | $                                       |  |       | $                                       | 
|                               |  |                                         |       |  |                                         |  |       |                                         | 
|Exploration operating expenses |  |                                         |       |  |                                         |  |       |                                         | 
|Claim maintenance              |  |                                         | 6,227 |  |                                         |  | 6,227 |                                         | 
|                               |  |                                         |       |  |                                         |  |       |                                         | 
|                               |  |                                         | 6,227 |  |                                         |  | 6,227 |                                         | 



Eldorado South IOCG & Uranium
Project, NT (Eldorado South Project)



During the year ended November 30, 2007,
we staked twenty four (24) claims (the “Eldorado South Uranium Mineral Claims”), and four (4) additional claims (the
“Eldorado West Uranium Mineral Claims”) located ten miles south of Eldorado uranium mine on the east side of Great
Bear Lake, NT and 680 km (423 miles) north of the city of Yellowknife, NT, collectively known as the Eldorado South Uranium Project.
During the year ended November 30, 2009, fourteen claims (14) were allowed to lapse. During the year ended November 30, 2012 and
up to April 5, 2013, three (3) claims were allowed to lapse. During the year ended November 30, 2013 and up to March 31, 2014,
three (3) claims were allowed to lapse The Eldorado South Uranium Project now consists of eight (8) mineral claims totaling 6,913.35
ha (17,082.89 acres) (Figure 7).



The Eldorado South claims cover a radiometric
anomaly that is over 3.5 kilometers in length and the expression suggests a potential near surface IOCG & uranium target. The
radiometric maps show a well defined uranium anomaly with a marked correlation of strong thorium (Th) and potassium (k) ratio patterns.
The Eldorado South Anomaly has never been drill tested. The Eldorado South Anomaly was discovered in 2006 as a result of the completion
of a High Resolution, Multi-Parameter Regional radiometric and magnetic geophysical survey which was conducted in July 2006. The
survey consisted of 16,708 line-kilometers at 100 meter line-spacing’s. The purpose of the radiometric survey was to measure
the gamma radiation field and locate prospective areas of high-grade uranium and poly-metallic deposition.



In December 2007, the Deline Land Corporation
passed a resolution placing a moratorium on any further uranium exploration and development on Deline District lands. The Deline
Land Corporation has stated publicly and reiterated that all current agreements between the Deline Land Corporation and the Company
would be fully honored. Several uranium mining moratoriums have been placed in several mining jurisdictions in Canada recently.
They include a three year moratorium on uranium mining in Labrador (April 2008) and a moratorium issued in the Deline District
(January 2008) in the Northwest Territories stating that they will not approve or consent to new uranium exploration or development
until the 26 recommendations of the Canada-Deline Uranium Table have been addressed to the satisfaction of the leadership of the
local community. The moratoriums do not apply to exploration for other minerals and mineral exploration activity is expected to
continue in full force.



On June 16, 2008, we completed our Community
Consultation in the community of Deline and finalized an expanded TEK (Traditional Education Knowledge) study for the region. Our
Land-Use permit application #SO7C-008 was deemed completed by the Sahtu Land and Water Board.



On July 14, 2008, we received final permit
approval from the Sahtu Land and Water Board (SLWB) for the issuance of a third “Class A”- 5 year 75,000 meter drill
permit (#S07C-008) for our Eldorado South Iron oxide, copper, gold, silver, and uranium project located in Canada’s Northwest
Territories. The Eldorado South permit (#S07C-008) is valid until July 10, 2013.



We completed a comprehensive First Nations
Traditional Educational Knowledge Report for this region which was completed to the satisfaction of the Deline Land Corporation
and the Community of Deline. We intend to further expand wildlife and environmental programs and baseline studies in the Eldorado
& Contact Lake uranium districts as the projects advance. On December 19, 2005 we signed a 5 Year Cooperation, Access and Benefits
Agreement with the Deline Land Corp and the Sahtu Dene & Metis for the eastern Great Bear Lake Region.





38







In our effort to maintain strong relations
and an ongoing working relationship with the Deline Land Corp. and the people of Sahtu-Dene First Nations peoples living in Deline,
we visited and participated in a comprehensive Community Consultation on June 18, 2008 in the community of Deline, NT. We made
a detailed presentation to the community of the results of our 2007 exploration & drilling program and our future plans for
expanded exploration and drilling in the 2008 season. We addressed various environmental issues, environmental best practices management
strategy, sustainable development philosophy and our policy of First Nations community outreach and development in the Sahtu Region.
We continue to maintain strong relations and a solid working relationship with the Deline Land Corp. and the people of Deline Sahtu-Dene
First Nations. We place the long term relationship and well-being of the Community of Deline, as the cornerstone to a successful
working relationship and a corporate priority, governing our long-term principles with regard to the responsible sustainable development
in the Sahtu Region.



No work is planned on this property in
2014.



A summary of our claims can be found below:



|Name  |  | Tag Number |  | Size (ha) |         
|----- |  | ---------- |  | --------- | --------
|PR 3  |  | K06183     |  |           | 1,045.10
|PR 4  |  | K06194     |  |           | 1,045.10
|PR 8  |  | K06198     |  |           | 1,045.10
|PR 9  |  | K06199     |  |           | 1,045.10
|PR 11 |  | K06201     |  |           | 480.77  
|PR 12 |  | K06202     |  |           | 1,045.10
|PR 13 |  | K06203     |  |           | 1,045.10
|PR 19 |  | K06209     |  |           | 161.98  
|      |  |            |  |           |         
|      |  |            |  |           | 6,913.35



39







Figure 7







40







We did not incur any expenditures related
to the Eldorado South Uranium Project over the past three fiscal years.



Port Radium - Crossfault Lake Mineral Claims, NT
(Eldorado-Contact Lake Project)



In 2005, we acquired a 100% undivided right,
title and interest, subject to a 2% NSR, in five mineral claims totalling 1,789.22 ha (4,421.24 acres) (the “Port Radium
– Crossfault Lake Mineral Claims”) located north of Port Radium on Great Bear Lake, NT, for cash payments of $60,000
(paid) and 90,000 of our common shares (issued and valued at $297,000). We may purchase one-half of the NSR for a one-time payment
of $1,000,000 (Figure 8).



No work is planned on this property in
2014.



A summary of our claims can be found below:



|Name     |  | Tag Number |  | Size (ha) |         
|-------- |  | ---------- |  | --------- | --------
|GOSSAN 1 |  | F91851     |  |           | 418.04  
|GOSSAN 2 |  | F91858     |  |           | 418.04  
|CROSS    |  | F91458     |  |           | 2.10    
|RAD 1    |  | F91859     |  |           | 627.06  
|RAD 2    |  | F91860     |  |           | 323.98  
|         |  |            |  |           | 1,789.22



We did not incur any expenditures related
to the Crossfault Lake Property over the past three fiscal years.





41







Figure 8





42







Port Radium - Eldorado Uranium Mineral Claims, NT
(Eldorado-Contact Lake Project)



In 2005, we entered into a lease agreement
with South Malartic Exploration Inc. to purchase a 50% undivided interest, title and right in three mineral claims, totalling 106.53
ha (263.13 acres) (the “Eldorado Uranium Mineral Claims”) located at Port Radium on Great Bear Lake, NT, for a cash
payment of $20,000 (paid) (Figure 9).



Acquisition of the 50% ownership in the
property entitled us to full access and possession to a detailed technical library, exploration reports and historical data in
South Malartic’s possession. Also, included in the data acquisition were reports, maps, historical uranium production records,
drill logs and uranium assay reports.



The property is located on Labine Point
at Port Radium, NT. Starting in 1933, the mine produced 15 million pounds of high grade uranium and 8 million ounces of silver,
plus copper, nickel, radium, lead and polonium. The mine currently has about 40 km of existing underground workings on 14 levels.



J. Fingler, P.Geo., of Vancouver, British
Columbia completed a National Instrument 43-101 compliant technical report dated August 21, 2006 (“Technical Report”)
on the Eldorado-Port Radium Property. The Technical Report provides a comprehensive description of the Eldorado-Port Radium Property
including previous work, geology and mineralization and also makes recommendations for further work on the Property.



No work is planned on this property in
2014.



A summary of our claims can be found below:



|Name     |  | Tag Number   |  | Size (ha) |       
|-------- |  | ------------ |  | --------- | ------
|ELDORADO |  | Lease # 3032 |  |           | 30.32 
|ELDORADO |  | Lease # 3033 |  |           | 44.81 
|ELDORADO |  | Lease # 3034 |  |           | 31.40 
|         |  |              |  |           |       
|         |  |              |  |           | 106.53



Our expenditures related to the Eldorado
Uranium Mineral Claims can be summarized as follows:



|                              |  | For the year ended November 30,  2013 |   |  | For the year ended November 30,  2012 |  |     | For the year ended November 30,  2011 | 
|----------------------------- |  | ------------------------------------- | - |  | ------------------------------------- |  | --- | ------------------------------------- | 
|                              |  | $                                     |   |  | $                                     |  |     | $                                     | 
|                              |  |                                       |   |  |                                       |  |     |                                       | 
|Exploration operating expense |  |                                       |   |  |                                       |  |     |                                       | 
|Claim maintenance             |  |                                       | - |  |                                       |  | 526 |                                       | 
|                              |  |                                       |   |  |                                       |  |     |                                       | 
|                              |  |                                       | - |  |                                       |  | 526 |                                       | 



43







Figure 9





44







North Contact Lake Mineral Claims, NT (Eldorado-Contact
Lake Project)



In 2006, we acquired a 100% right, interest
and title, subject to a 2% NSR, in eleven mineral claims (the “North Contact Lake Mineral Claims”), for a payment of
$75,000 cash (paid) and the issuance of 50,000 of our common shares (issued and valued at $182,500). We may purchase one-half of
the NSR for a one-time payment of $1,000,000. The North Contact Lake Mineral Claims are situated north of Contact Lake on Great
Bear Lake approximately 680 km (423 miles) north of Yellowknife, NT, totalling 6,305.51 ha (15,581.20 acres) (Figure 10).



The property is the northern extension
of the Contact Lake Project and includes the Contact Lake – Echo Bay Stato-volcanic complex, having hundreds of known or
recorded copper, gold, silver, nickel, cobalt, REE and high grade uranium occurrences identified in Proterozoic rocks.



No work is planned on this property in
2014.



A summary of our claims can be found below:



|Name  |  | Tag Number |  | Size (ha) |         
|----- |  | ---------- |  | --------- | --------
|EC 1  |  | F98661     |  |           | 250.82  
|EC 2  |  | F98662     |  |           | 940.59  
|EC 3  |  | F98663     |  |           | 940.59  
|EC 4  |  | F98664     |  |           | 587.35  
|EC 5  |  | F98665     |  |           | 55.60   
|EC 6  |  | F98666     |  |           | 192.30  
|EC 7  |  | F98667     |  |           | 477.82  
|EC 8  |  | F98668     |  |           | 1,045.10
|EC 9  |  | F98669     |  |           | 1,045.10
|EC 10 |  | F98670     |  |           | 731.57  
|EC 24 |  | F98369     |  |           | 38.67   
|      |  |            |  |           |         
|      |  |            |  |           | 6,305.51



We did not incur any expenditures related
to the North Contact Lake Mineral Claims over the past three fiscal years.



45







Figure 10







46









Longtom
Property (Damp Claim Lease), NT



We hold a 50% undivided interest subject
to a 2% NSR, totalling 355.34 ha (878.05 acres), in the Longtom Property (the “Longtom Property”) located about 350
km northwest of Yellowknife, NT. The Longtom Property is registered in the name of the Company (Figure 11).



We have the right to acquire the remaining
50% interest in the Longtom Property (the “Longtom Option”) for $315,000 payable either in cash or50% ($157,500)
in cash and 50% in common shares of the Company. The deemed price of our shares issued on the exercise of the Longtom Option would
be the average TSX Venture Exchange closing market price of our common shares on the five trading days immediately preceding and
the five trading days immediately following the date that the option is exercised. We are compelled to exercise the Longtom Option:
1) within 90 days from the date it has incurred $5,000,000 in exploration expenditures on the Longtom Property; or 2) at the date
we advise the optionor in writing that it will complete the Longtom Option to purchase the remaining 50% interest in the Longtom
Property.



We have the right to enter into joint venture
or option agreements related to the Longtom Property with third parties prior to the exercise of the Longtom Option.



In 2003, we entered into a Letter of Intent
(the “Letter of Intent”) with Fronteer Development Group Inc. (“Fronteer”). On October 26, 2006, Fronteer
earned its 75% interest in the Longtom Property by paying us $15,000 cash (received) and spending an aggregate of $500,000 (incurred)
on exploration expenditures over three years.



The Longtom Property is located 50 km southeast
of Great Bear Lake, NT.



The Longtom property is located within
the Bear Geological Province, bounded by the Coronation Geo-syncline to the East and the Great Bear Magmatic Zone to the West.
All known mineral deposits and showings occur along north-south and north-east fault zones and north-west fold axial planes. These
features are related to the Wopmay Deformation Zone, which was reactivated during an east-west shortening event, resulting in north-south
folding and the development of pervasive north-east striking strike slip faults. The development of these faults undoubtedly played
a role in the development of IOCG style mineralization in the Bear Province.



The rocks of the main Longtom claim area
have been divided into seven lithological units. Volcanic and sedimentary units dip moderately to steeply to the south in the area
of the Damp prospect and gently to the north northeast in the Devil’s Lake area. All units except the later diabase dykes
are affected by northeast trending faults and fractures.



No work is planned on this property in
2014. We consider this property immaterial to the Company.



We hold the following mineral lease claim
at Longtom:



|Claim Name |  | Tag Number           |  | Size (ha) |       
|---------- |  | -------------------- |  | --------- | ------
|DAMP       |  | Mineral Lease # 3759 |  |           | 355.34



47







Figure 11







48







Our expenditures related to the Longtom
Property are summarized as follows:



|                               |  | For the year
 ended
November 30,
 2013 |     |  | For the year
 ended
November 30,
 2012 |  |     | For the year
 ended
November 30,
 2011 | 
|------------------------------ |  | -------------------------------------- | --- |  | -------------------------------------- |  | --- | -------------------------------------- | 
|                               |  | $                                      |     |  | $                                      |  |     | $                                      | 
|                               |  |                                        |     |  |                                        |  |     |                                        | 
|Exploration operating expenses |  |                                        |     |  |                                        |  |     |                                        | 
|Claim maintenance              |  |                                        | 893 |  |                                        |  | 893 |                                        | 
|                               |  |                                        |     |  |                                        |  |     |                                        | 
|                               |  |                                        | 893 |  |                                        |  | 893 |                                        | 



Most previous work on the property was
concentrated on the Damp Zone, a relatively small area near its north end. The mineralization occurs in a specular hematite-magnetite
breccia, similar to that seen at major IOCG deposits. Shallow holes were drilled at the Damp Zone in 1988 (16 holes by CEGB totaling
1200m) and 1997 (4 holes by Mongolia Gold Resources totaling 944). Appreciable copper, gold, cobalt, silver, uranium bismuth and
nickel were obtained over considerable widths in a zone of albite and hematite-magnetite alteration in volcanic flows. The Damp
Zone is near the north end of a strong magnetic anomaly.



In 2003, we carried out semi-regional gravity
and IP surveys and followed up with a diamond drill program. A 12-hole (2634 m) drill program was carried out to test anomalies
arising from the magnetic, gravity and IP surveys. This drill program intersected IOCG-style mineralization and anomalous copper
values. The strongest combined magnetic-gravity-chargeability anomalies on the property remain untested.



During July and early August 2004, a nine-hole
NQ diamond drilling program was completed on the Longtom Property. A total of 2132 metres were drilled over the course of the program.
Drilling was designed to target IOCG style mineralization. In January 2005, a five day reconnaissance program was carried out in
order to re-examine drill core from historic operations.



Central
Canada Property (Ontario)



Nature of Interest and Terms of Acquisition



The Central Canada gold project consists
of seven claims totaling 24 claim units (~3.8 km2) located approximately 20 km east of the town of Atikokan and 190
km west of the City of Thunder Bay in the Province of Ontario.



We hold our interest in this Property under
an Option Agreement dated March 3, 2014 pursuant to which Alberta Star may earn a 60% interest in the Central Canada gold property
from TerraX Minerals Inc. In order to exercise the Option, Alberta Star must make cash payments to TerraX totaling $85,000 over
a three year period, with $10,000 paid upon execution of the Option Agreement, $25,000 due on the second anniversary of the execution
of the Option Agreement and a further $50,000 due on the third anniversary date. Alberta Star must also incur an aggregate of $500,000
in exploration expenditures over a three year period, with $100,000 to be incurred by March 31, 2015, a further $150,000 to be
incurred by March 31, 2016 and the remaining $250,000 to be incurred by March 31, 2017. Alberta Star will also be responsible for
payment of the annual pre-production royalty of $10,000 to the original vendors of the Central Canada Property due annually in
December beginning with the next payment due on December 11, 2014.



There are no encumbrances, either registered
or unregistered, affecting title to the mineral claims except for the 2.5% NSR Royalty retained by the original vendors.



49









Description, Location and Access



The Central Canada Property consists of
the following mineral claims located in the Hutchinson Township of the Province of Ontario:



|Township   |  | Claim   |  |  | Recording Date |  | Expiry Date |  | Units |   |    | Work Required |  
|---------- |  | ------- |  |  | -------------- |  | ----------- |  | ----- | - | -- | ------------- | -
|HUTCHINSON |  | 3008652 |  |  | 2003-Aug-05    |  | 2017-Aug-05 |  |       | 4 |    |               | $
|HUTCHINSON |  | 3008653 |  |  | 2003-Aug-05    |  | 2017-Aug-05 |  |       | 4 |    |               |  
|HUTCHINSON |  | 3008654 |  |  | 2003-Aug-05    |  | 2017-Aug-05 |  |       | 8 |    |               |  
|HUTCHINSON |  | 3014051 |  |  | 2003-Nov-13    |  | 2016-Nov-13 |  |       | 3 |    |               |  
|HUTCHINSON |  | 3014052 |  |  | 2003-Nov-13    |  | 2016-Nov-13 |  |       | 2 |    |               |  
|HUTCHINSON |  | 4251109 |  |  | 2009-Jun-26    |  | 2017-Jun-26 |  |       | 2 |    |               |  
|HUTCHINSON |  | 4251110 |  |  | 2009-Jun-26    |  | 2017-Jun-26 |  |       | 1 |    |               |  
|Total      |  |         |  |  |                |  |             |  |       |   | 24 |               |  



Access to
the Central Canada property is reasonably good. Access is via Highway 623 from Highway 11, approximately 24 km east of Atikokan.
10.2 km north of Highway 11, one turns west onto the Marmion Lake Shore Road. After 5.9 km, turn south onto a gravel road, and
travel approximately 2.8 km to the gas pipeline. From this point, access is by foot, ATV or snowmobile, 1.5 km east to the heart
of the property. The property is approximately 20 km east of Atikokan, a small mining-friendly town with local labour and services.
It is 190 km west of Thunder Bay, a city with a long mining history and home to personnel with the skills to work in the mining
industry.







The climate of the project area is continental
in nature, with cold winters (-10 to -35oC) and warm summers (+10 to +35oC). Seasonal variations affect exploration to
some extent (geological mapping cannot be done in the winter, geophysics and drilling are best done at certain times of the year
etc.), but the climate would not significantly hamper mining operations.



The property has gently rolling topography
with a maximum relief of approximately 30 m. Elevation varies from 420 to 450 m Above Sea Level. Approximately 40% of the property
is covered by lakes, but in general the property is dominated by forest and lesser swamps. Parts of the property have been logged
in the past, so the present forest is second growth, a mixture of jackpine, spruce, birch and poplar trees; swampier areas contain
small spruce trees and alders. The bulk of the property is covered by thin overburden, and outcrop density is moderate.



Logistical support and supplies are available
from the town of Atikokan, 24 km to the west. There is no electricity available at the property site, but surface water is abundant
within the property boundaries.





50







Maintaining Mineral Claims
in the Province of Ontario



In order to retain property title or mineral
claims in Ontario, we must complete and file assessment work of at least $400 per 16 hectare claim unit during the two-year period
immediately following the date the claim is recorded and $400 per claim unit per year thereafter.



Geology, History of Exploration and
Status



The Central Canada property straddles the
southern contact of the Marmion Batholith, host to the Hammond Reef gold deposit, 19 km to the northwest. The bulk of the property
is underlain by mafic rocks outside the batholith; these have been intruded by abundant felsic dikes presumably related to the
Marmion Batholith. Gold mineralization is associated with quartz-iron carbonate veins with minor pyrite and local tourmaline and/or
arsenopyrite. These veins are most common in or close to felsic dikes. Dikes and veins trend easterly, parallel to the contact
of the Marmion Batholith and to the strike of the regional scale Quetico Fault, which also occurs on the property. TerraX conducted
due diligence on the property in October 2009, collecting 18 grab samples of veins and alteration. Assay values range from 9
ppb to 22.9 g/t gold, and seven samples had >250 ppb Au. This includes results of 2.8, 4.48 and 22.9 g/t gold.



A shaft was sunk on the property in 1901
and deepened to 130’ in 1929. A 1929 Ontario Department of Mines report notes pyrite, chalcopyrite, tetrahedrite and free
gold at 30 to 40’ depth in the shaft, and values up to 21.0 g/t gold. Eighteen holes were drilled from 1929 to 1935. A pilot
mill was constructed on site, but there is no record of gold production. Three short holes were drilled in 1965, with a best intersection
of 7’ (2.13 m) @ 44 g/t gold. Thirteen holes were drilled in 1985 - the best intersection was 3.8’ (1.16 m) @ 30 g/t
gold. A 2003 Ontario Geological Survey property visit report noted that “gold mineralization is hosted by quartz-tourmaline
veins within sheared, deformed, carbonatized and sericitized quartz porphyry. Historical reports indicated up to 7 parallel and
extensional quartz vein sets over a strike length of 1000 m and across a width of 400 m...... Exploration programs should
consider using induced polarization (IP) geophysical surveys to delineate disseminated sulphide mineralized zones which locally
contain gold”. Freewest Resources stripped 17 areas on the property in 2004, and collected 54 samples, of which 21 returned
results >100 ppb gold, and the three highest were 1.24, 4.17 and 7.96 g/t gold. Freewest’s report recommended geophysics
and drilling, but this was not completed.



Induced Polarization (“IP”)
and magnetic surveys were conducted in February/March 2010 on the Central Canada property. Geophysical surveying covered the main
mineralized zone, which returned grab sample values up to 22.9 g/t Au in 2009. Unfortunately, this grid was not entirely
surveyed due to poor weather conditions, but two incompletely defined chargeability anomalies were detected. One of these is roughly
coincident with the 22.9 g/t Au sample, and one occurs in an area not previously investigated by TerraX.



A comprehensive
prospecting program was carried out by TerraX on the Central Canada property in June 2010. Extensive zones of shearing and carbonate-chlorite-sericite
alteration with quartz veining were noted across the property. This prospecting program collected
21 new grab samples. Results ranged from below detection to a high of 39.6 g/t Au on a sample collected near the circa 1900
shaft that occurs on the property. Importantly, two samples of approximately 1 g/t Au (907 and 1070 ppb) were taken from a new
showing 500 m northeast of the shaft. This showing consists of a northeast trending sericite carbonate shear with disseminated
to semi-massive pyrite and arsenopyrite.



In September 2010 TerraX conducted channel
sampling on the Central Canada property, following up on assay results from prospecting undertaken at Central Canada in early 2010
that returned a grab sample of 39.6 g/t gold. One hundred and twenty-three channel samples were collected over a strike
length of approximately 120 m, perpendicular to a series of easterly trending quartz-carbonate-pyrite veins and felsic dikes. Twenty-four
samples contained anomalous gold (20 ppb or higher), with a high value of 7.5 g/t Au. The lowest values were below detection levels.
Four separate anomalous intervals were obtained, namely;



| | - | 2.0 m @ 2.51 g/t Au (including 0.45 m @7.5 g/t Au);
| | - | ---------------------------------------------------

| | - | 12.0 m @ 334 ppb Au;
| | - | --------------------

| | - | 6.2 m @ 325 ppb Au; and
| | - | -----------------------

| | - | 2.65 m @ 754 ppb Au.
| | - | --------------------



Based on these results and historical information,
TerraX commenced drilling at Central Canada in March 2012. Three holes (363 m) were drilled approximately 55 meters apart to test
a 110 m strike length of the main mineralized structure, which trends east-northeast. Drill holes were aligned to cut normal to
the mineralized structures identified in the channel sampling. Drill intersections from southwest to northeast include 23.30
m @ 0.83 g/t Au (including 0.63 m @ 7.36 g/t Au) in hole CC12-03, 10.61 m @ 1.32 g/t Au (including 1.82 m
@ 4.77 g/t Au) in hole CC12-01, and 8.92 m @ 0.74 g/t Au in hole CC12-02.





51







To follow-up on the success of this initial
limited drill program at Central Canada, we are planning further drilling to determine the overall size of the mineralized structure,
which remains open along strike and down-dip. We currently anticipate a budget of $100,000 for further drilling. Hole CC12-02
encountered extensive alteration and was extended to a final depth of 157 meters. Several anomalous gold zones parallel to the
main structure were intersected in this hole indicating the potential for multiple gold horizons at Central Canada. All three
holes had significant gold intersections on the main structure indicating a continuously mineralized zone of consistent gold grade.



ITEM 4A
- Unresolved Staff Comments



Not applicable.



ITEM 5
- Operating and Financial Review and Prospects



The Company is engaged in the acquisition,
exploration and development of mineral resource properties. We had no operating revenue from our continuing operations during the
years ended November 30, 2013, 2012 and 2011 as we were, and remain, at an exploration stage with respect to our mineral properties.
In August 2010, the Company diversified into the oil and natural gas resource sector with the acquisition of revenue producing
resource assets to complement our existing mining interests and provide us with a working interest partner for future expansion
in the oil and natural gas resource sector. Revenues reported for the fiscal years ended November 30, 2013, 2012 and 2011 are in
relation to our discontinued petroleum operations.



On April 8, 2013, the Company entered into
an agreement with Petrocapita for the sale of its petroleum and natural gas properties in Alberta and Saskatchewan for cash consideration
of $1,875,000. The sale to Petrocapita was completed on April 23, 2013 for total net cash consideration of $1,900,513 after taking
into account initial industry standard adjustments to the agreed purchase price of $1,875,000. The effective date of this transaction
was March 1, 2013. The Company decided to sell its petroleum and natural gas assets because of continued decline in netbacks for
heavy oil in Western Canada.



This discussion and analysis of the operating
results and financial position of our Company for the three years ended November 30, 2013, 2012 and 2011 should be read in conjunction
with the financial statements and the related notes included in Item 18. This section contains ‘forward-looking statements”.
See “Cautionary Note on Forward-Looking Statements”.



Summary of Significant Accounting Policies



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



Areas requiring a significant degree of
estimation and judgment relate to the recoverability of the carrying value of petroleum and natural gas assets, fair value measurements
for financial instruments and share-based payments, the recognition and valuation of provisions for decommissioning liabilities,
the recoverability and measurement of deferred tax assets and liabilities and ability to continue as a going concern. Actual results
may differ from those estimates and judgments.



Cash and cash equivalents



Cash and cash equivalents include highly
liquid investments with original maturities of three months or less.





52







Property, plant and equipment



Items of property, plant and equipment,
which include petroleum and natural gas development and production assets, are measured at cost less accumulated depletion and
depreciation and accumulated impairment losses, net of reversals. Development and production assets are grouped into cash generating
units for impairment testing. When significant parts of an item of property, plant and equipment, including petroleum and natural
gas interests, have different useful lives, they are accounted for as separate items.



Gains and losses on the disposal of an
item of property, plant and equipment, including petroleum and natural gas interests, are determined by comparing the proceeds
from disposal with the carrying amount of property, plant and equipment and are recognized net in profit or loss.



Costs incurred subsequent to the determination
of technical feasibility and commercial viability and the costs of replacing parts of property, plant and equipment are recognized
as petroleum and natural gas development and production assets only when they increase the future economic benefits embodied in
the specific asset to which they relate. All other expenditures are recognized in profit or loss as incurred. Such capitalized
petroleum and natural gas assets generally represent costs incurred in developing proven and/or probable reserves and bringing
on or enhancing production from such reserves. The carrying amount of any replaced or sold component is derecognized. The costs
of the day-to-day servicing of oil and gas properties are recognized in profit or loss as incurred.



The net carrying value of petroleum and
natural gas development and production assets is depreciated using the unit of production method by reference to the ratio of production
in the year to the related proven and probable reserves, including estimated future development costs. Future development costs
are estimated taking into account the level of development required to bring reserves into production. These estimates are reviewed
by independent reserve engineers at least annually. Changes in estimates such as quantities of proved and probable reserves that
affect unit-of-production calculations are applied on a prospective basis.



Other items of property, plant and equipment
are depreciated over their estimated useful lives using the declining balance method at the following annual rates with half the
rate applied in year of acquisition:



|Computer equipment     |  | 30% 
|---------------------- |  | ----
|Computer software      |  | 100%
|Furniture and fixtures |  | 20% 
|Equipment              |  | 20% 



Exploration and evaluation properties



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



Option payments received are treated as
a reduction of the carrying value of the related property and deferred costs until the receipts are in excess of costs incurred,
at which time they are credited to income. Option payments are at the discretion of the optionee, and accordingly, are recorded
on a cash basis.



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



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



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



Revenue recognition



Petroleum and natural gas revenues are
recorded when title passes, the amount is determinable and collection is reasonably assured.



Decommissioning, restoration and similar
liabilities



The Company recognizes provisions for statutory,
contractual, constructive or legal obligations associated with the reclamation of mineral properties and retirement of long-term
assets, when those obligations result from the acquisition, construction, development or normal operation of the assets. The net
present value of future cost estimates arising from the decommissioning of plant, site restoration work and other similar retirement
activities is added to the carrying amount of the related asset, and depreciated on the same basis as the related asset, along
with a corresponding increase in the provision in the period incurred. Discount rates using a pre-tax rate that reflect the current
market assessments of the time value of money are used to calculate the net present value.





53







The Company’s estimates of reclamation
costs could change as a result of changes in regulatory requirements, discount rates and assumptions regarding the amount and timing
of the future expenditures. These changes are recorded directly to the related asset with a corresponding entry to the provision.



Changes in the net present value, excluding
changes in the Company’s estimates of reclamation costs, are charged to profit or loss for the period. The net present value
of reclamation costs arising from subsequent site damage that is incurred on an ongoing basis during production are charged to
profit or loss in the period incurred. The costs of reclamation projects that were included in the provision are recorded against
the provision as incurred. The costs to prevent and control environmental impacts at specific properties are capitalized in accordance
with the Company’s accounting policy for exploration and evaluation properties.



Share-based payments



Share-based payments to employees are measured
at the fair value of the instruments issued and recognized over the vesting periods. Share-based payments to non-employees are
measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined
the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received.
The corresponding amount is recorded to contributed surplus. The fair value of options is determined using the Black-Scholes Option
Pricing Model which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and
adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity
instruments granted shall be based on the number of equity instruments that will eventually vest.



Flow-through shares



Any premium received by the Company on
the issuance of flow-through shares is initially recorded as a liability and included in trade and other payables. Upon renouncement
by the Company of the tax benefits associated with the related expenditures, a deferred tax liability is recognized and the flow-through
liability will be reversed. To the extent that suitable deferred tax assets are available, the Company will reduce the deferred
tax liability and record a deferred tax recovery.



Taxation



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



Deferred tax liabilities are generally
recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences
to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can
be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from
the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither
the taxable profit nor the accounting profit.



The carrying amount of deferred tax assets
is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will
be available to allow all or part of the deferred income tax asset to be utilized.



Deferred tax assets and liabilities are
measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based
on the tax rates that have been enacted or substantively enacted at the reporting date.



Foreign currency translation



The Company’s reporting currency
and the functional currency of all of its operations is the Canadian dollar as this is the principal currency of the economic environment
in which they operate.



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



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





54







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



Loss per share



Basic per share amounts are calculated
by dividing the profit or loss attributable to shareholders of the Company by the weighted average number of shares outstanding
during the period. Diluted per share amounts are determined by adjusting the profit or loss attributable to common shareholders
and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares, which consist
of share purchase warrants and stock options.



Financial assets



Financial assets are classified as financial
assets at fair value through profit or loss (“FVTPL”), held-to-maturity, loans and receivables, available-for-sale
financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Company determines
the classification of its financial assets at initial recognition. Financial assets are recognized initially at fair value. The
subsequent measurement of financial assets depends on their classification as follows:



Financial assets at FVTPL



Financial assets are classified as held
for trading and are included in this category if acquired principally for the purpose of selling in the short term or if so designated
by management. Derivatives, other than those designated as effective hedging instruments, are also categorized as held for trading.
These assets are carried at fair value with gains or losses recognized in profit or loss. Transaction costs associated with financial
assets at FVTPL are expensed as incurred. Cash and cash equivalents are included in this category of financial assets.



Held-to-maturity and loans and receivables



Held-to-maturity and loans and receivables
are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are
carried at amortized cost using the effective interest method if the time value of money is significant. Gains and losses are recognized
in profit or loss when the financial asset classified in this category are derecognized or impaired, as well as through the amortization
process. Transaction costs are included in the initial carrying amount of the asset. Trade and other receivables is classified
as loans and receivables.



Available-for-sale



Available-for-sale financial assets are
those non-derivative financial assets that are not classified as loans and receivables. After initial recognition, available-for-sale
financial assets are measured at fair value, with gains or losses recognized within other comprehensive income. Accumulated changes
in fair value are recorded as a separate component of equity until the investment is derecognized or impaired. Transaction costs
are included in the initial carrying amount of the asset.



The fair value is determined by reference
to bid prices at the close of business on the reporting date. Where there is no active market, fair value is determined using valuation
techniques. Where fair value cannot be reliably measured, assets are carried at cost.



Derivatives designated as hedging instruments
in an effective hedge



The Company does not hold or have any exposure
to derivative instruments.



Financial liabilities



Financial liabilities are classified as
financial liabilities at FVTPL, derivatives designated as hedging instruments in an effective hedge, or as financial liabilities
measured at amortized cost, as appropriate. The Company determines the classification of its financial liabilities at initial recognition.
The measurement of financial liabilities depends on their classification, as follows:





55







Financial liabilities at FVTPL



Financial liabilities at FVTPL has two
subcategories, including financial liabilities held for trading and those designated by management on initial recognition. Transaction
costs on financial liabilities at FVTPL are expensed as incurred. These liabilities are carried at fair value with gains or losses
recognized in profit or loss.



Financial liabilities measured at amortized
cost



All other financial liabilities are initially
recognized at fair value, net of transaction costs. After initial recognition, other financial liabilities are subsequently measured
at amortized cost using the effective interest method. Amortized cost is calculated by taking into account any issue costs, and
any discount or premium on settlement. Gains and losses arising on the repurchase, settlement or cancellation of liabilities are
recognized respectively in interest, other revenues and finance costs. Trade payables are included in this category of financial
liabilities.



Derivatives designated as hedging instruments
in an effective hedge



The Company does not hold or have any exposure
to derivative instruments.



Impairment of financial assets



Financial assets, other than financial
assets at FVTPL, are assessed for indicators of impairment at each period end.



Assets carried at amortized cost



If there is objective evidence that an
impairment loss on assets carried at amortized cost have been incurred, the amount of the loss is measured as the difference between
the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s
original effective interest rate. The carrying amount of the asset is reduced, with the amount of the loss recognized in profit
or loss.



If, in a subsequent period, the amount
of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized,
the previously recognized impairment loss is reversed to the extent that the carrying value of the asset does not exceed what the
amortized cost would have been had the impairment not been recognized. Any subsequent reversal of an impairment loss is recognized
in profit or loss.



Available-for-sale



If an available-for-sale financial asset
is impaired, the cumulative loss previously recognized in equity is transferred to profit or loss. Any subsequent recovery in the
fair value of the asset is recognized within other comprehensive income.



Derecognition of financial assets and
liabilities



Financial assets are derecognized when
the rights to receive cash flows from the assets expire or, the financial assets are transferred and the Company has transferred
substantially all the risks and rewards of ownership of the financial assets. On derecognition of a financial asset, the difference
between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss
that had been recognized directly in equity is recognized in profit or loss.



For financial liabilities, they are derecognized
when the obligation specified in the relevant contract is discharged, cancelled or expires. The difference between the carrying
amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.



Impairment of non-financial assets



The carrying amount of the Company’s
assets is reviewed for an indication of impairment at the end of each reporting period. If an indication of impairment exists,
the Company makes an estimate of the asset’s recoverable amount. Individual assets are grouped for impairment assessment
purposes at the lowest level at which there are identifiable cash flows that are largely independent of the cash flows of other
groups of assets. Recoverable amount of an asset group is the higher of its fair value less costs to sell and its value in use.
In assessing value in use, the estimated future cash flows are adjusted for the risks specific to the asset group and are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money.





56







Where the carrying amount of an asset group
exceeds its recoverable amount, the asset group is considered impaired and is written down to its recoverable amount. Impairment
losses are recognized in profit or loss.



An assessment is made at each reporting
date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased.
If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss is reversed only if there
has been a change in the estimates used to determine the asset’s recoverable amount. An impairment loss is reversed only
to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation, if no impairment loss had been recognized.



Related party transactions



Parties are considered to be related if
one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other
party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control,
related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction when there
is a transfer of resources or obligations between related parties.



Joint Arrangements



Substantially all of the Company’s
petroleum and natural gas exploration and development activities involve jointly controlled assets; accordingly, the financial
statements reflect only the Company’s share of these jointly controlled assets and a proportionate share of the relevant
revenue and related costs.



General Assumptions and Policies



Exchange Rates



Transaction amounts denominated in foreign
currencies are translated into functional currency at exchange rates prevailing at transaction dates.



Inflation



Based on prior history for at least the
past two fiscal years, we do not believe that inflation will have a materially adverse effect on our financial condition. However,
no assurance can be given that we will not experience a substantial increase in inflation.



Financial Instruments and
Other Instruments



Fair Value



The fair value of financial assets and
financial liabilities at amortized cost is determined in accordance with generally accepted pricing models based on discounted
cash flow analysis or using prices from observable current market transactions. The Company considers that the carrying amount
of all its financial assets and financial liabilities recognized at amortized cost in the financial statements approximates their
fair value due to the demand nature or short term maturity of these instruments.



Exchange Risk



The majority of the Company’s cash
flows and financial assets and liabilities are denominated in Canadian dollars, which is the Company’s functional and reporting
currency. Foreign currency risk is limited to the portion of the Company’s business transactions denominated in currencies
other than the Canadian dollar.



The Company’s objective in managing
its foreign currency risk is to minimize its net exposures to foreign currency cash flows by holding most of its cash and cash
equivalents in Canadian dollars. The Company monitors and forecasts the values of net foreign currency cash flow and financial
position exposures and from time to time could authorize the use of derivative financial instruments such as forward foreign exchange
contracts to economically hedge a portion of foreign currency fluctuations. The Company has not, to the date of these financial
statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.





57







Interest Rate Risk



The Company’s interest rate risk
is primarily related to the Company’s cash and cash equivalents for which amounts were invested at interest rates in effect
at the time of investment. Changes in market interest rates affect the fair market value of the cash and cash equivalents. However,
as these investments come to maturity within a short period of time, the impact would likely not be significant.



A 1% change in short-term rates would have
changed the interest income and net earnings of the Company, assuming that all other variables remained constant, by approximately
$54,858 for the year ended 30 November 2013.



Credit Risk



Credit risk is the risk of an unexpected
loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises primarily from
the Company’s cash and cash equivalents and trade receivables. The Company manages its credit risk relating to cash and cash
equivalents by dealing only with highly-rated Canadian financial institutions. As at 30 November 2013, trade receivables were comprised
of GST/HST receivable of $3,186, petroleum revenue receivable of $Nil , trade receivable of $327 and interest receivable of $Nil
.. As a result, credit risk is considered insignificant.



Liquidity Risk



Liquidity
risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity
risk by continuously monitoring actual and projected cash flows and matching the maturity profile of financial assets and liabilities.
As the Company’s financial instruments are substantially comprised of cash and cash equivalents, liquidity risk is considered
insignificant.



| | A. | Operating Results.
| | -- | ------------------



The following discussion and analysis should
be read in conjunction with the Company’s audited financial statements and related notes thereto included herein. The Company’s
audited financial statements have been prepared in accordance with IFRS.



As at November 30, 2013, we had working
capital of $5,600,849, inclusive of $6,700,938 of cash and cash equivalents. Cash and cash equivalents at the date of this Annual
Report are approximately $6,000,000 which is sufficient to cover additional property acquisitions, planned exploration expenditures,
and administration for at least 12 months.



Year ended November 30,
2013 compared to year ended November 30, 2012



The Company’s net and comprehensive
earnings for the year ended November 30, 2013 was $673,069 or $0.031 per share compared to a net and comprehensive loss of $3,475,613
or $0.162 loss per share for the year ended November 30, 2012.



The Company sold all its heavy oil operations
to Petrocapita effective March 1, 2013 for total net cash consideration of $1,900,513 after taking into account initial industry
standard adjustments to the agreed purchase price of $1,875,000. This resulted in net earnings from discontinued operations of
$982,288 compared to a net loss from discontinued operations of $2,200,614 in the prior year. The current year earnings included
a gain on disposition of $1,098,679.



The Continuing Operation loss was reduced
$965,780 to $309,219 for the year ended November 30, 2013 from $1,274,999 for the year ended November 30, 2012.



The significant changes in Continuing Operations
during the current fiscal period compared to the same period a year prior are as follows:



Advertising and promotion expenses decreased
$17,577 to $3,944 during the year ended November 30, 2013 from the $21,521 incurred during the same period a year prior. The decrease
in advertising and promotion is primarily attributable to a decrease in advertising costs and news release dissemination fees.



Bank charges and interest increased $30,064
to $31,076 during the year ended November 30, 2013 from $1,012 incurred during the same period a year prior. During the current
year, interest of $29,719 was paid to the Canada Revenue Agency relating to past flow-through share transactions.



Consulting fees decreased $60,798 to $12,486
for the year ended November 30, 2013 from $73,284 for the year ended November 30, 2012. The decrease in consulting fees period
over period is due mainly to a decrease in the number of consultants used by the Company and the elimination of oil and gas reporting
requirements.





58







Director fees increased $18,000 to $44,000
for the year ended November 30, 2013 from $26,000 for the year ended November 30, 2012. The increase in director fees was due to
implementation of a policy of compensating the independent directors for their service effective May 1, 2012.



Legal and accounting fees decreased $62,808
to $174,600 for the year ended November 30, 2013, from $237,408 for the year ended November 30, 2012. The decrease in legal and
accounting fees from the previous year was mainly due to a reduction in legal fees paid to the Company’s legal counsels in
Alberta, British Columbia and the Northwest Territories for the Company’s Annual General Meeting, and other general corporate
matters.



Management fees increased $72,500 to $120,000
for the year ended November 30, 2013 from $47,500 for the year ended November 30, 2012. The increase is due to the CEO billing
his services under management fees instead of salaries effective July 11, 2012 and the Chairman billing for his services effective
July 1, 2013.



Meals and entertainment expenses for the
year ended November 30, 2013 were reduced $23,228 to $8,321 as compared to $31,549 in the prior year. The current year’s
meal and entertainment expenses were less due to a general reduction in the Company’s promotional activities and an effort
to reduce costs.



There was a $263,746 recovery of a general
provision related to flow-through shares as a result of a review of the Company’s filings related to prior flow-through transactions.



Office rent was reduced $16,962 to $39,517
for the year ended November 30, 2013 from $56,479 for the year ended November 30, 2012. Effective September 1, 2013, the Company
moved its office from #506 – 675 West Hastings Street, Vancouver to #2300 – 1066 West Hastings Street, Vancouver resulting
in an estimated monthly saving of $2,500.



Salaries and benefits for the year ended
November 30, 2013 were reduced $353,363 to $120,861 as compared to $474,224 for the year ended November 30, 2012 when management
fees were included in salaries and a termination fee of $204,167 was paid to the former President upon his resignation on July
10, 2012.



Stock-based compensation expense totalling
$57,760, a non-cash item, was incurred during the year ended November 30, 2013 on the granting of 1,025,000 stock options of which
512,500 stock options vested during the period as compared to $149,722 for the year ended November 30, 2012.



Shareholder information costs were reduced
from $47,300 during the year ended November 30, 2012 to $Nil for the year ended November 30, 2013. The decrease in shareholder
information costs period over period is due to no consultants being paid for the Company’s investor relations and corporate
development activities.



Interest income increased $9,955 to $80,576
for the year ended November 30, 2013, compared to $70,621 during the same period a year prior primarily due to higher interest
rates being paid on deposits during the current year.



There was an unrealized foreign exchange
gain of $104,230 (2012 – loss $41,778) for the year ended November 30, 2013 based primarily on the valuation of US$1,503,060
held in U.S. funds. This gain resulted from the Canadian dollar decreasing in value compared to the US dollar.



There was a capital loss of $19,853 resulting
from the disposition of office computers and furniture compared to a capital gain of $18,518 in the prior year upon the sale of
exploration camp equipment that was written off in a prior year.



Year ended November 30,
2012 compared to year ended November 30, 2011



The Company’s net and comprehensive
loss for the year ended November 30, 2012 was $3,475,613 or $0.162 per share compared to a net and comprehensive loss of $1,726,357
or $0.081 per share for the year ended November 30, 2011. The significant changes during the current fiscal period compared to
the same period a year prior are as follows:



Advertising and promotion expenses decreased
to $21,521 during the year ended November 30, 2012 from the $135,152 incurred during the same period a year prior. The decrease
in advertising and promotion is primarily attributable to a decrease in advertising costs and news release dissemination fees.





59







Consulting fees decreased to $73,284 for
the year ended November 30, 2012 from $182,825 for the year ended November 30, 2011. The decrease in consulting fees period over
period is due mainly to a decrease in the number of consultants used by the Company.



Director fees increased to $26,000 for
the year ended November 30, 2012 from $3,000 for the year ended November 30, 2011. The increase in director fees was due to implementation
of a policy of compensating the directors for their service effective May 1, 2012.



Filing and financing fees increased to
$62,014 for the year ended November 30, 2012 from $53,090 for the year ended November 30, 2011. The increase in costs is attributed
to a general increase in fees associated with regulatory authorities.



Legal and accounting fees decreased to
$237,408 for the year ended November 30, 2012, from $304,831 for the year ended November 30, 2011. The decrease in legal and accounting
fees from the previous year was mainly due to a reduction in legal fees paid to the Company’s legal counsels in Alberta,
British Columbia and the Northwest Territories for the Company’s Annual General Meeting, and other general corporate matters.



Management fees increased to $47,500 for
the year ended November 30, 2012 from $Nil for the year ended November 30, 2011. The increase is due to the interim CEO billing
his services under management fees instead of salaries effective July 11, 2012.



Office and miscellaneous expenses for the
year ended November 30, 2012 were reduced to $36,892 as compared to $48,693 in the prior year. The current year office expenses
were less due to a reduction in office overhead associated with the exploration programs and an effort to reduce costs.



Salaries and benefits for the year ended
November 30, 2012 were reduced to $474,224 as compared to $524,015 for the year ended November 30, 2011. The current year salaries
include severance of $204,167 that was paid to the former President upon his resignation on July 10, 2012.



Stock-based compensation expense totaling
$149,722, a non-cash item, was incurred during the year ended November 30, 2012 on the granting of 1,425,000 stock options that
vested during the period as compared to $216,070 for the year ended November 30, 2011.



Transfer fees and shareholder information
costs were reduced to $47,300 for the year ended November 30, 2012 from $118,674 for the year ended November 30, 2011. The decrease
in transfer fees and shareholder information costs period over period is due mainly to a decrease in the number of consultants
used for the Company’s investor relations and corporate development activities.



Travel expenses decreased to $17,757 during
the year ended November 30, 2012 from $44,125 during the same period a year prior. This was due to decreased travel expenditures
to the Companies working interest partner’s Lloydminster, Alberta office during the year.



Interest income increased to $70,621 for
the year ended November 30, 2012, compared to $63,373 during the same period a year prior primarily due to higher interest rates
being paid on deposits during the current year.



There was an unrealized foreign exchange
loss of $41,778 (2011 - $6,263) for the year ended November 30, 2012 based primarily on the valuation of US$1,532,611 held in U.S.
funds. This loss resulted as the Canadian dollar increased in value compared to the US dollar.



There was a capital gain of $18,518 resulting
from the sale of exploration camp equipment that was written off in the prior year.



| | B. | Liquidity and Capital Resources.
| | -- | --------------------------------



General

Since incorporation, we have financed our operations almost exclusively through the sale of common shares to investors. Our business
is mining exploration and development and we have no producing mineral resource properties that generate operating income or cash
flow from business operations. Until a significant body of ore is found, working capital requirements are minimal, and we expect
to continue to finance operations through the sale of equity in fiscal 2014.





60







In August 2010, we diversified into the
oil and natural gas resource sector with the acquisition of revenue producing resource assets to complement our existing advanced
stage mining interests but we sold these oil and natural gas assets during 2013. We had oil and gas operating revenues but we rely
primarily on existing cash and equity financing to fund our exploration and administrative costs. We expect to rely upon our available
capital throughout the current fiscal year.  If costs increase substantially or we incur greater losses than expected, our
exploration activities and other operations will be reliant upon equity financings to continue into the future.  The current
market conditions could make it difficult or impossible for us to raise necessary funds to meet our capital requirement and our
access to additional capital may not be available on terms acceptable to us or at all.



If we are unable to obtain financing through
equity investments, we will seek multiple solutions including, but not limited to, credit facilities or debenture issuances.



We do not have any loans outstanding at
this time. Our strong cash position will allow financial flexibility. See "Cautionary Note Regarding Forward Looking Statements".



The Company began recognizing and receiving
revenue from its heavy oil resource properties as of August 1, 2010 but sold all its heavy oil resource properties effective March
1, 2013. The Company relies on equity financing to fund its exploration and administrative costs.



During the year ended November 30, 2013,
675,000 options were exercised for proceeds of $133,875.



As at November 30, 2013, the Company had
cash and cash equivalents of $6,700,938 and working capital of $5,600,849 as compared to $6,997,109 of cash and cash equivalents
and working capital of $5,714,151 at November 30, 2012.



Total assets at November 30, 2013 decreased
to $6,738,829 from $8,638,833 at November 30, 2012, primarily as a result of the $1,760,758 special cash distribution from the
sale of its heavy oil property assets.



As of the date of this report the Company
has cash and cash equivalents of approximately $6,000,000 comprised of $4,300,000 in redeemable GIC’s held at large financial
institutions, $1,668,000 Canadian equivalent of US$1,503,000 and $32,000 in chequeing accounts. Short term investments with a current
value of $975,000 are comprised of 1,300,000 shares of TerraX Minerals Inc that most recently traded at $0.75on the TSX Venture
Exchange. The Company believes that this is sufficient to fund its currently planned exploration and administrative budget through
the balance of fiscal 2014.



We do not plan to fund any significant
exploration and development activities for 2014 other than exploration expenditures of $100,000 planned for drilling at our recently
acquired Central Canada gold project in Ontario.



Financing Activities



The particulars of all capital raising
transactions for the last two fiscal years are detailed below. Proceeds of these financings have been used for exploration and
for development expenditures (only when and if warranted) in connection with our mineral projects, for working capital and for
acquisition of additional projects.



| | i. | During the year ended 30 November, 2013, a total of 675,000 stock options with a weighted average
exercise price of $0.20 per share were exercised for proceeds of 133,875.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Financial Instruments



All financial instruments
we use are predominantly denominated in Canadian dollars. We do not engage in any hedging operations with respect to currency or
in-situ minerals. Funds which are currently in excess of our current expenditures are invested in low risk, highly liquid investments
with original maturations of three months or less.



Capital Expenditure Commitments



At November 30, 2013, we were not party
to any capital expenditure commitments.





61







| | C. | Research and Development, Patents and Licenses, etc.
| | -- | ----------------------------------------------------



None.



| | D. | Trend Information.
| | -- | ------------------



As we are an exploration company with no
producing mining properties, information regarding trends in production, sales and inventory are not meaningful.



| | E. | Off-balance Sheet Arrangements.
| | -- | -------------------------------



We have no off-balance sheet arrangements
that would require disclosure.



| | F. | Tabular Disclosure of Contractual Obligations.
| | -- | ----------------------------------------------



As of the year ended November 30, 2013,
we were not party to any agreements or arrangements which gave rise to any contractually obligated payments.



ITEM 6.
Directors, Senior Management and Employees



| | A. | Directors and Senior Management.
| | -- | --------------------------------



Directors

|Name of Director |  | Age |  | Date of First Election or 
Appointment
|---------------- |  | --- |  | --------------------------------------
|Guido Cloetens   |  | 47  |  | July 10, 2012                         
|Tom Ogryzlo      |  | 74  |  | July 10, 2012                         
|Robert Hall      |  | 37  |  | September 27, 2006                    
|Stuart Rogers    |  | 57  |  | March 1, 2007                         
|Martin Burian    |  | 50  |  | June 12, 2013                         
|Erwin Holsters   |  | 37  |  | June 12, 2013                         



Executive Officers and Management



|Name of Officer |  | Age |  | Office                 
|--------------- |  | --- |  | -----------------------
|Stuart Rogers   |  | 57  |  | Chief Executive Officer
|Gordon Steblin  |  | 54  |  | Chief Financial Officer



The following describes the business experience
of our directors and executive officers, including other directorships held in reporting companies:



Stuart Rogers, Chief Executive
Officer and Director



A director since March 2007, Stuart Rogers
has been involved in the venture capital community since 1987.  He is the President and founder of West Oak Capital Group,
Inc., a privately held investment banking firm specializing in the early stage finance of technology and resource projects through
the junior capital markets in Canada and the United States, and has served as a director of client companies listed on the TSX
Venture Exchange, the Toronto Stock Exchange, NASDAQ Small Capital Market and FINRA OTC Bulletin Board.   Mr. Rogers
is the President and a director of MAX Resource Corp. and serves as a director and Chief Financial Officer of TerraX Minerals Inc.
and Orefinders Resources Inc., all of which trade on the TSX Venture Exchange.



Gordon Steblin, Chief Financial
Officer



Mr. Steblin obtained a Bachelor of Commerce
degree in 1983 from the University of British Columbia, and in 1985 he became a Certified General Accountant. Mr. Steblin has over
20 years of financial experience in the junior mining/exploration sector. Mr. Steblin was previously the Chief Financial Officer
of client companies listed on the TSX Venture Exchange, the Toronto Stock Exchange and FINRA OTC Bulletin Board. Mr. Steblin is
currently the Chief Financial Officer of Freegold Ventures Limited which trades on the Toronto Stock Exchange and Arctic Hunter
Energy Inc. which trades on the TSX Venture Exchange.





62







Robert Hall, Director



Mr. Hall brings over 10 years experience
in management in both public and private companies to Alberta Star. He builds and maintains relationships with institutional and
retail investors. He is active as a director of Windfire Capital Corp. and Touchdown Resources Inc., both of which trade on the
TSX Venture Exchange. He is active as a director and officer of Arctic Hunter Energy Inc. and Doubleview Capital Corp., both of
which trade on the TSX Venture Exchange and Dynamic Gold Corp., a company trading on the FINRA OTC Bulletin Board. Mr. Hall holds
a Bachelor's degree in Education from the University of British Columbia.



Guido Cloetens, Chairman and
Director



Guido Cloetens is a Certified Investment
& Financial advisor located in Brussels, Belgium and has been active in the financial markets since 1988; he has participated
in numerous financings and initial public offerings in Europe, the United States and in Canada in both private equity and public
companies. Mr. Cloetens was a senior Investment advisor to international institutional investors from 1988 until 1995 with two
private banks and an advisor to high net worth investors and to family offices from 1996 until 2011.



Tom Ogryzlo, Director



Mr. Ogryzlo has over forty-five years of
experience in mining, energy and mining projects worldwide. He has been responsible for the, financing, engineering, construction
and operations of projects in many different countries. Mr. Ogryzlo has served as a director of many public companies, including
Franco Nevada Mining Corp., Vista Gold Corp., Aura Minerals Inc., Birim Goldfields Inc., Baja Mining Corp. and Tiomin Resources
Inc. During 2011, Mr. Ogryzlo served as Interim CEO of Aura Minerals Inc. until a permanent replacement could be located and is
currently the Interim CEO of Baja Mining Corp. which is developing a $1.5 billion copper/cobalt/zinc project currently under construction
in Baja California, Mexico.



Mr. Ogryzlo holds a Bachelor of Mechanical
Engineering from McGill University in Montreal, Quebec and, for many years, served as President of Kilborn Engineering Ltd. and
Kilborn SNC-Lavalin, one of the worlds largest engineering contractors. He has been past President of several producing precious
and base metal mining companies, including Triton Mining Corporation, Blackhawk Mining Inc. and Cerro Matoso S.A. His experience
in exploration and development of numerous multi-million dollar mining projects spans the world. Over a six year period with Hanna
Mining, he initially directed process development work as project manager and subsequently as President and General Manager, for
the Cerro Matoso ferro-nickel project in Columbia where he was instrumental in 1979 in organizing a US$450 million financing involving
World Bank, Exim, and a group of 52 private banks led by Chase Manhattan.



Martin Burian, Director



Martin Burian, CA, CBV, has eighteen years
of investment banking experience and was most recently Managing Director, Investment Banking at Haywood Securities Inc. from 2010
until May 2013, prior to which he served as President of Bolder Investment Partners from 2009 until its merger with Haywood Securities
in 2010. He is currently an officer or director of Cap-Ex Iron Ore Ltd., Canarc Resource Corp., Atlas Cloud Enterprises Inc. and
Tinkerine Studio Ltd.



Erwin Holsters, Director



A resident of Brussels, Belgium, Erwin
Holsters has been a Senior Private Banker at a leading European private bank since 2010, prior to which he was a Client Relationship
Manager at Robeco/Kaupthing Bank from 2007 to 2009. In 2012 he graduated from Insead Business School as a Certified Private Banker.



Family Relationships



There are no familial or marital relationships
that exist amongst our officers and directors.



Arrangements



There are no arrangements or understandings
between any of our directors or executive officers, and with our major shareholders, customers, suppliers or others, pursuant to
which they were selected to be a director or executive officers.





63







B.	Compensation.



We are required, under applicable securities
legislation in Canada, to disclose to our shareholders details of compensation paid to our directors and members of our administrative,
supervisory or management bodies. The following fairly reflects all material information regarding compensation paid to our directors
and members of our administrative, supervisory or management bodies in our fiscal year ended November 30, 2013.



We pay $1,000 per month to our directors
for their services in their capacity as directors from May 1, 2012 onwards. The board of directors may award special remuneration
to any director undertaking any special services on our behalf other than services ordinarily required of a director. Other than
as indicated below, no director received any compensation for his or her services as a director, including committee participation
and/or special assignments.



2013 Summary Compensation Table








|NAME AND PRINCIPAL POSITION                                                    |  | ANNUAL COMPENSATION |         |     | LONG-TERM 
COMPENSATION    
|------------------------------------------------------------------------------ |  | ------------------- | ------- | --- | ---------------------------
|                                                                               |  | Salary              |         |     | Other 
Annual 
Compensation
|                                                                               |  |                     |         |     |                            
|Stuart Rogers:   CEO                                                           |  |                     |         |     |                            
|Gordon Steblin:  CFO                                                           |  |                     | -       |     |                            
|Guido Cloetens (appointed June 12, 2013)  Chairman                             |  |                     | -       |     |                            
|Robert Hall:  Former Vice President Corporate Development and current Director |  | $                   | 106,666 | (5) |                            
|Brian Morrison (appointed Sept. 5, 2008, resigned June 12, 2013)  Director     |  |                     | -       |     |                            
|Edward Burylo (appointed Dec. 17, 2008, resigned June 12, 2013)  Director      |  |                     | -       |     |                            
|Guido Cloetens (appointed July 10, 2012)  Director                             |  |                     | -       |     |                            
|Tom Ogryzlo (appointed July 10, 2010)  Director                                |  |                     | -       |     |                            
|Martin Burian (appointed June 12, 2013)  Director                              |  |                     | -       |     |                            
|Erwin Holsters (appointed June 12, 2013)  Director                             |  |                     | -       |     |                            



Notes:



| | (1) | “Securities Under Options/SARs Granted” are grants made under the stock option plan
of the Company. “SAR” means stock appreciation rights. On July 18, 2013, the Company granted options to directors and
officers whereby 50% of the Stock options vested on July 18, 2013 and 50 % vested on January 18, 2014. The weighted average fair
value of the options granted and vested during the year ended November 30, 2013 was estimated at $0.065 per option at the grant
date using the Black-Scholes Option Pricing Model.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |     |                                                              
| | --- | -------------------------------------------------------------
| | (2) | Fees paid to a company controlled by Mr. Rogers for CEO fees.

| |     |                                                                          
| | --- | -------------------------------------------------------------------------
| | (3) | Fees paid to a company controlled by Mr. Steblin for accounting services.

| |     |                                                                                  
| | --- | ---------------------------------------------------------------------------------
| | (4) | Fees paid to a company controlled by Mr. Cloetens for Chairman and director fees.

| |     |                                                                                                                                       
| | --- | --------------------------------------------------------------------------------------------------------------------------------------
| | (5) | Mr. Hall resigned November 1, 2013 as Vice President Corporate Development and this amount includes
$40,000 paid/accrued as severance.

| |     |                                                                                    
| | --- | -----------------------------------------------------------------------------------
| | (6) | These amounts are directors fees paid to entities controlled by the named director.





64







The table below sets forth the stock options
granted to the Company’s director and officers during the fiscal year ended November 30, 2013:



|Director or Officer |  | Number of Common
 Shares(2) |         |     | Exercise Price
($) |  |      | Expiry Date
|------------------- |  | --------------------------- | ------- | --- | ------------------ |  | ---- | -----------
|Guido Cloetens      |  |                             | 200,000 |     |                    |  | 0.20 |            
|Tom Ogryzlo         |  |                             | 25,000  |     |                    |  | 0.20 |            
|Martin Burian       |  |                             | 200,000 |     |                    |  | 0.20 |            
|Erwin Holsters      |  |                             | 200,000 |     |                    |  | 0.20 |            
|Stuart Rogers       |  |                             | 250,000 | (1) |                    |  | 0.20 |            
|Robert Hall         |  |                             | 25,000  |     |                    |  | 0.20 |            
|Gordon Steblin      |  |                             | 125,000 |     |                    |  | 0.20 |            





| | (1) | These options were issued to West Oak Capital Group, Inc., a private company owned by Stuart
Rogers.
| | --- | ----------------------------------------------------------------------------------------------------



| | (2) | On July 18, 2013, the Company granted 1,025,000 options to directors and officers, exercisable at $0.20 per share until July
18, 2016. 512,500 options vested on July 18, 2013 and 512,500 options vested on January 18, 2014.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





Stock Option Plan



Our stock option plan provides for equity
participation by eligible directors, officers, employees and consultants through the acquisition of common shares pursuant to the
grant of options. Our board of directors administers the plan. Options may be granted to purchase common shares on terms that the
directors may determine, subject to the limitations of the stock option plan and the requirements of the TSX-Venture Exchange.



Under our stock option plan, the maximum
number of common shares of the Company which may be authorized for reservation for the grant of options from time to time shall
be 20% of the Company’s issued and outstanding common shares as of the date of shareholder approval of the Plan.



The following is a summary of the terms
of the stock option plan and is qualified in its entirety by the full text of the stock option plan which is available for review
at our offices:



| | 1. | The Company must obtain disinterested shareholder approval if the plan, together with any previous
plans, could result at any time in the grant to Insiders (as defined in the Plan), within a 12 month period, a number of options
exceeding 10% of the issued shares of the Company.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | The total number of common shares to be reserved for issuance over the previous one year period
for any optionee shall not exceed 5% of the issued common shares of the Company at the time of grant and the total number of common
shares that may be reserved for issuance over the previous 12 month period for individuals engaged in an investor relations capacity
shall not exceed 2% of the issued common shares of the Company at the time of grant. In addition, the total number of common shares
to be reserved for issuance over the previous 12 month period for any one consultant, shall not exceed 2% of the issued common
shares of the Company at the time of grant.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | While the Company’s common shares are listed on the Exchange, the purchase price per common
share for any option granted under the Plan shall not be less than the market price of the Company’s common shares less any
applicable discount in accordance with the policies of the Exchange.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | Options granted must expire not later than a maximum of five years from the date of the grant.
| | -- | ----------------------------------------------------------------------------------------------



| | 5. | Options will vest at the discretion of the board of directors.
| | -- | --------------------------------------------------------------



| | 6. | All options granted pursuant to the Plan shall be non-assignable.
| | -- | -----------------------------------------------------------------



See “Item 6.E.
– Share Ownership of Director and Officers” for table setting out the stock options currently outstanding to our directors
and officers.



Pension or Retirement Benefits



We do not have a pension,
retirement fund or similar benefits plan or other arrangement for non-cash compensation to our directors or senior officers, with
the exception of incentive stock options.



65







C.	Board Practices.



General



For a discussion of our directors’
terms in office, please see “Item 6.A.”



The directors hold office until the next
annual general meeting of the shareholders, at which time they may stand for re-election. We are required to hold an annual general
meeting within fifteen months from the last annual general meeting. Our most recent annual general meeting was held on June 12,
2013.



Service Contracts



There are no director service contracts.



Audit Committee



Our Board of Directors has one committee,
an audit committee. We do not have a compensation or remuneration committee.



Our audit committee is comprised of Martin
Burian, Erwin Holsters and Tom Ogryzlo. The audit committee performs the following functions, among others:



| | · | Directly appoints, retains and compensates our independent auditor and pre-approves all auditing
and non-auditing services of the independent auditor;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Evaluates the independent auditor's qualifications, performance and independence;
| | - | ---------------------------------------------------------------------------------

| | · | Discusses the scope of the independent auditors' examination;
| | - | -------------------------------------------------------------

| | · | Reviews and discusses the annual audited financial statements and quarterly financial statements
with management and the independent auditor and the report of the independent auditor thereon;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Assesses our accounting practices and policies;
| | - | -----------------------------------------------

| | · | Reviews and approves of all related-party transactions, including transactions between our company
and our officers or directors or affiliates of officers or directors;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Develops, and monitors compliance with, a code of ethics for senior financial officers;
| | - | ---------------------------------------------------------------------------------------

| | · | Develops, and monitors compliance with, a code of conduct for all our employees, officers and directors;
| | - | --------------------------------------------------------------------------------------------------------

| | · | Establishes procedures for the receipt, retention and treatment of complaints regarding accounting,
internal accounting controls or auditing matters; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Establishes procedures for the confidential, anonymous submission by employees of concerns regarding
questionable accounting or auditing matters.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------



The specific functions and responsibilities
of the audit committee are set forth in our audit committee charter. We have determined that Martin Burian qualifies as an audit
committee financial expert, pursuant to SEC regulations and section 803 of the NYSE MKT Company Guide. Members of the audit committee
satisfy the financial literacy requirements for audit committee members under the SEC rules and regulations. We have determined
that Messrs. Burian, Holsters and Ogryzlo are independent directors in accordance with Rule 10A-3 under the Exchange Act and Section
803 of the NYSE MKT Company Guide.



In order to act in a forward-thinking manner,
our board of directors intends to elect a compensation committee in 2014 whose members will include members of the audit committee,
to complete the following functions, among others:



| | · | Develops executive compensation philosophy and establishes and annually reviews and approves policies
regarding executive compensation programs and practices;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Reviews and approves corporate goals and objectives relevant to the Chief Executive Officer's compensation,
evaluates the Chief Executive Officer's performance in light of those goals and objectives and sets the Chief Executive Officer's
compensation based on this evaluation;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Reviews the Chief Executive Officer's recommendations with respect to, and approves annual compensation
for, our other executive officers;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------

| | · | Establishes and administers annual and long-term incentive compensation plans for key executives;
| | - | -------------------------------------------------------------------------------------------------

| | · | Recommends to the board for its approval and, where appropriate, submission to our stockholders,
incentive compensation plans and equity-based plans;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Recommends to the board for its approval changes to executive compensation policies and programs;
and
| | - | -----------------------------------------------------------------------------------------------------

| | · | Reviews and approves all special executive employment, compensation and retirement arrangements.
| | - | ------------------------------------------------------------------------------------------------





66







| | D. | Employees.
| | -- | ----------



At
the end of the fiscal year ended November 30, 2013, we had no employees. We hire contractors on an as-needed basis for geological
services and other trades and when required, we have retained geological and other consultants to conduct work programs on our
oil and gas and mineral property interests. Our Chief Executive Officer, Chief Financial Officer and Chairman are all engaged by
the Company as consultants.



At
the end of the fiscal year ended November 30, 2012, we had one employee being the Vice President of Corporate Development. The
employee was located in British Columbia.



At
the end of the fiscal year ended November 30, 2011, we had three employees consisting of the Chief Executive Officer, Manager of
Field Operations and an office assistant. All employees were located in British Columbia.



| | E. | Share Ownership.
| | -- | ----------------



Our directors and officers beneficially
own the following shares as of the date of this Annual Report:



Common Shares



|Director or Officer |  | Number of Common Shares
Owned |           |  | Percentage
of Outstanding(%)(1) | 
|------------------- |  | ----------------------------- | --------- |  | ------------------------------- | 
|Guido Cloetens      |  |                               | 3,496,000 |  |                                 | 
|Tom Ogryzlo         |  |                               | -         |  |                                 | 
|Martin Burian       |  |                               | 95,500    |  |                                 | 
|Erwin Holsters      |  |                               | -         |  |                                 | 
|Stuart Rogers       |  |                               | 339,000   |  |                                 | 
|Robert Hall         |  |                               | 35,900    |  |                                 | 
|Gordon Steblin      |  |                               | 101,000   |  |                                 | 



Notes:



| | (1) | Percentages are based on 21,655,979 shares of common stock issued and outstanding as of the date
of this Annual Report.
| | --- | -----------------------------------------------------------------------------------------------------------------------



Stock Options



The following incentive stock options are
currently outstanding to our directors and officers as of the date of this Annual Report:





67







Shares that may be Purchased Upon Exercise of Stock Options



|Director or Officer |  | Number of Common 
Shares |         |     | Exercise Price ($) |  |       | Expiry Date
|------------------- |  | ------------------------ | ------- | --- | ------------------ |  | ----- | -----------
|Guido Cloetens      |  |                          | 200,000 |     |                    |  | 0.20  |            
|Tom Ogryzlo         |  |                          | 75,000  |     |                    |  | 0.165 |            
|                    |  |                          | 100,000 |     |                    |  | 0.20  |            
|                    |  |                          | 25,000  |     |                    |  | 0.20  |            
|Martin Burian       |  |                          | 200,000 |     |                    |  | 0.20  |            
|Erwin Holsters      |  |                          | 200,000 |     |                    |  | 0.20  |            
|Stuart Rogers       |  |                          | 50,000  |     |                    |  | 1.00  |            
|                    |  |                          | 250,000 | (1) |                    |  | 0.20  |            
|Robert Hall         |  |                          | 50,000  |     |                    |  | 1.00  |            
|                    |  |                          | 75,000  |     |                    |  | 0.21  |            
|                    |  |                          | 100,000 |     |                    |  | 0.20  |            
|                    |  |                          | 25,000  |     |                    |  | 0.20  |            
|Gordon Steblin      |  |                          | 50,000  |     |                    |  | 1.00  |            
|                    |  |                          | 75,000  |     |                    |  | 0.21  |            
|                    |  |                          | 125,000 |     |                    |  | 0.20  |            



| | (1) | These options were issued to West Oak Capital Group, Inc., a private company owned by Stuart Rogers.
| | --- | ----------------------------------------------------------------------------------------------------



At the annual general meeting of our shareholders
held on June 12, 2013, our company’s stock option plan was proposed, and approved, and subsequently filed with the TSX-V.



We grant share options in accordance with
the policies of the TSX Venture Exchange. Under the general guidelines of the TSX Venture Exchange, we may reserve up to 20% of
our issued and outstanding shares to our employees, directors or consultants to purchase.



Our stock option plan provides for equity
participation by eligible directors, officers, employees and consultants through the acquisition of common shares pursuant to
the grant of options. Our board of directors administers the plan. Options may be granted to purchase common shares on terms that
the directors may determine, subject to the limitations of the stock option plan and the requirements of the TSX-V. For a summary
of the terms of the stock option plan, see “Item 6B.”



ITEM 7. Major
Shareholders and Related Party Transactions



| | A. | Major Shareholders.
| | -- | -------------------



We are a publicly-held corporation, with our common shares held
by residents of Canada, the United States of America and other countries. As of the date of filing this Annual Report, we are authorized
to issued an unlimited number of common shares without par value, of which 21,655,979 common shares are issued and outstanding
and unlimited number of preferred shares without par value, of which none are issued and outstanding.



As of the date of this report, there are no shareholders known
to us that are beneficial owners of more than 5% of our common shares except as set out herein.



Changes in Ownership Percentage



To the knowledge of the Company, the significant
changes over the last three years in the percentage of the issued share capital for the Company held by major shareholders, either
directly or by virtue of ownership of our common shares are noted below.



|Identity of Person or Group(1)(2) |  | 2013 |       |   | 2012 |  |      | 2011 | 
|--------------------------------- |  | ---- | ----- | - | ---- |  | ---- | ---- | 
|Guido Cloetens(3)                 |  |      | 16.91 | % |      |  | 9.91 | %    | 
|Tim Coupland(4)(5)                |  |      | -     |   |      |  | 5.03 | %    | 



68









Notes:



| | (1) | Beneficial ownership is determined in accordance with
the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject
to options or warrants currently exercisable, or exercisable within 60 days, are deemed outstanding for purposes of computing
the percentage ownership of the person holding such option or warrants, but are not deemed outstanding for purposes of computing
the percentage ownership of any other person.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Percentages are based on in: (1) 2013: 21,655,979 shares
of common stock issued and outstanding as of March 31, 2014 (2) 2012: 21,403,979 shares of common stock issued and outstanding
as of March 31, 2013; and (3) 2011: 21,403,979 shares of common stock issued and outstanding as of March 27, 2012; unless otherwise
noted.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Guido Cloetens beneficially owns 3,696,000 common shares
including 3,496,000 common shares and 200,000 common shares acquirable upon exercise of outstanding stock options for a total
of 16.91%; as of April 5, 2013, Mr. Cloetens beneficially owned 2,314,000 common shares including 2,139,000 common shares and
175,000 common shares acquirable upon exercise of outstanding stock options for a total of 9.91%.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | In 2011, Tim Coupland beneficially owned 1,912,517 common
shares including 1,077,517 common shares and 835,000 common shares acquirable upon exercise of outstanding stock options for a
total of 8.94%. Tim Coupland held 802,485 shares directly, T8X Capital Ltd., of which Tim Coupland is a 100% owner, held 275,032
shares and 835,000 stock options.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | As of July 10, 2012, Tim Coupland beneficially owned
1,077,517 common shares for a total of 5.03%. Tim Coupland held 802,485 shares directly, T8X Capital Ltd., of which Tim Coupland
is a 100% owner, holds 275,032 shares. His current shareholdings cannot be confirmed as he is no longer an insider of the Company.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | 
| |  | 

Voting Rights



Our major shareholders do not have any
different voting rights than other shareholders.



Corporate or Foreign Government Ownership



We are not controlled directly or indirectly
by any other corporation or any other foreign government or by any other natural or legal person, severally or jointly.



Geographic Breakdown of Shareholders



The following lists the geographical distribution
of shareholders at February 28, 2014:



|              |  | Number of registered |    |  |                  | 
|------------- |  | -------------------- | -- |  | ---------------- | 
|Location      |  | shareholders         |    |  | Number of shares | 
|Canada*       |  |                      | 6  |  |                  | 
|United States |  |                      | 3  |  |                  | 
|Other         |  |                      | 4  |  |                  | 
|Total         |  |                      | 13 |  |                  | 



Shares registered in intermediaries are
assumed to be held by residents of the same country in which the clearing-house is located.

* 3,496,000 common shares that are held
in Canadian intermediaries are beneficially owned by Guido Cloetens a resident of Belgium.



Change of Control



There are no arrangements for which through
their operation, at a subsequent date, may result in a change in our control.



Contingencies



We are aware of no contingencies or pending
legal proceedings as of the date of this report.





69







| | B. | Related Party Transactions.
| | -- | ---------------------------



TRANSACTIONS WITH RELATED PARTIES



Our board of directors consists of Guido
Cloetens, Tom Ogryzlo, Robert Hall, Martin Burian, Erwin Holsters and Stuart Rogers. Stuart Rogers is our Chief Executive Officer,
Guido Cloetens is our Chairman and Gordon Steblin is our Chief Financial Officer. We paid or accrued amounts to related parties
as follows for the year ended November 30, 2013:



|Management fees paid to a company controlled by Mr. Stuart Rogers  |  | $ | 95,000  | 
|------------------------------------------------------------------ |  | - | ------- | 
|Chairman fees paid to a company controlled by Mr. Guido Cloetens   |  | $ | 25,000  | 
|Accounting fees paid to a company controlled by Mr. Gordon Steblin |  | $ | 70,500  | 
|Director fees paid to Mr. Edward Burylo*                           |  | $ | 7,000   | 
|Director fees paid to Mr. Brian Morrison*                          |  | $ | 7,000   | 
|Director fees paid to a company controlled by Mr. Guido Cloetens   |  | $ | 7,000   | 
|Director fees paid to Mr. Tom Ogryzlo                              |  | $ | 12,000  | 
|Director fees paid to Mr. Martin Burian                            |  | $ | 5,500   | 
|Director fees paid to Mr. Erwin Holsters                           |  | $ | 5,500   | 
|Salaries and benefits paid/accrued to Mr. Rob Hall*                |  | $ | 106,666 | 
|                                                                   |  | $ | 341,166 | 



| | * | Resigned June 12, 2013.
| | - | -----------------------

| | ** | Resigned November 1, 2013 as Vice President Corporate Development and this total includes a severance
fee of $40,000.
| | -- | ---------------------------------------------------------------------------------------------------------------------



During the year ended November 30, 2013,
the Company purchased certain heavy oil assets for $102,000 from Arctic Hunter, a company with directors and officers in common,
as part of the sale to Petrocapita. During the year ended November 30, 2013, the Company sold plant, property and equipment to
Arctic Hunter for proceeds of $Nil (2012- $8,000), resulting in a gain of $Nil (2012- $8,000).



These transactions were in the normal course
of operations and were measured at the exchange value which represented the amount of consideration established and agreed to by
the related parties.



PROPOSED TRANSACTIONS



As is typical of the natural resource exploration
and development industry, we are continually reviewing potential merger, acquisition, investment and joint venture transactions
and opportunities that could enhance shareholder value.



The amounts charged to us for the services
provided have been determined by negotiation among the parties, and in certain cases, are covered by signed agreements. It is the
position of management that these transactions were in the normal course of operations and were measured at the exchange value
which represented the amount of consideration established and agreed to by the related parties.



Other than disclosed herein, no director
or senior officer, and no associate or affiliate of the foregoing persons, and no insider has or has had any material interest,
direct or indirect, in any transactions, or in any other proposed transaction, during the year ended November 30, 2013.



On February 28, 2014, the Company entered
into an agreement with TerraX Minerals Inc. (“TerraX”), a company with a director and officer in common, pursuant to
which the Company can earn up to a 60% interest in TerraX’s wholly-owned Central Canada gold project (the “Central
Canada Property”) in Ontario (the “Option”) and subscribed for 1,300,000 units of TerraX (the “Units”)
at $0.45 per Unit for gross proceeds of $585,000 (the “Private Placement”). Each Unit consists of one common share
and one-half of one share purchase warrant, with each full warrant entitling the holder to purchase an additional common share
at an exercise price of $0.57 per common share exercisable until February 28, 2016. No finder’s fees are payable in connection
with the Private Placement.



In order to exercise the Option, Alberta
Star must make cash payments to TerraX totaling $85,000 over a three year period, with $10,000 due upon execution of a definitive
option agreement (the “Option Agreement”), $25,000 due on the second anniversary of the execution of the Option Agreement
(an “Anniversary Date”) and a further $50,000 due on the third Anniversary Date. Alberta Star must also incur an aggregate
of $500,000 in exploration expenditures over a three year period, with $100,000 due on the first Anniversary Date, $150,000 due
on the second Anniversary Date and a further $250,000 due on the third Anniversary Date. Albert Star will also be responsible for
payment of the annual pre-production royalty of $10,000 to the original vendors of the Central Canada Property due annually in
December beginning with the next payment due on December 11, 2014.





70







The net proceeds of the Private Placement
will be used by TerraX to finance additional drilling planned for Terrax’s wholly-owned Northbelt property, which encompasses
3,562 hectares on the prolific Yellowknife belt, 15 km north of the city of Yellowknife, and covers 13 km of strike on the northern
extension of the geology that contained the Giant (7.6 Moz) and Con (5.5 Moz) gold mines. The Northbelt property is host to multiple
shears that are the recognized hosts for gold deposits in the Yellowknife camp and it contains innumerable gold showings.



Mr. Stuart Rogers, a director and the Chief
Financial Officer of TerraX, is also a director and the President and Chief Executive Officer of Alberta Star. Mr. Rogers beneficially
owns or controls 855,000 common shares and 447,500 securities convertible into common shares of TerraX, representing 2.06% of the
outstanding common shares of TerraX on a non-diluted basis and 3.11% of the outstanding common shares of TerraX on a diluted basis.
Mr. Rogers beneficially owns or controls 339,000 common shares and 300,000 securities convertible into common shares of Alberta
Star, representing 1.56% of the outstanding common shares of Alberta Star on a non-diluted basis and 2.89% of the outstanding common
shares of Alberta Star on a diluted basis. TerraX does not own any securities of Alberta Star and Alberta Star does not presently
own any securities of TerraX. Assuming completion of the Private Placement, Alberta Star will own 3.04% of the outstanding common
shares of TerraX on a non-diluted basis and 4.49% of the outstanding common shares of TerraX on a diluted basis. Mr. Rogers has
declared his interest in, and will abstain from voting in respect of, the Option and the Private Placement on behalf of TerraX
and Alberta Star. The directors of each of TerraX and Alberta Star have considered the merits of the Option and the Private Placement
in the absence of Mr. Rogers. The Option and Private Placement are exempt from the formal valuation and minority approval requirements
of Canadian Multilateral Instrument 61-101 pursuant to sections 5.5(b) and 5.7(1).



| | C. | Interests of Experts and Counsel.
| | -- | ---------------------------------



None.



71







ITEM 8.
Financial Information



| | A. | Financial Statements and Other Financial Information.
| | -- | -----------------------------------------------------

Financial Statements



As required, we have included the following
as audited by an independent auditor and accompanied by an audit report, as of November 30, 2013:



| | · | Statements of financial position as at November 30, 2013 and 2012;
| | - | ------------------------------------------------------------------



| | · | Statements of loss and comprehensive loss for the fiscal years ended November 30, 2013, 2012 and
2011;
| | - | ------------------------------------------------------------------------------------------------------



| | · | Statements of cash flows for the fiscal years ended November 30, 201, 2012 and 2011;
| | - | ------------------------------------------------------------------------------------



| | · | Statements of changes in shareholders’ equity for the fiscal years ended November 30, 2013,
2012 and 2011 ;
| | - | -----------------------------------------------------------------------------------------------------------



| | · | Related notes and schedules; and
| | - | --------------------------------



Legal Proceedings



We are
not involved in any litigation or legal proceedings and to our knowledge, no material legal proceedings involving us are to be
initiated against us.



Dividends



We have never paid any other dividends
and do not intend to pay any dividends in the near future.



Special Cash Distribution –
Reduction of Stated Capital



During the year ended November 30, 2013,
the Company made a Special Distribution of $0.08 per common share in the aggregate amount of $1,760,758 representing the proceeds
received from the sale of its various heavy oil assets by way of a reduction of stated capital of the Company.



B.	Significant Changes.



Since the fiscal period ended November
30, 2013, no changes have taken place which may materially affect the interpretation of our company’s financial statements.



ITEM 9.
The Offer and Listing



| | A. | Offer and Listing Details.
| | -- | --------------------------



Our common shares trade on the TSX-V under
symbol “ASX”, on the OTCBB under symbol “ASXSF” and on the Frankfurt Exchange under symbol “QLD”.
Our shares have traded on the TSX-V, and on its predecessor, the Alberta Stock Exchange, since December 5, 1997. The following
table sets forth the high and low closing prices in Canadian dollars of our common shares traded on the TSX-V and its predecessor:





72







|Period                                |  | High |      |  | Low |  
|------------------------------------- |  | ---- | ---- |  | --- | -
|December 1, 2008 to November 30, 2009 |  | $    | 1.30 |  |     | $
|December 1, 2009 to November 30, 2010 |  | $    | 1.20 |  |     | $
|December 1, 2010 to November 30, 2011 |  | $    | 0.70 |  |     | $
|December 1, 2011 to November 30, 2012 |  | $    | 0.26 |  |     | $
|December 1, 2012 to November 30, 2013 |  | $    | 0.27 |  |     | $



|Period                          |  | High |      |  | Low |  
|------------------------------- |  | ---- | ---- |  | --- | -
|December 2011 to February 2012  |  | $    | 0.26 |  |     | $
|March 2012 to May 2012          |  | $    | 0.26 |  |     | $
|June 2012 to August 2012        |  | $    | 0.20 |  |     | $
|September 2012 to November 2012 |  | $    | 0.23 |  |     | $
|December 2012 to February 2013  |  | $    | 0.19 |  |     | $
|March 2013 to May 2013          |  | $    | 0.24 |  |     | $
|June 2013 to August 2013        |  | $    | 0.27 |  |     | $
|September 2013 to November 2013 |  | $    | 0.19 |  |     | $
|December 2013 to February 2014  |  | $    | 0.24 |  |     | $



|Period         |  | High |      |  | Low |  
|-------------- |  | ---- | ---- |  | --- | -
|September 2013 |  | $    | 0.18 |  |     | $
|October 2013   |  | $    | 0.19 |  |     | $
|November 2013  |  | $    | 0.18 |  |     | $
|December 2013  |  | $    | 0.18 |  |     | $
|January 2014   |  | $    | 0.19 |  |     | $
|February 2014  |  | $    | 0.24 |  |     | $



Our common shares have been quoted for
trading on the OTCBB since July 16, 2002; no trades in our common shares occurred on this quotation system until January 29, 2003.
The following sets forth the high and low closing prices in United States dollars of our common shares traded on the OTCBB since
this date:



|Period                                |  | High |      |  | Low |    
|------------------------------------- |  | ---- | ---- |  | --- | ---
|December 1, 2008 to November 30, 2009 |  | US$  | 1.10 |  |     | US$
|December 1, 2009 to November 30, 2010 |  | US$  | 1.20 |  |     | US$
|December 1, 2010 to November 30, 2011 |  | US$  | 0.71 |  |     | US$
|December 1, 2011 to November 30, 2012 |  | US$  | 0.27 |  |     | US$
|December 1, 2012 to November 30, 2013 |  | US$  | 0.26 |  |     | US$



|Period                          |  | High |      |  | Low |    
|------------------------------- |  | ---- | ---- |  | --- | ---
|December 2011 to February 2012  |  | US$  | 0.26 |  |     | US$
|March 2012 to May 2012          |  | US$  | 0.27 |  |     | US$
|June 2012 to August 2012        |  | US$  | 0.20 |  |     | US$
|September 2012 to November 2012 |  | US$  | 0.26 |  |     | US$
|December 2012 to February 2013  |  | US$  | 0.18 |  |     | US$
|March 2013 to May 2013          |  | US$  | 0.23 |  |     | US$
|June 2013 to August 2013        |  | US$  | 0.26 |  |     | US$
|September 2013 to November 2013 |  | US$  | 0.18 |  |     | US$
|December 2013 to February 2014  |  | US$  | 0.21 |  |     | US$



|Period         |  | High |      |  | Low |    
|-------------- |  | ---- | ---- |  | --- | ---
|September 2013 |  | US$  | 0.18 |  |     | US$
|October 2013   |  | US$  | 0.18 |  |     | US$
|November 2013  |  | US$  | 0.17 |  |     | US$
|December 2013  |  | US$  | 0.16 |  |     | US$
|January 2014   |  | US$  | 0.17 |  |     | US$
|February 2014  |  | US$  | 0.21 |  |     | US$



| | B. | Plan of Distribution.
| | -- | ---------------------



Not applicable.







73







| | C. | Markets.
| | -- | --------



Our common shares trade on the TSX-V under
the symbol “ASX”, on the OTCBB under the symbol “ASXSF” and on the Frankfurt Exchange under the symbol
“QLD”. Our shares have traded on the TSX-V and on its predecessor, the Alberta Stock Exchange, since December 5, 1997;
the OTCBB since July 16, 2002. However, no trades in our common shares occurred on the OTCBB market until January 29, 2003.



| | D. | Selling Shareholders.
| | -- | ---------------------



Not applicable.



| | E. | Dilution.
| | -- | ---------



Not applicable.



| | F. | Expenses of the Issue.
| | -- | ----------------------



Not applicable.



ITEM 10.
Additional Information



| | A. | Share Capital.
| | -- | --------------



Not required.



| | B. | Memorandum and Articles of Association.
| | -- | ---------------------------------------



The information required by this Section
was previously disclosed, along with our Certificate of Incorporation, Certificate of Amendment, Registration of Restated Articles,
Bylaws and Articles of Association, all of which is hereby incorporated by reference, in our Form 20-F registration statement filed
with the Securities and Exchange Commission on June 8, 2001.



| | C. | Material Contracts.
| | -- | -------------------



We are a party to the following material
contracts for the two years preceding publication of this Annual Report, all of which are referred to in the exhibits section of
this Annual Report:



| | 1. | Agreement with Petrocapita Oil and Gas L.P. - On April 8, 2013, the Company entered into an agreement
with Petrocapita Oil and Gas L.P. (“Petrocapita”) of Calgary, Alberta for the sale of its petroleum and natural gas
properties in Alberta and Saskatchewan for cash consideration of $1,875,000. The sale to Petrocapita was completed on April 23,
2013 for total net cash consideration of $1,900,513 after taking into account initial industry standard adjustments to the agreed
purchase price of $1,875,000. The effective date of this transaction was March 1, 2013.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Indicative Term Sheet and Option Agreement with TerraX Minerals Inc. - On February 28, 2014, the
Company entered into an agreement with TerraX Minerals Inc. (“TerraX”), a company with directors and officers in common,
pursuant to which the Company can earn up to a 60% interest in TerraX’s wholly-owned Central Canada gold project (the “Central
Canada Property”) in Ontario (the “Option”) and subscribed for 1,300,000 units of TerraX (the “Units”)
at $0.45 per Unit for gross proceeds of $585,000 (the “Private Placement”). The Private Placement closed on March 3,
2014. Each Unit consists of one common share and one-half of one share purchase warrant, with each full warrant entitling the holder
to purchase an additional common share at an exercise price of $0.57 per common share exercisable until February 28, 2016. On March
3, 2014, the Company and TerraX entered into a definitive option agreement (the “Option Agreement”) related to the
Option. In order to exercise the Option, Alberta Star must make cash payments to TerraX totaling $85,000 over a three year period,
with $10,000 due upon execution of a definitive option agreement (the “Option Agreement”), $25,000 due on the second
anniversary of the execution of the Option Agreement (an “Anniversary Date”) and a further $50,000 due on the third
Anniversary Date. Alberta Star must also incur an aggregate of $500,000 in exploration expenditures over a three year period, with
$100,000 due on the first Anniversary Date, $150,000 due on the second Anniversary Date and a further $250,000 due on the third
Anniversary Date. Albert Star will also be responsible for payment of the annual pre-production royalty of $10,000 to the original
vendors of the Central Canada Property due annually in December beginning with the next payment due on December 11, 2014.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





74







| | 3. | Employment Agreement between Robert Hall and the Company dated February 1, 2012 with respect to
services in the capacity of Vice President Corporate Development at an annual salary of $80,000 filed as an exhibit with the commission
on April 5, 2012. Effective July 1, 2013, the base salary was reduced from $80,000 per annum to $60,000 per annum. On November
1, 2013, Mr. Hall resigned as Vice President, Corporate Development and $40,000 was paid or accrued on the termination of his employment
agreement.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | Consulting Agreement between Goring Development Corp. and the Company dated February 1, 2012 with
respect to services rendered in the capacity of Chief Financial Officer at an annual amount of $78,000 filed as an exhibit with
the commission on April 5, 2012. Effective July 1, 2013, the base salary was reduced from $78,000 per annum to $60,000 per annum.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. | The Company entered into an employment contract dated March 30, 2007 and amended February 1, 2012
with Tim Coupland with respect to services rendered in the capacity of Chief Executive Officer for an indefinite term filed as
an exhibit with the commission on April 5, 2012. Effective February 1, 2012, the base salary was reduced from $350,000 per annum
to $180,000 per annum. On July 10, 2012, Mr. Coupland resigned and $204,167 was paid on the termination of his employment agreement.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | D. | Exchange Controls.
| | -- | ------------------



There is no law or governmental decree
or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other
payments to a non-resident holder of Common Shares, other than withholding tax requirements. Any such remittances to United States
residents are generally subject to withholding tax, however no such remittances are likely in the foreseeable future. See “Taxation”,
below.



There is no limitation imposed by the laws
of Canada or by our charter or other constituent documents on the right of a non-resident to hold or vote the Common Shares, other
than as provided in the Investment Canada Act (Canada) (the “Investment Act”). The following discussion summarizes
the material features of the Investment Act for a non-resident who proposes to acquire a controlling number of our Common Shares.
It is general only, it is not a substitute for independent advice from an investor’s own advisor, and it does not anticipate
statutory or regulatory amendments. We do not believe the Investment Act will have any effect on us or on our non-Canadian shareholders
due to a number of factors including the nature of our operations and our relatively small capitalization.



The Investment Act generally prohibits
implementation of a “reviewable” investment by an individual, government or agency thereof, corporation, partnership,
trust or joint venture (each an “entity”) that is not a “Canadian” as defined in the Investment Act (a
“non-Canadian”), unless after review the Director of Investments appointed by the minister responsible for the Investment
Act is satisfied that the investment is likely to be of net benefit to Canada. The size and nature of a proposed transaction may
give rise to an obligation to notify the Director to seek an advance ruling. An investment in our Common Shares by a non-Canadian
(other than a “WTO Investor” as that term is defined in the Investment Act and which term includes entities which are
nationals of or are controlled by nationals of member states of the World Trade Organization) when we are not controlled by a WTO
Investor, would be reviewable under the Investment Act if it was an investment to acquire control of us and the value of our assets,
as determined in accordance with the regulations promulgated under the Investment Act, was over a certain figure, or if an order
for review was made by the federal cabinet on the grounds that the investment related to Canada’s cultural heritage or national
identity, regardless of the value of our assets. An investment in our Common Shares by a WTO Investor, or by a non-Canadian when
we are controlled by a WTO Investor, would be reviewable under the Investment Act if it was an investment to acquire control of
us and the value of our assets, as determined in accordance with the regulations promulgated under the Investment Act, was not
less than a specified amount, which for 2010 exceeds CAD$299 million. A non-Canadian would acquire control of us for the purposes
of the Investment Act if the non-Canadian acquired a majority of our Common Shares. The acquisition of less than a majority but
one-third or more of our Common Shares would be presumed to be an acquisition of control of us unless it could be established that,
on the acquisition, we were not controlled in fact by the acquiror through the ownership of our Common Shares.



| | E. | Taxation.
| | -- | ---------



Certain United States Federal Income
Tax Considerations



The following is a general summary of certain
material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating to the
acquisition, ownership, and disposition of common shares.





75







This summary is for general information
purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations
that may apply to a U.S. Holder arising from and relating to the acquisition, ownership, and disposition of common shares. In addition,
this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the
U.S. federal income tax consequences to such U.S. Holder, including specific tax consequences to a U.S. Holder under an applicable
tax treaty. Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice
with respect to any U.S. Holder. Except as specifically set forth below, this summary does not discuss applicable tax reporting
requirements. Each U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. federal alternative minimum,
U.S. federal estate and gift, U.S. state and local tax, and foreign tax consequences relating to the acquisition, ownership and
disposition of common shares.



No legal opinion from U.S. legal counsel
or ruling from the Internal Revenue Service (the “IRS”) has been requested, or will be obtained, regarding the U.S.
federal income tax consequences of the acquisition, ownership, and disposition of common shares. This summary is not binding on
the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this
summary. In addition, because the authorities on which this summary is based are subject to various interpretations, the IRS and
the U.S. courts could disagree with one or more of the positions taken in this summary.



Scope of this Summary



Authorities



This summary is based on the Internal Revenue
Code of 1986, as amended (the “Code”), Treasury Regulations (whether final, temporary, or proposed), published rulings
of the IRS, published administrative positions of the IRS, U.S. court decisions, the Convention Between Canada and the United States
of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the “Canada-U.S. Tax Convention”),
and U.S. court decisions that are applicable and, in each case, as in effect and available, as of the date of this document. Any
of the authorities on which this summary is based could be changed in a material and adverse manner at any time, and any such change
could be applied on a retroactive or prospective basis which could affect the U.S. federal income tax considerations described
in this summary. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation
that, if enacted, could be applied on a retroactive or prospective basis.

U.S. Holders



For purposes of this summary, the term
"U.S. Holder" means a beneficial owner of common shares that is for U.S. federal income tax purposes:



| | · | an individual who is a citizen or resident
of the U.S.;
| | - | -------------------------------------------------------



| | · | a corporation (or other entity taxable
as a corporation for U.S. federal income tax purposes) organized under the laws of the U.S., any state thereof or the District
of Columbia;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | an estate whose income is subject to U.S.
federal income taxation regardless of its source; or
| | - | ----------------------------------------------------------------------------------------------



| | · | a trust that (1) is subject to the primary
supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (2) has a valid
election in effect under applicable Treasury regulations to be treated as a U.S. person.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Non-U.S. Holders



For purposes of this summary, a “non-U.S.
Holder” is a beneficial owner of common shares that is not a U.S. Holder. This summary does not address the U.S. federal
income tax consequences to non-U.S. Holders arising from and relating to the acquisition, ownership, and disposition of common
shares. Accordingly, a non-U.S. Holder should consult its own tax advisor regarding the U.S. federal, U.S. federal alternative
minimum, U.S. federal estate and gift, U.S. state and local tax, and foreign tax consequences (including the potential application
of and operation of any income tax treaties) relating to the acquisition, ownership, and disposition of common shares.





76







U.S. Holders Subject to Special U.S.
Federal Income Tax Rules Not Addressed



This summary does not address the U.S.
federal income tax considerations applicable to U.S. Holders that are subject to special provisions under the Code, including the
following U.S. Holders: (a) that are tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other
tax-deferred accounts; (b) that are financial institutions, underwriters, insurance companies, real estate investment trusts, or
regulated investment companies; (c) that are brokers or dealers in securities or currencies or that are traders in securities that
elect to apply a mark-to-market accounting method; (d) that have a “functional currency” other than the U.S. dollar;
(e) that own common shares as part of a straddle, hedging transaction, conversion transaction, constructive sale, or other arrangement
involving more than one position; (f) that acquired common shares in connection with the exercise of employee stock options or
otherwise as compensation for services; (g) that hold common shares other than as a capital asset within the meaning of Section
1221 of the Code (generally, property held for investment purposes); (h) partnerships and other pass-through entities (and investors
in such partnerships and entities); or (i) that own or have owned (directly, indirectly, or by attribution) 10% or more of the
total combined voting power of the outstanding shares of the Company. This summary also does not address the U.S. federal income
tax considerations applicable to U.S. Holders who are (a) U.S. expatriates or former long-term residents of the U.S. subject to
Section 877 of the Code, (b) persons that have been, are, or will be a resident or deemed to be a resident in Canada for purposes
of the Income Tax Act (Canada) (“Tax Act”); (c) persons that use or hold, will use or hold, or that are or will be
deemed to use or hold common shares in connection with carrying on a business in Canada; (d) persons whose common shares constitute
“taxable Canadian property” under the Tax Act; or (e) persons that have a permanent establishment in Canada for the
purposes of the Canada-U.S. Tax Convention. U.S. Holders that are subject to special provisions under the Code, including U.S.
Holders described immediately above, should consult their own tax advisor regarding the U.S. federal, U.S. federal alternative
minimum, U.S. federal estate and gift, U.S. state and local tax, and foreign tax consequences relating to the acquisition, ownership
and disposition of common shares.



If an entity or arrangement that is classified
as a partnership for U.S. federal income tax purposes holds common shares, the U.S. federal income tax consequences to such partnership
and the partners of such partnership generally will depend on the activities of the partnership and the status of such partners.
Partners of entities or arrangements that are classified as partnerships for U.S. federal income tax purposes should consult their
own tax advisors regarding the U.S. federal income tax consequences arising from and relating to the acquisition, ownership, and
disposition of common shares.



Tax Consequences Not Addressed



This summary does not address the U.S.
state and local, U.S. federal estate and gift, U.S. federal alternative minimum tax or foreign tax consequences to U.S. Holders
of the acquisition, ownership, and disposition of common shares. Each U.S. Holder should consult its own tax advisor regarding
the U.S. state and local, U.S. federal estate and gift, U.S. federal alternative minimum tax and foreign tax consequences of the
acquisition, ownership, and disposition of common shares.



Passive Foreign Investment Company Rules



If the Company is considered a “passive
foreign investment company” under the meaning of Section 1297 of the Code (a “PFIC”) at any time during a U.S.
Holder’s holding period, the following sections will generally describe the U.S. federal income tax consequences to the U.S.
Holder of the acquisition, ownership, and disposition of common shares. In addition, in any year in which the Company is classified
as a PFIC, such holder will be required to file an annual report with the IRS containing such information as Treasury Regulations
and/or other IRS guidance may require. A failure to satisfy such reporting requirements may result in an extension of the time
period during which the IRS can assess a tax. U.S. Holders should consult their own tax advisors regarding the requirements of
filing such information returns under these rules, including the requirement to file a IRS Form 8621.



PFIC Status of the Company



The Company generally will be a PFIC if,
for a tax year, (a) 75% or more of the gross income of the Company for such tax year is passive income or (b) 50% or more of the
value of our assets either produce passive income or are held for the production of passive income, based on the quarterly average
of the fair market value of such assets. “Gross income” generally includes all revenues less the cost of goods sold,
plus income from investments and from incidental or outside operations or sources, and “passive income” generally includes,
for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain
gains from commodities transactions. Active business gains arising from the sale of commodities generally are excluded from passive
income if substantially all (85% or more) of a foreign corporation’s commodities are stock in trade or inventory, depreciable
property used in a trade or business or supplies regularly used or consumed in the ordinary course of its trade or business, and
certain other requirements are satisfied.



For purposes of the PFIC income test and
asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding shares
of another corporation, the Company will be treated as if it (a) held a proportionate share of the assets of such other corporation
and (b) received directly a proportionate share of the income of such other corporation. In addition, for purposes of the PFIC
income test and asset test described above, and assuming certain other requirements are met, “passive income” does
not include any interest, dividends, rents, or royalties that are received or accrued by the Company from a “related person”
(as defined in Section 954(d)(3) of the Code), to the extent such items are properly allocable to the income of such related person
that is not passive income.





77







In addition, under certain attribution
rules, if the Company is a PFIC, U.S. Holders will be deemed to own their proportionate share of any subsidiary of the Company
which is also a PFIC (a ‘‘Subsidiary PFIC’’), and will be subject to U.S. federal income tax on their proportionate
share of (i) a distribution on the shares of a Subsidiary PFIC and (ii) a disposition or deemed disposition of shares of a Subsidiary
PFIC, both as if such U.S. Holders directly held the shares of such Subsidiary PFIC.



The Company believes that it qualified
as a PFIC for the tax year ended November 30, 2009 and during prior tax years. However, no determination has been made regarding
our PFIC status for the tax years ended November 30, 2010, 2011, 2012 and 2013. The determination of whether a corporation was,
or will be, a PFIC for a tax year depends, in part, on the application of complex U.S. federal income tax rules, which are subject
to differing interpretations. In addition, whether a corporation will be a PFIC for any tax year depends on the assets and income
of such corporation over the course of each such tax year and, as a result, cannot be predicted with certainty as of the date of
this document. Accordingly, there can be no assurance that the IRS will not challenge any determination made by the Company (or
a Subsidiary PFIC) concerning its PFIC status. Each U.S. Holder should consult its own tax advisor regarding the PFIC status of
the Company and each Subsidiary PFIC.



Default PFIC Rules
Under Section 1291 of the Code



If the Company is a PFIC, the U.S. federal
income tax consequences to a U.S. Holder of the acquisition, ownership, and disposition of common shares will depend on whether
such U.S. Holder makes an election to treat the Company as a “qualified electing fund” or “QEF” under Section
1295 of the Code (a “QEF Election”) or a mark-to-market election under Section 1296 of the Code (a “Mark-to-Market
Election”). A U.S. Holder that does not make either a QEF Election or a Mark-to-Market Election will be referred to in this
summary as a “Non-Electing U.S. Holder.”



A Non-Electing U.S. Holder will be subject
to the rules of Section 1291 of the Code with respect to (a) any gain recognized on the sale or other taxable disposition of common
shares and (b) any excess distribution received on the common shares. A distribution generally will be an “excess distribution”
to the extent that such distribution (together with all other distributions received in the current tax year) exceeds 125% of the
average distributions received during the three preceding tax years (or during a U.S. Holder’s holding period for the common
shares, if shorter).



Under Section 1291 of the Code, any gain
recognized on the sale or other taxable disposition of common shares, and any “excess distribution” received on common
shares, must be ratably allocated to each day in a Non-Electing U.S. Holder’s holding period for the respective common shares.
The amount of any such gain or excess distribution allocated to the tax year of disposition or distribution of the excess distribution
and to years before the entity became a PFIC, if any, would be taxed as ordinary income. The amounts allocated to any other tax
year would be subject to U.S. federal income tax at the highest tax applicable to ordinary income in each such year, and an interest
charge would be imposed on the tax liability for each such year, calculated as if such tax liability had been due in each such
year. A Non-Electing U.S. Holder that is not a corporation must treat any such interest paid as “personal interest,”
which is not deductible.



If the Company is a PFIC for any tax year
during which a Non-Electing U.S. Holder holds common shares, the Company will continue to be treated as a PFIC with respect to
such Non-Electing U.S. Holder, regardless of whether the Company ceases to be a PFIC in one or more subsequent tax years. A Non-Electing
U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules of Section
1291 of the Code discussed above) as if such common shares were sold on the last day of the last tax year for which the Company
was a PFIC.



QEF Election



A U.S. Holder that makes a QEF Election
for the first tax year in which its holding period of its common shares begins, generally, will not be subject to the rules of
Section 1291 of the Code discussed above with respect to its common shares. However, a U.S. Holder that makes a QEF Election will
be subject to U.S. federal income tax on such U.S. Holder’s pro rata share of (a) the net capital gain of the Company, which
will be taxed as long-term capital gain to such U.S. Holder, and (b) and the ordinary earnings of the Company, which will be taxed
as ordinary income to such U.S. Holder. Generally, “net capital gain” is the excess of (a) net long-term capital gain
over (b) net short-term capital loss, and “ordinary earnings” are the excess of (a) “earnings and profits”
over (b) net capital gain. A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such amounts for
each tax year in which the Company is a PFIC, regardless of whether such amounts are actually distributed to such U.S. Holder by
the Company. However, for any tax year in which the Company is a PFIC and has no net income or gain, U.S. Holders that have made
a QEF Election would not have any income inclusions as a result of the QEF Election. If a U.S. Holder that made a QEF Election
has an income inclusion, such a U.S. Holder may, subject to certain limitations, elect to defer payment of current U.S. federal
income tax on such amounts, subject to an interest charge. If such U.S. Holder is not a corporation, any such interest paid will
be treated as “personal interest,” which is not deductible.





78







A U.S. Holder that makes a QEF Election
generally (a) may receive a tax-free distribution from the Company to the extent that such distribution represents “earnings
and profits” of the Company that were previously included in income by the U.S. Holder because of such QEF Election and (b)
will adjust such U.S. Holder’s tax basis in the common shares to reflect the amount included in income or allowed as a tax-free
distribution because of such QEF Election. In addition, a U.S. Holder that makes a QEF Election generally will recognize capital
gain or loss on the sale or other taxable disposition of common shares.



The procedure for making a QEF Election,
and the U.S. federal income tax consequences of making a QEF Election, will depend on whether such QEF Election is timely. A QEF
Election will be treated as “timely” if such QEF Election is made for the first year in the U.S. Holder’s holding
period for the common shares in which the Company was a PFIC. A U.S. Holder may make a timely QEF Election by filing the appropriate
QEF Election documents at the time such U.S. Holder files a U.S. federal income tax return for such year.



A QEF Election will apply to the tax year
for which such QEF Election is made and to all subsequent tax years, unless such QEF Election is invalidated or terminated or the
IRS consents to revocation of such QEF Election. If a U.S. Holder makes a QEF Election and, in a subsequent tax year, the Company
ceases to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those tax years in which
the Company is not a PFIC. Accordingly, if the Company becomes a PFIC in another subsequent tax year, the QEF Election will be
effective and the U.S. Holder will be subject to the QEF rules described above during any subsequent tax year in which the Company
qualifies as a PFIC.



U.S. Holders should be aware that there
can be no assurance that we will satisfy record keeping requirements that apply to a QEF, or that we will supply U.S. Holders with
information that such U.S. Holders require to report under the QEF rules, in event that we are a PFIC and a U.S. Holder wishes
to make a QEF Election. Thus, US Holders may not be able to make a QEF Election with respect to their common shares. Each U.S.
Holder should consult its own financial advisor, legal counsel, or accountant regarding the availability of, and procedure for
making, a QEF Election.



Mark-to-Market Election



A U.S. Holder may make a Mark-to-Market
Election only if the common shares are marketable stock. The common shares generally will be “marketable stock” if
the common shares are regularly traded on (a) a national securities exchange that is registered with the Securities and Exchange
Commission, (b) the national market system established pursuant to section 11A of the Securities and Exchange Act of 1934, or (c)
a foreign securities exchange that is regulated or supervised by a governmental authority of the country in which the market is
located, provided that (i) such foreign exchange has trading volume, listing, financial disclosure, and other requirements and
the laws of the country in which such foreign exchange is located, together with the rules of such foreign exchange, ensure that
such requirements are actually enforced and (ii) the rules of such foreign exchange ensure active trading of listed stocks. If
such stock is traded on such a qualified exchange or other market, such stock generally will be “regularly traded”
for any calendar year during which such stock is traded, other than in de minimis quantities, on at least 15 days during each calendar
quarter.



A U.S. Holder that makes a Mark-to-Market
Election with respect to its common shares generally will not be subject to the rules of Section 1291 of the Code discussed above
with respect to such common shares. However, if a U.S. Holder does not make a Mark-to-Market Election beginning in the first tax
year of such U.S. Holder’s holding period for the common shares or such U.S. Holder has not made a timely QEF Election, the
rules of Section 1291 of the Code discussed above will apply to certain dispositions of, and distributions on, the common
shares.



A U.S. Holder that makes a Mark-to-Market
Election will include in ordinary income, for each tax year in which the Company is a PFIC, an amount equal to the excess, if any,
of (a) the fair market value of the common shares, as of the close of such tax year over (b) such U.S. Holder’s tax basis
in such common shares. A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal to the
excess, if any, of (i) such U.S. Holder’s adjusted tax basis in the common shares, over (ii) the fair market value of such
common shares (but only to the extent of the net amount of previously included income as a result of the Mark-to-Market Election
for prior tax years).



A U.S. Holder that makes a Mark-to-Market
Election generally also will adjust such U.S. Holder’s tax basis in the common shares to reflect the amount included in gross
income or allowed as a deduction because of such Mark-to-Market Election. In addition, upon a sale or other taxable disposition
of common shares, a U.S. Holder that makes a Mark-to-Market Election will recognize ordinary income or ordinary loss (not to exceed
the excess, if any, of (a) the amount included in ordinary income because of such Mark-to-Market Election for prior tax years over
(b) the amount allowed as a deduction because of such Mark-to-Market Election for prior tax years).





79







A Mark-to-Market Election applies to the
tax year in which such Mark-to-Market Election is made and to each subsequent tax year, unless the common shares cease to be “marketable
stock” or the IRS consents to revocation of such election. Each U.S. Holder should consult its own tax advisor regarding
the availability of, and procedure for making, a Mark-to-Market Election.



Although a U.S. Holder may be eligible
to make a Mark-to-Market Election with respect to the common shares, no such election may be made with respect to the stock of
any Subsidiary PFIC that a U.S. Holder is treated as owning, because such stock is not marketable. Hence, the Mark-to-Market Election
will not be effective to eliminate the interest charge described above with respect to deemed dispositions of Subsidiary PFIC stock
or distributions from a Subsidiary PFIC.



Other PFIC Rules



Under Section 1291(f) of the Code, the
IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U.S. Holder that had not made a
timely QEF Election to recognize gain (but not loss) upon certain transfers of common shares that would otherwise be tax-deferred
(e.g., gifts and exchanges pursuant to corporate reorganizations). However, the specific U.S. federal income tax consequences to
a U.S. Holder may vary based on the manner in which common shares are transferred.



Certain additional adverse rules will apply
with respect to a U.S. Holder if the Company is a PFIC, regardless of whether such U.S. Holder makes a QEF Election. For example
under Section 1298(b)(6) of the Code, a U.S. Holder that uses common shares as security for a loan will, except as may be provided
in Treasury Regulations, be treated as having made a taxable disposition of such common shares.



Special rules also apply to the amount
of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC. Subject to such special rules, foreign taxes
paid with respect to any distribution in respect of stock in a PFIC are generally eligible for the foreign tax credit. The rules
relating to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a U.S. Holder should
consult with their own tax advisor regarding the availability of the foreign tax credit with respect to distributions by a PFIC.



In addition, a U.S. Holder who acquires
common shares from a decedent will not receive a “step up” in tax basis of such common shares to fair market value.



The PFIC rules are complex,
and each U.S. Holder should consult its own tax advisor regarding the PFIC rules and how the PFIC rules may affect the U.S. federal
income tax consequences of the acquisition, ownership, and disposition of common shares.



U.S. Federal Income Tax Consequences
of the Acquisition, Ownership, and Disposition of Common Shares



The following discussion is subject to
the rules described above under the heading “Passive Foreign Investment Company Rules”.



General Taxation of Distributions



Subject to the PFIC rules discussed above,
a U.S. Holder that receives a distribution, including a constructive distribution, with respect to a Common Share will be required
to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income tax withheld
from such distribution) to the extent of the current or accumulated “earnings and profits” of the Company, as computed
for U.S. federal income tax purposes. A dividend generally will be taxed to a U.S. Holder at ordinary income tax rates. To the
extent that a distribution exceeds the current and accumulated “earnings and profits” of the Company, such distribution
will be treated first as a tax-free return of capital to the extent of a U.S. Holder's tax basis in the common shares and thereafter
as gain from the sale or exchange of such common shares. (See “ Sale or Other Taxable Disposition of common shares”
below). However, the Company may not maintain the calculations of earnings and profits in accordance with U.S. federal income tax
principles, and each U.S. Holder should therefore assume that any distribution by the Company with respect to the common shares
will constitute ordinary dividend income. Dividends received on common shares generally will not be eligible for the “dividends
received deduction”. Subject to applicable limitations and provided that the Company is eligible for the benefits of the
Canada-U.S. Tax Convention, dividends paid by the Company to non-corporate U.S. Holders, including individuals, generally will
be eligible for the preferential tax rates applicable to long-term capital gains for dividends, provided certain holding period
and other conditions are satisfied, including that the Company not be classified as a PFIC (as defined below) in the tax year of
distribution or in the preceding tax year. The dividend rules are complex, and each U.S. Holder should consult its own tax advisor
regarding the application of such rules.





80







Sale or Other Taxable Disposition of
Common Shares



Subject to the PFIC rules discussed above,
upon the sale or other taxable disposition of common shares, a U.S. Holder generally will recognize capital gain or loss in an
amount equal to the difference between the amount of cash plus the fair market value of any property received and such U.S. Holder's
tax basis in such common shares sold or otherwise disposed of. Subject to the PFIC rules discussed above, gain or loss recognized
on such sale or other disposition generally will be long-term capital gain or loss if, at the time of the sale or other disposition,
the common shares have been held for more than one year.



Gain or loss recognized by a U.S. Holder
on the sale or other taxable disposition of common shares generally will be treated as “U.S. source” for purposes of
applying the U.S. foreign tax credit rules unless the gain is subject to tax in Canada and is resourced as “foreign source”
under the Canada-U.S. Tax Convention and such U.S. Holder elects to treat such gain or loss as “foreign source.”



Preferential tax rates apply to long-term
capital gain of a U.S. Holder that is an individual, estate, or trust. There are currently no preferential tax rates for long-term
capital gain of a U.S. Holder that is a corporation. Deductions for capital losses are subject to significant limitations under
the Code.



Receipt of Foreign Currency



The amount of any distribution paid to
a U.S. Holder in foreign currency, or on the sale, exchange or other taxable disposition of common shares, generally will be equal
to the U.S. dollar value of such foreign currency based on the exchange rate applicable on the date of receipt (regardless of whether
such foreign currency is converted into U.S. dollars at that time). If the foreign currency received is not converted into U.S.
dollars on the date of receipt, a U.S. Holder will have a basis in the foreign currency equal to its U.S. dollar value on the date
of receipt. Any U.S. Holder who receives payment in foreign currency and engages in a subsequent conversion or other disposition
of the foreign currency may have a foreign currency exchange gain or loss that would be treated as ordinary income or loss, and
generally will be U.S. source income or loss for foreign tax credit purposes. Each U.S. Holder should consult its own U.S. tax
advisor regarding the U.S. federal income tax consequences of receiving, owning, and disposing of foreign currency.



Foreign Tax Credit



Subject to the PFIC rules discussed above,
a U.S. Holder who pays (whether directly or through withholding) Canadian income tax with respect to dividends paid on the common
shares generally will be entitled, at the election of such U.S. Holder, to receive either a deduction or a credit for such Canadian
income tax paid. Generally, a credit will reduce a U.S. Holder’s U.S. federal income tax liability on a dollar-for-dollar
basis, whereas a deduction will reduce a U.S. Holder’s income subject to U.S. federal income tax. This election is made on
a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a
year.



Complex limitations apply to the foreign
tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holder’s U.S.
federal income tax liability that such U.S. Holder’s “foreign source” taxable income bears to such U.S. Holder’s
worldwide taxable income. In applying this limitation, a U.S. Holder’s various items of income and deduction must be classified,
under complex rules, as either “foreign source” or “U.S. source.” In addition, this limitation is calculated
separately with respect to specific categories of income. Dividends paid by the Company generally will constitute “foreign
source” income and generally will be categorized as “passive category income.” The foreign tax credit rules are
complex, and each U.S. Holder should consult its own tax advisor regarding the foreign tax credit rules.



Additional Tax on Passive Income



Individuals, estates and certain trusts
whose income exceeds certain thresholds will be required to pay a 3.8% Medicare surtax on “net investment income” including,
among other things, dividends and net gain from disposition of property (other than property held in certain trades or businesses).
U.S. Holders should consult their own tax advisors regarding the effect, if any, of this tax on their ownership and disposition
of common shares.





81







Backup Withholding and Information Reporting



Under U.S. federal income tax law and Treasury
Regulations, certain categories of U.S. Holders must file information returns with respect to their investment in, or involvement
in, a foreign corporation. For example, U.S. return disclosure obligations (and related penalties) are imposed on individuals who
are U.S. Holders that hold certain specified foreign financial assets in excess of certain threshold amounts. The definition of
specified foreign financial assets includes not only financial accounts maintained in foreign financial institutions, but also,
unless held in accounts maintained by a financial institution, any stock or security issued by a non-U.S. person, any financial
instrument or contract held for investment that has an issuer or counterparty other than a U.S. person and any interest in a foreign
entity. U.S. Holders may be subject to these reporting requirements unless their common shares are held in an account at certain
financial institutions. Penalties for failure to file certain of these information returns are substantial. U.S. Holders should
consult with their own tax advisors regarding the requirements of filing information returns, including the requirement to file
an IRS Form 8938.



Payments made within the U.S. or by a U.S.
payor or U.S. middleman, of dividends on, and proceeds arising from the sale or other taxable disposition of, common shares generally
may be subject to information reporting and backup withholding tax, at the rate of 28%, if a U.S. Holder (a) fails to furnish such
U.S. Holder’s correct U.S. taxpayer identification number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer
identification number, (c) is notified by the IRS that such U.S. Holder has previously failed to properly report items subject
to backup withholding tax, or (d) fails to certify, under penalty of perjury, that such U.S. Holder has furnished its correct U.S.
taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup withholding tax.
However, certain exempt persons, such as corporations, generally are excluded from these information reporting and backup withholding
rules. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a credit against a U.S. Holder’s
U.S. federal income tax liability, if any, or will be refunded, if such U.S. Holder furnishes required information to the IRS in
a timely manner. Each U.S. Holder should consult its own tax advisor regarding the information reporting and backup withholding
rules.



Certain Canadian Federal Income
Tax Consequences



The following discussion summarizes the
principal Canadian federal income tax considerations generally applicable to a person who owns one or more common shares of the
Company (the "Shareholder"), and who at all material times for the purposes of the Income Tax Act (Canada) (the "Canadian
Act") deals at arm's length with the Company, holds all common shares solely as capital property, is a non-resident of Canada,
and does not, and is not deemed to, use or hold any Common share in or in the course of carrying on business in Canada. It is assumed
that the common shares will at all material times be listed on a stock exchange that is prescribed for the purposes of the Canadian
Act.



This summary is based on the current provisions
of the Canadian Act, including the regulations thereunder, and the Canada-United States Income Tax Convention (1980) (the "Treaty")
as amended. This summary takes into account all specific proposals to amend the Canadian Act and the regulations thereunder publicly
announced by the government of Canada to the date hereof and the Company's understanding of the current published administrative
and assessing practices of Canada Customs and Revenue Agency. It is assumed that all such amendments will be enacted substantially
as currently proposed, and that there will be no other material change to any such law or practice, although no assurances can
be given in these respects. Except to the extent otherwise expressly set out herein, this summary does not take into account any
provincial, territorial or foreign income tax law or treaty.



This summary is not, and is not to be construed
as, tax advice to any particular Shareholder. Each prospective and current Shareholder is urged to obtain independent advice as
to the Canadian income tax consequences of an investment in common shares applicable to the Shareholder's particular circumstances.





82







A Shareholder generally will not be subject
to tax pursuant to the Canadian Act on any capital gain realized by the Shareholder on a disposition of a Common share unless the
Common share constitutes "taxable Canadian property" to the Shareholder for purposes of the Canadian Act and the Shareholder
is not eligible for relief pursuant to an applicable bilateral tax treaty. A Common share that is disposed of by a Shareholder
will not constitute taxable Canadian property of the Shareholder provided that the Common share is listed on a stock exchange that
is prescribed for the purposes of the Canadian Act (the Toronto Stock Exchange is so prescribed), and that neither the Shareholder,
nor one or more persons with whom the Shareholder did not deal at arm's length, alone or together at any time in the five years
immediately preceding the disposition owned, or owned any right to acquire, 25% or more of the issued shares of any class of the
capital stock of the Company. In addition, the Treaty generally will exempt a Shareholder who is a resident of the United States
for the purposes of the Treaty, and who would otherwise be liable to pay Canadian income tax in respect of any capital gain realized
by the Shareholder on the disposition of a Common share, from such liability provided that the value of the Common share is not
derived principally from real property (including resource property) situated in Canada or that the Shareholder does not have,
and has not had within the 12-month period preceding the disposition, a "permanent establishment" or "fixed base,"
as those terms are defined for the purposes of the Treaty, available to the Shareholder in Canada. The Treaty may not be available
to a non-resident Shareholder that is a U.S. LLC, which is not subject to tax in the U.S. Any dividend on a Common share, including
a stock dividend, paid or credited, or deemed to be paid or credited, by the Company to a Shareholder will be subject to Canadian
withholding tax at the rate of 25% on the gross amount of the dividend, or such lesser rate as may be available under an applicable
income tax treaty. Pursuant to the Treaty, the rate of withholding tax applicable to a dividend paid on a Common share to a Shareholder
who is a resident of the United States for the purposes of the Treaty will be reduced to 5% if the beneficial owner of the dividend
is a company that owns at least 10% of the voting stock of the Company, and in any other case will be reduced to 15%, of the gross
amount of the dividend. It is Canada Customs and Revenue Agency’s position that the Treaty reductions are not available to
a Shareholder that is a "limited liability company" resident in the United States. The Company will be required to withhold
any such tax from the dividend, and remit the tax directly to Canada Customs and Revenue Agency for the account of the Shareholder.



ALL PROSPECTIVE
INVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF PURCHASING THE COMMON SHARES.



| | F. | Dividends and Paying Agents.
| | -- | ----------------------------



Not applicable.



| | G. | Statement by Experts.
| | -- | ---------------------



Not applicable.



| | H. | Documents on Display.
| | -- | ---------------------



You may review a copy of our filings with
the SEC, including exhibits and schedules filed with it, in the SEC's Public Reference Room at 100 F Street NE, Washington, D.C.
20549. You may call the SEC at 1-800-SEC-0330 or the Conventional Reading Rooms’ Headquarters Office at 212-551-8090 for
further information on the public reference rooms. The SEC maintains a web site (www.sec.gov) that contains reports, proxy and
information statements and other information regarding registrants that file electronically with the SEC.



| | I. | Subsidiary Information
| | -- | ----------------------



Not applicable.



ITEM 11.
Quantitative and Qualitative Disclosures About Market Risk



| | A. | Quantitative Information About Market Risk.
| | -- | -------------------------------------------



Transaction Risk and Currency
Risk Management



Our operations do not employ financial
instruments or derivatives; and given that we keep our excess funds in high-grade short-term instruments, there are no significant
or unusual financial market risks.



| | B. | Qualitative Information About Market Risk.
| | -- | ------------------------------------------



Exchange Rate Sensitivity



A significant portion of our administrative
operations and other operations are denominated in Canadian funds, there is little exposure to foreign exchange movements between
the Canadian and international currencies.



We typically hold most of our funds in
Canadian dollars and report the results of our operations in Canadian dollars and are therefore are not subject to any material
exchange rate risk.



We do not hedge foreign currency risk,
and it does not consider this exposure to be material in the context of its operations.



There has been some difference in our operations
due to the affect of foreign exchange rate fluctuation in the period ended November 30, 2013.





83







Interest Rate Risk and Equity
Price Risk



We are primarily equity financed and do
not have any long term debt and, therefore, do not believe that the interest rate market’s risk is material.



Commodity Price Risk



While the value of our resource properties,
if any, can always be said to relate to the price of precious metals and the outlook for same, we do not have any operating mines
and hence does not have any hedging or other commodity based operations risks respecting our business activities. We are exposed
to market risk, primarily related to fluctuating prices in our common stock. See “Risk Factors”.



ITEM 12.
Descriptions of Securities Other than Equity Securities.



A. – C.



Not Applicable.



| | D. | American Depository Receipts
| | -- | ----------------------------



The Company does not have securities registered as American
Depository Receipts.



84







PART II



ITEM 13.
Defaults, Dividend Arrearages and Delinquencies.



Not applicable.



ITEM 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds.



A-D.



None.



| | E. | Use of Proceeds.
| | -- | ----------------



Not applicable.



ITEM 15.
Controls and Procedures.



| | A. | Disclosure Controls and Procedures
| | -- | ----------------------------------



At the end of the period covered by this
annual report for the fiscal year ended November 30, 2013, an evaluation was carried out under the supervision of, and with the
participation of, our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”),
of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the
Exchange Act). Based upon that evaluation, our CEO and CFO have concluded that the disclosure controls and procedures were effective
to give reasonable assurance that the information required to be disclosed by us in reports that are filed or submitted under the
Exchange Act are (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and
forms, and (ii) accumulated and communicated to management, including our principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.



| | B. | Management’s Annual Report on Internal Control
over Financial Reporting
| | -- | -----------------------------------------------------------------------



Management is responsible for establishing
and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. A company’s
internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.



A company’s internal control over
financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations
of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. It should
be noted that a control system, no matter how well conceived or operated, can only provide reasonable assurance, not absolute assurance,
that the objectives of the control system are met. Also, projections of any evaluation of effectiveness to future periods are subject
to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies
and procedures may deteriorate.



Management, including the CEO and CFO,
assessed the effectiveness of our internal control over financial reporting as of November 30, 2013. In making this assessment,
management used the criteria set forth in the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO). Based on our assessment, management has concluded that, as of November 30, 2013, our internal
control over financial reporting was effective and no material weaknesses in our internal control over financial reporting were
discovered.





85







| | C. | Attestation Report of the Registered Public Accounting
Firm
| | -- | -----------------------------------------------------------



This Annual Report does not include an
attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s
report was not subject to attestation by our registered public accounting firm pursuant the Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010, which permits the company to provide only management’s report in this Annual Report. The Dodd-Frank
Act permits a “non-accelerated filer” to provide only management’s report on internal control over financial
reporting in an Annual Report and omit an attestation report of the issuer’s registered public accounting firm regarding
management’s report on internal control over financial reporting.



| | D. | Changes in Internal Control Over Financial Reporting.
| | -- | -----------------------------------------------------



Based upon their evaluation of our controls,
senior management of the Company have concluded that, there were no significant changes in our internal control over financial
reporting or in other factors during our last fiscal year that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.



ITEM 16A.
Audit Committee Financial Expert.



Our Board of Directors has determined that
Martin Burian, a member of our Audit Committee, is the Audit Committee financial expert, as defined in Item 16A of Form 20-F, and
is an independent director pursuant to criteria set forth in Section 803A of the NYSE MKT Company Guide.



ITEM 16B.
Code of Ethics.



We have adopted a written Code of Ethics
that applies to all employees and executive officers, including our Chief Executive Officer and Chief Financial Officer. A copy
of the Code of Ethics is available on our website at www.alberta-star.com.



During the most recently completed fiscal
year, we had neither: (a) amended our Code of Ethics; nor (b) granted any waiver (including any implicit waiver) form any provision
of our Code of Ethics.



ITEM 16C
- Principal Accountant Fees and Services



Fees and Services



James Stafford, Chartered Accountants,
audited our financial statements for fiscal 2013 and 2012. The following is an aggregate of fees billed during each of the years
ended November 30, 2013 and 2012 for professional services rendered by our principal accountants:



|                                                                                              |  | 2013 |        |  | 2012 |  
|--------------------------------------------------------------------------------------------- |  | ---- | ------ |  | ---- | -
|Audit fees - auditing of our annual financial statements and preparation of auditors’ report. |  | $    | 39,000 |  |      | $
|Audit-Related fees – assurance and related services for the audit                             |  |      | -      |  |      |  
|Tax fees - preparation                                                                        |  |      | 2,891  |  |      |  
|All other fees – other services provided by our principal accountants.                        |  |      | 5,155  |  |      |  
|Total fees billed by our principal accountants                                                |  | $    | 47,046 |  |      | $



Pre-Approval Policies and Procedures



We have adopted certain policies and procedures
intend to ensure our principal accountants will maintain objectivity and independence in their audit of our financial statements.
To minimize relationships that could appear to impair the objectivity of our principal accountants, our audit committee has restricted
the non-audit services that our principal accountants may provide to us primarily to tax services and review assurance services.



In general, we seek to obtain non-audit
services from our principal accountants only when the services offered by our principal accountants are more effective or economical
than services available from other service providers, and, to the extent possible, only after competitive bidding. These determinations
are among the key practices adopted by the audit committee effective during fiscal 2013. The board has adopted policies and procedures
for pre-approving work performed by our principal accountants.



After careful consideration, the audit
committee of the board of directors has determined that payment of the above audit fees is in conformance with the independent
status of our company’s principal independent accountants. Before engaging the auditors in additional services, the audit
committee considers how these services will impact the entire engagement and independence factors.



The Audit Committee has pre-approved specifically
identified non-audit related services, including tax compliance, review of tax returns, and documentation of processes and controls
as submitted to the Audited Committee from time to time.





86







ITEM 16D.
Exemptions from the Listing Standards for Audit Committees.



Not applicable.



ITEM 16E.
Purchases of Equity Securities by the Issuers and Affiliated Purchasers.



We repurchased 290,000 common shares during
the fiscal year ended November 30, 2013 and 133,000 common shares from December 31, 2013 to February 28, 2014.



Purchases for the fiscal year ended November
30, 2013 and to February 28, 2014:



|                       |  | (a) Total Number of 
    Shares Purchased |         |  | (b) Average 
    Price Paid per 
    Share |   |      | (c) Total Number of 
    Shares Purchased as Part 
    of Publicly Announced 
    Plans or Programs |  |  | (d) Maximum Number  
    of Shares that May Yet 
    to Be Purchased Under 
    the Plans or Programs | 
|---------------------- |  | ----------------------------------------- | ------- |  | ------------------------------------------ | - | ---- | --------------------------------------------------------------------------------------------------- |  |  | ----------------------------------------------------------------------------------------------------- | 
|December 1 to 31, 2012 |  |                                           | -       |  |                                            |   | -    |                                                                                                     |  |  | -                                                                                                     | 
|January 1 to 31, 2013  |  |                                           | -       |  |                                            |   | -    |                                                                                                     |  |  | -                                                                                                     | 
|February 1 to 28       |  |                                           | -       |  |                                            |   | -    |                                                                                                     |  |  | -                                                                                                     | 
|March 1 to 31          |  |                                           | -       |  |                                            |   | -    |                                                                                                     |  |  | -                                                                                                     | 
|April 1 to 30          |  |                                           | -       |  |                                            |   | -    |                                                                                                     |  |  | -                                                                                                     | 
|May 3 to 31            |  |                                           | 43,000  |  |                                            | $ | 0.24 |                                                                                                     |  |  | 43,000                                                                                                | 
|June 1 to 30           |  |                                           | 106,500 |  |                                            | $ | 0.17 |                                                                                                     |  |  | 149,500                                                                                               | 
|July 1 to 31           |  |                                           | 140,500 |  |                                            | $ | 0.13 |                                                                                                     |  |  | 290,000                                                                                               | 
|August 1 to 31         |  |                                           | Nil     |  |                                            |   | -    |                                                                                                     |  |  | 290,000                                                                                               | 
|September 1 to 30      |  |                                           | Nil     |  |                                            |   | -    |                                                                                                     |  |  | 290,000                                                                                               | 
|October 1 to 31        |  |                                           | Nil     |  |                                            |   | -    |                                                                                                     |  |  | 290,000                                                                                               | 
|November 1 to 30       |  |                                           | Nil     |  |                                            |   | -    |                                                                                                     |  |  | 290,000                                                                                               | 
|December 1 to 31, 2013 |  |                                           | 92,500  |  |                                            | $ | 0.17 |                                                                                                     |  |  | 382,500                                                                                               | 
|January 1 to 31, 2014  |  |                                           | 23,500  |  |                                            | $ | 0.17 |                                                                                                     |  |  | 406,000                                                                                               | 
|February 1 to 28, 2014 |  |                                           | 17,000  |  |                                            | $ | 0.18 |                                                                                                     |  |  | 423,000                                                                                               | 



On May 1, 2013, the Company received approval
from the TSX Venture Exchange (the “Exchange”) for the Bid. Pursuant to the Bid, the Company may purchase for cancellation,
from time to time, as it considers advisable, up to 1,800,000 of its issued and outstanding common shares. The price which the
Company will pay for any shares purchased will be the prevailing market price of such common shares on the Exchange at the time
of such purchase. The Bid commenced on May 3, 2013 and will terminate on May 3, 2014, or such earlier time as the Bid is completed
or at the option of the Company. Jordan Capital Markets of Vancouver, British Columbia will conduct the Bid on behalf of the Company.
During the year ended November 30, 2013, the Company purchased 290,000 common shares at a total cost of $47,554 .



ITEM 16F.
CHANGE IN CERTIFYING ACCOUNTANT.



None.



ITEM 16G.
CORPORATE GOVERNANCE.



Not applicable.



ITEM 16H.
MINE SAFETY DISCLOSURE.



Not applicable.





87







PART III



ITEM 17
- Financial Statements



Not applicable.



ITEM 18
- Financial Statements



The financial statements and schedules
appear on Pages F-1 through F-45 of this Annual Report and are incorporated herein by reference. Our audited financial statements
as prepared by our management and approved by the audit committee include:



| | · | our statements of financial position as at November 30, 2013 and 2012;
| | - | ----------------------------------------------------------------------



| | · | the following statements for the fiscal years ended November 30, 2013, 2012 and 2011:
| | - | -------------------------------------------------------------------------------------



| | · | statements of loss and comprehensive loss; and
| | - | ----------------------------------------------



| | · | statements of cash flows;
| | - | -------------------------



| | · | our statements of changes in shareholders’ equity for the fiscal years ended November 30,
2013, 2012 and 2011;
| | - | --------------------------------------------------------------------------------------------------------------



| | · | notes to the financial statements; and
| | - | --------------------------------------



All of these were audited by our auditor,
James Stafford, Chartered Accountants.



The financial statements are prepared in
accordance with IFRS as issued by the IASB. All figures are expressed in Canadian dollars.



88







ITEM 19
- Exhibits



Financial Statements



|Description                    |  | Page      
|------------------------------ |  | ----------
|                               |  |           
|Financial Statements and Notes |  | F-1 - F-45



Exhibits



The following exhibits are included herein,
except for the exhibits marked with a bracketed number, which are incorporated herein by reference.



|Exhibit No. |  | Exhibit Title                                                                                                                                        
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------
|1.1(1)      |  | Certificate of Incorporation and Certificate of Amendment and Registration of Restated Articles                                                      
|1.2(1)      |  | Bylaws                                                                                                                                               
|1.3(1)      |  | Articles of Association                                                                                                                              
|4.1(2)      |  | Stock Option Plan as approved annually without change by Shareholders                                                                                
|4.2*(2)     |  | Employment Agreement dated March 30, 2007 between Alberta Star Development Corp. and Mr. Tim Coupland, President and CEO                             
|4.3(2)      |  | Financial Public Relations Service Agreement dated December 15, 2007 between Alberta Star Development Corp. and MI3 Communications Financieres Inc.  
|4.4(3)      |  | Shareholder Rights Plan Agreement dated October 10, 2008 between Alberta Star Development Corp. and MI3 Computershare Trust Company of Canada        
|4.5(4)      |  | Financial Public Relations Service Agreement dated November 4, 2009 between Alberta Star Development Corp. and Progressive IR Consultants Corp.      
|4.6(5)      |  | Agreement of Purchase and Sale made as of August 5, 2010 between Western Plains Petroleum Ltd. and Alberta Star Development Corp.                    
|4.7(5)      |  | Asset Purchase Agreement made as of August 25, 2010 between Western Plains Petroleum Ltd. and Alberta Star Development Corp.                         
|4.8(5)      |  | Sub-participation Agreement made as of October 14, 2010 between Arctic Hunter Uranium Inc. and Alberta Star Development Corp.                        
|4.9(5)      |  | Joint Operating Agreement made as of August 5, 2010 between Western Plains Petroleum Ltd. and Alberta Star Development Corp.                         
|4.10(6)     |  | Employment Agreement dated February 1, 2012 between Alberta Star Development Corp. and Mr. Tim Coupland, President and CEO                           
|4.11(6)     |  | Employment Agreement dated February 1, 2012 between Alberta Star Development Corp. and Mr. Rob Hall, Vice President Corporate Development            
|4.12(6)     |  | Consulting Agreement dated February 1, 2012 between Alberta Star Development Corp. and Goring Development Corp., acting as CFO                       
|4.13        |  | Agreement of Purchase and Sale dated April 8, 2013 between Alberta Star Development Corp. and Petrocapita Oil and Gas LP                             
|4.14        |  | Option and Joint Venture Agreement dated March 3, 3014 between Alberta Star Development Corp. and TerraX Minerals Inc.                               
|11.1(2)     |  | Code of Ethics                                                                                                                                       
|12.1        |  | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|12.2        |  | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|13.1        |  | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|13.2        |  | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002





89







| | * | Indicates management contract or compensatory plan or arrangement.
| | - | ------------------------------------------------------------------

| | (1) | incorporated by reference from our Form 20-F that was filed with the commission on June 8, 2001
| | --- | -----------------------------------------------------------------------------------------------

| | (2) | incorporated by reference from our Form 20-F that was filed with the commission on April 8, 2008
| | --- | ------------------------------------------------------------------------------------------------

| | (3) | incorporated by reference from our Form 20-F that was filed with the commission on March 24, 2009
| | --- | -------------------------------------------------------------------------------------------------

| | (4) | Incorporated by reference from our Form 20-F that was filed with the commission on April 12, 2010
| | --- | -------------------------------------------------------------------------------------------------

| | (5) | Incorporated by reference from our Form 20-F that was filed with the commission on May 17, 2011
| | --- | -----------------------------------------------------------------------------------------------

| | (6) | Incorporated by reference from our Form 20-F that was filed with the commission on April 5, 2012
| | --- | ------------------------------------------------------------------------------------------------



90







SIGNATURE



The registrant hereby certifies that it
meets all of the requirements for annual report filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.



|                      |  | ALBERTA STAR DEVELOPMENT CORP.
|--------------------- |  | ------------------------------
|                      |  |                               
|Dated: March 31, 2014 |  | By: “Stuart Rogers”           
|                      |  | Stuart Rogers, CEO            





91












Financial Statements



30 November 2013



(Expressed in Canadian dollars)



F-1







James
Stafford

|                             | James Stafford, Inc.            
|---------------------------- | --------------------------------
|                             | Chartered Accountants           
|                             | Suite 350 – 1111 Melville Street
|                             | Vancouver, British Columbia     
|INDEPENDENT AUDITOR’S REPORT | Canada V6E 3V6                  
|                             | Telephone +1 604 669 0711       
|                             | Facsimile +1 604 669 0754       
|                             | www.JamesStafford.ca            



To the Shareholders of Alberta Star
Development Corp.



We have audited the accompanying financial
statements of Alberta Star Development Corp. (the “Company”) which comprise the statements of financial position as
at 30 November 2013 and 2012, and the statements of earnings (loss) and comprehensive earnings (loss), cash flows and changes in
equity for each of the years in the three-year period ended 30 November 2013, and a summary of significant accounting policies
and other explanatory information.



Management’s Responsibility for
the Financial Statements



Management is responsible for the preparation
and fair presentation of these financial statements in accordance with International Financial Reporting Standards as issued by
the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or error.



Auditor’s Responsibility



Our responsibility is to express an opinion
on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing
standards and the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free from material misstatement.



An audit involves performing procedures
to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation
of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.



We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit opinion.



Opinion



In our opinion, the financial statements
present fairly, in all material respects, the financial position of the Company as at 30 November 2013 and 2012, and the results
of its operations and its cash flows for each of the years in the thee-year period ended 30 November 2013 in accordance with International
Financial Reporting Standards as issued by the International Accounting Standards Board.



Emphasis of Matter



Without qualifying our opinion, we draw
attention to Note 1 in the financial statements, which describes matters and conditions that indicate the existence of a material
uncertainty that raises substantial doubt about the ability of the Company to continue as a going concern.







Chartered Accountants

Vancouver, Canada

22 March 2014



F-2







Alberta Star Development Corp.



Statements of Financial Position





(Expressed in Canadian dollars)



|                                      |  | Notes |    |  | As at 30
 November
 2013 $ |  |             | As at 30
 November
 2012 $ | 
|------------------------------------- |  | ----- | -- |  | -------------------------- |  | ----------- | -------------------------- | 
|                                      |  |       |    |  |                            |  |             |                            | 
|ASSETS                                |  |       |    |  |                            |  |             |                            | 
|                                      |  |       |    |  |                            |  |             |                            | 
|Current assets                        |  |       |    |  |                            |  |             |                            | 
|Cash and cash equivalents             |  |       | 4  |  |                            |  | 6,700,938   |                            | 
|Trade and other receivables           |  |       | 5  |  |                            |  | 3,513       |                            | 
|Prepaid expenses                      |  |       | 6  |  |                            |  | 11,928      |                            | 
|                                      |  |       |    |  |                            |  |             |                            | 
|                                      |  |       |    |  |                            |  | 6,716,379   |                            | 
|                                      |  |       |    |  |                            |  |             |                            | 
|Exploration and evaluation properties |  |       | 7  |  |                            |  | 17,240      |                            | 
|Property, plant and equipment         |  |       | 8  |  |                            |  | 5,210       |                            | 
|                                      |  |       |    |  |                            |  |             |                            | 
|Total assets                          |  |       |    |  |                            |  | 6,738,829   |                            | 
|                                      |  |       |    |  |                            |  |             |                            | 
|EQUITY AND LIABILITIES                |  |       |    |  |                            |  |             |                            | 
|                                      |  |       |    |  |                            |  |             |                            | 
|Current liabilities                   |  |       |    |  |                            |  |             |                            | 
|Trade and other payables              |  |       | 9  |  |                            |  | 1,115,530   |                            | 
|                                      |  |       |    |  |                            |  |             |                            | 
|Decommissioning liabilities           |  |       | 10 |  |                            |  | -           |                            | 
|                                      |  |       |    |  |                            |  |             |                            | 
|Total liabilities                     |  |       |    |  |                            |  | 1,115,530   |                            | 
|                                      |  |       |    |  |                            |  |             |                            | 
|Equity                                |  |       |    |  |                            |  |             |                            | 
|Common shares                         |  |       | 11 |  |                            |  | 45,372,258  |                            | 
|Contributed surplus                   |  |       | 11 |  |                            |  | 13,715,857  |                            | 
|Deficit                               |  |       |    |  |                            |  | (53,464,816 | )                          | 
|                                      |  |       |    |  |                            |  |             |                            | 
|Total equity                          |  |       |    |  |                            |  | 5,623,299   |                            | 
|                                      |  |       |    |  |                            |  |             |                            | 
|Total liabilities and equity          |  |       |    |  |                            |  | 6,738,829   |                            | 



APPROVED BY THE BOARD:



|“ Stuart Rogers” |  | Director |  | “ Guido Cloetens” |  | Director
|---------------- |  | -------- |  | ----------------- |  | --------
|Stuart Rogers    |  |          |  | Guido Cloetens    |  |         



The accompanying notes are an integral part of these financial
statements.



F-3







Alberta Star Development Corp.

Statements of Earnings (Loss) and Comprehensive Earnings
(Loss)

(Expressed in Canadian dollars)



|                                                                   |  |       |        |  | Year ended 30 November | 
|------------------------------------------------------------------ |  | ----- | ------ |  | ---------------------- | 
|                                                                   |  | Notes |        |  | 2013 $                 | 
|                                                                   |  |       |        |  |                        | 
|CONTINUING OPERATIONS                                              |  |       |        |  |                        | 
|                                                                   |  |       |        |  |                        | 
|General and administrative expenses                                |  |       | 19     |  |                        | 
|                                                                   |  |       |        |  |                        | 
|Loss before other items                                            |  |       |        |  |                        | 
|                                                                   |  |       |        |  |                        | 
|Other items                                                        |  |       |        |  |                        | 
|Interest income                                                    |  |       |        |  |                        | 
|Rent recovery                                                      |  |       | 17     |  |                        | 
|Unrealized foreign exchange gain (loss)                            |  |       |        |  |                        | 
|Gain (loss) on disposal of property, plant and equipment           |  |       | 8 & 17 |  |                        | 
|Write-down of trades receivables                                   |  |       | 5      |  |                        | 
|Write-down of exploration and evaluation properties                |  |       | 7      |  |                        | 
|                                                                   |  |       |        |  |                        | 
|Net loss from continuing operations                                |  |       |        |  |                        | 
|DISCONTINUED OPERATIONS                                            |  |       |        |  |                        | 
|                                                                   |  |       |        |  |                        | 
|Net earnings (loss) from discontinued operations                   |  |       | 18     |  |                        | 
|                                                                   |  |       |        |  |                        | 
|Net earnings (loss) and comprehensive earnings (loss) for the year |  |       |        |  |                        | 
|                                                                   |  |       |        |  |                        | 
|Basic and diluted earnings (loss) per share                        |  |       |        |  |                        | 
|Earnings (loss) per share from continuing operations               |  |       | 14     |  |                        | 
|Earnings (loss) per share from discontinued operations             |  |       | 14     |  |                        | 
|Earnings (loss) per share                                          |  |       | 14     |  |                        | 



The accompanying notes are an integral part of these financial
statements.



F-4







Alberta Star Development Corp.

Statements of Cash Flows

(Expressed in Canadian dollars)



|                                                                              |  |             |  | Year ended 30 November |           
|----------------------------------------------------------------------------- |  | ----------- |  | ---------------------- | ----------
|                                                                              |  | Notes       |  | 2013 $                 |           
|                                                                              |  |             |  |                        |           
|OPERATING ACTIVITIES                                                          |  |             |  |                        |           
|                                                                              |  |             |  |                        |           
|Loss for the year from continuing operations                                  |  |             |  |                        | (309,219  
|Adjustments for:                                                              |  |             |  |                        |           
|Accrued interest income                                                       |  |             |  |                        | -         
|Depreciation                                                                  |  | 8           |  |                        | 5,793     
|Loss (gain) on sale of property, plant and equipment                          |  | 8 & 17      |  |                        | 19,853    
|Share-based payments                                                          |  | 12, 17 & 19 |  |                        | 57,760    
|Write-down of exploration and evaluation properties                           |  | 7           |  |                        | -         
|Operating cash flows before movements in working capital                      |  |             |  |                        |           
|Decrease in trade and other receivables                                       |  |             |  |                        | 5,905     
|Decrease in prepaid expenses                                                  |  |             |  |                        | 24        
|Increase (decrease) in trade and other payables                               |  |             |  |                        | (353,507  
|                                                                              |  |             |  |                        |           
|Cash used in operating activities from continuing operations                  |  |             |  |                        | (573,391  
|                                                                              |  |             |  |                        |           
|INVESTING ACTIVITIES                                                          |  |             |  |                        |           
|                                                                              |  |             |  |                        |           
|Exploration and evaluation expenditures                                       |  | 7           |  |                        | (17,240   
|Special cash distribution                                                     |  | 11.4        |  |                        | (1,760,758
|Purchase of shares to be returned to treasury                                 |  | 11.3        |  |                        | (47,554   
|Proceeds on sale of property, plant and equipment                             |  | 8           |  |                        | -         
|                                                                              |  |             |  |                        |           
|Cash from (used in) investing activities from continuing operations           |  |             |  |                        | (1,825,552
|                                                                              |  |             |  |                        |           
|FINANCING ACTIVITIES                                                          |  |             |  |                        |           
|                                                                              |  |             |  |                        |           
|Options exercised                                                             |  | 11.2        |  |                        | 133,875   
|                                                                              |  |             |  |                        |           
|Cash from financing activities from continuing operations                     |  |             |  |                        | 133,875   
|                                                                              |  |             |  |                        |           
|Decrease in cash and cash equivalents from continuing operations              |  |             |  |                        | (2,265,068
|Increase (decrease) in cash and cash equivalents from discontinued operations |  | 18          |  |                        | 1,968,897 
|Cash and cash equivalents, beginning of year                                  |  |             |  |                        | 6,997,109 
|                                                                              |  |             |  |                        |           
|Cash and cash equivalents, end of year                                        |  |             |  |                        | 6,700,938 



Supplemental cash flow information(Note 20)



The accompanying notes are an integral part of these financial
statements.



F-5







Alberta Star Development Corp.

Statements of Changes in Equity

(Expressed in Canadian dollars)





|                                   |  | Notes |  | Number
    of shares |            |   | Common
    shares $ |  |            | Contributed
    surplus $ |  |  | Warrant
    reserve $ |   |  | Deficit
    $ |          |   | Total
    $ | 
|---------------------------------- |  | ----- |  | -------------------- | ---------- | - | ------------------- |  | ---------- | ------------------------- |  |  | --------------------- | - |  | ------------- | -------- | - | ----------- | 
|                                   |  |       |  |                      |            |   |                     |  |            |                           |  |  |                       |   |  |               |          |   |             | 
|Balances, 1 December 2010          |  |       |  |                      | 21,403,979 |   |                     |  | 47,573,745 |                           |  |  | 13,231,208            |   |  |               | 131,064  |   |             | 
|Share-based payments               |  | 12    |  |                      | -          |   |                     |  | -          |                           |  |  | 216,070               |   |  |               | -        |   |             | 
|Warrants expired                   |  |       |  |                      | -          |   |                     |  | -          |                           |  |  | 131,064               |   |  |               | (131,064 | ) |             | 
|Net loss for the year              |  |       |  |                      | -          |   |                     |  | -          |                           |  |  | -                     |   |  |               |          |   |             | 
|                                   |  |       |  |                      |            |   |                     |  |            |                           |  |  |                       |   |  |               |          |   |             | 
|Balances, 30 November 2011         |  |       |  |                      | 21,403,979 |   |                     |  | 47,573,745 |                           |  |  | 13,578,342            |   |  |               | -        |   |             | 
|                                   |  |       |  |                      |            |   |                     |  |            |                           |  |  |                       |   |  |               |          |   |             | 
|Share-based payments               |  | 12    |  |                      | -          |   |                     |  | -          |                           |  |  | 149,722               |   |  |               | -        |   |             | 
|Net loss for the year              |  |       |  |                      | -          |   |                     |  | -          |                           |  |  | -                     |   |  |               | -        |   |             | 
|                                   |  |       |  |                      |            |   |                     |  |            |                           |  |  |                       |   |  |               |          |   |             | 
|Balances, 30 November 2012         |  |       |  |                      | 21,403,979 |   |                     |  | 47,573,745 |                           |  |  | 13,728,064            |   |  |               | -        |   |             | 
|                                   |  |       |  |                      |            |   |                     |  |            |                           |  |  |                       |   |  |               |          |   |             | 
|Common shares returned to treasury |  | 11.3  |  |                      | (290,000   | ) |                     |  | (644,571   | )                         |  |  | -                     |   |  |               | -        |   |             | 
|Special cash distribution          |  | 11.4  |  |                      | -          |   |                     |  | (1,760,758 | )                         |  |  | -                     |   |  |               | -        |   |             | 
|Options exercised                  |  | 11.2  |  |                      | 675,000    |   |                     |  | 203,842    |                           |  |  | (69,967               | ) |  |               | -        |   |             | 
|Share-based payments               |  | 12    |  |                      | -          |   |                     |  | -          |                           |  |  | 57,760                |   |  |               | -        |   |             | 
|Net earnings for the year          |  |       |  |                      | -          |   |                     |  | -          |                           |  |  | -                     |   |  |               | -        |   |             | 
|                                   |  |       |  |                      |            |   |                     |  |            |                           |  |  |                       |   |  |               |          |   |             | 
|Balances, 30 November 2013         |  |       |  |                      | 21,788,979 |   |                     |  | 45,372,258 |                           |  |  | 13,715,857            |   |  |               | -        |   |             | 





The accompanying notes are an integral part of these financial
statements.



F-6







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



| | 1. | CORPORATE INFORMATION
| | -- | ---------------------



Alberta Star Development Corp.
(the “Company”) was incorporated under the laws of the province of Alberta on 6 September 1996 and is in the exploration
stage.



The Company is in the business
of acquiring and exploring mineral and oil and gas properties. The recoverability of the amounts expended by the Company on acquiring
and exploring mineral and petroleum and natural gas properties is dependent upon the existence of economically recoverable reserves,
the ability of the Company to complete the acquisition and/or development of the properties and upon future profitable production.
Effective 1 March 2013, the Company sold all of its petroleum and natural gas properties (Note 18).



The head office, principal address
and registered and records office is located at Suite 2300 - 1066 West Hastings Street, Vancouver, British Columbia, V6E 3X2.



The Company’s financial
statements as at 30 November 2013 and for the year then ended have been prepared on a going concern basis, which contemplates the
realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company has net comprehensive
earnings of $673,069 for the year ended 30 November 2013 (2012 - net comprehensive loss of $3,475,613, 2011 – net comprehensive
loss of $1,726,357) and has working capital of $5,600,849 as at 30 November 2013 (2012 - $5,714,151).



The
Company had cash and cash equivalents of $6,700,938 at 30 November 2013 (2012 - $6,997,109), but management cannot provide assurance
that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity
capital. If the Company is unable to raise additional capital in the future, management expects that the Company will need to curtail
operations, liquidate assets, seek additional capital on less favourable terms and/or pursue other remedial measures. Management
is aware, in making its assessment, of material uncertainties related to events or conditions that may cast significant doubt upon
the Company’s ability to continue as a going concern.The
financial statements do not include any adjustments that might result from the outcome of this uncertainty.



| | 2. | BASIS OF PREPARATION
| | -- | --------------------



The financial statements of the
Company for the year ended 30 November 2013 were approved and authorized for issue by the Board of Directors on 21 March 2014.



| | 2.1 | Basis of presentation
| | --- | ---------------------



The Company’s financial
statements have been prepared on the historical cost basis except for certain financial instruments which are measured at fair
value, as explained in Note 16, and are presented in Canadian dollars except where otherwise indicated.



F-7







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)





| | 2.2 | Statement of compliance
| | --- | -----------------------



The financial statements of the
Company have been prepared in accordance with and using accounting policies in full compliance with International Financial Reporting
Standards (“IFRS”) and International Accounting Standards (“IAS”) as issued by the International Accounting
Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”),
effective for the Company’s reporting for the year ended 30 November 2013.



| | 2.3 | Adoption of new and revised standards and interpretations
| | --- | ---------------------------------------------------------



At the date of authorization
of these financial statements, the IASB and IFRIC have issued the following new and revised standards, amendments and interpretations
which are not yet effective during the year ended 30 November 2013.





| | · | IFRS 7 ‘Financial Instruments: Disclosures’is
effective for annual periods beginning on or after 1 January 2013 that provides additional disclosures related to offsetting financial
assets and financial liabilities.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | IFRS 9 ‘Financial Instruments: Classification and Measurement’is a new financial instruments standard effective for annual periods beginning on or after 1 January 2015 that replaces IAS
39 and IFRIC 9 for classification and measurement of financial assets and financial liabilities.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | IFRS 11 ‘Joint Arrangements’ is a new standard
effective for annual periods beginning on or after 1 January 2013 that replaces IAS 31 and Standing Interpretations Committee Standards
(“SIC”) 13.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | IFRS 12 ‘Disclosure of Interests in Other Entities’
is a new standard effective for annual periods beginning on or after 1 January 2013 that replaces disclosure requirements in IAS
27 (as amended in 2008), IAS 28 (as revised in 2003) and IAS 31.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | IFRS 13 ‘Fair Value Measurement’ is a new standard
effective for annual periods beginning on or after 1 January 2013 that replaces fair value measurement guidance in other IFRSs.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | IAS 1 ‘Presentation of Financial Statements’ is
effective for annual periods beginning on or after 1 January 2013 and clarifies requirements for comparative information.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | IAS19 (Amendment) ‘Employee
Benefits’ is effective for annual periods beginning on or after 1 January 2013 and revises recognition and measurement
of post-employment benefits.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





F-8









Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)





| | · | IAS 32 (Amendment) ‘Financial Instruments: Presentation’
is effective for annual periods beginning on or after 1 January 2014 and revises certain aspects of the requirements on offsetting.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------







The Company has not early adopted
these standards, amendments and interpretations and anticipates that the application of these standards, amendments and interpretations
will not have a material impact on the financial position and financial performance of the Company.



| | 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
| | -- | ------------------------------------------



| | 3.1 | Significant accounting judgments, estimates and assumptions
| | --- | -----------------------------------------------------------



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



Areas requiring a significant
degree of estimation and judgment relate to the recoverability of the carrying value of petroleum and natural gas assets, fair
value measurements for financial instruments and share-based payments, the recognition and valuation of provisions for decommissioning
liabilities, the recoverability and measurement of deferred tax assets and liabilities and ability to continue as a going concern.
Actual results may differ from those estimates and judgments.



| | 3.2 | Cash and cash equivalents
| | --- | -------------------------



Cash and cash equivalents include
highly liquid investments with original maturities of three months or less.



| | 3.3 | Property, plant and equipment
| | --- | -----------------------------



Items of property, plant and
equipment, which include petroleum and natural gas development and production assets, are measured at cost less accumulated depletion
and depreciation and accumulated impairment losses, net of reversals. Development and production assets are grouped into cash generating
units for impairment testing. When significant parts of an item of property, plant and equipment, including petroleum and natural
gas interests, have different useful lives, they are accounted for as separate items.



Gains and losses on the disposal
of an item of property, plant and equipment, including petroleum and natural gas interests, are determined by comparing the proceeds
from disposal with the carrying amount of property, plant and equipment and are recognized net in profit or loss.



F-9









Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



Costs incurred subsequent to
the determination of technical feasibility and commercial viability and the costs of replacing parts of property, plant and equipment
are recognized as petroleum and natural gas development and production assets only when they increase the future economic benefits
embodied in the specific asset to which they relate. All other expenditures are recognized in profit or loss as incurred. Such
capitalized petroleum and natural gas assets generally represent costs incurred in developing proven and/or probable reserves and
bringing on or enhancing production from such reserves. The carrying amount of any replaced or sold component is derecognized.
The costs of the day-to-day servicing of oil and gas properties are recognized in profit or loss as incurred.



The net carrying value of petroleum
and natural gas development and production assets is depreciated using the unit of production method by reference to the ratio
of production in the year to the related proven and probable reserves, including estimated future development costs. Future development
costs are estimated taking into account the level of development required to bring reserves into production. These estimates are
reviewed by independent reserve engineers at least annually. Changes in estimates such as quantities of proved and probable reserves
that affect unit-of-production calculations are applied on a prospective basis.



Other items of property, plant
and equipment are depreciated over their estimated useful lives using the declining balance method at the following annual rates
with half the rate applied in year of acquisition:



|Computer equipment     |  |  | 30  | %
|---------------------- |  |  | --- | -
|Computer software      |  |  | 100 | %
|Furniture and fixtures |  |  | 20  | %
|Equipment              |  |  | 20  | %



| | 3.4 | Non-currentassets
held for sale and discontinued operations
| | --- | -----------------------------------------------------------



Non-current assets and disposal
groups are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through
continuing use. Immediately before classification as held for sale, the assets, or components of a disposal group, are re-measured
at the lower of their carrying amount and fair value less costs to sell, with impairments recognized in the statements of income
in the period measured. Non-current assets or disposal groups held for sale are presented in current assets and liabilities within
the balance sheet. Assets or disposal groups held for sale are not depleted, depreciated or amortized. Liabilities associated with
assets held for sale are presented separately from the Company’s other liabilities.



Assets or disposal groups are
classified as held-for-sale when the sale is highly probable and the asset or disposal group is available for immediate sale in
its present condition. For the sale to be highly probable, management must be committed to a plan to sell the asset and an active
program to locate a buyer and complete the plan must have been initiated. The asset or disposal group must be actively marketed
for sale at a price that is reasonable in relation to its current fair value and the sale should be expected to be completed within
one year from the date of classification.



F-10









Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



A discontinued operation is a
component of the Company that has either been disposed of or that is classified as held for sale. A component of the Company is
comprised of operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from
the rest of the Company. Net earnings of a discontinued operation and any gain or loss on disposal are combined and presented as
net earnings from discontinued operations in the statements of earnings (loss) and comprehensive earnings (loss). Comparative periods
are re-presented to reflect discontinued operations presentation.



| | 3.5 | Exploration and evaluation properties
| | --- | -------------------------------------



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



Option payments received are
treated as a reduction of the carrying value of the related property and deferred costs until the receipts are in excess of costs
incurred, at which time they are credited to income. Option payments are at the discretion of the optionee, and accordingly, are
recorded on a cash basis.



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



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



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



| | 3.6 | Revenue recognition
| | --- | -------------------



Petroleum and natural gas revenues
are recorded when title passes, the amount is determinable and collection is reasonably assured.



F-11









Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



| | 3.7 | Decommissioning, restoration and similar liabilities
| | --- | ----------------------------------------------------



The Company recognizes provisions
for statutory, contractual, constructive or legal obligations associated with the reclamation of mineral properties and retirement
of long-term assets, when those obligations result from the acquisition, construction, development or normal operation of the assets.
The net present value of future cost estimates arising from the decommissioning of plant, site restoration work and other similar
retirement activities is added to the carrying amount of the related asset, and depreciated on the same basis as the related asset,
along with a corresponding increase in the provision in the period incurred. Discount rates using a pre-tax rate that reflect the
current market assessments of the time value of money are used to calculate the net present value.



The Company’s estimates
of reclamation costs could change as a result of changes in regulatory requirements, discount rates and assumptions regarding the
amount and timing of the future expenditures. These changes are recorded directly to the related asset with a corresponding entry
to the provision.



Changes in the net present value,
excluding changes in the Company’s estimates of reclamation costs, are charged to profit or loss for the period. The net
present value of reclamation costs arising from subsequent site damage that is incurred on an ongoing basis during production are
charged to profit or loss in the period incurred. The costs of reclamation projects that were included in the provision are recorded
against the provision as incurred. The costs to prevent and control environmental impacts at specific properties are capitalized
in accordance with the Company’s accounting policy for exploration and evaluation properties. A gain or loss may be incurred
upon settlement of the decommissioning obligation.



| | 3.8 | Share-based payments
| | --- | --------------------



Share-based payments to employees
are measured at the fair value of the instruments issued and recognized over the vesting periods. Share-based payments to non-employees
are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined
the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received.
The corresponding amount is recorded to contributed surplus. The fair value of options is determined using the Black-Scholes Option
Pricing Model which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and
adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity
instruments granted shall be based on the number of equity instruments that will eventually vest.



| | 3.9 | Flow-through shares
| | --- | -------------------



Any premium received by the Company
on the issuance of flow-through shares is initially recorded as a liability and included in trade and other payables. Upon renouncement
by the Company of the tax benefits associated with the related expenditures, a deferred tax liability is recognized and the flow-through
liability will be reversed. To the extent that suitable deferred tax assets are available, the Company will reduce the deferred
tax liability and record a deferred tax recovery.





F-12









Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



| | 3.10 | Taxation
| | ---- | --------



Deferred tax is provided, using
the liability method, on all temporary differences at the statement of financial position date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes.



Deferred tax liabilities are
generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary
differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences
can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or
from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.



The carrying amount of deferred
tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit
will be available to allow all or part of the deferred income tax asset to be utilized.



Deferred tax assets and liabilities
are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based
on the tax rates that have been enacted or substantively enacted at the reporting date.



| | 3.11 | Foreign currency translation
| | ---- | ----------------------------



The Company’s reporting
currency and the functional currency of all of its operations is the Canadian dollar as this is the principal currency of the economic
environment in which it operates.



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



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



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



F-13









Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



| | 3.12 | Earnings (loss) per share
| | ---- | -------------------------



Basic per share amounts are calculated
by dividing the earnings or loss attributable to shareholders of the Company by the weighted average number of shares outstanding
during the period. Diluted per share amounts are determined by adjusting the earnings or loss attributable to common shareholders
and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares, which consist
of share purchase warrants and stock options.



| | 3.13 | Financial assets
| | ---- | ----------------



Financial assets are classified
as financial assets at fair value through profit or loss (“FVTPL”), held-to-maturity, loans and receivables, available-for-sale
financial assets, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Company determines
the classification of its financial assets at initial recognition. Financial assets are recognized initially at fair value. The
subsequent measurement of financial assets depends on their classification as follows:



Financial assets at FVTPL



Financial assets are classified
as held for trading and are included in this category if acquired principally for the purpose of selling in the short term or if
so designated by management. Derivatives, other than those designated as effective hedging instruments, are also categorized as
held for trading. These assets are carried at fair value with gains or losses recognized in profit or loss. Transaction costs associated
with financial assets at FVTPL are expensed as incurred. Cash and cash equivalents are included in this category of financial assets.



Held-to-maturity and loans
and receivables



Held-to-maturity and loans and
receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such
assets are carried at amortized cost using the effective interest method if the time value of money is significant. Gains and losses
are recognized in profit or loss when the financial assets classified in this category are derecognized or impaired, as well as
through the amortization process. Transaction costs are included in the initial carrying amount of the asset. Trade and other receivables
are classified as loans and receivables.



Available-for-sale



Available-for-sale financial
assets are those non-derivative financial assets that are not classified as loans and receivables. After initial recognition, available-for-sale
financial assets are measured at fair value, with gains or losses recognized within other comprehensive income. Accumulated changes
in fair value are recorded as a separate component of equity until the investment is derecognized or impaired. Transaction costs
are included in the initial carrying amount of the asset.





F-14









Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



The fair value is determined
by reference to bid prices at the close of business on the reporting date. Where there is no active market, fair value is determined
using valuation techniques. Where fair value cannot be reliably measured, assets are carried at cost.



Derivatives designated as
hedging instruments in an effective hedge



The Company does not hold or
have any exposure to derivative instruments.



| | 3.14 | Financial liabilities
| | ---- | ---------------------



Financial liabilities are classified
as financial liabilities at FVTPL, derivatives designated as hedging instruments in an effective hedge, or as financial liabilities
measured at amortized cost, as appropriate. The Company determines the classification of its financial liabilities at initial recognition.
The measurement of financial liabilities depends on their classification, as follows:



Financial liabilities at FVTPL



Financial liabilities at FVTPL
has two subcategories, including financial liabilities held for trading and those designated by management on initial recognition.
Transaction costs on financial liabilities at FVTPL are expensed as incurred. These liabilities are carried at fair value with
gains or losses recognized in profit or loss.



Financial liabilities measured
at amortized cost



All other financial liabilities
are initially recognized at fair value, net of transaction costs. After initial recognition, other financial liabilities are subsequently
measured at amortized cost using the effective interest method. Amortized cost is calculated by taking into account any issue costs,
and any discount or premium on settlement. Gains and losses arising on the repurchase, settlement or cancellation of liabilities
are recognized respectively in interest, other revenues and finance costs. Trade payables are included in this category of financial
liabilities.



Derivatives designated as
hedging instruments in an effective hedge



The Company does not hold or
have any exposure to derivative instruments.



| | 3.15 | Impairment of financial assets
| | ---- | ------------------------------



Financial assets, other than
financial assets at FVTPL, are assessed for indicators of impairment at each period end.



F-15







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



Assets carried at amortized
cost



If there is objective evidence
that an impairment loss on assets carried at amortized cost has been incurred, the amount of the loss is measured as the difference
between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s
original effective interest rate. The carrying amount of the asset is reduced, with the amount of the loss recognized in profit
or loss.



If, in a subsequent period, the
amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment
was recognized, the previously recognized impairment loss is reversed to the extent that the carrying value of the asset does not
exceed what the amortized cost would have been had the impairment not been recognized. Any subsequent reversal of an impairment
loss is recognized in profit or loss.



Available-for-sale



If an available-for-sale financial asset
is impaired, the cumulative loss previously recognized in equity is transferred to profit or loss. Any subsequent recovery in the
fair value of the asset is recognized within other comprehensive income.



| | 3.16 | Derecognition of financial assets and liabilities
| | ---- | -------------------------------------------------



Financial assets are derecognized
when the rights to receive cash flows from the assets expire or, the financial assets are transferred and the Company has transferred
substantially all the risks and rewards of ownership of the financial assets. On derecognition of a financial asset, the difference
between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss
that had been recognized directly in equity is recognized in profit or loss.



For financial liabilities, they
are derecognized when the obligation specified in the relevant contract is discharged, cancelled or expires. The difference between
the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.



| | 3.17 | Impairment of non-financial assets
| | ---- | ----------------------------------



The carrying amount of the Company’s
assets is reviewed for an indication of impairment at the end of each reporting period. If an indication of impairment exists,
the Company makes an estimate of the asset’s recoverable amount. Individual assets are grouped for impairment assessment
purposes at the lowest level at which there are identifiable cash flows that are largely independent of the cash flows of other
groups of assets. Recoverable amount of an asset group is the higher of its fair value less costs to sell and its value in use.
In assessing value in use, the estimated future cash flows are adjusted for the risks specific to the asset group and are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money.





F-16









Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



Where the carrying amount of an asset group exceeds its recoverable
amount, the asset group is considered impaired and is written down to its recoverable amount. Impairment losses are recognized
in profit or loss.



An assessment is made at each
reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have
decreased. If such indication exists, the recoverable amount is estimated. A previously recognized impairment loss is reversed
only if there has been a change in the estimates used to determine the asset’s recoverable amount. An impairment loss is
reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined,
net of depreciation, if no impairment loss had been recognized.



| | 3.18 | Related party transactions
| | ---- | --------------------------



Parties are considered to be
related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over
the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common
control. Related parties may be individuals or corporate entities. A transaction is considered to be a related party transaction
when there is a transfer of resources or obligations between related parties.



| | 3.19 | Joint arrangements
| | ---- | ------------------



Substantially all of the Company’s
petroleum and natural gas exploration and development activities involve jointly controlled assets; accordingly, the financial
statements reflect only the Company’s share of these jointly controlled assets and a proportionate share of the relevant
revenue and related costs.



| | 3.20 | Comparative figures
| | ---- | -------------------



Certain comparative figures have
been adjusted to conform to the current year’s presentation.



| | 3.21 | Change in accounting policy
| | ---- | ---------------------------



The Company adopted IAS 1 (Amendment)
‘Presentation of Financial Statements’ effective 1 December 2012, which includes amendments of items and other
comprehensive income. The adoption of IAS 1 did not result in a significant impact on the Company’s financial statements.



F-17







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



| | 4. | CASH AND CASH EQUIVALENTS
| | -- | -------------------------



The Company’s cash and
cash equivalents are denominated in the following currencies:



|As at 30 November               |  | 2013 $ |           |  | 2012
$ | 
|------------------------------- |  | ------ | --------- |  | ------ | 
|                                |  |        |           |  |        | 
|Denominated in Canadian dollars |  |        | 5,104,715 |  |        | 
|Denominated in U.S. dollars     |  |        | 1,596,223 |  |        | 
|                                |  |        |           |  |        | 
|Total cash and cash equivalents |  |        | 6,700,938 |  |        | 



| | 5. | TRADE AND OTHER RECEIVABLES
| | -- | ---------------------------



The Company’s trade and
other receivables arise from petroleum and natural gas revenue receivable, Goods and Services Tax / Harmonized Sales Tax (“GST/HST”)
receivable due from the government taxation authorities, interest receivable and other receivables from related parties. These
are as follows:



|As at 30 November                 |  | 2013 $ |       |  | 2012
$ | 
|--------------------------------- |  | ------ | ----- |  | ------ | 
|                                  |  |        |       |  |        | 
|GST/HST receivable                |  |        | 3,186 |  |        | 
|Trade receivables (Note 17)       |  |        | 327   |  |        | 
|Interest receivable               |  |        | -     |  |        | 
|                                  |  |        |       |  |        | 
|Total trade and other receivables |  |        | 3,513 |  |        | 



Included in trade and other receivables
are amounts due from a company related to the Company by way of management and directors in common of $Nil (2012 - $1,273) (Note
17). The amounts are unsecured, non-interest bearing and have no fixed terms of repayment.



During the year ended 30 November
2013, the Company wrote down trade receivables of $3,980 (2012 - $Nil, 2011 - $Nil) (Note 20).



Included in trade and other receivables
is $Nil (2012 - $37,351, 2011 - $44,374) related to the purchase of capital expenditures for the petroleum and natural gas properties
as at 30 November 2013 (Note 20).



F-18







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



| | 6. | PREPAID EXPENSES
| | -- | ----------------



The Company’s prepaid expenses
are as follows:



|As at 30 November      |  | 2013 $ |        |  | 2012
$ | 
|---------------------- |  | ------ | ------ |  | ------ | 
|                       |  |        |        |  |        | 
|Insurance              |  |        | 11,830 |  |        | 
|Rent                   |  |        | -      |  |        | 
|Other                  |  |        | 98     |  |        | 
|                       |  |        |        |  |        | 
|Total prepaid expenses |  |        | 11,928 |  |        | 





F-19







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



| | 7. | EXPLORATION AND EVALUATION PROPERTIES
| | -- | -------------------------------------



The Company’s exploration
and evaluation properties expenditures for the year ended 30	November 2013 are as follows:



|                                 |  | Petroleum and Natural Gas Properties $ |   |  | Contact Lake Property $ |  |        | Glacier Lake
 Property $ |  |  | Longtom
 Property $ |  |  | Total$ |    
|-------------------------------- |  | -------------------------------------- | - |  | ----------------------- |  | ------ | ------------------------ |  |  | ------------------- |  |  | ------ | ---
|                                 |  |                                        |   |  |                         |  |        |                          |  |  |                     |  |  |        |    
|ACQUISITION COSTS                |  |                                        |   |  |                         |  |        |                          |  |  |                     |  |  |        |    
|                                 |  |                                        |   |  |                         |  |        |                          |  |  |                     |  |  |        |    
|Balance, 1 December 2012         |  |                                        | - |  |                         |  | -      |                          |  |  | -                   |  |  |        | -  
|Balance, 30 November 2013        |  |                                        | - |  |                         |  | -      |                          |  |  | -                   |  |  |        | -  
|                                 |  |                                        |   |  |                         |  |        |                          |  |  |                     |  |  |        |    
|EXPLORATION AND EVALUATION COSTS |  |                                        |   |  |                         |  |        |                          |  |  |                     |  |  |        |    
|                                 |  |                                        |   |  |                         |  |        |                          |  |  |                     |  |  |        |    
|Balance, 1 December 2012         |  |                                        | - |  |                         |  | -      |                          |  |  | -                   |  |  |        | -  
|Claim maintenance and permitting |  |                                        | - |  |                         |  | 10,120 |                          |  |  | 6,227               |  |  |        | 893
|Balance, 30 November 2013        |  |                                        | - |  |                         |  | 10,120 |                          |  |  | 6,227               |  |  |        | 893
|                                 |  |                                        |   |  |                         |  |        |                          |  |  |                     |  |  |        |    
|Total costs                      |  |                                        | - |  |                         |  | 10,120 |                          |  |  | 6,227               |  |  |        | 893





F-20







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



The Company’s exploration and evaluation properties expenditures
for the year ended 30 November 2012 are as follows:



|                                                   |  | Petroleum and
 Natural Gas
 Properties $ |          |   | Contact Lake
 Property $ |  |        | Glacier Lake
 Property $ |  |  | Other
 Properties $ |   |  | Total $ |       
|-------------------------------------------------- |  | ---------------------------------------- | -------- | - | ------------------------ |  | ------ | ------------------------ |  |  | ------------------- | - |  | ------- | ------
|                                                   |  |                                          |          |   |                          |  |        |                          |  |  |                     |   |  |         |       
|ACQUISITION COSTS                                  |  |                                          |          |   |                          |  |        |                          |  |  |                     |   |  |         |       
|                                                   |  |                                          |          |   |                          |  |        |                          |  |  |                     |   |  |         |       
|Balance, 1 December 2011                           |  |                                          | 701,510  |   |                          |  | -      |                          |  |  | -                   |   |  |         | -     
|Additions                                          |  |                                          | 8,006    |   |                          |  | -      |                          |  |  | -                   |   |  |         | -     
|Transfer to property, plant and equipment (Note 8) |  |                                          | (526,509 | ) |                          |  | -      |                          |  |  | -                   |   |  |         | -     
|Write-down (Notes 18 and 20)                       |  |                                          | (183,007 | ) |                          |  | -      |                          |  |  | -                   |   |  |         | -     
|Balance, 30 November 2012                          |  |                                          | -        |   |                          |  | -      |                          |  |  | -                   |   |  |         | -     
|                                                   |  |                                          |          |   |                          |  |        |                          |  |  |                     |   |  |         |       
|EXPLORATION AND EVALUATION COSTS                   |  |                                          |          |   |                          |  |        |                          |  |  |                     |   |  |         |       
|                                                   |  |                                          |          |   |                          |  |        |                          |  |  |                     |   |  |         |       
|Balance, 1 December 2011                           |  |                                          | 28,005   |   |                          |  | -      |                          |  |  | -                   |   |  |         | -     
|Camp costs and field supplies                      |  |                                          | -        |   |                          |  | 1,575  |                          |  |  | -                   |   |  |         | -     
|Claim maintenance and permitting                   |  |                                          | -        |   |                          |  | 5,134  |                          |  |  | 6,227               |   |  |         | 1,419 
|Transfer to property, plant and equipment (Note 8) |  |                                          | (16,199  | ) |                          |  | -      |                          |  |  | -                   |   |  |         | -     
|Write-down (Notes 18 and 20)                       |  |                                          | (11,806  | ) |                          |  | (6,709 | )                        |  |  | (6,227              | ) |  |         | (1,419
|Balance, 30 November 2012                          |  |                                          | -        |   |                          |  | -      |                          |  |  | -                   |   |  |         | -     
|                                                   |  |                                          |          |   |                          |  |        |                          |  |  |                     |   |  |         |       
|Total costs                                        |  |                                          | -        |   |                          |  | -      |                          |  |  | -                   |   |  |         | -     





F-21







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



Petroleum and natural gas
properties



During the year ended 30 November
2013, the Company recorded a provision for write-down of $Nil (2012 - $194,813, 2011 - $Nil) related to petroleum and natural gas
properties (Notes 18 and 20).



Contact Lake Property –
Contact Lake, Northwest Territories



During the year ended 30 November
2005, the Company acquired a 100% undivided right, title and interest, subject to a 1% net smelter return royalty (“NSR”),
in five mineral claims, totaling 1,801.82 hectares (“ha”) (4,450.50 acres) located five miles southeast of Port Radium
on Great Bear Lake, Northwest Territories (“NT”), for cash payments of $60,000 (paid) and 60,000 common shares (issued
and valued at $72,000) of the Company. The Company may purchase the NSR for a one-time payment of $1,000,000. The Company completed
additional staking in the area in order to increase the project size to sixteen contiguous claims, totaling 10,563.78 ha (26,103.57
acres). Collectively the properties are known as the Contact Lake Mineral Claims.



During the year ended 30 November
2013, the Company recorded a provision for write-down of $Nil (2012 - $6,709, 2011 - $8,074) related to the Contact Lake Property.



Port Radium – Glacier
Lake Property, Northwest Territories



During the year ended 30 November
2005, the Company acquired a 100% undivided right, title and interest, subject to a 2% NSR, in four mineral claims, totaling 2,520.78
ha (6,228.85 acres) (the “Glacier Lake Mineral Claims”) located one mile east of Port Radium on Great Bear Lake, NT,
for cash payments of $30,000 (paid) and 72,000 common shares (issued and valued at $72,000) of the Company. The Company may purchase
one-half of the NSR for a one-time payment of $1,000,000.



During the year ended 30 November
2013, the Company recorded provision for write-down of $Nil (2012 - $6,227, 2011 - $6,227) related to the Glacier Lake Property.



Port Radium – Crossfault
Lake Property, Northwest Territories



During the year ended 30 November
2005, the Company acquired a 100% undivided right, title and interest, subject to a 2% NSR, in five mineral claims, totaling 1,789.22
ha (4,421.24 acres) (the “Port Radium – Crossfault Lake Mineral Claims”) located north of Port Radium on Great
Bear Lake, NT, for cash payments of $60,000 (paid) and 90,000 common shares (issued and valued at $297,000) of the Company. The
Company may purchase one-half of the NSR for a one-time payment of $1,000,000.



Port Radium – Eldorado
Property, Northwest Territories



During the year ended 30 November
2005, the Company entered into a lease agreement with South Malartic Exploration Inc. to purchase a 50% undivided right, title
and interest in three mineral claims, totaling 106.53 ha (263.13 acres) (the “Eldorado Uranium Mineral Claims”) located
at Port Radium on Great Bear Lake, NT, for a cash payment of $20,000 (paid).





F-22







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



During the year ended 30 November
2013, the Company recorded a provision for write-down of $Nil (2012 - $526, 2011 - $526) related to the Eldorado property.



North Contact Lake Mineral
Claims – Great Bear Lake, Northwest Territories



During the year ended 30 November
2006, the Company acquired a 100% right, interest and title, subject to a 2% NSR, in eleven mineral claims (the “North Contact
Lake Mineral Claims”), for cash payments of $75,000 and the issuance of 50,000 common shares of the Company valued at $182,500.
The Company may purchase one-half of the NSR for a one-time payment of $1,000,000. The North Contact Lake Mineral Claims are situated
north of Contact Lake on Great Bear Lake approximately 680 km (423 miles) north of Yellowknife, NT, totaling 6,305.51 ha (15,581.20
acres).



Eldorado South IOCG
& Uranium Project, Northwest Territories



During the year ended 30 November
2007, the Company staked twenty-four claims (the “Eldorado South Uranium Mineral Claims”) and four additional claims
(the “Eldorado West Uranium Mineral Claims”) located ten miles south of the Eldorado uranium mine on the east side
of Great Bear Lake, NT and 680 km (423 miles) north of the city of Yellowknife, NT, collectively known as the Eldorado South Uranium
Project.



During the year ended 30 November
2009, fourteen claims were allowed to lapse and on 23 February 2013, three claims were allowed to lapse. The Eldorado South IOCG
& Uranium Project now consists of eleven mineral claims totaling 9,045.35 ha (22,351.06 acres).



On 23 February 2014, the Company
allowed three mineral claims related to the Eldorado South IOCG & Uranium Project to lapse (Note 23).



Longtom Property – Longtom
Lake, Northwest Territories



The Company holds a 50% undivided
interest subject to a 2% NSR, totaling 355.34 ha (878.05 acres), in the Longtom Property (the “Longtom Property”) located
about 350 km northwest of Yellowknife, NT. The Longtom Property is registered 100% in the name of the Company.



The Company has the right to
acquire the remaining 50% interest in the Longtom Property (the “Longtom Option”) for $315,000 payable either in cash
or 50% ($157,500) in cash and 50% in common shares of the Company. The deemed price of the Company’s shares issued on the
exercise of the Longtom Option would be the average TSX Venture Exchange closing market price of its common shares on the five
trading days immediately preceding and the five trading days immediately following the date that the option is exercised. The Company
is compelled to exercise the Longtom Option: 1) within 90 days from the date it has incurred $5,000,000 in exploration expenditures
on the Longtom Property; or 2) at the date the Company advises the optionor in writing that it will complete the Longtom Option
to purchase the remaining 50% interest in the Longtom Property.



The Company has the right to
enter into joint venture or option agreements related to the Longtom Property with third parties prior to the exercise of the Longtom
Option.





F-23







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



In 2003, the Company entered
into a Letter of Intent (the “Letter of Intent”) with Fronteer Development Group Inc. (“Fronteer”). On
26 October 2006, Fronteer earned its 75% interest in the Longtom Property by paying the Company $15,000 cash (received) and spending
an aggregate of $500,000 (incurred) on exploration expenditures over three years.



During the year ended 30 November
2013, the Company recorded a provision for write-down of $Nil (2012 - $893, 2011 - $893) related to the Longtom Property.



Longtom Property (Target 1)
– Longtom Lake, Northwest Territories



During the year ended 30 November
2003, the Company acquired a 50% interest in a 710.67 ha (1,756.10 acres) mineral property located in the Longtom Lake area of
the Northwest Territories for cash proceeds of $15,000 and 40,000 common shares of the Company valued at $56,000.



During the year ended 30 November
2012, the Company allowed this property to lapse.



| | 8. | PROPERTY, PLANT AND EQUIPMENT
| | -- | -----------------------------



The Company’s property,
plant and equipment as at 30 November 2013 are as follows:



|                       |  | Cost $ |        |  | Accumulated
 depreciation $ |  |        | Net book
 value $ | 
|---------------------- |  | ------ | ------ |  | --------------------------- |  | ------ | ----------------- | 
|                       |  |        |        |  |                             |  |        |                   | 
|Computer equipment     |  |        | 5,300  |  |                             |  | 4,942  |                   | 
|Furniture and fixtures |  |        | 25,706 |  |                             |  | 20,854 |                   | 
|                       |  |        |        |  |                             |  |        |                   | 
|Total                  |  |        | 31,006 |  |                             |  | 25,796 |                   | 



F-24







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



The changes in the Company’s
property, plant and equipment for the years ended 30 November 2013 and 2012 are as follows:



|                                                             |  | Petroleum and natural gas properties $ |            |   | Computer equipment $ |  |         | Equipment $ |  |  | Furniture and fixtures $ |   |  | Total $ |       
|------------------------------------------------------------ |  | -------------------------------------- | ---------- | - | -------------------- |  | ------- | ----------- |  |  | ------------------------ | - |  | ------- | ------
|                                                             |  |                                        |            |   |                      |  |         |             |  |  |                          |   |  |         |       
|COST                                                         |  |                                        |            |   |                      |  |         |             |  |  |                          |   |  |         |       
|Balance, as at 30 November 2011                              |  |                                        | 4,361,198  |   |                      |  | 60,749  |             |  |  | 58,720                   |   |  |         | 25,706
|Additions                                                    |  |                                        | 422,605    |   |                      |  | -       |             |  |  | -                        |   |  |         | -     
|Transfer from evaluation and exploration properties (Note 7) |  |                                        | 542,708    |   |                      |  | -       |             |  |  | -                        |   |  |         | -     
|Cost recovery                                                |  |                                        | (75,000    | ) |                      |  | -       |             |  |  | -                        |   |  |         | -     
|Asset retirement costs                                       |  |                                        | 28,358     |   |                      |  | -       |             |  |  | -                        |   |  |         | -     
|                                                             |  |                                        |            |   |                      |  |         |             |  |  |                          |   |  |         |       
|Balance, as at 30 November 2012                              |  |                                        | 5,279,869  |   |                      |  | 60,749  |             |  |  | 58,720                   |   |  |         | 25,706
|Additions                                                    |  |                                        | 134,652    |   |                      |  | -       |             |  |  | -                        |   |  |         | -     
|Cost recovery                                                |  |                                        | (30,000    | ) |                      |  | -       |             |  |  | -                        |   |  |         | -     
|Asset retirement costs                                       |  |                                        | (33,219    | ) |                      |  | -       |             |  |  | -                        |   |  |         | -     
|Dispositions (Note 18)                                       |  |                                        | (5,351,302 | ) |                      |  | (55,449 | )           |  |  | (58,720                  | ) |  |         | -     
|                                                             |  |                                        |            |   |                      |  |         |             |  |  |                          |   |  |         |       
|As at 30 November 2013                                       |  |                                        | -          |   |                      |  | 5,300   |             |  |  | -                        |   |  |         | 25,706



F-25









Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)





|                                        |  | Petroleum and 
natural gas
 properties $ |            |   | Computer
 equipment $ |  |         | Equipment $ |  |  | Furniture and fixtures $ |   |  | Total $ |       
|--------------------------------------- |  | ---------------------------------------- | ---------- | - | --------------------- |  | ------- | ----------- |  |  | ------------------------ | - |  | ------- | ------
|                                        |  |                                          |            |   |                       |  |         |             |  |  |                          |   |  |         |       
|ACCUMULATED DEPRECIATION AND IMPAIRMENT |  |                                          |            |   |                       |  |         |             |  |  |                          |   |  |         |       
|Balance, as at 30 November 2011         |  |                                          | 1,072,238  |   |                       |  | 45,343  |             |  |  | 41,211                   |   |  |         | 18,125
|Depletion and depreciation (Note 18)    |  |                                          | 1,658,495  |   |                       |  | 4,622   |             |  |  | 3,502                    |   |  |         | 1,516 
|Impairment loss (Note 18)               |  |                                          | 1,124,347  |   |                       |  | -       |             |  |  | -                        |   |  |         | -     
|                                        |  |                                          |            |   |                       |  |         |             |  |  |                          |   |  |         |       
|Balance, as at 30 November 2012         |  |                                          | 3,855,080  |   |                       |  | 49,965  |             |  |  | 44,713                   |   |  |         | 19,641
|Depletion and depreciation (Note 18)    |  |                                          | 163,738    |   |                       |  | 2,465   |             |  |  | 2,115                    |   |  |         | 1,213 
|Dispositions (Note 18)                  |  |                                          | (4,018,818 | ) |                       |  | (47,488 | )           |  |  | (46,828                  | ) |  |         | -     
|                                        |  |                                          |            |   |                       |  |         |             |  |  |                          |   |  |         |       
|As at 30 November 2013                  |  |                                          | -          |   |                       |  | 4,942   |             |  |  | -                        |   |  |         | 20,854
|                                        |  |                                          |            |   |                       |  |         |             |  |  |                          |   |  |         |       
|NET BOOK VALUES                         |  |                                          |            |   |                       |  |         |             |  |  |                          |   |  |         |       
|                                        |  |                                          |            |   |                       |  |         |             |  |  |                          |   |  |         |       
|At 30 November 2012                     |  |                                          | 1,424,789  |   |                       |  | 10,784  |             |  |  | 14,007                   |   |  |         | 6,065 
|                                        |  |                                          |            |   |                       |  |         |             |  |  |                          |   |  |         |       
|At 30 November 2013                     |  |                                          | -          |   |                       |  | 358     |             |  |  | -                        |   |  |         | 4,852 



F-26







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



On 9 August 2010, the Company
completed an asset purchase with Western Plains Petroleum Ltd. (“Western Plains”) pursuant to which the Company acquired
an undivided 50% interest in all of Western Plains’ oil and natural gas interests located in the Lloydminster/Maidstone areas
of Saskatchewan and the Lloydminster area of Alberta (the “Western Plains Assets”) for the cash purchase price of $1.7
million, having an effective date of 1 July 2010.



On 26 August 2010, the Company
completed a further oil & gas asset purchase with Western Plains pursuant to which the Company acquired an undivided 33.33%
interest in thirteen (13) crown leases located in the Lloydminster heavy oil area of Alberta for a cash purchase price of $1.467
million, having an effective date of 1 July 2010.



On 15 October 2010, the Company
entered into a sub-participation agreement with Arctic Hunter Energy Inc. (“Arctic Hunter”), a company with officers
and directors in common. Under the agreement, Arctic Hunter had agreed to a 100% participation interest in two (2) test wells by
31 October 2010. The Company held a 50% working interest in the Landrose, Saskatchewan assets which formed part of the heavy oil
assets acquired on 9 August 2010 from Western Plains. Arctic Hunter had to pay 100% of the Company’s share of the cost to
drill, complete and equip or abandon the test wells to earn 100% of the Company’s pre-farmout working interest in the Test
Wells spacing unit subject to reserving unto the Company a 10% overriding royalty payable by Arctic Hunter on all petroleum and
natural gas substances produced therefrom until payout. After payout, the Company would have the option to either covert to a 25%
working interest (being

50% of the Company’s pre-farmout
50% working interest) in the test wells spacing unit or remain in a gross overriding royalty position. Arctic Hunter had no option
to drill post-earning wells under the sub-participation agreement. Western Plains would be the operator of the test wells.



On 18 November 2010, the Company
entered into a participation agreement with Sahara Energy Ltd. (“Sahara Energy”), whereby the Company agreed to a 50%
participation interest with Sahara Energy in the joint lands. The Company had to pay 50% of the cost to drill, complete and equip
or abandon the test wells to earn a 50% working interest in the test well spacing unit and joint lands subject to reserving unto
Sahara Energy a 15% overriding royalty payable by the Company on all petroleum and natural gas substances produced therefrom until
payout. After payout, Sahara Energy would have the option to either convert to a 25% working interest (being 50% of Sahara Energy’s
pre-farmout 50% working interest) in the test well spacing unit and joint lands or remain in a gross overriding royalty position.
On 28 December 2011, this participation agreement was terminated.



On 19 November 2010, the Company
entered into an agreement with Western Plains to acquire a 50% undivided interest each in petroleum and natural gas rights from
Triwest Exploration Inc. for a purchase price of $41,510 each.



On 10 May 2011, the Company entered
into an asset exchange agreement with Canadian Natural Resources to acquire a 50% working interest in petroleum and natural gas
rights, including one standing case well, on 240 acres located in the Landrose area of Saskatchewan in exchange for its 50% working
interest in 320 acres of undeveloped land located in the Golden Lake area of Saskatchewan. The aggregate value of the assets exchanged
was $50,000.



F-27







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)





On 18 November 2011, the Company
entered into a sub-participation agreement with Arctic Hunter. Under the agreement, Arctic Hunter had agreed to participate with
the Company in the drilling of one test well. Arctic Hunter was to pay 50% of the Company’s share of the cost to drill, complete
and equip or abandon the test wells to earn a 25% working interest (being 50% of the Company’s pre-participation 50% working
interest) in the well. Arctic Hunter had no option to drill post-earning wells under the sub-participation agreement. Western Plains
was the operator of the test wells.



On 8 April 2013, the Company
entered into an agreement with Petrocapita Oil and Gas L.P. (“Petrocapita”) of Calgary, Alberta for the sale of its
petroleum and natural gas properties in Alberta and Saskatchewan for total consideration of $1,875,000 payable in cash at closing
(Note 18).



The sale to Petrocapita was completed
on 23 April 2013 for the agreed purchase price of $1,875,000. The effective date of this transaction was 1 March 2013. A gain of
$1,098,679 was recognized on this sale (Note 18).



As part of the transaction, the
Company terminated its sub-participation agreements with Arctic Hunter in respect of three wells located in Landrose, Saskatchewan
(the “Lands”). The Company and Arctic Hunter entered into a termination agreement pursuant to which Arctic Hunter relinquished
to the Company its interest in the Lands and the Company agreed to pay $102,000 to Arctic Hunter as consideration (Notes 17 and
18).



During the year ended 30 November
2013, the Company disposed of property, plant and equipment for proceeds of $Nil (2012 - $18,518, 2011 - $78,152) resulting in
a loss of $19,853 (2012 – gain of $18,518, 2011 - $57,435), of which proceeds of $Nil (2012 - $8,000, 2011 - $Nil) and a
gain of $Nil (2012 - $8,000, 2011 - $Nil) related to plant, property and equipment sold to Arctic Hunter (Notes 17 and 20).



Depletion and depreciation



No general and administrative
expenses were capitalized for the year ended 30 November 2013. Future development costs of $Nil (2012 - $Nil, 2011 - $274,500)
were included in the depletion calculation.





F-28









Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



Impairment test



The Company performed the impairment
test at 1 March 2013, the date the petroleum and natural gas assets were classified as held-for-sale, resulting in the recoverable
amount of petroleum and natural gas assets exceeding the net book value of petroleum and natural gas assets. Impairment of petroleum
and natural gas assets in the amount of $Nil (2012 - $1,124,347, 2011 - $Nil) was recognized during the year ended 30 November
2013 (Note 20).



Prices used in the evaluation
of the carrying value of the Company’s reserves for the purpose of the impairment test were:



|Year                                     |  | Heavy Crude Oil ($Cdn/BBL) |      
|---------------------------------------- |  | -------------------------- | -----
|                                         |  |                            |      
|2013                                     |  |                            | 60.92
|2014                                     |  |                            | 68.36
|2015                                     |  |                            | 71.10
|2016                                     |  |                            | 73.02
|2017                                     |  |                            | 73.02
|2018                                     |  |                            | 73.02
|2019                                     |  |                            | 73.81
|2020                                     |  |                            | 75.32
|2021                                     |  |                            | 76.87
|2022                                     |  |                            | 78.44
|                                         |  |                            |      
|Percentage increase each year thereafter |  |                            | 2.0  



| | 9. | TRADE AND OTHER PAYABLES
| | -- | ------------------------



The Company’s trade and
other payables are broken down as follows:



|As at 30 November              |  | 2013 $ |           |  | 2012
$ | 
|------------------------------ |  | ------ | --------- |  | ------ | 
|                               |  |        |           |  |        | 
|Trade payables                 |  |        | 25,313    |  |        | 
|Accrued liabilities            |  |        | 1,090,217 |  |        | 
|                               |  |        |           |  |        | 
|Total trade and other payables |  |        | 1,115,530 |  |        | 



Included in the cost of trade
and other payables as at 30 November 2013 is a general provision of $1,065,717 related to potential amendments associated with
the Company’s flow-through transactions (Notes 20 and 22).



Included in trade and other payables
at 30 November 2013 is $Nil (2012 - $25) payable to a company controlled by the Chief Executive Officer (“CEO”) and
director of the Company (Note 17.2). The amounts are unsecured, non-interest bearing and have no fixed terms of repayment.





F-29







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



Included in trade and other payables
at 30 November 2013 is $20,000 (2012 - $Nil) payable to the former VP of Corporate Development of the Company (Note 17.2). The
amounts are unsecured, non-interest bearing and have no fixed terms of repayment.



| | 10. | DECOMMISSIONING LIABILITIES
| | --- | ---------------------------



The total decommissioning liabilities
was estimated by management based on the Company’s net ownership interest in all wells and facilities, estimated costs to
reclaim and abandon the wells and facilities and the estimated timing of the costs to be incurred in future periods. The decommissioning
liabilities were sold on 1 March 2013, the effective date of the sale of the Company’s heavy oil assets to Petrocapita.



The total undiscounted abandonment
and restoration cost obligation at 30 November 2013 is $Nil (2012 - $675,870). The present value of the decommissioning liabilities
is estimated to be $Nil (2012 - $602,889). The present value of the decommissioning liabilities was calculated using an inflation
rate of 2% and discounted using a rate of 4%.



An accretion expense component
of $5,488 (2012 - $22,096, 2011 - $19,567) has been charged to operations, included in finance costs, to reflect an increase in
the carrying amount of the decommissioning liabilities.



The following table presents
the reconciliation of the beginning and ending aggregate carrying amount of the obligation associated with the retirement of petroleum
and natural gas properties:



|As at 30 November                                               |  | 2013 $ |          |   | 2012
$ | 
|--------------------------------------------------------------- |  | ------ | -------- | - | ------ | 
|                                                                |  |        |          |   |        | 
|Balance, beginning of year                                      |  |        | 602,889  |   |        | 
|Revisions to future reclamation and abandonment costs (Note 20) |  |        | (33,219  | ) |        | 
|Accretion (Note 18)                                             |  |        | 5,488    |   |        | 
|Liabilities transferred on dispositions (Note 18)               |  |        | (575,158 | ) |        | 
|                                                                |  |        |          |   |        | 
|Decommissioning liabilities, ending                             |  |        | -        |   |        | 



F-30







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



| | 11. | SHARE CAPITAL
| | --- | -------------



| | 11.1 | Authorized share capital
| | ---- | ------------------------



The Company has authorized an
unlimited number of voting common shares with no par value. Authorized share capital also consists of an unlimited number of preferred
shares with no par value, to be issued in series, with the directors being authorized to determine the designation, rights, privileges,
restrictions and conditions attached to all of the preferred shares. At 30 November 2013, the Company had 21,788,979 common shares
outstanding (2012 - 21,403,979) and no preferred shares outstanding (2012 - Nil).



On 11 March 2010, the Company
consolidated its share capital based on a one new common share without par value for every five existing common shares without
par value basis. All common shares and per share amounts have been restated to give retroactive effect to the share consolidation.



| | 11.2 | Shares issuances and repurchases
| | ---- | --------------------------------



During the year ended 30 November
2013, 675,000 options (2012 – Nil, 2011 - Nil) were exercised for proceeds of $133,875 (2012 - $Nil) (Note 11.6).



In addition, 290,000 (2012 – Nil)
shares were repurchased at a cost of $47,554 (2012 - $Nil) and were returned to capital pursuant to the Normal Course Issuer Bid
(the “Bid”) (Note 11.3).



During the year ended
30 November 2012, the Company did not issue any common shares.



| | 11.3 | Normal Course Issuer Bid
| | ---- | ------------------------



On 1 May 2013, the Company received
approval from the TSX Venture Exchange (the “Exchange”) for the Bid. Pursuant to the Bid, the Company may purchase
for cancellation, from time to time, as it considers advisable, up to 1,800,000 of its issued and outstanding common shares. The
price which the Company will pay for any shares purchased will be the prevailing market price of such common shares on the Exchange
at the time of such purchase. The Bid commenced on 3 May 2013 and will terminate on 3 May 2014, or such earlier time as the Bid
is completed or at the option of the Company. Jordan Capital Markets of Vancouver, British Columbia will conduct the Bid on behalf
of the Company. During the year ended 30 November 2013, the Company purchased 290,000 (2012 – Nil) common shares at a total
cost of $47,554 (2012 - $Nil) (Note 11.2). The difference between the share repurchase price and the original share issuance of
$597,017 (2012 - $Nil) has been included in equity. As at 30 November 2013, 290,000 (2012 – Nil) common shares have been
returned to treasury and have been cancelled.



From 1 December 2013 to 28 February
2014, the Company repurchased 133,000 shares of the Company, which have been cancelled (Note 23).



F-31







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



| | 11.4 | Special cash distribution
| | ---- | -------------------------



On 12 June 2013, the Company
received approval at its annual and special general meeting for a special cash distribution to its shareholders derived from the
proceeds received from the sale of the Company’s interest in its various heavy oil assets by way of a reduction of stated
capital of the Company (the “Special Distribution”). The Special Distribution of $0.08 per common share was paid on
5 July 2013, to holders of record of 22,009,474 common shares on 26 June 2013 in the aggregate amount of $1,760,758.



| | 11.5 | Share purchase warrants
| | ---- | -----------------------



There were no share purchase
warrants for the years ended 30 November 2013 and 2012.



| | 11.6 | Stock options
| | ---- | -------------



The Company grants share options
in accordance with the policies of the Exchange. Under the general guidelines of the Exchange, the Company may reserve up to 20%
of its issued and outstanding shares for its employees, directors or consultants to purchase shares of the Company. The exercise
price for options granted under the plan will not be less than the market price of the common shares less applicable discounts
permitted by the Exchange and options will be exercisable for a term of up to five years, subject to earlier termination in the
event of death or the cessation of services.



The following is a summary of
the changes in the Company’s stock option plan for the years ended 30 November 2013, 2012 and 2011:



|                               |  | 2013              |           |   | 2012                              |  |      | 2011              | 
|------------------------------ |  | ----------------- | --------- | - | --------------------------------- |  | ---- | ----------------- | 
|Year ended 30 November         |  | Number of options |           |   | Weighted average exercise price $ |  |      | Number of options | 
|                               |  |                   |           |   |                                   |  |      |                   | 
|Outstanding, beginning of year |  |                   | 2,025,000 |   |                                   |  | 0.36 |                   | 
|Granted                        |  |                   | 1,025,000 |   |                                   |  | 0.20 |                   | 
|Exercised (Note 11.2)          |  |                   | (675,000  | ) |                                   |  | 0.20 |                   | 
|Expired                        |  |                   | (450,000  | ) |                                   |  | 0.48 |                   | 
|Cancelled                      |  |                   | (80,000   | ) |                                   |  | 1.00 |                   | 
|                               |  |                   |           |   |                                   |  |      |                   | 
|Outstanding, end of year       |  |                   | 1,845,000 |   |                                   |  | 0.27 |                   | 



F-32







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



On 18 July 2013, the Company
granted 1,025,000 options to directors and officers, exercisable at $0.20 per share until 18 July 2016. 512,500 options vested
on 18 July 2013 and 512,500 options vested on 18 January 2014. The weighted average fair value of the options granted and vested
during the year ended 30 November 2013 was estimated at $0.065 (2012 - $0.10, 2011 - $0.24) per option at the grant date using
the Black-Scholes Option Pricing Model. The weighted average assumptions used for the calculation were:



|Year ended 30 November      |  | 2013 |            |   | 2012 |  |            | 2011 | 
|--------------------------- |  | ---- | ---------- | - | ---- |  | ---------- | ---- | 
|                            |  |      |            |   |      |  |            |      | 
|Risk free interest rate     |  |      | 1.19       | % |      |  | 1.11       | %    | 
|Expected life               |  |      | 3.00 years |   |      |  | 2.92 years |      | 
|Expected volatility         |  |      | 77.17      | % |      |  | 79.02      | %    | 
|Expected dividend per share |  |      | -          | % |      |  | -          | %    | 



During the year ended 30 November
2013, the Company amended the expiry date for 100,000 stock options previously granted from 12 October 2015 to 12 June 2014, and
amended the expiry date for 75,000 stock options previously granted from 9 January 2015 to 12 June 2014. The incremental fair value
related to the modifications resulted in a decrease of $3,249. The decrease in fair value did not have an impact on the financial
statements.



The following weighted-average
assumptions were used for the Black-Scholes valuation of stock options modified during the year:



|Year ended 30 November      |  | 2013 |            |   | 2012 |  |   | 2011 | 
|--------------------------- |  | ---- | ---------- | - | ---- |  | - | ---- | 
|                            |  |      |            |   |      |  |   |      | 
|Risk free interest rate     |  |      | 1.18       | % |      |  | - |      | 
|Expected life               |  |      | 0.84 years |   |      |  | - |      | 
|Expected volatility         |  |      | 85.26      | % |      |  | - |      | 
|Expected dividend per share |  |      | -          | % |      |  | - |      | 



The following table summarizes
information regarding stock options outstanding and exercisable as at 30 November 2013:



|Grant date       |  | Expiry date     |  | Number of  options outstanding |           |  | Number of options exercisable |  |           | Exercise price $ |  |  | Remaining contractual life (years) | 
|---------------- |  | --------------- |  | ------------------------------ | --------- |  | ----------------------------- |  | --------- | ---------------- |  |  | ---------------------------------- | 
|3 July 2009      |  | 2 July 2014     |  |                                | 170,000   |  |                               |  | 170,000   |                  |  |  | 1.00                               | 
|9 January 2012   |  | 12 June 2014    |  |                                | 75,000    |  |                               |  | 75,000    |                  |  |  | 0.21                               | 
|9 January 2012   |  | 9 January 2015  |  |                                | 150,000   |  |                               |  | 150,000   |                  |  |  | 0.21                               | 
|31 January 2012* |  | 31 January 2014 |  |                                | 50,000    |  |                               |  | 50,000    |                  |  |  | 0.25                               | 
|10 July 2012     |  | 10 July 2015    |  |                                | 75,000    |  |                               |  | 75,000    |                  |  |  | 0.165                              | 
|12 October 2012  |  | 12 June 2014    |  |                                | 100,000   |  |                               |  | 100,000   |                  |  |  | 0.20                               | 
|12 October 2012  |  | 12 October 2015 |  |                                | 200,000   |  |                               |  | 200,000   |                  |  |  | 0.20                               | 
|18 July 2013     |  | 18 July 2016    |  |                                | 1,025,000 |  |                               |  | 512,500   |                  |  |  | 0.20                               | 
|                 |  |                 |  |                                |           |  |                               |  |           |                  |  |  |                                    | 
|Total options    |  |                 |  |                                | 1,845,000 |  |                               |  | 1,332,500 |                  |  |  |                                    | 

*Note 23





F-33







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



| | 11.7 | Shareholder rights plan
| | ---- | -----------------------



Effective 10 October 2008, the
Board of Directors has approved and adopted a shareholder rights plan (the “Rights Plan”) subject to shareholder and
regulatory approval which was received on 3 February 2009. The Rights Plan extends the minimum expiry period for a takeover bid
to 60 days and requires a bid to remain open for an additional 10 business days after an offeror publicly announces it has received
tenders for more than 50% of the Company’s voting shares. The principle purpose of the Rights Plan is to ensure that all
shareholders will be treated equally and fairly in the event of a bid for control of the Company through an acquisition of its
common shares. It is designed to provide the Company shareholders with sufficient time to properly consider a takeover bid without
undue time constraints. In addition, it will provide the board with additional time for review and consideration of unsolicited
takeover bids, and if necessary, for the consideration of alternatives.



| | 12. | SHARE-BASED PAYMENTS
| | --- | --------------------



Share-based payments for the
following options granted by the Company will be amortized over the vesting period, of which $57,760 was recognized in the year
ended 30 November 2013 (2012 - $149,722, 2011 - $216,070) (Notes 17 and 19):



|Grant date      |  | Fair value $ |         |  | Amount  vested in 2013 $ |  |        | Amount vested in 2012 $ |  |  | Amount  vested in  2011 $ | 
|--------------- |  | ------------ | ------- |  | ------------------------ |  | ------ | ----------------------- |  |  | ------------------------- | 
|                |  |              |         |  |                          |  |        |                         |  |  |                           | 
|4 November 2009 |  |              | 2,682   |  |                          |  | -      |                         |  |  | -                         | 
|8 December 2010 |  |              | 213,707 |  |                          |  | -      |                         |  |  | 319                       | 
|9 January 2012  |  |              | 58,211  |  |                          |  | -      |                         |  |  | 58,211                    | 
|31 January 2012 |  |              | 3,014   |  |                          |  | -      |                         |  |  | 3,014                     | 
|10 July 2012    |  |              | 13,229  |  |                          |  | -      |                         |  |  | 13,229                    | 
|12 October 2012 |  |              | 74,949  |  |                          |  | -      |                         |  |  | 74,949                    | 
|18 July 2013    |  |              | 66,523  |  |                          |  | 57,760 |                         |  |  | -                         | 
|                |  |              |         |  |                          |  |        |                         |  |  |                           | 
|Total           |  |              | 432,315 |  |                          |  | 57,760 |                         |  |  | 149,722                   | 







F-34







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



| | 13. | TAXES
| | --- | -----



| | 13.1 | Provision for income taxes
| | ---- | --------------------------



|Year ended 30 November          |  | 2013 $ |          |   | 2012 $ |  |            | 2011
$ | 
|------------------------------- |  | ------ | -------- | - | ------ |  | ---------- | ------ | 
|                                |  |        |          |   |        |  |            |        | 
|Earnings (loss) before tax      |  |        | 673,069  |   |        |  | (3,475,613 | )      | 
|Statutory tax rate              |  |        | 25.69    | % |        |  | 25.13      | %      | 
|                                |  |        |          |   |        |  |            |        | 
|Expected tax recovery (expense) |  |        | (172,895 | ) |        |  | 873,422    |        | 
|Non-deductible items            |  |        | 165,058  |   |        |  | (41,590    | )      | 
|Change in future tax rates      |  |        | 96,866   |   |        |  | 175,310    |        | 
|Change in valuation allowance   |  |        | (89,029  | ) |        |  | (1,007,142 | )      | 
|                                |  |        |          |   |        |  |            |        | 
|Tax recovery for the year       |  |        | -        |   |        |  | -          |        | 



| | 13.2 | Deferred tax balances
| | ---- | ---------------------



The tax effects of temporary
differences that give rise to future income tax assets and liabilities are as follows:



|As at 30 November                     |  | 2013 $ |            |   | 2012 $ |  |            | 2011
$ | 
|------------------------------------- |  | ------ | ---------- | - | ------ |  | ---------- | ------ | 
|                                      |  |        |            |   |        |  |            |        | 
|Tax loss carry-forwards               |  |        | 2,165,346  |   |        |  | 1,935,768  |        | 
|Property, plant and equipment         |  |        | 90,681     |   |        |  | 84,013     |        | 
|Exploration and evaluation properties |  |        | 2,502,947  |   |        |  | 2,492,295  |        | 
|Decommissioning liabilities           |  |        | -          |   |        |  | 156,751    |        | 
|Share issue costs                     |  |        | -          |   |        |  | 1,118      |        | 
|                                      |  |        | 4,758,974  |   |        |  | 4,669,945  |        | 
|Less: Valuation allowance             |  |        | (4,758,974 | ) |        |  | (4,669,945 | )      | 
|                                      |  |        |            |   |        |  |            |        | 
|Deferred tax assets                   |  |        | -          |   |        |  | -          |        | 



F-35







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



| | 13.3 | Expiry dates
| | ---- | ------------



The Company’s recognized
and unrecognized deferred tax assets related to unused tax losses have the following expiry dates:



|As at 30 November                           |  | 2013
$ |          
|------------------------------------------- |  | ------ | ---------
|                                            |  |        |          
|Non-capital losses                          |  |        |          
|2026                                        |  |        | 672,083  
|2028                                        |  |        | 2,495,893
|2029                                        |  |        | 1,870,522
|2030                                        |  |        | 1,672,630
|2031                                        |  |        | 424,853  
|2032                                        |  |        | 309,187  
|2033                                        |  |        | 883,085  
|                                            |  |        |          
|Total non-capital losses                    |  |        | 8,328,253
|                                            |  |        |          
|Total resource-related deduction, no expiry |  |        | 9,649,380



| | 14. | EARNINGS (LOSS) PER SHARE
| | --- | -------------------------



The calculation of basic and
diluted earnings (loss) per share is based on the following data:



|Year ended 30 November                                                  |  | 2013 |            |   | 2012 |   |            | 2011 | 
|----------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | - | ---------- | ---- | 
|                                                                        |  |      |            |   |      |   |            |      | 
|Net loss for the year from continuing operations                        |  | $    | (309,219   | ) |      | $ | (1,274,999 | )    | 
|Net earnings (loss) for the year from discontinued operations (Note 18) |  | $    | 982,288    |   |      | $ | (2,200,614 | )    | 
|                                                                        |  |      |            |   |      |   |            |      | 
|Net earnings (loss) for the year                                        |  | $    | 673,069    |   |      | $ | (3,475,613 | )    | 
|Weighted average number of shares – basic and diluted                   |  |      | 21,586,557 |   |      |   | 21,403,979 |      | 



The basic earnings (loss) per
share is computed by dividing the net earnings (loss) by the weighted average number of common shares outstanding during the year.
The diluted earnings (loss) per share reflects the potential dilution of common share equivalents, such as outstanding stock options
and share purchase warrants, in the weighted average number of common shares outstanding during the year, if dilutive. All of the
stock options were anti-dilutive for the years ended 30 November 2013, 2012 and 2011.



F-36







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



| | 15. | CAPITAL RISK MANAGEMENT
| | --- | -----------------------



The capital structure of the
Company consists of equity attributable to common shareholders, comprising of issued capital, contributed surplus and deficit.
The Company’s objectives when managing capital are to: (i) preserve capital, (ii) obtain the best available net return, and
(iii) maintain liquidity.



The Company manages the capital
structure and makes adjustments to it in light of changes in economic condition and the risk characteristics of the underlying
assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue new debt, acquire or dispose
of assets or adjust the amount of cash and cash equivalents and investments.



Management reviews its capital
management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.
There were no changes in the Company’s approach to capital management during the year ended 30 November 2013. The Company
is not subject to externally imposed capital requirements.



| | 16. | FINANCIAL INSTRUMENTS
| | --- | ---------------------



| | 16.1 | Categories of financial instruments
| | ---- | -----------------------------------



|As at 30 November                        |  | 2013 $ |           |  | 2012
$ | 
|---------------------------------------- |  | ------ | --------- |  | ------ | 
|                                         |  |        |           |  |        | 
|FINANCIAL ASSETS                         |  |        |           |  |        | 
|                                         |  |        |           |  |        | 
|FVTPL, at fair value                     |  |        |           |  |        | 
|Cash and cash equivalents                |  |        | 6,700,938 |  |        | 
|                                         |  |        |           |  |        | 
|Loans and receivables, at amortized cost |  |        |           |  |        | 
|Trade and other receivables              |  |        | 327       |  |        | 
|                                         |  |        |           |  |        | 
|Total financial assets                   |  |        | 6,701,265 |  |        | 
|                                         |  |        |           |  |        | 
|FINANCIAL LIABILITIES                    |  |        |           |  |        | 
|                                         |  |        |           |  |        | 
|Other liabilities, at amortized cost     |  |        |           |  |        | 
|Trade payables                           |  |        | 25,313    |  |        | 
|                                         |  |        |           |  |        | 
|Total financial liabilities              |  |        | 25,313    |  |        | 



F-37







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



| | 16.2 | Fair value
| | ---- | ----------



The fair value of financial assets
and financial liabilities at amortized cost is determined in accordance with generally accepted pricing models based on discounted
cash flow analysis or using prices from observable current market transactions. The Company considers that the carrying amount
of all its financial assets and financial liabilities recognized at amortized cost in the financial statements approximates their
fair value due to the demand nature or short term maturity of these instruments.



The following table provides
an analysis of the Company’s financial instruments that are measured subsequent to initial recognition at fair value, grouped
into Level 1 to 3 based on the degree to which the inputs used to determine the fair value are observable.



| | · | Level 1 fair value measurements are those derived from quoted prices
in active markets for identical assets or liabilities.
| | - | ---------------------------------------------------------------------------------------------------------------------------

| | · | Level 2 fair value measurements are those derived from inputs other
than quoted prices included within Level 1, that are observable either directly or indirectly.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Level 3 fair value measurements are those derived from valuation techniques
that include inputs that are not based on observable market data. As at 30 November 2013, the Company does not have any Level 3
financial instruments.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|As at 30 November                    |  | 2013 $ |           |  | 2012
$ | 
|------------------------------------ |  | ------ | --------- |  | ------ | 
|                                     |  |        |           |  |        | 
|LEVEL 1                              |  |        |           |  |        | 
|                                     |  |        |           |  |        | 
|Financial assets at fair value       |  |        |           |  |        | 
|Cash and cash equivalents            |  |        | 6,700,938 |  |        | 
|                                     |  |        |           |  |        | 
|Total financial assets at fair value |  |        | 6,700,938 |  |        | 



There were no transfers
between Level 1 and 2 in the year ended 30 November 2013.



F-38







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



| | 16.3 | Management of financial risks
| | ---- | -----------------------------



The financial risk arising from
the Company’s operations are credit risk, liquidity risk, interest rate risk, currency risk and commodity price risk. These
risks arise from the normal course of operations and all transactions undertaken are to support the Company’s ability to
continue as a going concern. The risks associated with these financial instruments and the policies on how to mitigate these risks
are set out below. Management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and
effective manner.



Credit risk



Credit risk is the risk of an
unexpected loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises primarily
from the Company’s cash and cash equivalents and trade receivables. The Company manages its credit risk relating to cash
and cash equivalents by dealing only with highly-rated Canadian financial institutions. As at 30 November 2013, trade receivables
were comprised of GST/HST receivable of $3,186 (2012 - $9,202), petroleum revenue receivable of $Nil (2012 - $164,709), trade receivable
of $327 (2012 - $Nil) and interest receivable of $Nil (2012 - $216). As a result, credit risk is considered insignificant.



Liquidity risk



Liquidity risk is the risk that
the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk by continuously
monitoring actual and projected cash flows and matching the maturity profile of financial assets and liabilities. As the Company’s
financial instruments are substantially comprised of cash and cash equivalents, liquidity risk is considered insignificant.



Interest rate risk



The Company’s interest
rate risk is primarily related to the Company’s cash and cash equivalents for which amounts were invested at interest rates
in effect at the time of investment. Changes in market interest rates affect the fair market value of the cash and cash equivalents.
However, as these investments come to maturity within a short period of time, the impact would likely not be significant.



A 1% change in short-term rates
would have changed the interest income and net earnings of the Company, assuming that all other variables remained constant, by
approximately $54,858 for the year ended 30 November 2013.



Currency risk



The majority of the Company’s
cash flows and financial assets and liabilities are denominated in Canadian dollars, which is the Company’s functional and
reporting currency. Foreign currency risk is limited to the portion of the Company’s business transactions denominated in
currencies other than the Canadian dollar.



F-39







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



The Company’s objective
in managing its foreign currency risk is to minimize its net exposures to foreign currency cash flows by holding most of its cash
and cash equivalents in Canadian dollars (Note 4). The Company monitors and forecasts the values of net foreign currency cash flow
and financial position exposures and from time to time could authorize the use of derivative financial instruments such as forward
foreign exchange contracts to economically hedge a portion of foreign currency fluctuations. The Company has not, to the date of
these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.



Commodity price
risk



The Company is in the
exploration stage and is not subject to commodity price risk.



| | 17. | RELATED PARTY TRANSACTIONS
| | --- | --------------------------



|For the year ended 30 November 2013, the Company had related party transactions with Arctic Hunter, a company related by way of officers and directors in common for rent recovery and purchase of certain of its petroleum and natural gas properties (Note 8).
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 17.1 | Related party expenses
| | ---- | ----------------------



The Company’s
related party expenses (recovery) are broken down as follows:



|Year ended 30 November                  |  | 2013 $ |        |   | 2012 $ |  |        | 2011
$ | 
|--------------------------------------- |  | ------ | ------ | - | ------ |  | ------ | ------ | 
|                                        |  |        |        |   |        |  |        |        | 
|Rent recovery                           |  |        | (4,500 | ) |        |  | (2,000 | )      | 
|                                        |  |        |        |   |        |  |        |        | 
|Total related party expenses (recovery) |  |        | (4,500 | ) |        |  | (2,000 | )      | 



| | 17.2 | Due from/to related parties
| | ---- | ---------------------------



The assets and liabilities of
the Company include the following amounts due from/to related parties:



|As at 30 November                            |  | 2013 $ |        |  | 2012
$ | 
|-------------------------------------------- |  | ------ | ------ |  | ------ | 
|                                             |  |        |        |  |        | 
|Arctic Hunter                                |  |        | -      |  |        | 
|                                             |  |        |        |  |        | 
|Total amount due from related party (Note 5) |  |        | -      |  |        | 
|                                             |  |        |        |  |        | 
|Company controlled by CEO and director       |  |        | -      |  |        | 
|Former VP of Corporate Development           |  |        | 20,000 |  |        | 
|                                             |  |        |        |  |        | 
|Total amount due to related parties (Note 9) |  |        | 20,000 |  |        | 





F-40







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



The amounts due to/from related parties are unsecured, non-interest
bearing and have no fixed terms of repayment.



| | 17.3 | Key management personnel compensation
| | ---- | -------------------------------------



The remuneration of
directors and other members of key management were as follows:



|Year ended 30 November                      |  | 2013 $ |         |  | 2012 $ |  |         | 2011
$ | 
|------------------------------------------- |  | ------ | ------- |  | ------ |  | ------- | ------ | 
|                                            |  |        |         |  |        |  |         |        | 
|Short-term benefits                         |  |        | 341,166 |  |        |  | 604,000 |        | 
|Share-based payments (Notes 12 and 19)      |  |        | 57,760  |  |        |  | 146,388 |        | 
|                                            |  |        |         |  |        |  |         |        | 
|Total key management personnel compensation |  |        | 398,926 |  |        |  | 750,388 |        | 



| | 17.4 | Other related party transactions
| | ---- | --------------------------------



During the year ended 30 November
2013, the Company terminated its sub-participation agreements with Arctic Hunter as part of the sale to Petrocapita. Pursuant to
the termination of the sub-participation agreements, Arctic Hunter relinquished to the Company its interest in three wells and
the Company purchased the interest for $102,000 (Notes 8 and 18).



During the year ended 30 November
2013, the Company sold plant, property and equipment to Arctic Hunter for proceeds of $Nil (2012 - $8,000, 2011 - $Nil), resulting
in a gain of $Nil (2012 - $8,000, 2011 - $Nil) (Notes 8 and 20).



| | 18. | DISCONTINUED OPERATIONS
| | --- | -----------------------



On 8 April 2013, the Company
entered into an agreement with Petrocapita of Calgary, Alberta for the sale of its petroleum and natural gas properties in Alberta
and Saskatchewan for total consideration of $1,875,000 payable in cash at closing. Per the agreement, Petrocapita agreed to assume
all of the related abandonment and reclamation obligations pertaining to the oil assets purchased which would otherwise be the
responsibility of the Company (Note 8).



The sale to Petrocapita was completed
on 23 April 2013 for the agreed purchase price of $1,875,000. The effective date of this transaction was 1 March 2013. A gain of
$1,098,679 was recognized on this sale (Note 8).



As part of the transaction, the
Company terminated its sub-participation agreements with Arctic Hunter in respect of the Lands. The Company and Arctic Hunter entered
into a termination agreement pursuant to which Arctic Hunter relinquished to the Company its interest in the Lands and the Company
agreed to pay $102,000 to Arctic Hunter as consideration (Notes 8 and 17).



Assets and liabilities related
to this disposition had been classified as held for sale as at 1 March 2013, and revenues and expenses associated with these operations
were presented as discontinued operations.





F-41









Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



The results of discontinued operations
are set out below. The comparative net loss and cash flows from discontinued operations have been revised to include those operations
classified as discontinued in the current year.







|Year ended 30 November                                       |  | 2013 $ |           |   | 2012 $ |  |            | 2011
$ | 
|------------------------------------------------------------ |  | ------ | --------- | - | ------ |  | ---------- | ------ | 
|                                                             |  |        |           |   |        |  |            |        | 
|Petroleum revenue                                            |  |        | 267,535   |   |        |  | 2,422,266  |        | 
|Petroleum royalties                                          |  |        | (52,132   | ) |        |  | (502,812   | )      | 
|Petroleum production and transportation                      |  |        | (162,568  | ) |        |  | (1,120,317 | )      | 
|Depletion and depreciation (Note 8)                          |  |        | (163,738  | ) |        |  | (1,658,495 | )      | 
|Finance costs (Note 10)                                      |  |        | (5,488    | ) |        |  | (22,096    | )      | 
|Write-down of exploration and evaluation properties (Note 7) |  |        | -         |   |        |  | (194,813   | )      | 
|Write-down of property, plant and equipment (Note 8)         |  |        | -         |   |        |  | (1,124,347 | )      | 
|                                                             |  |        |           |   |        |  |            |        | 
|Net loss for the year                                        |  |        | (116,391  | ) |        |  | (2,200,614 | )      | 
|                                                             |  |        |           |   |        |  |            |        | 
|Gain on disposition of assets held for sale                  |  |        | 1,098,679 |   |        |  | -          |        | 
|                                                             |  |        |           |   |        |  |            |        | 
|Net earnings (loss) from discontinued operations             |  |        | 982,288   |   |        |  | (2,200,614 | )      | 



|Year ended 30 November                                   |  | 2013 $ |           |  | 2012 $ |  |          | 2011
$ | 
|-------------------------------------------------------- |  | ------ | --------- |  | ------ |  | -------- | ------ | 
|                                                         |  |        |           |  |        |  |          |        | 
|Net cash inflows from operating activities               |  |        | 217,544   |  |        |  | 766,823  |        | 
|Net cash inflows (outflows) from investing activities    |  |        | 1,751,353 |  |        |  | (318,260 | )      | 
|                                                         |  |        |           |  |        |  |          |        | 
|Net cash inflows (outflows) from discontinued operations |  |        | 1,968,897 |  |        |  | 448,563  |        | 



F-42







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



| | 19. | GENERAL AND ADMINISTRATIVE EXPENSES
| | --- | -----------------------------------



|Year ended 30 November                                                            |  | 2013 $ |          |   | 2012 $ |  |           | 2011
$ | 
|--------------------------------------------------------------------------------- |  | ------ | -------- | - | ------ |  | --------- | ------ | 
|                                                                                  |  |        |          |   |        |  |           |        | 
|Advertising and promotion                                                         |  |        | 3,944    |   |        |  | 21,521    |        | 
|Depreciation (Note 8)                                                             |  |        | 5,793    |   |        |  | 9,640     |        | 
|Automotive                                                                        |  |        | -        |   |        |  | 3,388     |        | 
|Bank charges and interest                                                         |  |        | 31,076   |   |        |  | 1,012     |        | 
|Consulting fees                                                                   |  |        | 12,486   |   |        |  | 73,284    |        | 
|Directors fees (Note 17)                                                          |  |        | 44,000   |   |        |  | 26,000    |        | 
|Filing fees                                                                       |  |        | 53,960   |   |        |  | 62,014    |        | 
|Legal and accounting (Note 17)                                                    |  |        | 174,600  |   |        |  | 237,408   |        | 
|Management fees (Note 17)                                                         |  |        | 120,000  |   |        |  | 47,500    |        | 
|Meals and entertainment                                                           |  |        | 8,321    |   |        |  | 31,549    |        | 
|Office and miscellaneous                                                          |  |        | 35,300   |   |        |  | 36,892    |        | 
|Recovery of general provision related to flow-through shares (Notes 9, 20 and 22) |  |        | (263,746 | ) |        |  | -         |        | 
|Rent and utilities                                                                |  |        | 39,517   |   |        |  | 56,479    |        | 
|Salaries and benefits (Note 17)                                                   |  |        | 120,861  |   |        |  | 474,224   |        | 
|Share-based payments (Notes 12 and 17)                                            |  |        | 57,760   |   |        |  | 149,722   |        | 
|Telephone and internet                                                            |  |        | 4,698    |   |        |  | 14,315    |        | 
|Shareholder information                                                           |  |        | -        |   |        |  | 47,300    |        | 
|Travel                                                                            |  |        | 26,122   |   |        |  | 17,757    |        | 
|                                                                                  |  |        |          |   |        |  |           |        | 
|Total                                                                             |  |        | 474,692  |   |        |  | 1,310,005 |        | 



| | 20. | SUPPLEMENTAL CASH FLOW INFORMATION
| | --- | ----------------------------------



Included in trade and other receivables
is $Nil (2012 - $37,351, 2011 - $44,374) related to the purchase of capital expenditures for the petroleum and natural gas properties
as at 30 November 2013 (Note 5).



During the year ended 30 November
2013, the Company wrote down trade receivables of $3,980 (2012 - $Nil, 2011 - $Nil) (Note 5).



Included in decommissioning liabilities
is $33,219 (2012 – expense of $28,358, 2011 – expense of $15,683) related to the revision of future reclamation costs
as at 30 November 2013 (Note 10).



During the year ended 30 November
2013, impairment loss of petroleum and natural gas assets of $Nil was identified (2012 - $1,124,347, 2011 - $Nil), which was a
result in estimated discounted future net cash flows associated with reserves exceeding the net book value of petroleum and natural
gas assets (Note 8).



During the year ended 30 November
2013, impairment loss of exploration and evaluation properties of $Nil was identified (2012 - $209,168, 2011 - $15,720) (Notes
7 and 18).





F-43







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



During the year ended 30 November
2013, the Company disposed of property, plant and equipment for proceeds of $Nil (2012 - $18,518, 2011 - $78,152) resulting in
a loss of $19,853 (2012 – gain of $18,518, 2011 – gain of $57,435), of which proceeds of $Nil (2012 - $8,000, 2011
- $Nil) and a gain of $Nil (2012 - $8,000, 2011 - $Nil) related to plant, property and equipment sold to Arctic Hunter (Notes 8
and 17).



The Company has recorded a general
provision of $1,065,717 related to prior flow-through transactions. However, there is no certainty that additional amounts related
to the Company’s prior flow-through transactions may not be assessed or deemed payable (Notes 9 and 22).



| | 20.1 | Cash payments for interest and taxes
| | ---- | ------------------------------------



The Company made cash payments for interest of $29,719 (2012
- $Nil, 2011 - $Nil) and income taxes of $Nil (2012 - $Nil, 2011 - $Nil) during the year ended 30 November 2013.



| | 21. | SEGMENTED INFORMATION
| | --- | ---------------------



The Company’s business
activity is acquiring and exploring mineral and petroleum and natural gas properties. At 30 November 2013, the Company operates
in two geographical areas, being British Columbia and the Northwest Territories. Discontinued operations consist of operations
related to petroleum and natural gas properties in Alberta/Saskatchewan (Note 18). The following is an analysis of the revenues,
net loss, current assets and non-current assets by reportable segment:



|                                      |  | British Columbia |            |   | Northwest Territories |  |        | Discontinued Operations |  |  | Total      |  
|------------------------------------- |  | ---------------- | ---------- | - | --------------------- |  | ------ | ----------------------- |  |  | ---------- | -
|                                      |  |                  |            |   |                       |  |        |                         |  |  |            |  
|Petroleum revenue, net of royalties   |  |                  |            |   |                       |  |        |                         |  |  |            |  
|For the year ended 30 November 2013   |  |                  | -          |   |                       |  | -      |                         |  |  | 215,403    |  
|For the year ended 30 November 2012   |  |                  | -          |   |                       |  | -      |                         |  |  | 1,919,454  |  
|For the year ended 30 November 2011   |  |                  | -          |   |                       |  | -      |                         |  |  | 1,905,957  |  
|                                      |  |                  |            |   |                       |  |        |                         |  |  |            |  
|Net earnings (loss)                   |  |                  |            |   |                       |  |        |                         |  |  |            |  
|For the year ended 30 November 2013   |  |                  | (309,219   | ) |                       |  | -      |                         |  |  | 982,288    |  
|For the year ended 30 November 2012   |  |                  | (1,279,162 | ) |                       |  | 4,163  |                         |  |  | (2,200,614 | )
|For the year ended 30 November 2011   |  |                  | (1,689,926 | ) |                       |  | 24,280 |                         |  |  | (60,711    | )
|                                      |  |                  |            |   |                       |  |        |                         |  |  |            |  
|Current assets                        |  |                  |            |   |                       |  |        |                         |  |  |            |  
|As at 30 November 2013                |  |                  | 6,716,379  |   |                       |  | -      |                         |  |  | -          |  
|As at 30 November 2012                |  |                  | 7,018,479  |   |                       |  | -      |                         |  |  | 164,709    |  
|                                      |  |                  |            |   |                       |  |        |                         |  |  |            |  
|Exploration and evaluation properties |  |                  |            |   |                       |  |        |                         |  |  |            |  
|As at 30 November 2013                |  |                  | -          |   |                       |  | 17,240 |                         |  |  | -          |  
|As at 30 November 2012                |  |                  | -          |   |                       |  | -      |                         |  |  | -          |  
|                                      |  |                  |            |   |                       |  |        |                         |  |  |            |  
|Property, plant and equipment         |  |                  |            |   |                       |  |        |                         |  |  |            |  
|As at 30 November 2013                |  |                  | 5,210      |   |                       |  | -      |                         |  |  | -          |  
|As at 30 November 2012                |  |                  | 30,856     |   |                       |  | -      |                         |  |  | 1,424,789  |  



F-44







Alberta Star Development Corp.

Notes to the Financial Statements

30 November 2013

(Expressed in Canadian dollars)



| | 22. | COMMITMENTS AND OTHER OBLIGATIONS
| | --- | ---------------------------------

The Company has certain obligations related to the amendments of its flow-through filings (Note 9).



The Company has recorded a general
provision of $1,065,717 related to prior flow-through transactions. However, there is no certainty that additional amounts related
to the Company’s prior flow-through transactions will not be assessed or deemed payable (Notes 9 and 20).



| | 23. | EVENTS AFTER THE REPORTING PERIOD
| | --- | ---------------------------------



The following events occurred
subsequent to 30 November 2013:



| | i. | On 31 January 2014, 50,000 stock options with an exercise price of $0.25 granted on 31 January
2012 expired (Note 11.6).
| | -- | ------------------------------------------------------------------------------------------------------------------------



| | ii. | On 23 February 2014, the Company allowed three mineral claims related to the Eldorado South IOCG
& Uranium Project to lapse (Note 7).
| | --- | -------------------------------------------------------------------------------------------------------------------------------------



| | iii. | For the period from 1 December 2013 to 28 February 2014, the Company repurchased 133,000 shares
of the Company, which have been cancelled (Note 11.3).
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------



| | iv. | On 28 February 2014, the Company entered into an agreement with TerraX Minerals Inc. (“TerraX”),
a company with a director and officer in common, pursuant to which the Company can earn up to a 60% interest in TerraX’s
wholly-owned Central Canada gold project (the “Central Canada Property”) in Ontario (the “Option”) and
subscribed for 1,300,000 units of TerraX (the “Units”) at $0.45 per Unit for gross proceeds of $585,000 (the “Private
Placement”). Each Unit consists of one common share and one-half of one share purchase warrant, with each full warrant entitling
the holder to purchase an additional common share at an exercise price of $0.57 per common share exercisable until 28 February
2016. No finder’s fees were payable in connection with the private placement.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In order to exercise the Option, the Company must make cash
payments to TerraX totaling $85,000 over a three year period, with $10,000 due upon execution of a definitive option agreement
(the “Option Agreement”), $25,000 due on the second anniversary of the execution of the Option Agreement (the “Anniversary
Date”) and a further $50,000 due on the third Anniversary Date. The Company must also incur an aggregate of $500,000 in exploration
expenditures over a three year period, with $100,000 due on the first Anniversary Date, $150,000 due on the second Anniversary
Date and a further $250,000 due on the third Anniversary Date. The Company will also be responsible for payment of the annual pre-production
royalty of $10,000 to the original vendors of the Central Canada Property due annually in December beginning with the next payment
due on 11 December 2014.





F-45