UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549



FORM 20-F



[X]  REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)OF THE SECURITIES EXCHANGE ACT OF 1934



OR

[ ]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended________________________________



OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to __________





INTERNATIONAL KRL RESOURCES CORP.

(Exact name of Registrant as specified in its charter)



__________British Columbia, Canada_____________

(Jurisdiction of incorporation or organization)



Suite 570  789 West Pender Street, Vancouver, B.C. Canada  V6C 1H2

(Address of principal executive offices)



Securities to be registered pursuant to Section 12(b) of the Act:

None



Securities to be registered pursuant to Section 12(g) of the Act:

Common-Voting Shares, without 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 issuer's classes of capital or common stock as of the close of the period covered by the annual report.                                                             39,389,726



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 12 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 ninety days.            Yes ___   No xxx



Indicate by check mark which financial statement item the registrant has elected to follow:                                   Item 17 xxx   Item 18 ___



Page 1 of xxx

Index to Exhibits on Page xx



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INTERNATIONAL KRL RESOURCES CORP.

FORM 20-F REGISTRATION STATEMENT

TABLE OF CONTENTS





Introduction                                                                 x



PART I



Item 1.  Identity of Directors, Senior Management and Advisors               x

Item 2.  Offer Statistics and Expected Timetable                             x

Item 3.  Key Information                                                     x

Item 4.  Information on the Company                                         xx

Item 5.  Operating and Financial Review and Prospects                       xx

Item 6.  Directors, Senior Management and Employees                         xx

Item 7.  Major Shareholders and Related Party Transactions                  xx

Item 8.  Financial Information                                              xx

Item 9.  The Offer and Listing                                              xx

Item 10. Additional Information                                             xx

Item 11. Quantitative and Qualitative Disclosures About Market Risk         xx

Item 12. Description of Securities Other Than Equity Securities             xx





PART II



Item 13. Default, Dividend Arrearages and Delinquencies                     xx

Item 14. Material Modifications to the Rights of

Security Holders and Use of Proceeds                               xx

Item 15. Controls and Procedures                                            xx

Item 16. Reserved





PART III



Item 17. Financial Statements                                               xx

Item 18. Financial Statements                                               xx

Item 19. Exhibits                                                           xx





Mining Glossary                                                             xx



Signature Page







---









INTRODUCTION



International KRL Resources Corp was incorporated under the Company Act of the Province of British Columbia on July 10, 1978 under the name Kingdom Resources Ltd. On November 27, 1989 the name was changed to KRL Resources Corp. and on March 6, 2002, the name was changed to International KRL Resources Corp. In this Registration Statement, the Company, "we", "our", and "us", refers to International KRL Resources Crop. (unless the context otherwise requires).  Summary discussions of documents referred to in this Registration Statement may not be complete, and we refer you to the actual documents for more complete information.  Our principal corporate offices are located at Suite 570  789 West Pender Street, Vancouver, British Columbia Canada V6C 1H2; our telephone number is 604-689-0299 and our fax number is 604-689-0288.





BUSINESS OF INTERNATIONAL KRL RESOURCES CORP.



International KRL Resources Corp. (the Company") is principally a mineral company engaged directly in the acquisition and exploration of mineral properties.





FINANCIAL AND OTHER INFORMATION



In this Registration Statement, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$ or $).  The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$).





FORWARD-LOOKING STATEMENTS



This Registration Statement includes forward-looking statements, principally in ITEM #4, Information on the Company and ITEM #5, Operating and Financial Review and Prospects".  We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting our business.  These forward-looking statements are subject to risks, uncertainties and assumptions including, among other things, the factors discussed in this Registration Statement under ITEM #3, Key Information, Risk Factors" and factors described in documents that we may furnish from time to time to the Securities and Exchange Commission.



The words "believe", "may", "will", "estimate", "continue", "anticipate", "intend", "expect", and similar words are intended to identify forward-looking statements.  In light of these risks and uncertainties, the forward-looking information, events and circumstances discussed in this Registration Statement might not occur.  Our actual results and performance could differ substantially from those anticipated in our forward-looking statements.  We undertake no obligation to update publicly or revise any forward-looking statements because of new information, future events or otherwise.



PART I



ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS



1.A.1.  Directors

Table No. 1 lists as of 3/01/2005 the names, ages and dates of election of the Directors of the Company.



Table No. 1

Directors



|                          |     |                                
|------------------------- | --- | -------------------------------
|                          |     |                                
|Name                      | Age | Date First Elected or Appointed
|Seamus Young (1)          | 65  | 1986                           
|Mike Muzylowski (2)(1)    | 72  | 1990                           
|F. Charles Vickers (2)(3) | 56  | 2005                           
|Clifford H. Frame (4)     | -   | 2005                           
|Judith T. Mazvihwa (2)(1) | 31  | 2003                           
|                          |     |                                



(1)

Resident/Citizen of British Columbia, Canada

(2)

Member of the Audit Committee

(3)

Resident/Citizen of Texas, US

(4)

Resident/Citizen of Ontario, Canada







1.A.2.  Senior Management

Table No. 2 lists, as of 10/24/2005, the names, ages and dates of appointment of the Senior Management of the Company.  The Senior Management serves at the pleasure of the Board of Directors.



Table No. 2

Senior Management



|                                |     |                          
|------------------------------- | --- | -------------------------
|                                |     |                          
|Name and Position               | Age | Date of First Appointment
|                                |     |                          
|Seamus Young, President and CEO | 65  | 1986                     
|Judith T. Mazvihwa, CFO         | 31  | 2003                     
|                                |     |                          





Seamus Youngs business functions, as President and Chief Executive Officer of the Company include strategic planning, business development, liaison with lawyers-regulatory authorities-financial and community/shareholders; and, reporting to the Board of Directors.



Judith Mazvihwas business functions, as Chief Financial Officer includes liaison with auditors and accountants, preparation/payment/organization of the expenses/taxes/activities of the Company; and reporting to the Board of Directors.



1.B.  Advisors

The Companys attorneys are: Miller Thomson LLP

Contact: Gregory Smith

1000-840 Howe Street

Vancouver, British Columbia Canada V6Z 2M1

Telephone: 604-643-1258

Facsimile: 604-643-1200



The Companys bank is:       The Bank of Montreal

595 Burrard Street

Vancouver, British Columbia Canada V7X 1L7

Telephone: 604-665-2609



1.C.  Auditors

The Companys auditor for its financial statements, for each of the preceding four periods, was Manning Elliott, Chartered Accountants. Manning Elliott, Chartered Accountants is a member of the Canadian Institute of Chartered Accountants.





ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE.

--- No Disclosure Necessary ---





ITEM 3.  KEY INFORMATION.



3.A.1.  Selected Financial Data

3.A.2.  Selected Financial Data

The selected financial data of the Company for Fiscal 2005/2004 ended May 31st was derived from the financial statements of the Company that have been audited by Manning Elliott, independent registered public accounting firm, as indicated in their audit reports, which are included elsewhere in this Registration Statement.  The selected financial data of the Company for Fiscal 2001/2000/1999 ended December 31st was derived from the financial statements of the Company that were audited by Jones Richard & Company, Independent Chartered Accountant; these financial statements are not included herein.



The selected financial data should be read in conjunction with the financial statements and other financial information included elsewhere in the Registration Statement.



The Company has not declared any dividends since incorporation and does not anticipate that it will do so in the foreseeable future.  The present policy of the Company is to retain all available funds for use in its operations and the expansion of its business.



Table No. 3 is derived from the financial statements of the Company, which have been prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP).  All material numerical differences between Canadian GAAP and US GAAP, as applicable to the Company, are described in footnotes to the financial statements.

Table No. 3

Selected Financial Data

(CDN$ in 000, except per share data)

________________________________________________________________________________

________________________________________________________________________________





|                           | Fiscal Year Ended 5/31/05 | Fiscal Year Ended 5/31/04 | Fiscal Year Ended 5/31/03 | Fiscal Year Ended 5/31/02 | Fiscal Year Ended 5/31/01 | Fiscal Year Ended 5/31/00 | Fiscal Year Ended 5/31/99
|-------------------------- | ------------------------- | ------------------------- | ------------------------- | ------------------------- | ------------------------- | ------------------------- | -------------------------
|                           |                           |                           |                           |                           |                           |                           |                          
|Revenue                    | Nil                       | Nil                       | Nil                       | Nil                       | Nil                       | Nil                       | Nil                      
|Net Income (Loss)          | ($859)                    | ($520)                    | ($411)                    | ($150)                    | ($159)                    | ($183)                    | ($1,848)                 
|(Loss) per Share           | ($0.03)                   | ($0.03)                   | ($0.04)                   | ($0.02)                   | ($0.01)                   | ($0.01)                   | ($0.11)                  
|Dividends Per Share        | Nil                       | Nil                       | Nil                       | Nil                       | Nil                       | Nil                       | Nil                      
|Wtg. Avg. Shares (000) 2c) | 25,696                    | 17,971                    | 10,704                    | 6,760                     | 15,889                    | 18,343                    | 16,800                   
|                           |                           |                           |                           |                           |                           |                           |                          
|Working Capital            | $1,440                    | $480                      | $28                       | ($35)                     | ($62)                     | $138                      | $19                      
|Long Term Debt             | Nil                       | Nil                       | Nil                       | Nil                       | $111                      | $67                       | $121                     
|Shareholders Equity       | $5,514                    | $3,676                    | $2,655                    | $2,006                    | $1,743                    | $1,543                    | $726$                    
|Total Assets               | $5,569                    | $3,755                    | $2,753                    | $2,045                    | $1,928                    | $1,646                    | $1,057                   
|                           |                           |                           |                           |                           |                           |                           |                          
|US GAAP Net Loss           | ($1,694)                  | ($1,034)                  | ($993)                    | ($277)                    | N/A                       | N/A                       | N/A                      
|US GAAP Loss per Share     | ($0.07)                   | ($0.06)                   | ($0.09)                   | ($0.04)                   | N/A                       | N/A                       | N/A                      
|US GAAP Avg Shares         | 25,696                    | 17,971                    | 10,704                    | 6,760                     | N/A                       | N/A                       | N/A                      
|                           |                           |                           |                           |                           |                           |                           |                          
|US GAAP Equity             | $1,490                    | $528                      | $6                        | ($30)                     | N/A                       | N/A                       | N/A                      
|US GAAP Total Assets       | $1,546                    | $607                      | $147                      | $10                       | N/A                       | N/A                       | N/A                      







(1) Cumulative Net Loss during exploration stage through 5/31/2005 under US GAAP, is ($3,998,000)

________________________________________________________________________________

________________________________________________________________________________





3.A.3.  Exchange Rates

In this Registration Statement, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$).  The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$).



Table No. 4 sets forth the exchange rates for the Canadian Dollar at the end of the five most recent fiscal years ended May 31st, the average rates for the period, and the range of high and low rates for the period.



For purposes of this table, the rate of exchange means the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York.  The table sets forth the number of Canadian Dollars required under that formula to buy one U.S. Dollar.  The average rate means the average of the exchange rates on the last day of each month during the period.



Table No. 4

U.S. Dollar/Canadian Dollar

______________________________________________________________________________

______________________________________________________________________________

Average     High     Low    Close

------------------------------------------------------------------------------

|October 2005                | 1.18 | 1.18 | 1.17 | 1.18
|--------------------------- | ---- | ---- | ---- | ----
|September 2005              | 1.18 | 1.18 | 1.17 | 1.18
|August 2005                 | 1.20 | 1.22 | 1.19 | 1.20
|July 2005                   | 1.22 | 1.24 | 1.20 | 1.22
|June 2005                   | 1.24 | 1.26 | 1.23 | 1.24
|May 2005                    | 1.26 | 1.27 | 1.24 | 1.26
|Fiscal Year Ended 5/31/2005 | 1.26 | 1.26 | 1.25 | 1.26
|Fiscal Year Ended 5/31/2004 | 1.38 | 1.39 | 1.37 | 1.38
|Fiscal Year Ended 5/31/2004 | 1.34 | 1.41 | 1.27 | 1.37
|Fiscal Year Ended 5/31/2003 | 1.52 | 1.60 | 1.34 | 1.37
|Fiscal Year Ended 5/31/2002 | 1.57 | 1.61 | 1.51 | 1.53
|Fiscal Year Ended 5/31/2001 | 1.52 | 1.58 | 1.49 | 1.55
|Fiscal Year Ended 5/31/2000 | 1.47 | 1.51 | 1.44 | 1.50



______________________________________________________________________________

______________________________________________________________________________





3.B.  Capitalization and Indebtedness

Table No. 5 sets forth the capitalization and indebtedness of the Company as of August 31, 2005.  As of August 31, 2005 the Company had cash and cash equivalents totaling $1,266,617.  As of August 31, 2005 the Company has no significant debt outstanding and had issued and outstanding common-voting shares of 39,370,256.



Table No. 5

Capitalization and Indebtedness

August 31, 2005

______________________________________________________________________________

______________________________________________________________________________



|SHAREHOLDERS EQUITY                                   |             
|------------------------------------------------------ | ------------
|39,370,256 Commonvoting shares issued and outstanding | $12,327,394 
|Contributed Surplus                                    | $518,487    
|Retained Earnings (deficit)                            | ($6,625,133)
|Net Stockholders Equity                               | $6,220,748  
|                                                       |             
|As of                                                  |             
|Stock Options Outstanding:                             | 3,520,000   
|Warrants Outstanding:                                  | 18,231,420  
|Preference Shares Outstanding:                         | Nil         
|Capital Leases:                                        | Nil         
|Guaranteed Debt                                        | Nil         
|Secured Debt:                                          | Nil         



______________________________________________________________________________

______________________________________________________________________________



3.C.  Reasons For The Offer And Use Of Proceeds

--- No Disclosure Necessary ---



Risk Factors

Cumulative Unsuccessful Exploration Efforts By Int. KRL Resources Personnel Could Result In the Company Having to Cease Operations:

The expenditures to be made by Int. KRL Resources in the exploration of its properties as described herein may not result in discoveries of mineralized material in commercial quantities.  Most exploration projects do not result in the discovery of commercially mineable ore deposits and this occurrence could ultimately result in KRL Resources having to cease operations.

Int. KRL Resources Has No Reserves on the Properties in Which It Has an Interest and If Reserves Are Not Defined the Company Could Have to Cease Operations:

The properties in which Int. KRL Resources has an interest or the concessions in which the Int. KRL Resources has the right to earn an interest are in the exploratory stage only and are without a known body of ore. If Int. KRL Resources does not ultimately find a body of ore, it would have to cease operations.



There is No Guarantee of Clear Title to Any of the Mineral Properties to which Int. KRL Resources Has an Interest:

Unregistered agreements or unregistered transfers of title could cause Int. KRL Resources to forfeit its interests in one or more of its property interests. Forfeiting an interest in a property would result in significant capital losses to Int. KRL Resources.

Mineral Prices May Not Support Corporate Profit for Int. KRL Resources:

The resource exploration industry is intensely competitive and even if commercial quantities of mineral resources are developed (which is not guaranteed), a profitable market may not exist for the sale of same. If a profitable market does not exist Int. KRL Resources could have to cease operations.



Int. KRL Resources Has No Positive Cash Flow and No History of Significant Earnings and Is Dependent Upon Public and Private Distributions of Equity to Obtain Capital in Order to Sustain Operations. Public distributions of capital result in dilution to existing shareholders:

None of Int. KRL Resources properties have advanced to the commercial production stage and the Company has no significant history of earnings or positive cash flow from operations. The cumulative loss through August 31, 2005 since the Companys inception of the development stage, according to U.S. GAAP, is ($3,998,000). The Company does not know if it will ever generate material revenue from mining operations or if it will ever achieve self-sustaining commercial mining operations. Historically, the only source of funds available to the company has been through the sale of its common-voting shares. Any future additional equity financing would cause dilution to current stockholders.



As of November 14, 2005, Int. KRL Resources had 3,745,000 share purchase options outstanding and 18,231,420 share purchase warrants outstanding.  If all of the share purchase warrants and share purchase options were exercised, the number of common-voting shares issued and outstanding would increase from 39,389,726 to 61,366,146.  This represents an increase of 56% in the number of shares issued and outstanding and would result in significant dilution to current shareholders.





The Amount of Capital Necessary to Meet All Environmental Regulations Associated with the Exploration Programs of Int. KRL Resources Could Be In An Amount Great Enough to Force the Company to Cease Operations:

The current and anticipated future operations of the Company including further exploration activities, require permits from various Canadian governmental authorities.   Such operations are subject to various laws governing land use, the protection of the environment, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, mine safety and other matters. Unfavorable amendments to current laws, regulations and permits governing operations and activities of resource exploration companies, or more stringent implementation thereof, could have a materially adverse impact on the Company and cause increases in capital expenditures which could result in a cessation of operations by Int. KRL Resources.



Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions there under, 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. Parties engaged in resource exploration may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violation of applicable laws or regulations.



Large increases in capital expenditures resulting from any of the above factors could force Int. KRL Resources to cease operations.



Operating Hazards and Risks Associated with the Mining Industry Could Result in Int. KRL Resources Having to Cease Operations:

Resource exploration activities generally involve a high degree of risk.  Hazards such as unusual or unexpected formations and other conditions are involved.  Operations in which the Company has 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 explorationfacilities, damage to life and property, environmental damage and legal liability for any or all damage.  Int. KRL Resources may become subject to liability for cave-ins and other hazards for which it cannot insure or against which it may elect not to insure where premium costs are disproportionate to the Companys perception of the relevant risks.  The payment of such insurance premiums and of such liabilities would reduce the funds available for exploration activities and could force Int. KRL Resources to cease operations.



The Risks Associated with Penny Stock Classification Could Affect the Marketability of the Common Stock of Int. KRL Resources And Shareholders Could Find It Difficult to Sell Their Stock:

The Companys stock is subject to penny stock rules as defined in 1934 Securities and Exchange Act rule 3a51-1.  The Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.  The Companys Class A shares are subject to these penny stock rules. Transaction costs associated with purchases and sales of penny stocks are likely to be higher than those for other securities.  Penny stocks generally are equity securities with a price of less than U.S. $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).



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 that 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 such 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 Companys common-voting shares in the United States and shareholders may find it more difficult to sell their shares.



Int. KRL Resources is Dependent on Key Personnel and the Absence of Any of These Individuals Could Result in the Company Having to Cease Operations:

While engaged in the business of exploiting mineral properties, the nature of Int. KRL Resources business, its ability to continue its exploration of potential exploration projects, and to develop a competitive edge in the marketplace, depends, in large part, on its ability to attract and maintain qualified key management personnel.  Competition for such personnel is intense and the Company may not be able to attract and retain such personnel.  Int. KRL Resources growth will depend, on the efforts of its Senior Management, particularly its President and Chief Executive Officer, Seamus Young and its Chief Financial Officer, Judith T. Mazvihwa. Loss of these individuals could have a materially adverse effect on the Company.  Int. KRL Resources has no key-man life insurance or written consulting agreements with the Senior Officers or Directors.



Control by Principal Stockholders, Officers and Directors Could Adversely Affect Stockholders of Int. KRL Resources

The Companys Senior Management, Directors and greater-than-five-percent stockholders (and their affiliates), acting together, have the ability to control substantially all matters submitted to Int. KRL Resources stockholders for approval (including the election and removal of directors and any merger, consolidation or sale of all or substantially all of the Companys assets) and to control the Companys management and affairs.  Accordingly, this concentration of ownership may have the effect of delaying, deferring or preventing a change in control of Int. KRL Resources, impeding a merger, consolidation, takeover or other business combination involving the Company or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the Company, which in turn could materially adversely affect the market price of the Companys stock.



Dilution Through Employee/Director/Consultant Options Could Adversely Affect Stockholders of Int. KRL Resources

Because the success of Int. KRL Resources is highly dependent upon its respective employees, the Company has granted to some or all of its key employees, Directors and consultants options to purchase common-voting shares as non-cash incentives.  To the extent that significant numbers of such options may be granted and exercised, the interests of the other stockholders of the Company may be diluted.



U.S. Investors May Not Be Able to Enforce Their Civil Liabilities Against Int. KRL Resources or Our Its Directors, Controlling Persons and Officers

It may be difficult to bring and enforce suits against Int. KRL Resources.  The Company is a corporation incorporated in Canada under the Company Act of the Province of British Columbia.  A majority of the Company's directors are residents of Canada, and all or substantial portions of their assets are located outside of the United States.  As a result, it may be difficult for U.S. holders of our common shares to effect service of process on these persons within the United States or to realize in the United States upon judgments rendered against them.  In addition, a shareholder should not assume that the courts of Canada (i) would enforce judgments of U.S. courts obtained in actions against us or such persons predicated upon the civil liability provisions of the U.S. federal securities laws or other laws of the United States, or (ii) would enforce, in original actions, liabilities against us or such persons predicated upon the U.S. federal securities laws or other laws of the United States.



However, U.S. laws would generally be enforced by a Canadian court provided that those laws are not contrary to Canadian public policy, are not foreign penal laws or laws that deal with taxation or the taking of property by a foreign government and provided that they are in compliance with applicable Canadian legislation regarding the limitation of actions.  Also, a Canadian court would generally recognize a judgment obtained in a U.S. Court except, for example:

a) Where the U.S. court where the judgment was rendered had no jurisdiction according to applicable Canadian law;

b) The judgment was subject to ordinary remedy (appeal, judicial review and any other judicial proceeding which renders the judgment not final, conclusive or enforceable under the laws of the applicable state) or not final, conclusive or enforceable under the laws of the applicable state;

c) The judgment was obtained by fraud or in any manner contrary to natural justice or rendered in contravention of fundamental principles of procedure;

d) A dispute between the same parties, based on the same subject matter has given rise to a judgment rendered in a Canadian court or has been decided in a third country and the judgment meets the necessary conditions for recognition in a Canadian court;

e) The outcome of the judgment of the U.S. court was inconsistent with Canadian public policy;

f) The judgment enforces obligations arising from foreign penal laws or laws that deal with taxation or the taking of property by a foreign government; or

g) There has not been compliance with applicable Canadian law dealing with the limitation of actions.



As a "foreign private issuer, Int. KRL Resources is exempt from the Section 14 proxy rules and Section 16 of the 1934 Securities Act May Result in Shareholders Having Less Complete and Timely Data

The submission of proxy and annual meeting of shareholder information (prepared to Canadian standards) on Form 6-K may result is shareholders having less complete and timely data.  The exemption from Section 16 rules regarding sales of common-voting shares by insiders may result in shareholders having less data.



Foreign Operations:

The Companys foreign activities are subject to the risk normally associated with conducting business in foreign countries, including exchange controls and currency fluctuations, limitations on repatriation of earnings, foreign taxation, laws or policies of particular countries, labor practices and disputes, and uncertain political and economic environments, as well as risks of war and civil disturbances, or other risk that could cause exploration or development difficulties or stoppages, restrict the movement of funds or result in the deprivation or loss of contract rights or the taking of property by nationalization or expropriation without fair compensation.  Foreign operations could also be adversely impacted by laws and policies of the United States affecting foreign trade, investment and taxation.  The Company currently has exploration projects located in Canada.



ITEM 4.  INFORMATION ON THE COMPANY



4.A. History and Development of the Company



Introduction



The Companys executive office is located at:

Suite 570  789 West Pender Street

Vancouver, British Columbia, Canada V6C 1H2

Telephone: (604) 689-0299

Facsimile: (604) 689-0288

Website: www.krl.net

Email: info@krl.net



The contact person is: Mr. Seamus Young, President and Chief Executive Officer



The Company's fiscal year ends May 31st.



The Company's common-voting shares trade on the TSX Venture Exchange in Toronto under the symbol "IRK".



The authorized share capital of the Company consists of 100,000,000 common shares without par value. As of May 31, 2005 there were 35,345,256 common shares issued and outstanding. As of August 31, 2005 (the most recent quarter) there were 39,370,256 common shares issued and outstanding.



In this Registration Statement, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$).



Incorporation and Name Changes

The Company was incorporated on July 10, 1978 under the name Kingdom Resources Ltd. pursuant to the requirements of the British Columbia Company Act. The Companys original authorized capital consisted of 5,000,000 no par value common shares.



On September 4, 1981 the Companys authorized capital was increased to 10,000,000 no par value common shares.



ON November 27, 1989 the Company completed a share consolidation on a one new share for three old shares basis resulting in an authorized share capital of 3,333,333 no par value common shares, of which 1,116,126 shares were fully paid and issued.  Also on November 27, 1989 the Company name was changed to KRL Resources Corp. and the authorized capital was increased to 10,000,000 no par value common shares.



On September 16, 1991 the Companys authorized capital was increased to 50,000,000 no par value common shares.



On March 6, 2002 the Company completed a share consolidation on a one new share for five old shares basis resulting in an authorized share capital of 20,000,000 no par value common shares, of which 5,816,784 common shares were fully paid and issued. Also on March 6, 2002 the Company name was changed to International KRL Resources Corp. and the authorized capital was increased to 100,000,000 no par value common shares.



Financings

The Company has financed its operations through funds raised in loans, public/private placements of common-voting shares, shares issued for property, shares issued in debt settlements, and shares issued upon exercise of stock options and share purchase warrants.



____________________________________________________________________________________________________________________________________________________________



|Fiscal Year                                                                                                                                                 | Nature of Share Issuance                                                                                                                                                                                                                                                                                                                                                   | Number of Shares (Pre-consolidation)                                                            | Capital Raised                                                                                  
|----------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------
|                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                 |                                                                                                 
|Fiscal 1999                                                                                                                                                 | Private Placement (flow-through shares)(1)
Exercise of stock options
Payment for mineral property (2)
Payment for mineral property (3)
Payment for mineral property (4)
Payment for mineral property (5)
Payment for mineral property (5)
Payment for mineral property (6)
Payment for mineral property (7)
Payment for mineral property (8)                            | 325,000

650,000
75,000
50,000
50,000
25,000
20,000
50,000
20,000
25,000                        | $48,750

$97,500
$6,000
$5,000
$7,500
$3,750
$3,600
$7,500
$3,000
$2,250                        
|                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                 |                                                                                                 
|Fiscal 2000                                                                                                                                                 | Exercise of stock options
Exercise of share purchase warrants (9)
Settlement of debt (10)
Private Placement (11)
Private Placement (12)
Private Placement (13)
Payment for mineral property (14)
Payment for mineral property (15)
Payment for mineral property (16)
Payment for mineral property (17)
Payment for mineral property (18)
Payment for mineral property (19) | 775,000
200,000

67,362
1,664,999
1,224,999
440,000
100,000
100,000
60,000
30,000
25,000
50,000 | $116,250
$30,000

$10,104
$249,750
$183,750
$440,000
$15,000
$15,000
$9,000
$4,500
$3,750
$7,500
|                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                 |                                                                                                 
|Fiscal 2001                                                                                                                                                 | Exercise of stock options
Exercise of share purchase warrants (20)
Private Placement (21)
Payment for mineral property (22)
Payment for mineral property (23)
Payment for mineral property (24)
Payment for mineral property (25)
Payment for mineral property (26)
Payment for mineral property (27)
Payment for mineral property (28)                                    | 300,000

455,000
1,810,000
50,000
200,000
50,000
50,000
20,000
100,000
50,000                   | $45,000

$70,250
$181,000
$10,000
$20,000
$7,500
$5,000
$2,600
411,000
$6,000                   
|                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                 |                                                                                                 
|Fiscal 2002 (The Company consolidated its share capital on the basis of five old shares for one new share pursuant to a Special Resolution dated 12/7/2001) | Exercise of stock options
Payment for mineral property (29)
Private Placement (30)                                                                                                                                                                                                                                                                                         | 250,000
50,000
1,000,000                                                                        | $37,500
$3,500
$100,000                                                                         
|                                                                                                                                                            | Nature of Share Issuance                                                                                                                                                                                                                                                                                                                                                   | Number of Shares (Post-consolidation)                                                           | Capital Raised                                                                                  
|Fiscal 2002                                                                                                                                                 | Private Placement (31)
Payment for mineral property (32)
Issued in payment of debt (33)                                                                                                                                                                                                                                                                                    | 1,000,000
20,000
1,127,427                                                                      | $100,000
$2,800
$169,114                                                                        
|                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                 |                                                                                                 
|Fiscal 2003                                                                                                                                                 | Private Placement (34)
Private Placement (35)
Private Placement (36)
Private Placement (37)
Exercise of share purchase warrants (38)                                                                                                                                                                                                                                       | 1,400,000
2,404,000
1,905,000
250,000

720,000                                                  | $195,000
$300,500
$355,000
$50,000

$108,000                                                    
|                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                 |                                                                                                 
|Fiscal 2004                                                                                                                                                 | Private Placement (39)
Broker Commission (40)
Private Placement (41)
Exercise of share purchase warrants (42)
Exercise of stock options (43)
Payment for mineral property (44)                                                                                                                                                                                             | 2,855,500
100,000
4,815,000

248,760

151,500
160,000                                           | $428,325
$15,000
$963,000

$172,100

$30,300
$29,000                                            
|                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                 |                                                                                                 
|Fiscal 2005                                                                                                                                                 | Private placement (45)
Broker commission (46)
Private placement (47)
Broker commission (48)
Private placement (49)
Payment for property (50)
Payment for property (51)                                                                                                                                                                                                     | 1,900,000
22,293
7,981,667
332,990
2,100,000
50,000
250,000                                     | $380,00
$3,344
$1,444,750
$49,948
$420,000
$10,000
$35,000                                      



(1)

This private placement financing consisted of 325,000 units at a price of $0.15 per unit. Each unit consisted of one flow-through share and one share purchase warrant exercisable to acquire one additional flow-through share at a price of $0.15 per share on or before December 31, 1999, or at a price of $0.20 per share on or before December 31, 2000. The mechanics of Flow Through Agreements are as follows: Certain provisions of the Canadian Income Tax Act allow companies in the resource sector to incur expenditures and renounce them in favor of the investor, who is entitled to claim them.  The Company has incurred such Canadian exploration expenses (primarily expenses incurred for determining the existence, location, extent or quality of a mineral resource in Canada in the course of carrying out geological survey and sampling work.  There is a risk to the Company that if Revenue Canada denies the deductions in the hands of the investor penalties could be levied by Revenue Canada and that the shareholders could sue the Company for damages.  The Company is confident that it is in full compliance with the Canadian Income Tax Act and does not anticipate any such difficulties.

(2)

These shares were issued in partial payment for a 100% interest (subject to a 2% net smelter returns royalty) in eleven mining claims located in the MacMurchy Township of Ontario, Canada.

(3)

These shares were issued in partial payment for a 100% interest (subject to a 2% net smelter returns royalty) in one mineral claim located in the MacMurchy Township of Shining Tree, Ontario.

(4)

These shares were issued in partial payment for a 100% interest (subject to a 2% net smelter returns royalty) in nine mineral claims located in the MacMurchy Township of Shining Tree, Ontario.

(5)

These shares were issued in partial payment for a 100% interest (subject to a 2% net smelter returns royalty) in one mineral claim located in the MacMurchy Township of Shining Tree, Ontario.

(6)

These shares were issued in partial payment for a 100% interest (subject to a 2% net smelter returns royalty) in three mineral claims located in the MacMurchy Township of Shining Tree, Ontario.

(7)

These shares were issued in partial payment for a 100% interest (subject to a 2% net smelter returns royalty) in three mineral claims located in the MacMurchy Township of Shining Tree, Ontario.

(8)

These shares were issued in partial payment for a 100% interest (subject to a 2% net smelter returns royalty) in eleven mining claims located in the MacMurchy Township of Ontario, Canada.

(9)

These shares were issued pursuant to the private placement described in (1) above.

(10)

This debt was owed to Bruce F. Jamieson Inc. and Bruce F. Jamieson & Co. for accounting services rendered and to Marigold Management Ltd., an unrelated company, for administrative services rendered.

(11)

This private placement consisted of the following: (a) 708,333 units consisting of one flow-through share and one share purchase warrant.  Each warrant was exercisable to acquire one addition flow-through share at a price of $0.15 per share on or before July 7, 2000, or at a price of $0.20 per share on or before July 7, 2001 and (b) 956,666 units consisting on one share and one share purchase warrant.  Each warrant was exercisable to acquire one additional share at a price of $0.15 per share on or before July 7, 2000, or at a price of $0.20 per share on or before July 7, 2001.

(12)

This private placement consisted of the following: (a) 1,091,666 units consisting of one flow-through share and one share purchase warrant.  Each share purchase warrant was exercisable to acquire one additional flow-through share at a price of $0.15 per share on or before January 21, 2001, or at a price of $0.20 per share on or before January 31, 2002 and (b) 133,333 units consisting of one share and one share purchase warrant.  Each share purchase warrant was exercisable to acquire one additional share at a price of $0.15 per share on or before January 21, 2001 or at a price of $0.20 per share on or before January 21, 2002.

(13)

Each unit of this private placement consisted of: (a) Four flow-through shares and four share purchase warrants.  Each share purchase warrant was exercisable to acquire one additional flow-through share at a price of $0.25 per share on or before March 22, 2001 and (b) One share and one share purchase warrant.  Each share purchase warrant was exercisable to acquire one additional share at a price of $0.25 per share on or before March 22, 2001.

(14)

By an Option Agreement dated August 10, 1998, the Company acquired a 100% interest (subject to a 2% net smelter returns royalty) in nine mineral claims located in the MacMurchy Township of Shining Tree, Ontario, for consideration of 150,000 shares of the Companys capital stock.

(15)

By an Option Agreement dated August 10, 1998, the Company acquired a 100% interest (subject to a 2% net smelter returns royalty) in three mineral claims located in the MacMurchy Township of Shining Tree, Ontario, for consideration of 150,000 shares of the Companys capital stock.

(16)

By an Option Agreement dated August 4, 1998, the Company acquired a 100% interest (subject to a 3% net smelter returns royalty) in four mineral claims located in the MacMurchy Township, Ontario for consideration of 100,000 shares of the Companys capital stock.

(17)

By an Agreement dated June 18, 1999, the Company acquired a 100% interest in three mineral claims located in the MacMurchy and Kelvin Townships, Ontario for consideration of 30,000 shares of the Companys capital stock.

(18)

By an Agreement dated June 18, 1999, the Company acquired a 100% interest in one mineral claim located in the MacMurchy Township, Ontario for consideration of 25,000 shares of the Companys capital stock.

(19)

By an Agreement dated March 6, 2000, the Company acquired a right to earn a 100% interest (subject to a 2% net smelter returns royalty) in thirty-three claim units located in the MacMurchy Township, Ontario.

(20)

These were exercised from prior private placement financings. 420,000 shares (of which 60,000 were flow-through shares) were exercised at a price of $0.15 per share; 25,000 shares at a price of $0.25 per share; and, 10,000 flow-through shares at a price of $0.10 per share.

(21)

The Company sold 1,810,000 units at a price of $0.10 per unit.  Each unit consisted of one flow-through share and one share purchase warrant exercisable to acquire one additional flow-through share at a price of $0.10 per share on or before December 15, 2001 or at a price of $0.15 per share on or before December 15, 2002.

(22)

By an Agreement dated March 6, 2000, the Company acquired a right to earn a 100% interest (subject to a 2% net smelter returns royalty) in thirty-three claim units located in the MacMurchy Township.

(23)

By an Option Agreement dated October 25, 2000, the Company acquired a 100% interest (subject to a 2% net smelter returns royalty) in seven mineral claims located in the MacMurchy and Fawcett Townships, Ontario.

(24)

By an Option Agreement dated October 27, 2000, the Company acquired a 100% interest (subject to a 2% net smelter returns royalty) in one mineral claim located in the Tyrell Township, Ontario.

(25)

By a Letter Agreement dated November 18, 1997, the Company acquired the right to earn a 100% interest (subject to a 1% net smelter returns royalty) in two mineral claims located in the Knight Township of Shining Tree, Ontario.

(26)

By a Purchase Agreement dated July 28, 2000, the Company acquired a 100% interest in one mineral claim located in the MacMurchy Township, Ontario.

(27)

By an Agreement dated January 22, 2001, the Company acquired a 100% interest (subject to a 2% net smelter returns royalty) in thirty mineral claims located in the MacMurchy, Tryell and Knight Townships.

(28)

By an Agreement dated January 23, 2001, the Company acquired a 100% interest in two mineral claims located in the MacMurchy Township, Ontario.

(29)

This payment relates to the Copper Hill Project located in Ontario referred to in Note 5(a) to the Financial Statements for the Years Ended May 31, 2003 and 2002.

(30)

570,000 of these units were flow-through units at a price of $0.10 per unit. Each unit consisted of one pre-consolidation flow-through share and one pre-consolidation share purchase warrant exercisable to acquire one additional pre-consolidation share purchase warrant exercisable to acquire one additional pre-consolidation share at a price of $0.10 per share on or before August 27, 2003.  430,000 of these units were sold at a price of $0.10 per unit. Each of these units consisted of one pre-consolidation share and one pre-consolidation share purchase warrant exercisable to acquire one additional pre-consolidation share at a price of $0.10 per share on or before August 27, 2003.

(31)

The Company sold 1,000,000 post-consolidation units at a price of $0.10 per unit.  Each unit consisted on one post-consolidated share and one post-consolidated share purchase warrant exercisable to acquire one additional post-consolidated share at a price of $0.10 per share on or before February 4, 2003.

(32)

This payment relates to the Copper Hill Project located in Ontario referred to in Note 5(a) to the Financial Statements for the Years Ended May 31, 2003 and 2002.

(33)

These debts were to the following individuals and companies for services rendered:



a.

Michael J. Casselman, an officer of the Issuer, for debt owing in the amount of $9,800;

b.

Rita Chow, an unrelated party, for debt owing in the amount of $15,000;

c.

Donegal Developments Ltd., a private company owned by Seamus Young who is an officer and director of the Issuer, for debt owing in the amount of $31,718.73;

d.

Miller Thomson LLP, an unrelated legal firm, for debt owing in the amount of $22,165,30;

e.

Richards Buell Sutton, an unrelated legal firm, for debt owing in the amount of $32,881.95;

f.

T-Bags Management Inc., a private company owned by Seamus Young who is an officer and a director of the Issuer, for debt owing in the amount of $15,618.44;

g.

John J. Watkins, an unrelated party, for debt owing in the amount of $10,165.00; and,

h.

Seamus Young, an officer and a director of the Issuer, for debt owing in the amount of $40,764.59

(34)

This private placement consisted of the sale of 1,300,000 units at a price of $0.15 per unit.  Each unit consisted of one share and one-half share purchase warrant.  One full warrant was required to acquire one additional common share.  The full warrants have an exercise price of $0.20 per share on or before October 1, 2003 or $0.25 per share on or before October 1, 2004. 100,000 shares and 260,000 agents purchase warrants exercisable under these same conditions were issued to Canaccord Capital Corporation as a corporate financing fee. This corporate financing fee related to the assisted given to the Company by Canaccord Capital Corporation in selling the units.

(35)

This private placement consisted of the sale of 2,003,333 units at a price of $0.15 per unit.  Each unit consisted of one share and one-half share purchase warrant.  One full warrant was exercisable to acquire one additional common share.  The full warrants have an exercise price of $0.20 per share on or before October 7, 2003 or $0.25 per share on or before October 7, 2004.  In addition, 400,667 agents purchase warrants exercisable under the same conditions, and which expire on November 11, 2004, were issued to Canaccord Capital Corporation as a corporate financing fee. This corporate financing fee related to the assistance given to the Company by Canaccord Capital Corporation in selling the units.

(36)

This private placement consisted of the sale of 1,775,000 units at a price of $0.20 per unit. Each unit consisted of one share and one-half share purchase warrant.  One full warrant is exercisable to acquire one additional common share.  The full warrants have an exercise price of $0.25 per share on or before August 31, 2004 or $0.25 per share on or before August 31, 2004.  In addition 130,000 common shares and 355,000 agents purchase warrants exercisable at a price of $0.25 per share, and which expire August 31, 2004, were issued to Canaccord Capital Corporation as a corporate financing fee. This corporate financing fee related to the assistance given to the Company by Canaccord Capital Corporation in selling the units.

(37)

This private placement consisted of the sale of 250,000 units at a price of $0.20 per unit.  Each unit consisted on one share and one-half share purchase warrant exercisable to acquire one-half additional shares. The purchase warrants have an exercise price of $0.25 per share on or before September 18, 2004.  In addition, 50,000 agents purchase warrants exercisable at a price of $0.25 per share, and which expired September 18, 2004, were issued to Canaccord Capital Corporation as a corporate financing fee.  This corporate financing fee related to the assistance given to the Company by Canaccord Capital Corporation in selling the units.

(38)

These units were related to the private placement described in (34) above.

(39)

This private placement consisted of the sale of 729,000 Flow-Through Units and 2,126,500 Non-Flow-Through Units were sold through Canaccord Capital Corporation, as agent, at a price of $0.15 per Flow-Through and Non-Flow-Through Unit. Each Flow-Through Unit consisted of one flow-through common share and one-half of one Warrant.  Each Non-Flow-Through Unit consisted of one non-flow-through common share and one Warrant.  One whole Warrant entitled the holder to purchase one additional non-flow-through common share at a price of $0.18 per for a period of 12 months from closing.  The Issuer also issued 100,000 common shares and 571,000-share purchase warrants to Canaccord Capital Corporation in connection with the offering.  These warrants have the same terms of the other warrants.

(40)

These shares were issued to Canaccord Capital in consideration for their assistance in facilitating this private placement financing.

(41)

This private placement consisted of the sale of 815,000 Flow-Through Units and 4,000,000 Non-Flow-Through Units. Each Flow-Through-Unit consisted of one flow-through common share and one warrant entitling the holder to purchase an additional flow-through-share at a price of $0.20 for a period of 12 months. Each Non-Flow-Through Unit consisted of one common share and one warrant entitling the holder to purchase one additional common share at a price of $0.20 for 24 months. The Issuer issued 100,000 common shares to Canaccord Capital Corporation as consideration for waiver of their right of first refusal to provide this financing.

(42)

During the year the Company issued 248,760 common shares as a result of the exercise of share purchase warrants at a price of $0.18 for total cash consideration of $172,100.

(43)

During the year the Company issued 151,500 common shares as a result of the exercise of incentive stock options at a price of $0.20 for total cash consideration of $30,300.

(44)

During the year, the Company issued 160,000 shares pursuant to   property acquisition option agreements. This payment relates to the Copper Hill Project located in Ontario referred to in Note 6(a) to the Financial Statements for the Years Ended May 31, 2004 and 2003.

(45)

These units were issued pursuant to a brokered private placement of 1,900,000 flow-through units at $0.20 per unit.  Each unit consisted of one flow-through share, one half of one transferable warrant exercisable at a price of $0.40 on or before May 19, 2006 and one-half of one transferable warrant exercisable to purchase one non-flow-through share at a price of $0.80 on or before May 19, 2007.

(46)

These units totaling 22,293 were issued pursuant to a financing commission payable to the agent at a price of $0.15 per unit.

(47)

These units were issued pursuant to a private placement of 4,950,000 flow-through units at a price of $0.20 and 3,031,667 non-flow-through units at a price of $0.15 per unit.  Each flow-through unit consists of one flow-through share, one-half of one transferable warrant exercisable at a price of $0.40 on or before April 12, 2006, and one-half of one transferable warrant exercisable at a price of $0.80 on or before April 12, 2007.  Each non-flow-through unit consists of one non-flow-through common share, one-half of one transferable warrant exercisable at a price of $0.35 on or before April 12, 2006 and one-half of one transferable warrant exercisable at a price of $0.75 on or before April 12, 2007.

(48)

These units totaling 332,990 were issued pursuant to a financing commission payable to the agent at a price of $0.15 per unit.

(49)

These flow-through units were issued pursuant to a private placement of 2,100,000 units at a price of $0.20 per unit.  Each unit consists of one flow-through share and one-half of one share purchase warrant exercisable at a price of $0.25 on or before August 16, 2005.

(50)

The Company issued 50,000 shares pursuant to an option agreement to purchase a house in Gowganda, Ontario at a deemed price of $0.20 per share.

(51)

The Company issued 250,000 shares pursuant to property acquisition option agreements valued at $35,000.

-----------------------------------------------------------------

______________________________________________________________________________

______________________________________________________________________________

Capital Expenditures



|Fiscal Year |        
|----------- | -------
|            |        
|Fiscal 1999 | Nil    
|Fiscal 2000 | Nil    
|Fiscal 2001 | $7,648 
|Fiscal 2002 | Nil    
|Fiscal 2003 | $21,538
|Fiscal 2004 | $47,508
|Fiscal 2005 | $7,971 



4.B.  BUSINESS OVERVIEW



Historical Corporate Development

For the past three years, the Company has been active in mineral exploration work in Canada in the provinces of Ontario, British Columbia, Yukon Territory, and Saskatchewan. The Company is currently concentrating the majority of its efforts on its Nor Property in the Yukon Territory and the Copper Hill Property, which is located in Ontario. The Company has been inactive for the past three years on its Bear River Project, which is located in the Skeena Mining Division in British Columbia; however, management plans to carry out exploration work on this project during Fiscal 2006.



Copper Hill Gold Project, Ontario



During Fiscal 2002 the Company acquired a 100% interest in seven mining claims (68 units) contiguous with its Copper Hill Project. The company acquired it interest in these claims from Charles Webster, an unrelated party, by paying Mr. Webster 50,000 shares of its common stock. The Company also did fieldwork in the Golden Sylvia area of the Copper Hill Project. This fieldwork consisted of geological mapping; detailed rock sampling and exploratory drilling.



The shareholders of the Company approved a name change from KRL Resources Corp. to International KRL Resources Corp. on December 7, 2001 and at the same time approved a consolidation of the Companys issued and unissued common shares on a basis of five old shares for one new share. Both the name change and the share consolidation became effective on March 6, 2002 with the approval from the TSX Venture Exchange.



During Fiscal 2003, the Company continued exploration work on its Copper Hill Project. On October 9, 2002, the Company sold 1,300,000 units for gross proceeds of $195,000. These funds were used for further exploration work on the Golden Sylvia portion of the Copper Hill Project. After three months of work, on January 6, 2003, the Company announced that it had completed this program and would begin to drill test the results of the findings. A 1500-meter drill hole program was started on February 13, 2003. This program consisted of ten drill holes, five of which were completed by March 3, 2003. An additional three drill holes were completed by the end of March 2003. The Company announced at the end of March 2003 that the drill program had been expanded from 1500 meters to 2500 meters and would consist of twelve drill holes. This program was completed on April 15, 2003.



During Fiscal 2004 the Company continued work on the Copper Hill Project. On October 30, 2003, the Company announced that it begun a new drill program on the Jude Zone (formerly called the Golden Sylvia Zone) and the adjacent Golden Sylvia Iron Formation Zone. Four drill holes were completed by November 5, 2003.  Two of these were on the Jude Zone and two were on the Golden Sylvia Iron Formation Zone. Two additional drill holes were completed on the Golden Sylvia Iron Formation Zone by November 13, 2003.



On November 17, 2003, management announced that they planned to expand their exploration program at the Copper Hill Project to include searching for nickel.



On December 1, 2003, the Company announced that it had received assay data for all of the drill holes completed during the program announced on October 30, 2003, on both the Jude Zone and the Golden Sylvia Iron Formation Zone. The Golden Sylvia Iron Formation Zone was the main focus of this particular drill program and, because of the results obtained from the drilling; management decided that the Company would continue a systematic exploration program to fully evaluate the Zone along strike and at depth.



On December 2, 2003, the Company announced that it had acquired an additional ten kilometers of unexplored iron formation located to the south, southeast of the Golden Sylvia Iron Formation Zone.



On December 9, 2003, the Company announced that it had entered into an agreement to acquire an additional forty-seven mineral claims in the area.



On January 29, 2004 RAB Special Situations L.P., an unrelated financial institution located in the United Kingdom, announced that it had subscribed for 3,900,000 units of the Company at a price of $0.20 per share. Each unit consisted of one common share and one non-transferable share purchase warrant which entitled RAB Financial to purchase an additional share at a rice of $0.20 for a period of one year. (This transaction took place off the market by way of a private placement.)



On February 9, 2004, the Company announced that it had entered into an option agreement with a private unrelated company called Hemlo North Shore Inc. to jointly explore the Decker Claim Block located in the northeast portion of the Companys Copper Hill Property. Under the terms of this agreement, Hemlo North Shore Inc. agreed to spend a total of $1.2 million on the project over a four-year period to earn a 50% interest in the Decker Claim Block with a minimum annual commitment of $300,000 per year. On February 18, 2004, the Company and Hemlo North Shore Inc. began a 1040-meter drill program on the project.



ON March 3, 2004, the Company began a high-resolution, fixed-wing airborne

geophysical survey on the Copper Hill Project.



On March 25, 2004, the Company announced that it had completed a 1009 meter drill program, consisting of five drill holes, on the LG Zone located with the Copper Hill Project as well as three drill holes on the Tiger Zone, which is located approximately 300 meters to the south-east. The Company will use the results of this drill program to plan further exploration activity in this area once they are available.



On June 10, 2004, the Company started a reverse circulation-drilling program on the Golden Sylvia Iron Formation Zone located within the Copper Hill Project. This program consists of nine vertical reverse circulation drill holes totaling 1,115 meters.  On June 24, 2004, the Company announced that it had completed eight of the nine drill holes and was, at that time, drilling the ninth hole.  All of the drill holes, which were completed, were drilled to a depth of approximately 100 meters. The Company completed this drill program on July 6, 2004.



In August/September 2005, International KRL Resources Corp. drilled CH-05-14 to test the GEOTEM conductor in the middle of North Foley Lake, located on the eastern extension of the Red Dome Rhyolite on the Copper Hill Property. The 600 m long conductor, striking roughly north-west/south-east and dipping to the south-west, was identified by a GEOTEM airborne electromagnetic survey carried out in the winter 2004.



The 351m hole intersected a sequence of fragmental felsic volcanics, chert and mafic volcanics with moderate carbonate, minor sericite and local hematite alteration. No significant assay results were identified in this unit. The last 3.9 meters of the hole returned a weighted average of 0.8grams/tonne gold. The Qualified Person for this project is J. L. LeBel (P.Eng.).



In 2005, the Company also carried out an extensive prospecting, mapping and rock chip sampling program covering all the magnetic and EM conductors identified by the airborne survey carried out in 2004. The results of this survey will be released as soon as they have been compiled



Nor Property, Yukon Territory (Uranium)



The Nor Uranium Property is located on the east flank of the Richardson Mountains, about 65 km east of the Dempster Highway and 250km north of Dawson City, Yukon Territory.  The property exhibits some similarities to the Olympic Dam Uranium Mine property in Australia, including some similarities in geology, presence of anomalous uranium, copper, gold and rare earth elements and very large magnetic and gravity anomalies.  The property has not previously been explored as a uranium target.



International KRL acquired the right to earn a 100% interest subject to a 2% NSR by an option agreement signed in October, 2004.  The terms of the option are detailed in note 6(b) in the financial statements.  Since signing the option, the Company has staked additional ground contiguous to, and in the vicinity of, the property.



The Nor Property now comprises 282 claims. In 2005 International KRL Resources Corp. carried out a geophysics and geochemical sampling program. The aeromagnetic helicopter survey was flown by McPhar Geosurveys Ltd. (McPhar) using a high-sensitivity caesium magnetometer. The magnetometer bird was flown at a nominal height of 45m. The survey totalled 1155 km on 155 flight lines (100m spacing), plus 123 km on 8 tie lines (1 km spacing). The flight lies were flown at an azimuth of 65o and the perpendicular tie lines at 155o. The data were field processed by McPhar then forwarded to their Newmarket office for final levelling and filtering.



The survey was successful in defining many obvious and more subtle features of the Richardson fault array as well as providing high resolution magnetic coverage of the Nor ridge. Standard colour contoured Total Magnetic Intensity (TMI) map a collection of filtered and derivative maps were produced and a presentation of the survey was given to the Company by VOX Geoscience Ltd. The Qualified Person for the geophysical portion of the project is Ken Robertson (P.Geo.).



The Company also completed a geochemical soil survey on the property.  Over 1,100 soil samples were collected for analysis from a surveyed grid on the property this year. Soil samples were collected at 50m intervals along survey lines spaced at 400m and 200m apart. Geochemical analyses for 36 elements were conducted by Acme Analytical Labs in Vancouver.  Sampling was conducted by a crew from Ryanwood Exploration under the direction of Mark Terry, the on-site company geologist.  The Qualified Person for the program is Michael H. Sanguinetti, P. Eng.



Initial evaluation of the geochemical results has shown coincident copper and uranium anomalies extending intermittently along 8.5 kilometres over the surveyed length of the property.  In addition, coincident rare earth element (REE) anomalies occur along the anomalous copper-uranium trend.  Evaluation of the geochemical anomalies with the results of geological mapping, rock sampling and the induced polarization survey is in progress and will be reported in a timely manner.



Carswell Property, Saskatchewan - Uranium



The Carswell uranium property is located on the Carswell Dome Formation in the Athabasca Basin.  The property is adjacent to the Cluff Lake Uranium Mine boundary.  The Cluff Lake Mine has been one of the largest producers of uranium in the world.  Subsequent to the period end, the Company granted an option to Essendon Solutions Inc. to acquire a 50% interest in the property for total present and future consideration of $25,000, 200,000 shares and a commitment to expend $100,000 on exploration on the property.





Plan Of Operations



Source of Funds for Fiscal 2005/2006

The Companys primary source of funds since incorporation has been through the issuance of common shares and share purchase warrants.



The Company had working capital of $1,405,952 at August 31, 2005 and a working capital of $1,439,778 at May 31, 2005.





Source of Funds for Fiscal 2004/2005

The Companys primary source of funds since incorporation has been through the issuance of common shares and share purchase warrants.



The Company had working capital of $27,612 at 5/31/2003 and a working capital deficit of ($35,058) at 5/31/2002.



Subsequent to the end of Fiscal 2003, May 31, 2003, the Company has raised $1,479,626 through private placement financings, the exercise of share purchase options and the exercise of share purchase warrants.



Use of Funds for Fiscal 2004/2005

During Fiscal 2004 and Fiscal 2005, respectively, the Company estimates that it might expend $300,000 and $345,000 on general/administrative expenses.  During Fiscal 2004 and Fiscal 2005, respectively, the Company estimates that it might expend $1.0 million and $1.5 million on property acquisition/exploration expenses.



Anticipated Changes to Facilities/Employees

The Company will continue to focus the majority of its efforts on the further exploration of the Nor and Copper Hill properties.  The Company has no plans to add any additional personnel.  Management anticipates that any property exploration efforts will be carried out by outside contractors.



United States vs. Foreign Sales/Assets

The Company generated no revenue during the last three years.



At 5/31/2005, 5/31/2004, 5/31/2003, and 5/31/2002, respectively: all of the Companys assets were located in Canada.



Material Effects of Government Regulations

The current and anticipated future operations of the Company, including further exploration activities require permits from Canadas governmental authorities.  Such operations are subject to various laws governing land use, the protection of the environment, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, well safety and other matters.  Unfavorable amendments to current laws, regulations and permits governing operations and activities of resource exploration companies, or more stringent implementation thereof, could have a materially adverse impact on the Company and cause increases in capital expenditures which could result in a cessation of operations by the Company.  The Company has had no material costs related to compliance and/or permits in recent years, and anticipates no material costs in the next year.



Seasonality

Dependency upon Patents/Licenses/Contracts/Processes

Sources/Availability of Raw Materials

--- No Disclosure Necessary ---



4.C. Organization Structure

International KRL Resources Corp was incorporated under the Company Act of the Province of British Columbia on July 10, 1978 under the name Kingdom Resources Ltd. On November 27, 1989 the name was changed to KRL Resources Corp. and on March 6, 2002, the name was changed to International KRL Resources Corp.



4.D.  Property, Plant and Equipment

The Companys executive offices are located in rented premises of approximately 1,500 sq. ft. at 789 West Pender Street, #570, Vancouver, British Columbia, Canada V6C 1H2.  The Company began occupying these facilities in April 2005.  Monthly rent is $1,821.11.



The Company is concentrating all of its efforts in Canada. What follows is a discussion of the Companys interests in Canada.



The Shinning Tree/Copper Hill/Golden Sylvia Property



Acquisition Details

The Company owns or has the option to acquire a 100% interest in mining claims and leased claims comprising 850 contiguous units covering approximately 13,200 hectares of Provincial Crown lands. The claims were acquired either by staking or pursuant to numerous property acquisition agreements entered into by the Company since 1991. All of these claims are in good standing through 2005. The property acquisition agreements are described below:



Property Description and Location

This property is located in the Canadian province of Ontario and covers portions of the MacMurchy, Kelvin, Fawcett, Tyrell, Natal, Leonard and Churchill Townships. The claims are approximately 54 miles south of the city of Timmins and are within 3 miles of the junctions of the Grassy Lake Road and Canadian Highway 560.

Local Resources, Infrastructure and Physiography

Most of the claims on this property are accessible by existing paved or gravel roads.

The topography on the property is of moderate relief of about 75 meters with rounded rock knolls covered in part by glacial gravel and sand deposits and separated by cedar swamps.  Approximately 50% of the property is covered by mature pine forest, large parts of which have recently been logged.

The climate is typical of northern Ontario, in that it is very cold in the winter and warm in the summers.  The precipitation is moderate.

Future Plans by International KRL Resources



The Issuer is currently engaged in exploratory work on the Nor Property in the Yukon and Copper Hill Property in Shining Tree, Ontario. The most recent work on the Nor Property consisted aeromagnetic survey, geochemistry analysis, and mapping. On the Copper Hill Property the most recent work consisted of a diamond drill program and down hole geophysical survey.



The Company plans to continue its exploration work on the Nor and Copper Hill properties and management will formulate a work program for 2006 at a later date.



Nor Property, Yukon Territory (Uranium)



Acquisition Details



International KRL acquired the right to earn a 100% interest subject to a 2% NSR by an option agreement signed in October, 2004.  Pursuant to an Option Agreement dated October 28, 2004 the Company acquired the right to earn a 100% interest, subject to a 2% NSR Royalty, in 52 mineral claims in the Dawson Mining District, Yukon Territory. In order to exercise the option, the Company must pay a total of up to $207,500 cash consideration and issue a total of 1,000,000 shares as follows:

Cash consideration:

(i)

$7,500 paid within 5 days of agreement;

(ii)

a further $20,000 paid on June 1, 2005;

(iii)

a further $30,000 to be paid on December 1, 2005;

(iv)

a further $40,000 to be paid on December 1, 2006;

(v)

a further $50,000 to be paid December 1, 2007; and

(vi)

a further $60,000 to be paid December 1, 2008.



If at any time the shares of the Company trade, for 10 days, at $1 or more, all further cash payments will be deemed to have been satisfied.

Share consideration:

(i)

200,000 shares issued in December, 2004;

(ii)

a further 200,000 shares issued on December 1, 2005;

(iii)

a further 200,000 shares to be issued on December 1, 2006;

(iv)

a further 200,000 shares to be issued on December 1, 2007; and

(v)

a further 200,000 shares to be issued on December 1, 2008.

The Company will have the right to purchase 50% of the NSR royalty retained by the Optionor for a purchase price of $2,000,000 and the right of first refusal on the remaining 50%.



Since signing the option, the Company has staked additional ground contiguous to, and in the vicinity of, the property. The Nor Property now comprises 282 claims.



Property Description and Location



The Nor Uranium Property is located on the east flank of the Richardson Mountains, about 65 km east of the Dempster Highway and 250km north of Dawson City, Yukon Territory.  The property exhibits some similarities to the Olympic Dam Uranium Mine property in Australia, including some similarities in geology, presence of anomalous uranium, copper, gold and rare earth elements and very large magnetic and gravity anomalies.  The property has not previously been explored as a uranium target.



Local Resources, Infrastructure and Physiography

The property is accessible by helicopter from the Eagle Plains Lodge on the Dempster Highway, 65km west of the property. The nearest community is Fort McPherson, 140km north of the property.

The topography on the property is of moderate relief. The whole property is covered by permafrost, from the valley to the highest point on the ridge is 290m.

The climate is typical of the Yukon Territory, in that it is very cold (-50oC) in the winter and relatively warm in the summers (+30oC).  The precipitation is high/moderate.



Future Plans by International KRL Resources



The Issuer is currently engaged in compiling results from the exploration program of 2005. The most recent work consisted of geophysical, geochemical surveys, extensive mapping and prospecting. The geophysics program was carried out by McPhar Geophysics Ltd. The purpose of this work is to assist ongoing exploration efforts and to generate exploration targets.



The Company plans to continue its exploration work on the Nor Property and plans to drill the property in the next exploration season of 2006.





Carswell Property, Saskatchewan - Uranium



The Carswell uranium property is located on the Carswell Dome Formation in the Athabasca Basin.  The property is adjacent to the Cluff Lake Uranium Mine boundary.  The Cluff Lake Mine has been one of the largest producers of uranium in the world.  Subsequent to the period end, the Company granted an option to Essendon Solutions Inc. to acquire a 50% interest in the property for total present and future consideration of $25,000, 200,000 shares and a commitment to expend $100,000 on exploration on the property.





Bear River Property

The Company owns a 100% interest in three mineral claims, representing 31 units, located in the Skeena Mining Division of British Columbia.



The property is available for option. The Company has not done any exploration work on the property since Fiscal 1999, ended May 31, 1999.





ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion for the Six Months Ended 11/30/2005, and 11/30/2004, and the fiscal years ended 5/31/2005, 5/31/2004, and 5/31/2003 should be read in conjunction with the financial statements of the Company and the notes thereto.



Overview



During the year, the Company raised a gross amount of $2.2 million from private placements and the exercise of warrants.  $62,000 was spent on property option payments and new property acquisitions.  $790,000 was spent on mineral exploration.  Administration expenses amounted to $309,000 (calculated as total expenses less financing fees, option gains, write-offs and write-downs and stock based compensation).



With the price of precious metals rising since November 2001, management will concentrate the majority of its efforts on the Companys mineral exploration projects in Canada.





SELECTED ANNUAL INFORMATION (expressed in Canadian dollars)



|                   | May 31, 2005 | May 31, 2004 | May 31, 2003
|------------------ | ------------ | ------------ | ------------
|                   |              |              |             
|Net loss           | (859,431)    | (520,094)    | (410,918)   
|Net loss per share | (0.03)       | (0.03)       | (0.04)      
|Total assets       | 5,569,509    | 3,755,045    | 2,709,503   





As the Company has no revenues, increased activity causes increased losses.  Other losses can be caused by write-downs or write-offs of assets which do not follow a trend.  The increased success in the past year in the raising of capital has allowed the company to increase its activity which has resulted in a higher loss figure.



Results of Operations



Fiscal Year 2005 Ended 5/31/2005 vs Fiscal Year 2004 Ended 5/31/2004



Net loss in the current year was $859,431 compared to $520,094 in the prior year.  Most office expense categories increased due to increased activity by the Company however other categories benefited from increased sharing of costs by Logan Resources Ltd.  Significant line item changes were as follows:



·

Accounting and legal dropped from $94,797 to $29,470 due to a combination of factors including extra accounting needed for the Company's registration with the SEC in the prior year, Canaccord financing legal costs in the prior year of $20,000 and a $12,000 reversal in the current year of prior year legal fees recorded in error.

·

Administration salaries were up from $48,597 to $80,155 due to the hiring on a shared basis of additional office staff.

·

Financing fees and expenses were up from $95,421 to $250,404 due mainly to the increase in capital raised from $1.5 million in 2004 to $2.2 million in 2005 and a more rigorous categorization of financing direct legal and broker legal costs to financing.

·

Promotion and travel decreased from $71,715 to $41,207 due to decreased travel costs that in the prior year included a trip to Europe and attendance at shows by more company personnel.  This year the Company participated in the New York Gold Show, New Orleans Investor Conference, the San Francisco Investor Show, the Vancouver Investment Conference and the Prospectors and Developers Conference.  However, in the current year, Logan Resources Ltd. was able to share much of the costs.  Also, in the prior year, more was spent on custom display material.

·

Stock exchange and filing fees were down from $41,595 to $16,504 mainly due to costs associated with registration with the SEC incurred in the prior year.

·

Stock-based compensation increased from $39,722 to $327,787 due to increased grants of stock options to employees, consultants, and financing agents and an increase in the expected volatility of the Company's share price.  This expense is entirely non-cash.

·

The gain on property option represents the excess of the value of shares and cash received during the year pursuant to the optioning of 50% of the Companys interest in the Carswell property, over the Companys cost of acquisition and exploration on the property.



SUMMARY OF QUARTERLY RESULTS



|                   | May 31, 2005 | Feb. 28, 2005 | Nov 30,
2004 | Aug 31, 2004 | May 31, 2004 | Feb 29, 2004 | Nov 30, 2003 | Aug 31, 2003
|------------------ | ------------ | ------------- | ------------ | ------------ | ------------ | ------------ | ------------ | ------------
|Net loss           | (534,215)    | (101,255)     | (88,291)     | (135,670)    | (150,820)    | (162,766)    | (149,450)    | (57,059)    
|Net loss per share | (0.019)      | (0.004)       | (0.004)      | (0.006)      | (0.007)      | (0.009)      | (0.007)      | (0.004)     



For each of the above periods, the Company had no revenue.   Net loss and loss before discontinued operations and extraordinary items was the same for all periods. Net loss per share was the same on a basic and diluted basis for all periods.



Loss in the last quarter was exceptionally high due to $309,607 of non-cash stock based compensation and $211,564 of financing costs associated with the $1.8 million in financings of that quarter.



LIQUIDITY



As at May 31, 2005, the Company had a working capital balance of $1,439,778.  This included flow-through share funds of $1.3 million, which are committed to mineral exploration in Canada. Since the year end, the Company has raised an additional $545,000 from the issue of non-flow-through shares and an additional $312,500 from the issue of flow-through shares.  These funds will be sufficient for the Company to meet its working capital needs and property payment commitments (currently $30,000) in the coming year and to carry out a significant amount of exploration.  Nonetheless, in the longer term, as the company has no regular source of revenue, it will be continuing to seek new equity capital, through private placements or public offerings.



For Years Ended May 31st

|                                  |  | 2005     | 2004    
|--------------------------------- |  | -------- | --------
|Exploration And Development Costs |  |          |         
|Accommodation and meals           |  | $39,778  | $42,687 
|Assays                            |  | $65,903  | $18,657 
|Drafting                          |  | $4,706   | $9,214  
|Drilling                          |  | $239,082 | $227,882
|Geological wages, fees and costs  |  | $164,122 | $117,306
|Geophysics                        |  | $68,664  | $128,746
|License and recording fees        |  | $11,009  | $2,312  
|Supplies and communication        |  | $43,708  | $4,682  
|Support wages                     |  | $115,294 | $33,628 
|Travel and vehicle expense        |  | $55,085  | $22,073 
|                                  |  |         





Results of Operations



Nine Months Ended 2/29/2004 vs. Nine Months Ended 2/28/2003

For the nine months ended 2/29/2004, the Company incurred a net loss of ($369,274) [2003-($322,097)] which included charges to income not involving cash of amortization in the amount of $1,171.



The resultant loss per share for the nine-month period ended 2/29/2004 was ($0.02).  The net loss per share for the nine months ended 2/29/2003 was ($0.03).



Expenses incurred during the nine-month period ended 2/29/2004 were $369,274, which represented an increased over the same nine-month period last fiscal year when expenses were $322,097. The primary reasons for the increases in expenses were increases that resulted from the fact that management communicated more extensively with both shareholders and the investment community in Canada. Shareholder relations, meetings and news releases, which represented no expenses in the prior fiscal period, were $56,089 for the first nine months of Fiscal 2004. Travel expenses were $9,046 during the first nine months of Fiscal 2004 as compared to nil during the first nine months of Fiscal 2003. Stock exchange and filing fees also increased from $12,540 during the first nine months of Fiscal 2003 to $38,638 during the first nine months of Fiscal 2004.  This was due primarily to the greater fees incurred during the third fiscal quarter of Fiscal 2004 as a result of the large number of share issuances resulting from the exercise of share purchase warrants and private placement financings.



Expenses, which decreased significantly during the first nine months of Fiscal 2004 as compared to the first nine months of Fiscal 2003, included Financing fees and costs (down $37,662 because of the lesser amount raised from private placement financings) and legal fees (down $9,913 also because of the lesser amount raised from private placement financings).





Fiscal 2003 Ended 5/31/2003 vs. Fiscal 2002 Ended 5/31/2002

During the financial years ending May 31, 2003 and May 31, 2002, the company realized no income.



The Companys activity increased significantly during Fiscal 2003 as compared to Fiscal 2002. This increased activity is described in the prior section: 4.B Business Overview.



Expenses incurred during the financial year ended May 31, 2003, were $410,918, which represented an increase of $260,946 over expenses of $149,972 incurred during the financial year ended May 31, 2002.



The most significant component of the increase in expenses was in the category of financing fees. During Fiscal 2003, the Company raised $1,060,500 through the sale of units and the exercise of share purchase options. During Fiscal 2002, the Company only raised $237,500 resulting in significantly lower associated costs which are directly correlated with the size of the financing.



During Fiscal 2003 other notable expense category increases resulting from the increased corporate activity were as follows:



1.

Accounting and audit: An increase of $12,691 or 77%. The increase in these fees was a direct result of the higher number of financings, which occurred during Fiscal 2003 as compared to Fiscal 2002. Each financing required separate input from the Companys auditor.

2.

Legal fees: An increase of $64,788 or approximately 400%. The increase in these fees was a direct result of the higher number of financings, which occurred during Fiscal 2003 as compared to Fiscal 2002. Each financing required legal services from the Companys legal counsel. These services consisted primarily of the preparation of offering documents.

3.

Office and miscellaneous: An increase of $12,106 or 118%. The increase in office and miscellaneous expenses was the result of staff expenses resulting from the higher level of activity.

4.

Promotion and travel: An increase of $31,769 or 234%. This increase resulted from the Companys decision to increase awareness among Canadian investors of the changes, which were occurring within the structure of the Company and its operations. Investor meetings were conducted informing people of the name change, share re-organization (roll-back) and increased activity on the mineral properties.

5.

Salaries and benefits: An increase of $23,653 or 157%. This increase resulted from the slightly large staff necessitated by the increased corporate activity.





The Company spent $558,655 during Fiscal 2003 on its mineral properties as compared to $118,931 during Fiscal 2002. The expenses for each fiscal year are outlined below:



For the Years Ended May 31st





|Exploration and Development Costs | 2003     | 2002   
|--------------------------------- | -------- | -------
|                                  |          |        
|Accommodation and meals           | $33,700  | $4,886 
|Assays                            | $39,33   | $6,039 
|Drafting                          | $18,189  | $2,797 
|Drilling                          | $178,174 | $140   
|Labor                             | $183,713 | $98,503
|License and Recording Fees        | $935     | $2,113 
|Supplies and Miscellaneous        | $25,302  | $843   
|Surveys                           | $33,891  | $1,000 
|Travel                            | $45,418  | $2,610 





The company recorded a net loss of ($410,910) during the year ended May 31, 2003, compared to a net loss of ($149,972) in the previous fiscal year.  This resulted in a net loss of ($0.04) per share during Fiscal 2003, compared to a net loss of ($0.02) per share in the previous year.



Fiscal 2002 Ended 5/31/2002 vs. Fiscal 2001 Ended 5/31/2001

During the financial years ended May 31, 2002 and May 31, 2001, the company realized no income.



The net loss for Fiscal 2002 was approximately $24,000 less that that for Fiscal 2001.  The primary reason the difference was the lower amount of travel and promotion, which occurred during Fiscal 2002. During Fiscal 2002, the Company spent only $13,580 on promotion and travel while during Fiscal 2001 the Company spent $38,025 on these types of expenses.



Management spent considerable effort during Fiscal 2002 re-organizing the Company as was evidenced by the share consolidation effective March 6, 2002 and the name change, which also occurred on March 6, 2002.



As described earlier in this document in 4.B Business Overview, the Company was engaged in exploration work on its mineral properties; however, the level of work was significantly less than that which occurred during subsequent periods.



Expenses incurred during the financial year ended May 31, 2002, were $130,744, a decrease of $24,027 over expenses of $154,771 incurred during the financial year ended May 31, 2001.  The most significant component of the decreased expenses in the category of promotion and travel as described above. Rent expense also decreased to $2,020 during Fiscal 2002 from $16,200 in Fiscal 2001. The only major increase in an expense category occurred in the area of legal fees, which increased by $10,625 during Fiscal 2002 as compared to Fiscal 2001. The primary reasons for the increased in this category was the additional legal work needed to complete the change of company name and the share consolidation.



The company recorded a net loss of ($130,744) during the year ended May 31, 2002, compared to net loss in the amount of ($154,771) in the previous fiscal year.  This resulted in a net loss of ($0.02) per share for Fiscal 2002 compared to net loss of ($0.05) per share for Fiscal 2001.



Fiscal 2001 Ended 5/31/2001 vs. Fiscal 2000 Ended 5/31/2000

The company incurred a net loss of ($158,894) for Fiscal 2001 or ($0.01) per share compared to a net loss of ($183,425) or ($0.01) per share in Fiscal 2000.



Expenses during Fiscal 2110 totaled $154,771 as compared to the expenses for the previous 12-month period, which were $151,774.  The primary differences in expense categories occurred in accounting and audit; legal fees; and, promotion and travel. The lower level of business activity resulted in a decrease in both accounting fees and legal fees. Promotion and travel expenses did increase as management, during Fiscal 2001, attempted to communicate with shareholders and potential investors in Canada to a larger extent than during Fiscal 2000.



Liquidity and Capital Resources



Nine Months Ended 2/29/2004

The Companys current assets as of 2/29/2004 totaled $712,117.  Of this amount cash represented $196,554; $500,000 consisted of bank securities and term deposits and the balance consisted of prepaid expenses; good and services tax recoverable; share subscriptions receivable; and, accounts receivable.



The only sources of significant additional funds, which are presently available to the Company, are the sale of equity capital or the offering by the Company of an interest in its properties to be earned by another party.  There is no assurance that such sources of financing will be available on acceptable terms, if at all.



Management believes that the Company currently has sufficient capital to sustain operations through the end of the current calendar year.  This belief is based on past levels of expenditures, which occurred during the Companys prior fiscal years.



Cash used for operating activities during the nine months ended 2/29/2004 totaled ($458,919), including the net loss of ($369,274).  Adjustments during this period were accounts receivable/payable & accrued liabilities in the amount of ($14,885); prepaid expenses in the amount of $5,460; amount due from related parties in the amount of ($122,077); share subscription advances in the amount of $33,439; and, goods and services tax recoverable in the amount of $7,246.



Investing activities during the nine months ended 2/29/2004 consisted primarily of exploration expenditures, which amounted to $439,965, and the acquisition of marketable securities, in the amount of $500,000. The Company also purchased equipment in the amount of $32,772 ($24,580 of this amount was for the purchase of a new truck for company operations).



The exploration expenditures are outlined below:



|Exploration Costs                                      | Amount  
|------------------------------------------------------ | --------
|                                                       |         
|Accommodation and Meals                                | $26,238 
|Amortization of field-use equipment                    | $6,842  
|Assays                                                 | $10,012 
|Drafting and mapping                                   | $6,538  
|Drilling                                               | $129,481
|Geological consultants wages, fees and costs           | $67,084 
|Labor and payroll assessments                          | $51,437 
|License and recording fees                             | $1,134  
|Supplies and miscellaneous                             | $7,031  
|Surveys                                                | $116,094
|Telecommunications  satellite, field phones, internet | $953    
|Travel and vehicle expenses                            | $17,122 



During the nine months ended 2/29/2004 the Issuer received $1,479,626 from the issuance of common shares resulting from private placement financings and the exercise of share purchase options and share purchase warrants as described above in 4.A History and Development of the Company.



Fiscal 2003 Ended 5/31/2003

As at 5/31/2003, the Company had an accumulated deficit of ($4,936,002) and working capital of $27,612.  Of this amount, $22,742 was represented by cash.



During the fiscal year ended 5/31/2003, the Company completed the following four private placements:



(1)

This private placement consisted of the sale of 1,300,000 units at a price of $0.15 per unit.  Each unit consisted of one share and one-half share purchase warrant.  One full warrant was required to acquire one additional common share.  The full warrants have an exercise price of $0.20 per share on or before October 1, 2003 or $0.25 per share on or before October 1, 2004. 100,000 shares and 260,000 agents purchase warrants exercisable under these same conditions were issued to Canaccord Capital Corporation as a corporate financing fee. This corporate financing fee related to the assisted given to the Company by Canaccord Capital Corporation in selling the units.

(2)

This private placement consisted of the sale of 2,003,333 units at a price of $0.15 per unit.  Each unit consisted of one share and one-half share purchase warrant.  One full warrant was exercisable to acquire one additional common share.  The full warrants have an exercise price of $0.20 per share on or before October 7, 2003 or $0.25 per share on or before October 7, 2004.  In addition, 400,667 agents purchase warrants exercisable under the same conditions, and which expire on November 11, 2004, were issued to Canaccord Capital Corporation as a corporate financing fee. This corporate financing fee related to the assistance given to the Company by Canaccord Capital Corporation in selling the units.

(3)

This private placement consisted of the sale of 1,775,000 units at a price of $0.20 per unit. Each unit consisted of one share and one-half share purchase warrant.  One full warrant is exercisable to acquire one additional common share.  The full warrants have an exercise price of $0.20 per share on or before August 31, 2003 or $0.25 per share on or before August 31, 2004.  In addition 130,000 common shares and 355,000 agents purchase warrants exercisable at a price of $0.25 per share, and which expire August 31, 2004, were issued to Canaccord Capital Corporation as a corporate financing fee. This corporate financing fee related to the assistance given to the Company by Canaccord Capital Corporation in selling the units.

(4)

This private placement consisted of the sale of 250,000 units at a price of $0.20 per unit.  Each unit consisted on one share and one-half share purchase warrant exercisable to acquire one-half additional shares. The purchase warrants have an exercise price of $0.25 per share on or before September 18, 2003.  In addition, 50,000 agents purchase warrants exercisable at a price of $0.25 per share, and which expired September 18, 2003, were issued to Canaccord Capital Corporation as a corporate financing fee.  This corporate financing fee related to the assistance given to the Company by Canaccord Capital Corporation in selling the units.



During the fiscal year there were 720,000 share purchase warrants exercised for proceeds to the Company in the amount of $108,000. The details of this warrant exercises are described in Item 4, History and Development of the Company, Financings, note (34).



Cash Used for Operating Activities during Fiscal 2003 was ($447,725) including the net loss for the fiscal year of ($410,918).  The only adjustment for the fiscal year was depreciation in the amount of $4,281.



Changes in non-cash working capital was ($41,088) and consisted of decreases in goods and services tax recoverable; accounts receivable; prepaid expenses and deposits; and, share subscriptions receivable. Increases occurred in amount due from a related party; accounts payable and accrued liabilities; and, amount due to related parties.



The decrease in goods and services tax recoverable resulted from the inactivity of the Issuer and the fact that it had no capital.



The decrease in accounts receivable resulted from the inactivity of the Issuer and the fact that it had no capital.



The decrease in prepaid expenses: resulted from the inactivity of the Issuer and the fact that it had no capital.



The increase in deposits resulted from the exercise of share purchase options and the sale of treasury shares.



The increase in amount due from a related party resulted from the fact that T-Bags Management, Ltd. owed the Issuer funds, which were subsequently paid.



The increase in accounts payable and accrued liabilities resulted from a lack of capital by the Issuer.



The increase in share subscriptions receivable resulted from increased stock options issuances.



Cash Used for Investing Activities during Fiscal 2003 totaled ($591,193) which consisted entirely of expenditures on the Companys mineral properties. Of this amount, $558,655 consisted of exploration work on the Issuers properties as follows:



|Exploration Costs          | Amount  
|-------------------------- | --------
|                           |         
|Accommodations and meals   | $33,700 
|Assays                     | $39,333 
|Drafting                   | $18,189 
|Drilling                   | $178,174
|Labor                      | $183,713
|License and recording fees | 4935    
|Supplies and miscellaneous | $25,302 
|Surveys                    | $33,891 
|Travel                     | $45,418 





Cash Provided by Financing Activities during Fiscal 2003 was $1,060,500. This consisted entirely of the issuance of shares as described earlier in Item 4. History and Development of the Company, Financings.



Fiscal 2002 Ended 5/31/2002

As at 5/31/2002, the Issuer had an accumulated deficit of ($4,525,084) and a working capital deficit of ($35,058). Of this amount, cash represented $1,160 and other current assets were $3,693.



During the fiscal year ended 5/31/2002, the Issuer completed one private placement raising $100,000 through the sales of 1,000,000 units as described in Item 4, History and Development of the Company, Financings.



Cash Used for Operating Activities during Fiscal 2002 was ($126,839) including the net loss for the fiscal year of ($149,972).  The only significant adjustment for the fiscal year was amortization in the amount of $1,841.



Changes in non-cash working capital were $21,264 and consisted of increases in goods and services tax recoverable and accounts payable and accrued liabilities. Decreases occurred in amount due from related party and amount due to related parties.



The increases in goods and services recoverable were the result of increased exploration activity.



The increases in accounts payable and accrued liabilities were the result of limited funds available for exploration activity.



Cash Used for Investing Activities during Fiscal 2002 totaled ($111,504) which consisted almost entirely of expenditures on the Companys mineral properties. The only exception was $8,613 received from the sale of marketable securities.  These securities were issued as a result of a small private placement. Exploration expenses, which were incurred during Fiscal 2002, are shown in the following table.



|Exploration Costs          | Amount 
|-------------------------- | -------
|                           |        
|Accommodation and meals    | $4,886 
|Assays                     | $6,039 
|Drafting                   | $2,797 
|Drilling                   | $140   
|Labor                      | $98,503
|License and recording fees | $2,113 
|Supplies and miscellaneous | $1,000 
|Travel                     | $2,619 



Cash Provided by Financing Activities during Fiscal 2002 was $1,060,500. This consisted entirely of the issuance of shares as described in Item 4, History and Development of the Company, Financings.

US GAAP Reconciliation



5.E.  Off-Balance Sheet Arrangements.

5.F.  Tabular disclosure of contractual obligations.

--- No Disclosure Necessary ---



Critical Accounting Policies

Management is required to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  On a regular basis, we evaluate our estimates and assumptions.  We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Actual results may differ from these estimates under different assumptions or conditions.



The significant US GAAP versus Canadian GAAP accounting policies that are most critical to aid in fully understanding and evaluating reported financial results include: the expensing of mineral property acquisition/exploration costs and accounting for stock-based compensation.



The Company capitalizes mineral property acquisition/exploration/development costs until the property is placed into production, sold, allowed to lapse or otherwise abandoned.  All mineral property acquisition, exploration and development costs have been acquired for cash and/or common-voting shares.  The company performs periodic evaluations to evaluate recoverability of mineral property costs.  Under SEC interpretation of US GAAP, for exploration stage properties, all such acquisition and/or exploration costs are expensed in the period incurred.



For US GAAP purposes, the Company had elected under Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based Compensation (SFAS 123) to continue to apply the intrinsic value based method of accounting for stock-based compensation under APB 25 Accounting for Stock Issued to Employees.  Under the intrinsic value method, stock compensation is the excess, if any, of the quoted market value of the stock at the measured date of the grant over the amount an optionee must pay to acquire the stock.  Under US GAAP, the issue of stock options to non-employees is accounted for under SFAS 123.  The fair value of the stock options granted to non-employees will be estimated using the Black-Scholes option pricing model and the following weighted-average assumptions: dividend yield; expected volatility; risk-free interest rate; and expected average option life.  There were no stock options granted or outstanding during Fiscal 2002/2001/2000.  The first calculation and footnote disclosure was adopted for Fiscal 2003 Ended January 31st.



Recent Accounting Pronouncements Applicable to Us



In July 2001, the Financial Accounting Standards Board, or FASB, issued Statement of Financial Accounting Standards, or SFAS, No. 141 Business Combinations, or SFAS 141, and SFAS No. 142, Goodwill and Other Intangible Assets, or SFAS 142.  SFAS 141 requires all business combinations initiated after 6/30/2001 to be accounted for using the purchase method of accounting.  Under SFAS 142, goodwill and intangible assets with indefinite lives are no longer amortized but are reviewed for impairment annually, or more frequently if impairment indicators arise.  All other intangible assets will continue to be amortized over their estimated useful lives.  The amortization provisions of SFAS 142 apply to goodwill and intangible assets acquired after 6/30/2001.  With respect to goodwill and intangible assets acquired prior to 7/1/2001, we are required to adopt SFAS 142 effective 7/1/2002.  The adoption of SFAS 141 and SFAS 142 is not expected to have a material impact on our financial position or results of operations.



In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, or SFAS 144.  Although SFAS 144 supersedes SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, or SFAS 121, it retains the requirements of SFAS 121 regarding recognition of impairment loss for long-lived assets to be held and used (based on undiscounted cash flows) and resolves certain implementation issues.  Under SFAS 144, companies will (1) recognize an impairment loss only if the carrying amount of a long-lived asset is not recoverable based on its undiscounted future cash flows and (2) measure an impairment loss as the difference between the carrying amount and fair value of the asset.  SFAS 144 also provides guidance on accounting and disclosure issues surrounding long-lived assets to be disposed of by sale.  The adoption of SFAS 144 on 7/1/2002 is not expected to have a material impact on our financial position or results of operations.



On 4/30/2002, the FASB issued Statement of Financial Accounting Standards No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections (""SFAS 145"").  Among other amendments and rescissions, SFAS No.145 eliminates the requirement that gains and losses from the extinguishments of debt be aggregated and, if material, classified as an extraordinary item, net of the related income tax effect, unless such gains and losses meet the criteria in paragraph 20 of Accounting Principles Board Opinion No. 30, Reporting the Results of Operations, Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions.  The adoption of SFAS 145 on 5/15/2002 does not have a material impact on our financial position or results of operations.



In July 2002, the Financial Accounting Standards Board issued SFAS No. 146, Accounting for Exit or Disposal Activities.  SFAS No. 146 addresses the recognition, measurement, and reporting of costs that are associated with exit and disposal activities, including costs related to terminating a contract that is not a capital lease and termination benefits that employees who are involuntarily terminated receive under the terms of a one-time benefit arrangement that is not an ongoing benefit arrangement or an individual deferred-compensation contract.  SFAS No. 146 supercedes Emerging Issues Task Force Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).  SFAS No. 146 will be effective for exit or disposal activities of the Company that are initiated after 12/31/2002 and are not expected to have a material impact on our financial position or results of operations.



ITEM 6.  DIRECTORS, SENIOR MANAGEMENT, AND EMPLOYEES



6.A.  Directors and Senior Management



Table No. 6

Directors and Senior Management

11/14/2005

______________________________________________________________________________

______________________________________________________________________________

|Date of                                                                       
|------------------------------------------------------------------------------
|First                                                                         
|Election or                                                                   
|Name                          Position             Age             Appointment

------------------------------------------------------------------------------

|Seamus Young                      | President/Director | 65 | 1986
|--------------------------------- | ------------------ | -- | ----
|Mike Muzylowski (1)               | Director           | 72 | 1990
|F. Charles Vickers (1)            | Director           | 56 | 2005
|Clifford H. Frame                 | Director           |    | 2005
|Judith T. Mazvihwa (1)            | Director           | 31 | 2003
|                                  |                    |    |     
|(1) Member of the Audit Committee |                    |   

______________________________________________________________________________



Seamus Youngis a mining engineer with forty years experience.  He immigrated to Canada from Tipperary, Ireland in May of 1964.  He has been involved in the resource industry since that time.  He has been involved with the Issuer since 1983 and with Logan Resources Ltd., a public company trading on the TSX Venture Exchange, since 1992.



Mike Muzylowskihas a Bachelor of Science degree from the University of Manitoba and over 40 years of experience in the business of finding and developing mines. He is currently the President and CEO of Callinan Mines, an unrelated public company, and the Chairman of Tan Range Exploration Corporation, an unrelated public company. He has been instrumental in the discovery and production of some fifteen mines.  He received the award of Mine Developer of the Year in 1988 from the Prospectors and Developers Association Conference in Canada.



Clifford H. Frameis a professional engineer with 40 years of experience in all aspects of resource project development, acquisition, marketing, financing, operations and production. Widely recognized for his achievements in the resource industry, he has overseen several major mine developments in Canada, Australia, Ireland and Indonesia. Mr. Frame has outstanding industry experience, leadership and communication skills, which have earned him extensive international mining contacts and well-established relationships with government, financial and investor groups. He has a strong background in all aspects of mine exploration, development and operation.



F. Charles Vickersis the president of Greyling Investments, Inc. which is a major shareholder in the Company as well as a number of other junior resource companies in Canada.  Mr. Vickers was the Chairman and President of Troutline Investments Inc. until April of 2004 when Troutline successfully merged with three oil and gas companies to become Innova Energy Ltd. (Innova). Mr. Vickers continues to serve as a director of Innova.  Innova has grown from an initial market capitalization of $67 million to a current market valuation of almost $200 million. Mr. Vickers has 30 years of experience with resource based companies.



Judith T. Mazvihwa has been in mining business for 10 years and was a mine geologist for Casmyn Mining (Pvt) Ltd. in Zimbabwe.  From December 1996 to April 1997, she was a geologist with Prospecting Ventures Ltd.; from June 1997 to September 1999, she was Mining Geologist Section Head with Casmyn Mining Zimbabwe (Pvt) Ltd.; from March 2002 to April 2002, she worked for Cumberland Resources Ltd.; and from April 2002 to November 2002, she was with Northgate Exploration Ltd.  Since December 2002, she was Officer Manager with International KRL Resources Corp. and since December 2003, she has been a CFO and Director of International KRL Resources Corp., a mineral exploration company publicly traded on the TSX Venture Exchange.



(Charles D. Mooney resigned from the Board of Directors August 15, 2005.)



The Directors have served in their respective capacities since their election and/or appointment and will serve until the next Annual General Meeting or until a successor is duly elected, unless the office is vacated in accordance with the Articles/By-Laws of the Company.





The Senior Management serves at the pleasure of the Board of Directors.



No Director and/or Senior Management had been the subject of any order, judgment, or decree of any governmental agency or administrator or of any court or competent jurisdiction, revoking or suspending for cause any license, permit or other authority of such person or of any corporation of which he is a Director and/or Senior Management, to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining or enjoining any such person or any corporation of which he is an officer or director from engaging in or continuing any conduct/practice/employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security or any aspect of the securities business or of theft or of any felony.



There are no family relationships between any two or more Directors or Senior Management.



There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a Director or member of senior management.



6.B.  Compensation



Cash Compensation

Total compensation accrued and/or paid (directly and/or indirectly) to all Directors/Senior Management during Fiscal 2005 ended 5/31/2005 was as follows;



|                | Fiscal Year 2005 | Fiscal Year 2004
|--------------- | ---------------- | ----------------
|Management Fees | $29,600          | $32,500         
|Salary          | $28,900          | $26,400         





Director Compensation.  The Company had no formal plan for compensating its Directors for their service in their capacity as Directors.  Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of the Board of Directors.  The Board of Directors may award special remuneration to any Director undertaking any special services on behalf of the Company other than services ordinarily required of a Director.  Other than indicated below no Director received any compensation for his services as a Director, including committee participation and/or special assignments.



Stock Options.  The Company may grant stock options to Directors, Senior Management and employees.  950,000 stock options were granted or exercised during Fiscal 2005.  Refer to ITEM #6.E., "Share Ownership" and Table No. 8 for information about stock options outstanding.



Change of Control Remuneration.  The Company had no plans or arrangements in respect of remuneration received or that may be received by Executive Officers of the Company in Fiscal 2005 to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds US$60,000 per Senior Management.



Other Compensation.  No Senior Management/Director received other compensation in excess of the lesser of US$25,000 or 10% of such officer's cash compensation, and all Senior Management/Directors as a group did not receive other compensation which exceeded US$25,000 times the number of persons in the group or 10% of the compensation.



Bonus/Profit Sharing/Non-Cash Compensation.  Except for the stock option program discussed in ITEM #6.E., the Company had no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to the Company's Directors or Senior Management.



Pension/Retirement Benefits.  No funds were set aside or accrued by the Company during Fiscal 2005 to provide pension, retirement or similar benefits for Directors or Senior Management.



6.C.  Board Practices



6.C.1.  Terms of Office.  Refer to ITEM 6.A.1.

6.C.2.  Directors Service Contracts.  --- No Disclosure Necessary ---

6.C.3.  Board of Director Committees.

The Company has an Audit Committee, which recommends to the Board of Directors the engagement of the independent auditors of the Company and reviews with the independent auditors the scope and results of the Companys audits, the Companys internal accounting controls, and the professional services furnished by the independent auditors to the Company.  The current members of the Audit Committee are: F. Charles Vickers, Mike Muzylowski and Judith T. Mazvihwa.



6.D.  Employees

As of 11/14/2005, the Company had 5 employees, outside of independent contractors, excluding the Senior Management.



6.E.  Share Ownership

Table No. 7 lists, as of 10/18/2005, Directors and Senior Management who beneficially own the Company's voting securities, consisting solely of common shares, and the amount of the Company's voting securities owned by the Directors and Senior Management as a group.



Table No. 7

Shareholdings of Directors and Senior Management

Shareholdings of 5% Shareholders

______________________________________________________________________________

______________________________________________________________________________



|Title of Class | Name of Beneficial Owner              | Amount and Nature of Beneficial Ownership | Percent of Class
|-------------- | ------------------------------------- | ----------------------------------------- | ----------------
|Common         | Seamus Young                          | 738,697                                   | 1.87%           
|Common         | Mike Muzylowski                       | 90,800                                    | 0.23%           
|Common         | Judith T. Mazvihwa                    | 175,000                                   | 0.44%           
|Common         | F. Charles Vickers                    | 0                                         | 0%              
|Common         | Clifford H. Frame                     | 0                                         | 0%              
|Common         | RAB Special Situations LP             | 3,900,000                                 | 9.90%           
|               | Total Directors/Management 5% Holders | 4,904,497                                 | 12.44%          



(1) 1,400,000 shares controlled and directed for Greyling Investment Inc.



# Based on 39,389,726 fully diluted shares as of 11/15/2005.



Stock Options.



Description of the Companys Stock Option Plan:



At the Companys annual general meeting held on November 17, 2005, shareholders approved the adoption of the 2003 Share Incentive Plan (the Plan) in order to provide incentive to employees, management and others who provide services to the Company to act in the best interest of the Company.



Pursuant to the Plan, the Issuer has authorized the reservation of up to 10% of the issued and outstanding common shares of the Issuer for the grant of options from time to time.  Under the Plan, the Board may from time to time grant to directors, officers, employees and consultants of the Issuer, as the Board shall designate, options to purchase from the Issuer such number of common shares of the Board shall designate.  Some of he significant terms of the Plan are as follows.



1.

Options may be granted on authorized but unissued common shares up to but not exceeding 10% of the issued and outstanding common shares of the Issuer at the time of any such grant of options.

2.

The total number of common shares to be reserved for issuance over the previous twelve month period for any optionee shall not exceed 5% of the issued common shares of the Issuer at the time of grant with the exception that, as long as the Issuers common shares are listed on Tier 2 of the TSX Venture Exchange (TSX-V), the total number of common shares that may be reserved for issuance over the previous twelve months period for individuals engaged in an investor relations capacity shall not exceed 2% of the issued common shares of the Issuer at the time of grant.  In addition, the total number of common shares to be reserved for issuance over the previous twelve-month period for any one consultant, shall not exceed 2% of the issued common shares of the Issuer at the time of grant.

3.

While the Issuers common shares are listed on the TSX-V, the purchase price per common share for any option granted under the Plan shall not be less than the discounted market price of the Issuers common shares in accordance with the policies of the TSX-V. At such time as the Issuers common shares are listed on the Toronto Stock Exchange (the TSE) the purchase price per common share for any option granted under the Plan shall be not less than the fair market value in accordance with the policies of the TSE.

4.

Options granted must expire not later than a maximum of five years from the date of the grant while the Issuers common shares are listed on Tier 2 of the TSX-V. At such time as the Issuers common shares are listed on Tier 1 of the TSX-V or the TSE options granted must expire not later than a maximum of ten years from the date of grant.

5.

In the event that the Plan is amended to permit the number of common shares reserved for issue under the Plan to exceed of 10% of the outstanding shares of the Issuer, then, provided the Issuers common  shares are listed on Tier 2 of the TSX-V all options will vest in equal amounts over consecutive quarterly periods for a period of no less than eighteen months from the date of grant.  At such time as the Issuers common shares are listed on Tier 1 of the TSX-V or the TSE, options will vest at the discretion of the board of directors.

6.

All options granted pursuant to the Plan shall be non-assignable and non-transferable.

7.

Subject to the receipt of disinterested shareholder approval for the grant of options under the Plan, the Plan will allow:



(i)

the number of Common Shares reserved for issuance under the stock options granted to insiders to exceed 10% of the outstanding Common Shares of the Issuer;

(ii)

the issuance to insiders, within a one year period of a number of shares exceeding 10% of the outstanding Common Shares of the Issuer;

(iii)

the issuance to any one insider and such insiders associates, within a one year period, of a number of Common Shares exceeding 5% of the outstanding Common Shares; and,

(iv)

the Issuer to have the ability to decrease the exercise price of stock options previously granted to insiders.



The names and titles of the Directors/Executive Officers of the Company to whom outstanding stock options have been granted and the number of common-voting shares subject to such options are set forth in Table No. 8 as of 11/15/2005, as well as the number of options granted to Directors and independent contractors.



Table No. 8

Stock Options Outstanding

______________________________________________________________________________

______________________________________________________________________________



|Name                                 | Number of  Common-voting Shares | Exercise Price | Grant Date        | Expiration Date  
|------------------------------------ | ------------------------------- | -------------- | ----------------- | -----------------
|Mike Muzylowski, Director            | 150,000                         | $0.20          | 05/19/04          | 05/19/06         
|                                     | 250,000                         | $0.25          | 07/08/05          | 07/08/07         
|Seamus Young, Officer/Director       | 220,000
200,000                 | $0.20
$0.20    | 05/06/04
02/16/05 | 05/06/06
02/16/07
|                                     | 250,000                         | $0.25          | 07/08/05          | 07/08/07         
|Clifford H. Frame                    | 500,000                         | $0.45          | 08/15/05          | 08/15/07         
|                                     | 500,000                         | $0.60          | 08/15/05          | 08/15/07         
|Judith T. Mazvihwa, Officer/Director | 125,000
50,000                  | $0.20
$0.20    | 05/19/04
02/16/05 | 05/19/06
02/16/07
|                                     | 250,000                         | $0.25          | 07/08/05          | 07/08/07         
|Employees/Consultants                | 425,000                         | $0.20          | 05/06/04          | 05/06/06         
|                                     |                                 |                |                   |                  
|Total Officers/Directors             | 2,920,000                       |                |                   |                  
|Total Consultants                    | 600,000                         |                |                   |                  
|Total                                | 3,520,000                       |                |                   |                  

______________________________________________________________________________





ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS



7.A.  Major Shareholders.



7.A.1.a.  Holdings By Major Shareholders.

Refer to ITEM #6.E and Table No. 7.



7.A.1.b.  Significant Changes in Major Shareholders Holdings.

The participation in private placements of equity by the Company, the exercise of stock options/share purchase warrants, and sales by the individuals has lead over the last several years to some significant changes in the holdings of major shareholders; the table below reflects direct/indirect holdings of common-voting shares, refer to Table No. 7 for additional information.



______________________________________________________________________________



|Name               | Shares
Owned
5/31/2005 | Shares Owned 5/31/2004 | Shares Owned 5/31/2003
|------------------ | ---------------------- | ---------------------- | ----------------------
|                   |                        |                        |                       
|Seamus Young       | 738,697                | 697,697                | 669,665               
|Mike Muzylowski    | 90,800                 | 100,800                | 100,800               
|Judith T. Mazvihwa | 175,000                | Nil                    | Nil                   



_____________________________________________________________________________





7.A.1.c.  Different Voting Rights.  The Companys major shareholders do not have different voting rights.



7.A.2.  Canadian Share Ownership.

On 11/15/2005, the Companys shareholders list showed 39,389,726 common-voting shares outstanding and 121 registered shareholders.  The Company has researched the indirect holding by depository institutions and other financial institutions and estimates that there are: 99 holders of record" resident in Canada, holding 36,772,801 common-voting shares; 20 holders of record" resident in the USA, holding 2,603,392 common-voting shares; and 2 holders of record in located in other parts of the world holding 13,533 common-voting shares.



The Company has researched the indirect holding by depository institutions and other financial institutions; based on this research and other research into the indirect holdings of other institutions, the Company believes that it has in excess of 500 beneficial owners of its common-voting shares.



7.A.3.  Control of Company.  The Company is a publicly owned Canadian corporation, the shares of which are owned by U.S. residents, Canadian residents and other foreign residents.  The Company is not controlled by any foreign government or other person(s) except as described in ITEM #4.A., History and Growth of the Company, and ITEM #6.E., Share Ownership.



7.A.4.  Change of Control of Company Arrangements.   No Disclosure Necessary





7.B.  Related Party Transactions



Accounting Fees

The Company paid accounting fees of $7,300 to its former auditor, Jones Richards & Company and $7,750 to Manning Elliott during Fiscal 2002 and Fiscal 2003, respectively. The aggregate fees billed by the Companys external auditors in each of the last three fiscal years for audit fees are as follows:



|Financial Year
Ending | Audit Fees | Audit Related Fees | Tax Fees | All Other Fees
|--------------------- | ---------- | ------------------ | -------- | --------------
|May 31, 2005          | 18,000     | nil                | nil      | nil           
|May 31, 2004          | 8,500      | nil                | 600      | nil           
|May 31, 2003          | 7,750      | nil                | nil      | 4,450         



Indirect Payments

---No Disclosure Necessary---



Shareholder Loans

---No Disclosure Required---



Amounts Owing to Senior Management/Directors

---No Disclosure Required---



7.C.  Interests of Experts and Counsel

---No Disclosure Necessary---





ITEM 8.  FINANCIAL INFORMATION



8.A.  Financial Statements and Other Financial Information

The Company's financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP), the application of which, in the case of the Company, conforms in all material respects for the periods presented with United States GAAP, except as discussed in footnotes to the financial statements.



The financial statements as required under ITEM #17 are attached hereto and found immediately following the text of this Registration Statement.  The audit reports of Manning Elliott, independent Chartered Accountants, are included herein immediately preceding the financial statements.



Audited Financial Statements:

Fiscal Years ended 5/31/05, 5/31/04, 5/31/03





8.A.7.  Legal/Arbitration Proceedings

The Directors and the management of the Issuer do not know of any material, active or pending, legal proceedings against them; nor is the Issuer involved as a plaintiff in any material proceeding or pending litigation.



The Directors and the management of the Issuer know of no active or pending proceedings against anyone that might materially adversely affect an interest of the Issuer.



ITEM 9.  THE OFFER AND LISTING



9.A.  Common Share Trading Information



The Company's common-voting shares trade on the TSX Venture Exchange (formerly the Canadian Venture Exchange) in Canada, under the symbol "IRK".  The initial public offering was effective on the Vancouver Stock Exchange in 1983.



Table No. 9 lists the high and low sales prices on the TSX Venture Exchange for actual trades of common-voting shares of the Company for the last six months, last ten fiscal quarters, and last five fiscal years.



Table No. 9

TSX Venture Exchange

Common-voting Shares Trading Activity

______________________________________________________________________________

______________________________________________________________________________



|Period Ended          | High (Cdn. $) | Low (Cdn. $)
|--------------------- | ------------- | ------------
|                      |               |             
|Monthly:              |               |             
|11/30/2005            | $0.25         | $0.16       
|10/30/2005            | $0.27         | $0.20       
|09/30/2005            | $0.27         | $0.17       
|08/31/2005            | $0.175        | $0.15       
|07/31/2005            | $0.23         | $0.17       
|06/30/2005            | $0.24         | $0.16       
|05/31/2005            | $0.195        | $0.17       
|04/31/2005            | $0.23         | $0.19       
|03/31/2005            | $0.21         | $0.165      
|02/28/2005            | $0.16         | $0.135      
|01/31/2005            | $0.165        | $0.135      
|12/31/2004            | $0.14         | $0.135      
|11/30/2004            | $0.14         | $0.125      
|10/30/2004            | $0.19         | $0.13       
|09/30/2004            | $0.20         | $0.12       
|08/31/2004            | $0.21         | $0.11       
|07/31/2004            | $0.19         | $0.14       
|06/30/2004            | $0.19         | $0.14       
|05/31/2004            | $0.17         | $0.145      
|04/31/2004            | $0.25         | $0.15       
|03/31/2004            | $0.32         | $0.205      
|02/29/2004            | $0.31         | $0.25       
|01/31/2004            | $0.25         | $0.19       
|                      |               |             
|Fiscal Quarters:      |               |             
|05/31/2004            | $0.32         | $0.145      
|02/29/2004            | $0.31         | $0.16       
|11/30/2003            | $0.29         | $0.15       
|08/31/2003            | $0.31         | $0.16       
|05/31/2003            | $0.28         | $0.145      
|02/28/2003            | $0.32         | $0.11       
|11/30/2002            | $0.14         | $0.09       
|08/31/2002            | $0.22         | $0.08       
|05/31/2002            | $0.50         | $0.09       
|02/28/2002            | Did Not       | Trade       
|                      |               |             
|Annual (Fiscal Year): |               |             
|05/31/2004            | $0.32         | $0.145      
|05/31/2003            | $0.32         | $0.08       
|05/31/2002            | $0.50         | $0.09       
|05/31/2001            | Did Not       | Trade       
|05/31/2000            | Did Not       | Trade       

______________________________________________________________________________

______________________________________________________________________________



The TSX Venture Exchange

The TSX Venture Exchange is a result of the acquisition by the Toronto Stock Exchange of the Canadian Venture Exchange (CDNX) from its member firms on 8/1/2001.  The CDNX resulted from the merger between the Vancouver Stock Exchange and the Alberta Stock Exchange that took place on 11/29/1999, to form the CDNX.  The TSX Venture Exchange currently operates as a complementary but independent exchange from its parent, the Toronto Stock Exchange.



The initial roster of the CDNX was made up of venture companies previously listed on the Vancouver Stock Exchange or the Alberta Stock Exchange and later incorporated junior listings from the Montreal Stock Exchange, the Winnipeg Stock Exchange, and the CDN Over-The-Counter Market.  The TSX Venture Exchange is a venture market as compared to the Toronto Stock Exchange that is Canadas senior market and the Montreal Exchange that is Canadas market for derivatives products.



The TSX Venture Exchange currently has five service centers: Calgary, Toronto, Vancouver, Winnipeg and Montreal.  These service centers provide corporate finance, surveillance and marketing expertise.  The corporate office for the TSX Venture Exchange is located in Calgary and the operations office is located in Vancouver.



The TSX Venture Exchange is a self-regulating organization owned and operated by the Toronto Stock Exchange, which in turn is owned by its member brokerage firms.  Representatives of member firms and the public govern it.



Organizationally, the TSX Venture Exchange is comprised of seven business areas: Corporate Finance Services, Trading Services and Market Information Services, Compliance, Marketing, Technology, Corporate Affairs and Human Resources.



The TSX Venture Exchange acts as a business link between TSX members, listed companies and investors.  TSX Venture Exchange policies and procedures are designed to accommodate companies still in their formative stages and recognize those that are more established.  Listings are predominately small and medium sized companies.



The Canadian Investor Protection Fund (CIPF) protects investors in Canada.  The CIPF is a private trust fund established to protect customers in the event of the insolvency of a member of any of the following self-regulatory organizations: the TSX Venture Exchange; the Montreal Exchange; the Toronto Stock Exchange; the Toronto Futures Exchange; and the Investment Dealers Association of Canada.



Post-trade monitoring of market activity occurs in the market surveillance department.  Sophisticated software analyses trade data from TRADETSX to detect possible market improprieties.  A variety of surveillance and investigative tools allow the TSX Venture Exchange to perform electronic market monitoring and trade reviews.



The surveillance department is also responsible for monitoring and reviewing listed company activities and detecting breaches of the listing policies or the listing agreement.  Market surveillance and listed company surveillance activities are closely coordinated.





9.A.5.  Common Share Description



Common-voting Share Description

All of the authorized common-voting shares of the Company.  Once issued, the A Common-voting shares rank equally as to dividends, voting powers, and participation in assets.  Holders of common-voting stock are entitled to one vote for each share held of record on all matters to be acted upon by the shareholders.  Holders of common-voting stock are entitled to receive such dividends as may be declared from time to time by the Board of Directors, in its discretion, out of funds legally available therefore.



Upon liquidation, dissolution or winding up of the Company, holders of common stock are entitled to receive pro rata the assets of Company, if any, remaining after payments of all debts and liabilities.  No shares have been issued subject to call or assessment.  There are no pre-emptive or conversion rights and no provisions for redemption or purchase for cancellation, surrender, or sinking or purchase funds.



Provisions as to the modification, amendment or variation of such shareholder rights or provisions are contained in the Canada Business Corporations Act (Corporations Act).  Unless the Corporations Act or the Company's Articles or Memorandum otherwise provide, any action to be taken by a resolution of the members may be taken by an ordinary resolution or by a vote of a majority or more of the shares represented at the shareholders' meeting.



There are no restrictions on the repurchase or redemption of common-voting shares of the Company while there is any arrearage in the payment of dividends or sinking fund installments.



Stock Options

Refer to ITEM 6.E. and Table No. 8 for additional information.



Share Purchase Warrants



Table No. 10 lists, as of 11/15/2005, share purchase warrants outstanding, the date the share purchase warrants were issued, the exercise price, and the expiration date of the share purchase warrants.  As of 11/15/2005, the Company was aware of approximately 30 holders of its 11,651,574 share purchase warrants, allof whom were resident in Canada.  These warrants were issued in conjunction with private placements and are non-transferable.





Table No. 10

Share Purchase Warrants Outstanding (Note: details below as at 11/15/2005)

______________________________________________________________________________



|Effective Date of Issuance | Number of Share Purchase Warrants Originally Issued | Number of Share Purchase Warrants Still Outstanding | Year #1 | Year #2 | Expiration Date of Share Purchase Warrants
|-------------------------- | --------------------------------------------------- | --------------------------------------------------- | ------- | ------- | ------------------------------------------
|01/28/04                   | 4,000,000                                           | 3,900,000                                           | $0.20   | $0.20   | 01/28/06                                  
|04/12/05                   | 1,515,834                                           | 1,515,834                                           | $0.35   | $0.75   | 04/12/07                                  
|04/12/05                   | 2,475,000                                           | 2,475,000                                           | $0.40   | $0.80   | 04/12/07                                  
|04/12/07                   | 166,495                                             | 166,495                                             | $0.35   | $0.75   | 04/12/07                                  
|05/19/05                   | 950,000                                             | 950,000                                             | $0.40   | $0.80   | 05/19/07                                  
|05/19/05                   | 950,000                                             | 950,000                                             | $0.40   | $0.80   | 05/19/07                                  
|05/19/05                   | 11,146                                              | 11,146                                              | $0.35   | $0.75   | 05/19/07                                  
|08/03/05                   | 650,000                                             | 650,000                                             | $0.30   |         | 08/03/06                                  
|08/03/05                   | 2,075,000                                           | 2,075,000                                           | $0.30   |         | 08/03/06                                  
|08/03/05                   | 19,470                                              | 19,470                                              | $0.30   |         | 08/03/06                                  
|08/03/05                   | 1,250,000                                           | 1,250,000                                           | $0.50   |         | 08/03/06                                  



______________________________________________________________________________





9.A.6.  Differing Rights

9.A.7.a.  Subscription Warrants/Right

9.A.7.b.  Convertible Securities/Warrants

--- No Disclosure Necessary ---



9.C.  Stock Exchanges Identified

The common-voting shares trade on the TSX Venture Exchange in Canada.

Refer to ITEM #9.A.4.



ITEM 10.  ADDITIONAL INFORMATION



10.A.  Share Capital



10.A.1.  Authorized/Issued Capital.  As of 5/31/2005, 5/31/2004, and 5/31/2003, there were 100,000,000 common voting shares without par value authorized.  At these dates, there were 35,345,256, 22,708,306, and 14,262,546, common voting shares without par value issued and outstanding.



During the last five years, less than 10% of the capital has been paid for with assets other than cash.



10.A.2.  Shares Not Representing Capital.

10.A.3.  Shares Held By Company.

--- No Disclosure Necessary ---



10.A.4.  Stock Options/Share Purchase Warrants

10.A.5.  Stock Options/Share Purchase Warrants

--- Refer to Table No. 8 and Table No. 10. ---



10.A.6.  History of Share Capital

The Company has financed its operations through funds raised in public/private placements of common-voting shares and Special Warrants; and shares issued upon conversion of warrants.

______________________________________________________________________________

______________________________________________________________________________



|Fiscal Year                                                                                                                                                 | Nature of Share Issuance                                                                                                                                                                                                                                                                                                                                                   | Number of Shares (Pre-consolidation)                                                            | Capital Raised                                                                                  
|----------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------
|                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                 |                                                                                                 
|Fiscal 1999                                                                                                                                                 | Private Placement (flow-through shares)(1)
Exercise of stock options
Payment for mineral property (2)
Payment for mineral property (3)
Payment for mineral property (4)
Payment for mineral property (5)
Payment for mineral property (5)
Payment for mineral property (6)
Payment for mineral property (7)
Payment for mineral property (8)                            | 325,000

650,000
75,000
50,000
50,000
25,000
20,000
50,000
20,000
25,000                        | $48,750

$97,500
$6,000
$5,000
$7,500
$3,750
$3,600
$7,500
$3,000
$2,250                        
|                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                 |                                                                                                 
|Fiscal 2000                                                                                                                                                 | Exercise of stock options
Exercise of share purchase warrants (9)
Settlement of debt (10)
Private Placement (11)
Private Placement (12)
Private Placement (13)
Payment for mineral property (14)
Payment for mineral property (15)
Payment for mineral property (16)
Payment for mineral property (17)
Payment for mineral property (18)
Payment for mineral property (19) | 775,000
200,000

67,362
1,664,999
1,224,999
440,000
100,000
100,000
60,000
30,000
25,000
50,000 | $116,250
$30,000

$10,104
$249,750
$183,750
$440,000
$15,000
$15,000
$9,000
$4,500
$3,750
$7,500
|                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                 |                                                                                                 
|Fiscal 2001                                                                                                                                                 | Exercise of stock options
Exercise of share purchase warrants (20)
Private Placement (21)
Payment for mineral property (22)
Payment for mineral property (23)
Payment for mineral property (24)
Payment for mineral property (25)
Payment for mineral property (26)
Payment for mineral property (27)
Payment for mineral property (28)                                    | 300,000

455,000
1,810,000
50,000
200,000
50,000
50,000
20,000
100,000
50,000                   | $45,000

$70,250
$181,000
$10,000
$20,000
$7,500
$5,000
$2,600
411,000
$6,000                   
|                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                 |                                                                                                 
|Fiscal 2002 (The Company consolidated its share capital on the basis of five old shares for one new share pursuant to a Special Resolution dated 12/7/2001) | Exercise of stock options
Payment for mineral property (29)
Private Placement (30)                                                                                                                                                                                                                                                                                         | 250,000
50,000
1,000,000                                                                        | $37,500
$3,500
$100,000                                                                         
|                                                                                                                                                            | Nature of Share Issuance                                                                                                                                                                                                                                                                                                                                                   | Number of Shares (Post-consolidation)                                                           | Capital Raised                                                                                  
|Fiscal 2002                                                                                                                                                 | Private Placement (31)
Payment for mineral property (32)
Issued in payment of debt (33)                                                                                                                                                                                                                                                                                    | 1,000,000
20,000
1,127,427                                                                      | $100,000
$2,800
$169,114                                                                        
|                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                 |                                                                                                 
|Fiscal 2003                                                                                                                                                 | Private Placement (34)
Private Placement (35)
Private Placement (36)
Private Placement (37)
Exercise of share purchase warrants (38)                                                                                                                                                                                                                                       | 1,400,000
2,404,000
1,905,000
250,000

720,000                                                  | $195,000
$300,500
$355,000
$50,000

$108,000                                                    
|                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                 |                                                                                                 
|Fiscal 2004                                                                                                                                                 | Private Placement (39)
Broker Commission (40)
Private Placement (41)
Exercise of share purchase warrants (42)
Exercise of stock options (43)
Payment for mineral property (44)                                                                                                                                                                                             | 2,855,500
100,000
4,815,000

248,760

151,500
160,000                                           | $428,325
$15,000
$963,000

$172,100

$30,300
$29,000                                            
|                                                                                                                                                            |                                                                                                                                                                                                                                                                                                                                                                            |                                                                                                 |                                                                                                 
|Fiscal 2005                                                                                                                                                 | Private placement (45)
Broker commission (46)
Private placement (47)
Broker commission (48)
Private placement (49)
Payment for property (50)
Payment for property (51)                                                                                                                                                                                                     | 1,900,000
22,293
7,981,667
332,990
2,100,000
50,000
250,000                                     | $380,00
$3,344
$1,444,750
$49,948
$420,000
$10,000
$35,000                                      



(1)

This private placement financing consisted of 325,000 units at a price of $0.15 per unit. Each unit consisted of one flow-through share and one share purchase warrant exercisable to acquire one additional flow-through share at a price of $0.15 per share on or before December 31, 1999, or at a price of $0.20 per share on or before December 31, 2000. The mechanics of Flow Through Agreements are as follows: Certain provisions of the Canadian Income Tax Act allow companies in the resource sector to incur expenditures and renounce them in favor of the investor, who is entitled to claim them.  The Company has incurred such Canadian exploration expenses (primarily expenses incurred for determining the existence, location, extent or quality of a mineral resource in Canada in the course of carrying out geological survey and sampling work.  There is a risk to the Company that if Revenue Canada denies the deductions in the hands of the investor penalties could be levied by Revenue Canada and that the shareholders could sue the Company for damages.  The Company is confident that it is in full compliance with the Canadian Income Tax Act and does not anticipate any such difficulties.

(2)

These shares were issued in partial payment for a 100% interest (subject to a 2% net smelter returns royalty) in eleven mining claims located in the MacMurchy Township of Ontario, Canada.

(3)

These shares were issued in partial payment for a 100% interest (subject to a 2% net smelter returns royalty) in one mineral claim located in the MacMurchy Township of Shining Tree, Ontario.

(4)

These shares were issued in partial payment for a 100% interest (subject to a 2% net smelter returns royalty) in nine mineral claims located in the MacMurchy Township of Shining Tree, Ontario.

(5)

These shares were issued in partial payment for a 100% interest (subject to a 2% net smelter returns royalty) in one mineral claim located in the MacMurchy Township of Shining Tree, Ontario.

(6)

These shares were issued in partial payment for a 100% interest (subject to a 2% net smelter returns royalty) in three mineral claims located in the MacMurchy Township of Shining Tree, Ontario.

(7)

These shares were issued in partial payment for a 100% interest (subject to a 2% net smelter returns royalty) in three mineral claims located in the MacMurchy Township of Shining Tree, Ontario.

(8)

These shares were issued in partial payment for a 100% interest (subject to a 2% net smelter returns royalty) in eleven mining claims located in the MacMurchy Township of Ontario, Canada.

(9)

These shares were issued pursuant to the private placement described in (1) above.

(10)

This debt was owed to Bruce F. Jamieson Inc. and Bruce F. Jamieson & Co. for accounting services rendered and to Marigold Management Ltd., an unrelated company, for administrative services rendered.

(11)

This private placement consisted of the following: (a) 708,333 units consisting of one flow-through share and one share purchase warrant.  Each warrant was exercisable to acquire one addition flow-through share at a price of $0.15 per share on or before July 7, 2000, or at a price of $0.20 per share on or before July 7, 2001 and (b) 956,666 units consisting on one share and one share purchase warrant.  Each warrant was exercisable to acquire one additional share at a price of $0.15 per share on or before July 7, 2000, or at a price of $0.20 per share on or before July 7, 2001.

(12)

This private placement consisted of the following: (a) 1,091,666 units consisting of one flow-through share and one share purchase warrant.  Each share purchase warrant was exercisable to acquire one additional flow-through share at a price of $0.15 per share on or before January 21, 2001, or at a price of $0.20 per share on or before January 31, 2002 and (b) 133,333 units consisting of one share and one share purchase warrant.  Each share purchase warrant was exercisable to acquire one additional share at a price of $0.15 per share on or before January 21, 2001 or at a price of $0.20 per share on or before January 21, 2002.

(13)

Each unit of this private placement consisted of: (a) Four flow-through shares and four share purchase warrants.  Each share purchase warrant was exercisable to acquire one additional flow-through share at a price of $0.25 per share on or before March 22, 2001 and (b) One share and one share purchase warrant.  Each share purchase warrant was exercisable to acquire one additional share at a price of $0.25 per share on or before March 22, 2001.

(14)

By an Option Agreement dated August 10, 1998, the Company acquired a 100% interest (subject to a 2% net smelter returns royalty) in nine mineral claims located in the MacMurchy Township of Shining Tree, Ontario, for consideration of 150,000 shares of the Companys capital stock.

(15)

By an Option Agreement dated August 10, 1998, the Company acquired a 100% interest (subject to a 2% net smelter returns royalty) in three mineral claims located in the MacMurchy Township of Shining Tree, Ontario, for consideration of 150,000 shares of the Companys capital stock.

(16)

By an Option Agreement dated August 4, 1998, the Company acquired a 100% interest (subject to a 3% net smelter returns royalty) in four mineral claims located in the MacMurchy Township, Ontario for consideration of 100,000 shares of the Companys capital stock.

(17)

By an Agreement dated June 18, 1999, the Company acquired a 100% interest in three mineral claims located in the MacMurchy and Kelvin Townships, Ontario for consideration of 30,000 shares of the Companys capital stock.

(18)

By an Agreement dated June 18, 1999, the Company acquired a 100% interest in one mineral claim located in the MacMurchy Township, Ontario for consideration of 25,000 shares of the Companys capital stock.

(19)

By an Agreement dated March 6, 2000, the Company acquired a right to earn a 100% interest (subject to a 2% net smelter returns royalty) in thirty-three claim units located in the MacMurchy Township, Ontario.

(20)

These were exercised from prior private placement financings. 420,000 shares (of which 60,000 were flow-through shares) were exercised at a price of $0.15 per share; 25,000 shares at a price of $0.25 per share; and, 10,000 flow-through shares at a price of $0.10 per share.

(21)

The Company sold 1,810,000 units at a price of $0.10 per unit.  Each unit consisted of one flow-through share and one share purchase warrant exercisable to acquire one additional flow-through share at a price of $0.10 per share on or before December 15, 2001 or at a price of $0.15 per share on or before December 15, 2002.

(22)

By an Agreement dated March 6, 2000, the Company acquired a right to earn a 100% interest (subject to a 2% net smelter returns royalty) in thirty-three claim units located in the MacMurchy Township.

(23)

By an Option Agreement dated October 25, 2000, the Company acquired a 100% interest (subject to a 2% net smelter returns royalty) in seven mineral claims located in the MacMurchy and Fawcett Townships, Ontario.

(24)

By an Option Agreement dated October 27, 2000, the Company acquired a 100% interest (subject to a 2% net smelter returns royalty) in one mineral claim located in the Tyrell Township, Ontario.

(25)

By a Letter Agreement dated November 18, 1997, the Company acquired the right to earn a 100% interest (subject to a 1% net smelter returns royalty) in two mineral claims located in the Knight Township of Shining Tree, Ontario.

(26)

By a Purchase Agreement dated July 28, 2000, the Company acquired a 100% interest in one mineral claim located in the MacMurchy Township, Ontario.

(27)

By an Agreement dated January 22, 2001, the Company acquired a 100% interest (subject to a 2% net smelter returns royalty) in thirty mineral claims located in the MacMurchy, Tryell and Knight Townships.

(28)

By an Agreement dated January 23, 2001, the Company acquired a 100% interest in two mineral claims located in the MacMurchy Township, Ontario.

(29)

This payment relates to the Copper Hill Project located in Ontario referred to in Note 5(a) to the Financial Statements for the Years Ended May 31, 2003 and 2002.

(30)

570,000 of these units were flow-through units at a price of $0.10 per unit. Each unit consisted of one pre-consolidation flow-through share and one pre-consolidation share purchase warrant exercisable to acquire one additional pre-consolidation share purchase warrant exercisable to acquire one additional pre-consolidation share at a price of $0.10 per share on or before August 27, 2003.  430,000 of these units were sold at a price of $0.10 per unit. Each of these units consisted of one pre-consolidation share and one pre-consolidation share purchase warrant exercisable to acquire one additional pre-consolidation share at a price of $0.10 per share on or before August 27, 2003.

(31)

The Company sold 1,000,000 post-consolidation units at a price of $0.10 per unit.  Each unit consisted on one post-consolidated share and one post-consolidated share purchase warrant exercisable to acquire one additional post-consolidated share at a price of $0.10 per share on or before February 4, 2003.

(32)

This payment relates to the Copper Hill Project located in Ontario referred to in Note 5(a) to the Financial Statements for the Years Ended May 31, 2003 and 2002.

(33)

These debts were to the following individuals and companies for services rendered:



a.

Michael J. Casselman, an officer of the Issuer, for debt owing in the amount of $9,800;

b.

Rita Chow, an unrelated party, for debt owing in the amount of $15,000;

c.

Donegal Developments Ltd., a private company owned by Seamus Young who is an officer and director of the Issuer, for debt owing in the amount of $31,718.73;

d.

Miller Thomson LLP, an unrelated legal firm, for debt owing in the amount of $22,165,30;

e.

Richards Buell Sutton, an unrelated legal firm, for debt owing in the amount of $32,881.95;

f.

T-Bags Management Inc., a private company owned by Seamus Young who is an officer and a director of the Issuer, for debt owing in the amount of $15,618.44;

g.

John J. Watkins, an unrelated party, for debt owing in the amount of $10,165.00; and,

h.

Seamus Young, an officer and a director of the Issuer, for debt owing in the amount of $40,764.59

(1)

This private placement consisted of the sale of 1,300,000 units at a price of $0.15 per unit.  Each unit consisted of one share and one-half share purchase warrant.  One full warrant was required to acquire one additional common share.  The full warrants have an exercise price of $0.20 per share on or before October 1, 2003 or $0.25 per share on or before October 1, 2004. 100,000 shares and 260,000 agents purchase warrants exercisable under these same conditions were issued to Canaccord Capital Corporation as a corporate financing fee. This corporate financing fee related to the assisted given to the Company by Canaccord Capital Corporation in selling the units.

(2)

This private placement consisted of the sale of 2,003,333 units at a price of $0.15 per unit.  Each unit consisted of one share and one-half share purchase warrant.  One full warrant was exercisable to acquire one additional common share.  The full warrants have an exercise price of $0.20 per share on or before October 7, 2003 or $0.25 per share on or before October 7, 2004.  In addition, 400,667 agents purchase warrants exercisable under the same conditions, and which expire on November 11, 2004, were issued to Canaccord Capital Corporation as a corporate financing fee. This corporate financing fee related to the assistance given to the Company by Canaccord Capital Corporation in selling the units.

(3)

This private placement consisted of the sale of 1,775,000 units at a price of $0.20 per unit. Each unit consisted of one share and one-half share purchase warrant.  One full warrant is exercisable to acquire one additional common share.  The full warrants have an exercise price of $0.25 per share on or before August 31, 2004 or $0.25 per share on or before August 31, 2004.  In addition 130,000 common shares and 355,000 agents purchase warrants exercisable at a price of $0.25 per share, and which expire August 31, 2004, were issued to Canaccord Capital Corporation as a corporate financing fee. This corporate financing fee related to the assistance given to the Company by Canaccord Capital Corporation in selling the units.

(4)

This private placement consisted of the sale of 250,000 units at a price of $0.20 per unit.  Each unit consisted on one share and one-half share purchase warrant exercisable to acquire one-half additional shares. The purchase warrants have an exercise price of $0.25 per share on or before September 18, 2004.  In addition, 50,000 agents purchase warrants exercisable at a price of $0.25 per share, and which expired September 18, 2004, were issued to Canaccord Capital Corporation as a corporate financing fee.  This corporate financing fee related to the assistance given to the Company by Canaccord Capital Corporation in selling the units.

(5)

These units were related to the private placement described in (34) above.

(6)

This private placement consisted of the sale of 729,000 Flow-Through Units and 2,126,500 Non-Flow-Through Units were sold through Canaccord Capital Corporation, as agent, at a price of $0.15 per Flow-Through and Non-Flow-Through Unit. Each Flow-Through Unit consisted of one flow-through common share and one-half of one Warrant.  Each Non-Flow-Through Unit consisted of one non-flow-through common share and one Warrant.  One whole Warrant entitled the holder to purchase one additional non-flow-through common share at a price of $0.18 per for a period of 12 months from closing.  The Issuer also issued 100,000 common shares and 571,000-share purchase warrants to Canaccord Capital Corporation in connection with the offering.  These warrants have the same terms of the other warrants.

(7)

These shares were issued to Canaccord Capital in consideration for their assistance in facilitating this private placement financing.

(8)

This private placement consisted of the sale of 815,000 Flow-Through Units and 4,000,000 Non-Flow-Through Units. Each Flow-Through-Unit consisted of one flow-through common share and one warrant entitling the holder to purchase an additional flow-through-share at a price of $0.20 for a period of 12 months. Each Non-Flow-Through Unit consisted of one common share and one warrant entitling the holder to purchase one additional common share at a price of $0.20 for 24 months. The Issuer issued 100,000 common shares to Canaccord Capital Corporation as consideration for waiver of their right of first refusal to provide this financing.

(9)

During the year the Company issued 248,760 common shares as a result of the exercise of share purchase warrants at a price of $0.18 for total cash consideration of $172,100.

(10)

During the year the Company issued 151,500 common shares as a result of the exercise of incentive stock options at a price of $0.20 for total cash consideration of $30,300.

(11)

During the year, the Company issued 160,000 shares pursuant to   property acquisition option agreements. This payment relates to the Copper Hill Project located in Ontario referred to in Note 6(a) to the Financial Statements for the Years Ended May 31, 2004 and 2003.

(12)

These units were issued pursuant to a brokered private placement of 1,900,000 flow-through units at $0.20 per unit.  Each unit consisted of one flow-through share, one half of one transferable warrant exercisable at a price of $0.40 on or before May 19, 2006 and one-half of one transferable warrant exercisable to purchase one non-flow-through share at a price of $0.80 on or before May 19, 2007.

(13)

These units totaling 22,293 were issued pursuant to a financing commission payable to the agent at a price of $0.15 per unit.

(14)

These units were issued pursuant to a private placement of 4,950,000 flow-through units at a price of $0.20 and 3,031,667 non-flow-through units at a price of $0.15 per unit.  Each flow-through unit consists of one flow-through share, one-half of one transferable warrant exercisable at a price of $0.40 on or before April 12, 2006, and one-half of one transferable warrant exercisable at a price of $0.80 on or before April 12, 2007.  Each non-flow-through unit consists of one non-flow-through common share, one-half of one transferable warrant exercisable at a price of $0.35 on or before April 12, 2006 and one-half of one transferable warrant exercisable at a price of $0.75 on or before April 12, 2007.

(15)

These units totaling 332,990 were issued pursuant to a financing commission payable to the agent at a price of $0.15 per unit.

(16)

These flow-through units were issued pursuant to a private placement of 2,100,000 units at a price of $0.20 per unit.  Each unit consists of one flow-through share and one-half of one share purchase warrant exercisable at a price of $0.25 on or before August 16, 2005.

(17)

The Company issued 50,000 shares pursuant to an option agreement to purchase a house in Gowganda, Ontario at a deemed price of $0.20 per share.

(18)

The Company issued 250,000 shares pursuant to property acquisition option agreements valued at $35,000.

-----------------------------------------------------------------

______________________________________________________________________________





10.A.7.  Resolutions/Authorizations/Approvals

--- No Disclosure Necessary ---





10.B.  Memorandum and Articles of Association

The Company was originally incorporated in the Province of British Columbia on July 10, 1978.



According to the Companys Articles, There are no restrictions on the business of the Company.



According to Part 15 DISCLOSURE OF INTEREST OF DIRECTORS:



1.1

A Director who is, in any way, directly or indirectly interested in an existing or proposed contract or transaction with the Company or who holds any office or possesses any property whereby, whether directly or indirectly, a duty or interest might be created in conflict with his duty or interest as a Director shall declare the nature and extent of his interest in such contract or transaction or of the conflict or potential conflict with his duty and interest as a Director, as the case may be, in accordance with the provisions of the Companies Act.

1.2

A Director shall not vote in respect of any contract of transaction with the Company in which he is interested and if he shall do so his vote shall not be counted, but he shall be counted in the quorum present at the meeting at which such vote is taken.  This Article 15.2 and Article 151 shall not apply in those circumstances where a Director is, under the Companies Act, deemed not to be interested in a proposed contract or transaction.

1.3

A Director may hold any office or place of profit under the Company (other than, if the Company is or becomes a reporting company, the office of auditor of the Company) in conjunction with his office of Director for such period and on such terms (as to remuneration or otherwise) as the Directors may determine and no Director or intended Director shall be disqualified by his office from contracting with the Company either with regard to his tenure of any such other office or place of profit or as vendor, purchaser or otherwise, and, subject to compliance with the provisions of the Companies Act, no contract or transaction entered into by or on behalf of the Company in which a Director is in any way interested shall for such reasons be liable to be voided.

1.4

Subject to compliance with the provisions of the Companies Act, a Director may act by himself or his firm in a professional capacity for the Company (except as auditor of the Company) and he or his firm shall be entitled to remuneration for professional services as if he were not a Director.

1.5

A Director may be or become a director or other officer of employee of, or otherwise interested in, any corporation or firm in which the Company may be interested as a shareholder or otherwise, and, subject to compliance with the provisions of the Companies Act, such Director shall not be accountable to the Company for any remuneration or other benefits received by him as director, officer or employee of, or from his interest in, such other corporation or firm, unless the Company otherwise directs.



The issue of borrowing capital is addressed in Part 8  Borrowing and Mortgaging of the Companys articles:



8.1 The Directors may from time to time exercise all the powers of the Company to borrow money in such manner and amount, on such security, from such sources and upon such terms and conditions as they think fit, and to issue bonds, debentures and other securities either outright or as security for any liability or obligation of the Company or any other person, and to mortgage, charge or give other security on the undertaking, or on the whole or any part of the property and assets, of the Company (both present and future). Any bonds, debentures or other securities may be issued at a discount, premium or otherwise, and with any special privileges as to redemption, surrender, drawing, conversion, allotment of shares, attending and voting at general meetings of the Company, appointment of Directors or otherwise and may by their terms be assignable free from equities between the Company and the person to whom they were issued or any subsequent holder thereof, all as the Directors may determine.



The common Shares of the Company carry and are subject to the following rights, privileges, restrictions and conditions:



a.

The holders of Common Shares are entitled to receive notice of any meeting of the shareholders of the Company and to attend and vote thereat except those meetings where only holders of a specified class or particular series of shares are entitled to vote and each holder thereof shall be entitled to one vote per share in person or by proxy.

b.

Subject to the rights, privileges, restrictions and conditions attaching to any other shares of the Company, the holders of the Common Shares are entitled to receive any dividends declared and paid by the Company.

c.

Subject to the rights, privileges, restrictions and conditions attaching to any other shares of the Company, in the event of the liquidation, dissolution or winding-up of the Company, the holders of the Common Shares are entitled to receive the remaining property of the Company after payment of all of the Companys liabilities.



There are no restrictions on the repurchase or redemption of common shares of the Company while there is any arrearage in the payment of dividends or sinking fund installments.



There is no liability to further capital calls by the Company.



There are no provisions discriminating against any existing or prospective holder of securities as a result of such shareholder owning a substantial number of shares.



The rights of holders of the Companys stock can only be altered by a Special Shareholders meeting.



The first annual general meeting shall be held within 15 months from the date of incorporation and the following annual general meetings shall be held once in every calendar year at a time, not being more than 13 months after the holding of the last preceding annual general meeting, and at a place as the Directors shall appoint.  In default of the meeting being held, the meeting shall be called by any two members in the same manner as nearly as possible as that in which meetings are to be called by the Directors.



The Directors may, whenever they think fit, convene a general meeting.  A general meeting, if requisitioned in accordance with The Act, shall be convened by the Directors or, if not convened by the Directors, may be convened by the requisitionists as provided in The Act.



Not less than 21 days notice of any general meeting specifying the time and place of meeting and in case of special business, the general nature of that business shall be given in the manner mentioned in Article 22, or in such other manner, if any, as may be prescribed by ordinary resolution whether previous notice has been given or not, to any person as may by law or under these Articles or other regulations of the Company entitled to receive the notice from the Company.  But the accidental omission to give notice of any meeting to, or the non-receipt of any notice, by any person shall not invalidate any proceedings at that meeting.



Persons entitled to notice of a general meeting may waive or reduce the period of notice convening the meeting, by unanimous consent in writing, and may give such waiver before, during or after the meeting.



There are no limitations on the rights to own securities.



There is no provision of the Companys articles of association, charter or bylaws that would have an effect of delaying, deferring or preventing a change in control of the Company and that would operate only with respect to a merger, acquisition or corporate restructuring involving the Company (or any of its subsidiaries).



Shareholder ownership must be disclosed to the British Columbia Securities Commission and the TSX Venture Exchange by any shareholder who owns more than 10% of the Companys common stock.







10.C.  Material Contracts   --- No Disclosure Necessary ---



10.D.  Exchange Controls

Canada has no system of exchange controls.  There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian public company to non-resident investors.  There are no laws in Canada or exchange restrictions affecting the remittance of dividends, profits, interest, royalties and other payments to non-resident holders of the Company's securities, except as discussed in ITEM 10, Taxation" below.



Restrictions on Share Ownership by Non-Canadians.  There are no limitations under the laws of Canada or in the organizing documents of the Company on the right of foreigners to hold or vote securities of the Company, except that the Investment Canada Act may require review and approval by the Minister of Industry (Canada) of certain acquisitions of "control" of the Company by a "non-Canadian". The threshold for acquisitions of control is generally defined as being one-third or more of the voting shares of the Company.  "Non-Canadian" generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians.



10.E.  Taxation



Canadian Federal Income Tax Considerations

The following is a brief summary of some of the principal Canadian federal income tax consequences to a holder of the common-voting shares of the Company (a "U.S. Holder") who deals at arm's length with the Company, holds the shares as capital property and who, for the purposes of the Income Tax Act (Canada) (the "Act") and the Canada  United States Income Tax Convention (the "Treaty"), is at all relevant times resident in the United States, is not and is not deemed to be resident in Canada and does not use or hold and is not deemed to use or hold the shares in carrying on a business in Canada.  Special rules, which are not discussed below, may apply to a U.S. Holder that is an insurer that carries on business in Canada and elsewhere.



This summary is of a general nature only and is not, and should not be interpreted as, legal or tax advice to any particular U.S. Holder and no representation is made with respect to the Canadian income tax consequences to any particular person. Accordingly, U.S. Holders are urged to consult their own tax advisors with respect to their particular circumstances.



Under the Act and the Treaty, a U.S. Holder of the common-voting shares will generally be subject to a 15% withholding tax on dividends paid or credited or deemed by the Act to have been paid or credited on such shares.  The withholding tax rate is 5% where the U.S. Holder is a corporation that beneficially owns at least 10% of the voting shares of the Company and the dividends may be exempt from such withholding in the case of some U.S. Holders such as qualifying pension funds and charities.



In general, a U.S. Holder will not be subject to Canadian income tax on capital gains arising on the disposition of shares of the Company unless (i) at any time in the five-year period immediately preceding the disposition, 25% or more of the shares of any class or series of the capital stock of the Company was owned by (or was under option of or subject to an interest of) the U.S. holder or persons with whom the U.S. holder did not deal at arm's length, and (ii) the value of the common-voting shares of the Company at the time of the disposition derives principally from real property (as defined in the Treaty) situated in Canada.  For this purpose, the Treaty defines real property situated in Canada to include rights to explore for or exploit mineral deposits and other natural resources situated in Canada, rights to amounts computed by reference to the amount or value of production from such resources, certain other rights in respect of natural resources situated in Canada and shares of a corporation the value of whose shares is derived principally from real property situated in Canada.



The US Internal Revenue Code provides special anti-deferral rules regarding certain distributions received by US persons with respect to, and sales and other dispositions (including pledges) of stock of, a passive foreign investment company.  A foreign corporation, such as the Company, will be treated as a passive foreign investment company if 75% or more of its gross income is passive income for a taxable year or if the average percentage of its assets (by value) that produce, or are held for the production of, passive income is at least 50% for a taxable year. The Company believes that it was not a passive foreign investment company for the taxable year ended January 31, 2003 and, furthermore, expects to conduct its affairs in such a manner so that it will not meet the criteria to be considered passive foreign investment company in the foreseeable future.



Dividends

A Holder will be subject to Canadian withholding tax ("Part XIII Tax") equal to 25%, or such lower rate as may be available under an applicable tax treaty, of the gross amount of any dividend paid or deemed to be paid on common shares.  Under the Canada-U.S. Income Tax Convention (1980) as amended by the Protocols signed on 6/14/1983, 3/28/1984, 3/17/1995, and 7/29/1997 (the "Treaty"), the rate of Part XIII Tax applicable to a dividend on common shares paid to a Holder who is a resident of the United States and who is the beneficial owner of the dividend, is 5%.  If the Holder is a company that owns at least 10% of the voting stock of the Company paying the dividend, and, in all other cases, the tax rate is 15% of the gross amount of the dividend.  The Company will be required to withhold the applicable amount of Part XIII Tax from each dividend so paid and remit the withheld amount directly to the Receiver General for Canada for the account of the Holder.



Disposition of Common Shares

A Holder who disposes of a common share, including by deemed disposition on death, will not normally be subject to Canadian tax on any capital gain (or capital loss) thereby realized unless the common share constituted "taxable Canadian property" as defined by the Tax Act.  Generally, a common share of a public corporation will not constitute taxable Canadian property of a Holder if the share is listed on a prescribed stock exchange unless the Holder or persons with whom the Holder did not deal at arm's length alone or together held or held options to acquire, at any time within the five years preceding the disposition, 25% or more of the shares of any class of the capital stock of the Company.  The Canadian Venture Exchange is a prescribed stock exchange under the Tax Act.  A Holder who is a resident of the United States and realizes a capital gain on a disposition of a common share that was taxable Canadian property will nevertheless, by virtue of the Treaty, generally be exempt from Canadian tax thereon unless (a) more than 50% of the value of the common shares is derived from, or from an interest in, Canadian real estate, including Canadian mineral resource properties, (b) the common share formed part of the business property of a permanent establishment that the Holder has or had in Canada within the 12 month period preceding the disposition, or (c) the Holder is an individual who (i) was a resident of Canada at any time during the 10 years immediately preceding the disposition, and for a total of 120 months during any period of 20 consecutive years, preceding the disposition, and (ii) owned the common share when he ceased to be resident in Canada.



A Holder who is subject to Canadian tax in respect of a capital gain realized on a disposition of a common share must include three quarters of the capital gain (taxable capital gain) in computing the Holder's taxable income earned in Canada.  The Holder may, subject to certain limitations, deduct three-quarters of any capital loss (allowable capital loss) arising on a disposition of taxable Canadian property from taxable capital gains realized in the year of disposition in respect to taxable Canadian property and, to the extent not so deductible, from such taxable capital gains realized in any of the three preceding years or any subsequent year.





United States Taxation

For federal income tax purposes, an individual who is a citizen or resident of the United States or a domestic corporation ("U.S. Taxpayer") will recognize a gain or loss on the sale of the Company's common-voting shares equal to the difference between the proceeds from such sale and the adjusted tax basis of the common-voting shares.  The gain or loss will be a capital gain or capital loss if the Company's common-voting shares are a capital asset in U.S. Taxpayer's hands.



For federal income tax purposes, a U.S. Taxpayer will be required to include in gross income dividends received on the Company's common-voting shares.  A U.S. Taxpayer who pays Canadian tax on a dividend on common shares will be entitled, subject to certain limitations, to a credit (or alternatively, a deduction) against federal income tax liability.  A domestic corporation that owns at least 10% of the voting shares should consult its tax advisor as to applicability of the deemed paid foreign tax credit with respect to dividends paid on the Company's common shares.



Under a number of circumstances, United States Investor acquiring shares of the Company may be required to file an information return with the Internal Revenue Service Center where they are required to file their tax returns with a duplicate copy to the Internal Revenue Service Center, Philadelphia, PA 19255.  In particular, any United States Investor who becomes the owner, directly or indirectly, of 10% or more of the shares of the Company will be required to file such a return.  Other filing requirements may apply, and United States Investors should consult their own tax advisors concerning these requirements.



The US Internal Revenue Code provides special anti-deferral rules regarding certain distributions received by US persons with respect to, and sales and other dispositions (including pledges) of stock of, a passive foreign investment company.  A foreign corporation, such as the Company, will be treated as a passive foreign investment company if 75% or more of its gross income is passive income for a taxable year or if the average percentage of its assets (by value) that produce, or are held for the production of, passive income is at least 50% for a taxable year.  The Company believes that it was not a passive foreign investment company for the taxable year ended 1/31/2003 and, furthermore, expects to conduct its affairs in such a manner so that it will not meet the criteria to be considered passive foreign investment company in the foreseeable future.



10.F.  Dividends and Paying Agents

The Company has not declared any dividends on its common shares for the last five years and does not anticipate that it will do so in the foreseeable future.  The present policy of the Company is to retain future earnings for use in its operations and the expansion of its business.



Notwithstanding the aforementioned: the Company is unaware of any dividend restrictions; has no specific procedure for the setting of the date of dividend entitlement; but might expect to set a record date for stock ownership to determine entitlement; has no specific procedures for non-resident holders to claim dividends, but might expect to mail their dividends in the same manner as resident holders.  The Company has not nominated any financial institutions to be the potential paying agents for dividends in the United States.



10.G.  Statement by Experts

The Companys auditors for its financial statements for each of the preceding three years was Manning Elliott, Chartered Accountants.  Manning Elliott is a member of the Canadian Institute of Chartered Accountants.  The audit report for Fiscal 2005/ 2004/2003/2002 is included with the related financial statements in this Registration Statement with their consent.



10.H.  Document on Display    --- No Disclosure Necessary ---



ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

--- No Disclosure Necessary ---





ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

12.A.  Debt Securities            --- No Disclosure Necessary ---

12.B.  Warrants and Rights        --- No Disclosure Necessary ---

12.C.  Other Securities           --- No Disclosure Necessary ---

12.D.  American Depository Shares  -- No Disclosure Necessary ---









PART II



ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

--- No Disclosure Necessary ---





ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY

HOLDERS AND USE OF PROCEEDS   --- No Disclosure Necessary ---





ITEM 15.  CONTROLS AND PROCEDURES

Within the 90-day period prior to the filing of this report ("Date of Evaluation"), an evaluation was carried out under the supervision and with the participation of the Company's management, including the Chief Executive Officer ("CEO") of the effectiveness of our disclosure controls and procedures.  Based on that evaluation, the CEO has concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.



The Company's disclosure controls and procedures operate such that important information flows to appropriate collection and disclosure points in a timely manner and are effective to ensure that such information is accumulated and communicated to the Company's management, and made known to the Company's Chief Executive Officer and Chief Financial Officer, including the period when this Registration Statement on Form 20-F was prepared, as appropriate to allow timely decision regarding the required disclosure.



There have been no significant changes in the Company's internal controls or the occurrence of events or other factors that could significantly affect these controls, subsequent to the Date of Evaluation.  Nor have there been any corrective actions with regard to significant deficiencies or material weaknesses.





ITEM 16.  RESERVED

ITEM 16A. Audit Committee Financial Expert-Not Applicable--

ITEM 16B. Code of Ethics-Not Applicable-

ITEM 16C. Principal Accountant Fees and Services-Not Applicable--

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

--Not Applicable--



PART III



ITEM 17.  FINANCIAL STATEMENTS

The Company's financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP), the application of which, in the case of the Company, conforms in all material respects for the periods presented with United States GAAP, except as discussed in footnotes to the financial statements.



The financial statements as required under ITEM #17 are attached hereto and found immediately following the text of this Registration Statement.  The audit report of Manning Elliott, independent Chartered Accountants, is included herein immediately preceding the audited financial statements.



Audited Financial Statements



Auditors Report dated September 20, 2005.



Comment by Auditor for U.S. Readers on Canada-U.S. Reporting Differences





Comment by Auditor for U.S. Readers on Canada-U.S. Reporting Differences dated September 20, 2005



Balance Sheets as at May 31, 2005 and 2004



Statements of Operations and Deficit for the Years ended May 31, 2005, 2004 and 2003



Statements of Cash Flows for the Years ended May 31, 2005, 2004 and 2003



Schedules of Deferred Exploration and Development Costs for the Years ended May 31, 2005 and 2004



Notes to the Audited Financial Statements





ITEM 18.  FINANCIAL STATEMENTS

The Company has elected to provide financial statements pursuant to ITEM #17.



ITEM 19.  EXHIBITS





1.  Articles of Incorporation/Bylaws as currently in effect:

Incorporated by reference to the Registration Statement and Form 6-Ks



2.  Instruments defining the rights of holders of equity or debt securities

being registered.

--- Refer to Exhibit No. 1 ---



3.  Voting Trust Agreements:             No Disclosure Necessary



4.  Material Contracts:

Incorporated by reference to the Registration Statement and Form 6-Ks



5.  Foreign Patents:                     No Disclosure Necessary

6.  Earnings Per Share Calculation:      No Disclosure Necessary

7.  Ratio of Earnings To Fixed Charges:  No Disclosure Necessary

8.  List of Subsidiaries:                No Disclosure Necessary

9.   Statement Regarding Date of Financial Statements: No Disclosure Necessary

10.  Notice Required by Rul3e 104 of Regulation BTR:   No Disclosure Necessary

11.  Code of Ethics as required by ITEM No. 16:        No Disclosure Necessary



12:  The certifications required by Rule 13a-14(a) or Rule 15d-14(a).......xxx



13.  The certifications required by Rule 13a-14(b) or Rule 15d-14(b) and

Section 1350 of Chapter 63 of Title 18 of the United States Code      xxx



14.  Additional Exhibits:

Incorporated by reference to the Registration Statement and Form 6-Ks





Mining Glossary



|S.E.C Industry Guide                                                                                                                                                                                                                                                                                                                                                                                                                 | National Instrument 43-101                                                                                                                                                                                                                                                                                                                                                                              
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|Reserve:That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination. The United States Securities and Exchange Commission requires a final or full Feasibility Study to support either Proven or Probable Reserves and does not recognize other classifications of mineralized deposits.                                                                   | Mineral Reserve:The economically mineable part of a Measured or Indicated 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 (Measured) Reserves: 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 measurement are spaced so closely and the geologic character is so well defined that size, share, depth, and mineral content of reserves are well established.                                            | Proven Mineral Reserve:The economically mineable part of 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 is justified.                                                
|                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                         
|Probable (Indicated) 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 (measured) reserves, is high enough to assume continuity between points of observation. | Probable Mineral Reserve: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.



Alteration any change in the mineral composition of a rock brought about by physical or chemical means.



Assaying- laboratory examination that determines the content or proportion of a specific metal (ie:silver) contained within a sample.  Technique usually involves firing/smelting.



Argentite  a silver sulphide mineral, typically an important ore of silver.





Batholith  a very large intrusive mass of igneous rock.



Bottle Roll Leach Test  a small scale laboratory test where representative mineralized samples and solutions or solvents are placed in a bottle which is continuously agitated.  The solutions are frequently measured to determine the cumulative extraction of the contained metals into solution.



Bulk Sample  A collection of representative mineralized material whose location, geologic character and metal assay content can be determined and then used for metallurgical or geotechnical testing purposes.



Chlorargyrite -a silver bearing mineral (AgC1); silver chloride.



Column Leach Test  a metallurgical test where materials are stacked inside a columnar container and subjected to a controlled flow of fluids or solvents intended to dissolve or extract minerals into solutions which are measured.



Core Samples- the cylindrical form of rock called core that is extracted from a diamond drill hole.  Mineralized sections are separated and these samples are sent to a laboratory for analysis.



Cut-off grade - the lowest grade of mineralized material that qualifies as reserve in a deposit.  ie: contributing material of the lowest assay that is included in a reserve estimate.



Dacite a fine grained, acid volcanic rock containing less quartz than similar rhyolitic rocks.



Diamond Drilling  a type of rotary drilling in which diamond bits are used as the rock-cutting tool to produce a recoverable drill core sample of rock for observation and analysis.



Dip  the angle that a structural surface, a bedding or fault plan, makes with the horizontal, measured perpendicular to the strike of the structure.



Disseminated  where minerals occur as scattered particles in the rock.



Dore  a combination of silver and gold metal, typically unrefined in a bar form.



Environmental Baseline Study -a geotechnical study that monitors and establishes the numerous naturally occurring base levels present within a specific area/environment.  These can include; water chemistry, flora and fauna.



Epithermal  low temperature hydrothermal process or product.



Exploration work involved in searching for ore, usually by drilling or driving a drift.



Fault  a fracture or break in rock along which there has been movement.



Feasibility  is a definitive study of the viability of a mineral project by a qualified professional which defines: (1) mining methods, pit configuration, mine scheduling, mine equipment and all related costing, (2) method of mineral processing and all related plant, equipment and costing, (3) necessary determination of all infrastructure required and relevant costs and (4) all requirements of government and markets for mine operation. A definitive financial analysis of the mineral project taking into consideration all relevant factors which will establish the presence of a Mineral Reserve and the details of its economic viability.



Felsic an adjective describing an igneous rock having mostly light colored minerals and rich in silica, potassium and sodium.



Fracture  a break or crack in rock.



Fracture-controlled -a type of mineralization where circulating fluids deposit minerals preferentially upon fracture planes within a rock mass.



Grade  The metal content of rock with precious metals, grade can be expressed as troy ounces or grams per tonne of rock.



Granodiorite  a medium to coarse-grained intrusive igneous rock, intermediate in composition between quartz diorite and quartz monzonite.



Heap Leach  a mineral processing method involving the crushing and stacking ore on an impermeable liner upon which solutions may be sprayed that dissolves metal i.e. gold/silver, etc.; the solutions containing the metals are then collected and treated to recover the metals.



Hematite  an iron oxide mineral.



Hydrothermal  the products or the actions of heated waters in a rock mass such as a mineral deposit precipitating from a hot solution.



Hydrothermal alteration- the process by which heated or superheated water/solutions alter the chemistry of the rocks they circulate through.



Igneous a primary type of rock formed by the cooling of molten material.



Intrusion; Intrusive molten rock which is intruded (injected) into spaces that are created by a combination of melting and displacement.



Jones splitter -a mechanical device into which sample material consisting of rock chips from drill holes is fed into a hopper.  The device then statistically splits the volume of material to produce a smaller representative sample, which is then sent to a laboratory for analysis.



Merril-Crowe  a common metallurgical process facility which extracts precious metals from leach solutions via precipitation using a zinc dust.



Mesothermal intermediate temperature hydrothermal process (200-300C) or product.



Metamorphosed rocks- rocks that are changed in character by processes of intense heat and pressure deep within the earths crust.



Metallurgy the study of the extractive processes which produce minerals from their host rocks.



Metallurgical Tests- are scientific examinations of rock/material to determine the optimum extraction of metal contained.  Core samples from diamond drill holes are used as representative samples of the mineralization for this testwork.



Metavolcanic a rock of volcanicorigin that has undergone a change in its primary character.



Mineral a naturally formed chemical element or compound having a definitive chemical composition and, usually a characteristic crystal form.



Mineralization a natural concentration in rocks or soil of one or more metalliferous minerals.



Open Pit  a mining method whereby the mineral reserves are accessed from surface by the successive removal of layers of material usually creating a large pit at the surface of the earth.



Pyrite- an iron sulphide mineral, the most common naturally occurring sulphide mineral.



Quartz  crystalline silica; often forming veins in fractures and faults within older rocks.



Quartz Monzonite- a coarse grained, quartz rich igneous rock usually occurring as a smaller rock mass associated with major granitic bodies.



Resource  a concentration of mineral material in such form and amount that economic extraction of a commodity from the concentration is currently or potentially feasible.  Locations, grade, quality or quantity are estimated from specific geologic evidence.



Reverse Circulation Drilling (RC) a drilling method used in geological appraisals whereby the drilling fluid passes inside the drill stem to a down-the-hole precision bit and returns to the surface outside the drill stem carrying the drill chip samples.



Rhyolite a fine grained, acid volcanic rock containing abundant silica.



Roof Pendant  older rocks projecting down from the roof into a batholith.



Sericite  a fine grained mica (clay-like) mineral.



Silification  the in situ alteration of a rock, which involves an increase in the proportion of silica minerals.



Supergene effects- the effect of the water/solutions percolating down from the earths surface (weathering); these solutions can dissolve minerals at the surface and then reconcentrate at depth.



Talusthe accumulation of fragments and coarse debris on steep slopes and at the base of cliffs as a result of the mechanical weathering of rocks.



Vein a thin, sheet-like, crosscutting body of hydrothermal mineralization, principally quartz.



Volcanics those originally molten rocks, generally fine grained, that have reached or nearly reached the Earths surface before solidifying.



Waste  barren rock in a mine, or mineralized material that is too low in grade to be mined and milled at a profit.



Waste to Ore Strip Ratio  the amount of waste material mined for each unit of ore presented as a ratio.



---











INTERNATIONAL KRL RESOURCES CORP. (the Company)

ARTICLES

1.

INTERPRETATION



1.1

Definitions



1.2

Business Corporations Act and Interpretation Act Definitions Applicable



2.

SHARES AND SHARE CERTIFICATES



2.1

Authorized Share Structure



2.2

Form of Share Certificate



2.3

Shareholder Entitled to Share Certificate or Acknowledgement



2.4

Delivery by Mail



2.5

Replacement of Worn Out or Defaced Share Certificate or Acknowledgement



2.6

Replacement of Lost, Stolen or Destroyed Share Certificate or Acknowledgement



2.7

Splitting Share Certificates



2.8

Share Certificate Fee



2.9

Recognition of Trusts



3.

ISSUE OF SHARES



3.1

Directors Authorized



3.2

Commissions and Discounts



3.3

Brokerage



3.4

Conditions of Issue



3.5

Share Purchase Warrants and Rights



4.

SHARE REGISTERS



4.1

Central Securities Register



4.2

Closing Register



5.

SHARE TRANSFERS



5.1

Registering Transfers



5.2

Form of Instrument of Transfer



5.3

Transferor Remains Shareholder



5.4

Signing of Instrument of Transfer



5.5

Enquiry as to Title Not Required



5.6

Transfer Fee



6.

TRANSMISSION OF SHARES



6.1

Legal Personal Representative Recognized on Death



6.2

Rights of Legal Personal Representative



7.

PURCHASE OF SHARES



7.1

Company Authorized to Purchase Shares



7.2

Purchase When Insolvent



7.3

Sale and Voting of Purchased Shares



8.

BORROWING POWERS



9.

ALTERATIONS



9.1

Increase or Reduction in Authorized Share Structure



9.2

Alteration of Authorized Share Structure



9.3

Special Rights and Restrictions



9.4

Change of Name



9.5

Other Alterations



10.

MEETINGS OF SHAREHOLDERS



10.1

Annual General Meetings



10.2

Resolution Instead of Annual General Meeting



10.3

Calling of Meetings of Shareholders



10.4

Notice for Meetings of Shareholders



10.5

Record Date for Notice



10.6

Record Date for Voting



10.7

Failure to Give Notice and Waiver of Notice



10.8

Notice of Special Business at Meetings of Shareholders



11.

PROCEEDINGS AT MEETINGS OF SHAREHOLDERS



11.1

Special Business



11.2

Special Majority



11.3

Quorum



11.4

One Shareholder May Constitute Quorum



11.5

Other Persons May Attend



11.6

Requirement of Quorum



11.7

Lack of Quorum



11.8

Lack of Quorum at Succeeding Meeting



11.9

Chair



11.10

Selection of Alternate Chair



11.11

Adjournments



11.12

Notice of Adjourned Meeting



11.13

Decisions by Show of Hands or Poll



11.14

Declaration of Result



11.15

Motion Need Not be Seconded



11.16

Casting Vote



11.17

Manner of Taking Poll



11.18

Demand for Poll on Adjournment



11.19

Chair Must Resolve Dispute



11.20

Casting of Votes



11.21

Demand for Poll



11.22

Demand for Poll Not to Prevent Continuance of Meeting



11.23

Retention of Ballots and Proxies



12.

VOTES OF SHAREHOLDERS



12.1

Number of Votes by Shareholder or by Shares



12.2

Votes of Persons in Representative Capacity



12.3

Votes by Joint Holders



12.4

Legal Personal Representatives as Joint Shareholders



12.5

Representative of a Corporate Shareholder



12.6

Proxy Provisions Do Not Apply to all Companies



12.7

Appointment of Proxy Holders



12.8

Alternate Proxy Holders



12.9

When Proxy Holder Need Not Be Shareholder



12.10

Deposit of Proxy



12.11

Validity of Proxy Vote



12.12

Form of Proxy



12.13

Revocation of Proxy



12.14

Revocation of Proxy Must Be Signed



12.15

Production of Evidence of Authority to Vote



13.

DIRECTORS



13.1

Number of Directors



13.2

Change in Number of Directors



13.3

Directors' Acts Valid Despite Vacancy



13.4

Qualifications of Directors



13.5

Remuneration of Directors



13.6

Reimbursement of Expenses of Directors



13.7

Special Remuneration for Directors



13.8

Gratuity, Pension or Allowance on Retirement of Director



14.

ELECTION AND REMOVAL OF DIRECTORS



14.1

Election at Annual General Meeting



14.2

Consent to be a Director



14.3

Failure to Elect or Appoint Directors



14.4

Places of Retiring Directors Not Filled



14.5

Directors May Fill Casual Vacancies,



14.6

Remaining Directors Power to Act



14.7

Shareholders May Fill Vacancies



14.8

Additional Directors



14.9

Ceasing to be a Director



14.10

Removal of Director by Shareholders



14.11

Removal of Director by Directors



15.

ALTERNATE DIRECTORS



15.1

Appointment of Alternate Director



15.2

Notice of Meetings



15.3

Alternate for More Than One Director Attending Meetings



15.4

Consent Resolutions



15.5

Alternate Director Not an Agent



15.6

Revocation of Appointment of Alternate Director



15.7

Ceasing to be an Alternate Director



15.8

Remuneration and Expenses of Alternate Director



16.

POWERS AND DUTIES OF DIRECTORS



16.1

Powers of Management



16.2

Appointment of Attorney of Company



17.

INTERESTS OF DIRECTORS AND OFFICERS



17.1

Obligation to Account for Profits



17.2

Restrictions on Voting by Reason of Interest



17.3

Interested Director Counted in Quorum



17.4

Disclosure of Conflict of Interest or Property



17.5

Director Holding Other Office in the Company



17.6

No Disqualification



17.7

Professional Services by Director or Officer



17.8

Director or Officer in Other Corporations



18.

PROCEEDINGS OF DIRECTORS



18.1

Meetings of Directors



18.2

Voting at Meetings



18.3

Chair of Meetings



18.4

Meetings by Telephone or Other Communications Medium



18.5

Calling of Meetings



18.6

Notice of Meetings,



18.7

When Notice Not Required



18.8

Meeting Valid Despite Failure to Give Notice



18.9

Waiver of Notice of Meetings



18.10

Quorum



18.11

Validity of Acts Where Appointment Defective



18.12

Consent Resolutions in Writing



19.

EXECUTIVE AND OTHER COMMITTEES



19.1

Appointment and Powers of Executive Committee



19.2

Appointment and Powers of Other Committees



19.3

Obligations of Committees



19.4

Powers of Board



19.5

Committee Meetings



20.

OFFICERS



20.1

Directors May Appoint Officers



20.2

Functions, Duties and Powers of Officers



20.3

Qualifications



20.4

Remuneration and Terms of Appointment



21.

INDEMNIFICATION



21.1

Definitions



21.2

Mandatory Indemnification of Directors and Former Directors



21.3

Indemnification of Other Persons



21.4

Non-Compliance with Business Corporations Act



21.5

Company May Purchase Insurance



22.

DIVIDENDS



22.1

Payment of Dividends Subject to Special Rights



22.2

Declaration of Dividends



22.3

No Notice Required



22.4

Record Date



22.5

Manner of Paying Dividend



22.6

Settlement of Difficulties



22.7

When Dividend Payable



22.8

Dividends to be Paid in Accordance with Number of Shares



22.9

Receipt by Joint Shareholders



22.10

Dividend Bears No Interest



22.11

Fractional Dividends



22.12

Payment of Dividends



22.13

Capitalization of Surplus



23.

ACCOUNTING RECORDS



23.1

Recording of Financial Affairs



23.2

Inspection of Accounting Records



24.

NOTICES



24.1

Method of Giving Notice



24.2

Deemed Receipt of Mailing



24.3

Certificate of Sending



24.4

Notice to Joint Shareholders



24.5

Notice to Trustees



25.

SEAL



25.1

Who May Attest Seal



25.2

Sealing Copies



25.3

Mechanical Reproduction of Seal



26.

PROHIBITIONS



26.1

Definitions



26.2

Application



26.3

Consent Required for Transfer of Shares or Designated Securities







---





1.

INTERPRETATION

1.1

Definitions

In these Articles, unless the context otherwise requires:

(1)

board of directors, directors and board mean the directors or sole director of the Company for the time being;

(2)

Business Corporations Act means the Business Corporations Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;

(3)

Interpretation Act means the Interpretation Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;

(4)

legal personal representative means the personal or other legal representative of the shareholder;

(5)

registered address of a shareholder means the shareholder's address as recorded in the central securities register;

(6)

seal means the seal of the Company, if any.

1.2

Business Corporations Act and Interpretation Act Definitions Applicable

The definitions in the Business Corporations Act and the definitions and rules of construction in the Interpretation Act, with the necessary changes, so far as applicable, and unless the context requires otherwise, apply to these Articles as if they were an enactment. If there is a conflict between a definition in the Business Corporations Act and a definition or rule in the Interpretation Act relating to a term used in these Articles, the definition in the Business Corporations Act will prevail in relation to the use of the term in these Articles. If there is a conflict between these Articles and the Business Corporations Act, the Business Corporations Act will prevail.

2.

SHARES AND SHARE CERTIFICATES

2.1

Authorized Share Structure

The authorized share structure of the Company consists of shares of the class or classes and series, if any, described in the Notice of Articles of the Company.

2.2

Form of Share Certificate

Each share certificate issued by the Company must comply with, and be signed as required by, the Business Corporations Act.

2.3

Shareholder Entitled to Share Certificate or Acknowledgement

Each shareholder is entitled, without charge, to (a) one share certificate representing the shares of each class or series of shares registered in the shareholder's name or (b) a non-transferable written acknowledgement of the shareholder's right to obtain such a share certificate, provided that in respect of a share held jointly by several persons, the Company is not bound to issue more than one share certificate or acknowledgement and delivery of a share certificate or acknowledgement for a share to one of several joint shareholders or to one of the shareholders' duly authorized agents will be sufficient delivery to all.

2.4

Delivery by Mail

Any share certificate or non-transferable written acknowledgement of a shareholder's right to obtain a share certificate may be sent to the shareholder by mail at the shareholder's registered address and neither the Company nor any director, officer or agent of the Company is liable for any loss to the shareholder because the share certificate or acknowledgement is lost in the mail or stolen.

2.5

Replacement of Worn Out or Defaced Share Certificate or Acknowledgement

If the directors are satisfied that a share certificate or a non-transferable written acknowledgement of the shareholder's right to obtain a share certificate is worn out or defaced, they must, on production to them of the share certificate or acknowledgement, as the case may be, and on such other terms, if any, as they think fit:

(1)

order the share certificate or acknowledgement, as the case may be, to be cancelled; and

(2)

issue a replacement share certificate or acknowledgement, as the case may be.

2.6

Replacement of Lost, Stolen or Destroyed Share Certificate or Acknowledgement

If a share certificate or a non-transferable written acknowledgement of a shareholder's right to obtain a share certificate is lost, stolen or destroyed, a replacement share certificate or acknowledgement, as the case may be, must be issued to the person entitled to that share certificate or acknowledgement, as the case may be, if the directors receive:

(1)

proof satisfactory to them that the share certificate or acknowledgement is lost, stolen or destroyed; and

(2)

any indemnity the directors consider adequate.

2.7

Splitting Share Certificates

If a shareholder surrenders a share certificate to the Company with a written request that the Company issue in the shareholder's name two or more share certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as the share certificate so surrendered, the Company must cancel the surrendered share certificate and issue replacement share certificates in accordance with that request.

2.8

Share Certificate Fee

There must be paid to the Company, in relation to the issue of any share certificate under Articles 2.5, 2.6 or 2.7, the amount, if any and which must not exceed the amount prescribed under the Business Corporations Act, determined by the directors.

2.9

Recognition of Trusts

Except as required by law or statute or these Articles, no person will be recognized by the Company as holding any share upon any trust, and the Company is not bound by or compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any share or fraction of a share or (except as by law or statute or these Articles provided or as ordered by a court of competent jurisdiction) any other rights in respect of any share except an absolute right to the entirety thereof in the shareholder.

3.

ISSUE OF SHARES

3.1

Directors Authorized

Subject to the Business Corporations Act and the rights of the holders of issued shares of the Company, the Company may issue, allot, sell or otherwise dispose of the unissued shares, and issued shares held by the Company, at the times, to the persons, including directors, in the manner, on the terms and conditions and for the issue prices (including any premium at which shares with par value may be issued) that the directors may determine. The issue price for a share with par value must be equal to or greater than the par value of the share.

3.2

Commissions and Discounts

The Company may at any time pay a reasonable commission or allow a reasonable discount to any person in consideration of that person purchasing or agreeing to purchase shares of the Company from the Company or any other person or procuring or agreeing to procure purchasers for shares of the Company.

3.3

Brokerage

The Company may pay such brokerage fee or other consideration as may be lawful for or in connection with the sale or placement of its securities.

3.4

Conditions of Issue

Except as provided for by the Business Corporations Act, no share may be issued until it is fully paid. A share is fully paid when:

(1)

consideration is provided to the Company for the issue of the share by one or more of the following:

(a)

past services performed for the Company;

(b)

property;

(c)

money; and

(2)

the value of the consideration received by the Company equals or exceeds the issue price set for the share under Article 3.1.

3.5

Share Purchase Warrants and Rights

Subject to the Business Corporations Act, the Company may issue share purchase warrants, options and rights upon such terms and conditions as the directors determine, which share purchase warrants, options and rights may be issued alone or in conjunction with debentures, bonds, shares or any other securities issued or created by the Company from time to time.

4.

SHARE REGISTERS

4.1

Central Securities Register

As required by and subject to the Business Corporations Act, the Company must maintain in British Columbia a central securities register. The directors may, subject to the Business Corporations Act, appoint an agent to maintain the central securities register. The directors may also appoint one or more agents, including the agent which keeps the central securities register, as transfer agent for its shares or any class or series of its shares, as the case may be, and the same or another agent as registrar for its shares or such class or series of its shares, as the case may be. The directors may terminate such appointment of any agent at any time and may appoint another agent in its place.

4.2

Closing Register

The Company must not at any time close its central securities register.

5.

SHARE TRANSFERS

5.1

Registering Transfers

A transfer of a share of the Company must not be registered unless:

(1)

a duly signed instrument of transfer in respect of the share has been received by the Company;

(2)

if a share certificate has been issued by the Company in respect of the share to be transferred, that share certificate has been surrendered to the Company; and

(3)

if a non-transferable written acknowledgement of the shareholder's right to obtain a share certificate has been issued by the Company in respect of the share to be transferred, that acknowledgement has been surrendered to the Company.

5.2

Form of Instrument of Transfer

The instrument of transfer in respect of any share of the Company must be either in the form, if any, on the back of the Company's share certificates or in any other form that may be approved by the directors from time to time.

5.3

Transferor Remains Shareholder

Except to the extent that the Business Corporations Act otherwise provides, the transferor of shares is deemed to remain the holder of the shares until the name of the transferee is entered in a securities register of the Company in respect of the transfer.

5.4

Signing of Instrument of Transfer

If a shareholder, or his or her duly authorized attorney, signs an instrument of transfer in respect of shares registered in the name of the shareholder, the signed instrument of transfer constitutes a complete and sufficient authority to the Company and its directors, officers and agents to register the number of shares specified in the instrument of transfer or specified in any other manner, or, if no number is specified, all the shares represented by the share certificates or set out in the written acknowledgements deposited with the instrument of transfer:

(1)

in the name of the person named as transferee in that instrument of transfer; or

(2)

if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered.

5.5

Enquiry as to Title Not Required

Neither the Company nor any director, officer or agent of the Company is bound to inquire into the title of the person named in the instrument of transfer as transferee or, if no person is named as transferee in the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the transfer by the shareholder or by any intermediate owner or holder of the shares, of any interest in the shares, of any share certificate representing such shares or of any written acknowledgement of a right to obtain a share certificate for such shares.

5.6

Transfer Fee

There must be paid to the Company, in relation to the registration of any transfer, the amount, if any, determined by the directors.

6.

TRANSMISSION OF SHARES

6.1

Legal Personal Representative Recognized on Death

In case of the death of a shareholder, the legal personal representative, or if the shareholder was a joint holder, the surviving joint holder, will be the only person recognized by the Company as having any title to the shareholder's interest in the shares. Before recognizing a person as a legal personal representative, the directors may require proof of appointment by a court of competent jurisdiction, a grant of letters probate, letters of administration or such other evidence or documents as the directors consider appropriate.

6.2

Rights of Legal Personal Representative

The legal personal representative has the same rights, privileges and obligations that attach to the shares held by the shareholder, including the right to transfer the shares in accordance with these Articles, provided the documents required by the Business Corporations Act and the directors have been deposited with the Company.

7.

PURCHASE OF SHARES

7.1

Company Authorized to Purchase Shares

Subject to Article 7.2, the special rights and restrictions attached to the shares of any class or series and the Business Corporations Act, the Company may, if authorized by the directors, purchase or otherwise acquire any of its shares at the price and upon the terms specified in such resolution.

7.2

Purchase When Insolvent

The Company must not make a payment or provide any other consideration to purchase or otherwise acquire any of its shares if there are reasonable grounds for believing that:

(1)

the Company is insolvent; or

(2)

making the payment or providing the consideration would render the Company insolvent.

7.3

Sale and Voting of Purchased Shares

If the Company retains a share redeemed, purchased or otherwise acquired by it, the Company may sell, gift or otherwise dispose of the share, but, while such share is held by the Company, it:

(1)

is not entitled to vote the share at a meeting of its shareholders;

(2)

must not pay a dividend in respect of the share; and

(3)

must not make any other distribution in respect of the share.

8.

BORROWING POWERS

The Company, if authorized by the directors, may:

(1)

borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate;

(2)

issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as they consider appropriate;

(3)

guarantee the repayment of money by any other person or the performance of any obligation of any other person; and

(4)

mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.

9.

ALTERATIONS

9.1

Increase or Reduction in Authorized Share Structure

Subject to the Business Corporations Act,the Company may by resolution of the directors increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of shares that the Company is authorized to issue out of any class or series of shares for which no maximum is established.

9.2

Alteration of Authorized Share Structure

Subject to Article 9.3 and the Business Corporations Act, the Company may by special resolution:

(1)

create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares;

(2)

subdivide or consolidate all or any of its unissued, or fully paid issued, shares;

(3)

if the Company is authorized to issue shares of a class of shares with par value:

(a)

decrease the par value of those shares; or

(b)

if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;

(4)

change all or any of its unissued, or fully paid issued, shares with par value into shares without par value or any of its unissued shares without par value into shares with par value;

(5)

alter the identifying name of any of its shares; or

(6)

otherwise alter its shares or authorized share structure when required or permitted to do so by the Business Corporations Act.

9.3

Special Rights and Restrictions

Subject to the Business Corporations Act, the Company may by special resolution:

(1)

create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, whether or not any or all of those shares have been issued; or

(2)

vary or delete any special rights or restrictions attached to the shares of any class or series of shares, whether or not any or all of those shares have been issued.

9.4

Change of Name

The Company may by resolution of the directors authorize an alteration of its Notice of Articles in order to change its name or adopt or change any translation of that name.

9.5

Other Alterations

If the Business Corporations Act does not specify the type of resolution and these Articles do not specify another type of resolution, the Company may by special resolution alter these Articles.

10.

MEETINGS OF SHAREHOLDERS

10.1

Annual General Meetings

Unless an annual general meeting is deferred or waived in accordance with the Business Corporations Act, the Company must hold its first annual general meeting within 18 months after the date on which it was incorporated or otherwise recognized, and after that must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual reference date at such time and place as may be determined by the directors.

10.2

Resolution Instead of Annual General Meeting

If all the shareholders who are entitled to vote at an annual general meeting consent by a unanimous resolution under the Business Corporations Act to all of the business that is required to be transacted at that annual general meeting, the annual general meeting is deemed to have been held on the date of the unanimous resolution.  The shareholders must, in any unanimous resolution passed under this Article 10.2, select as the Company's annual reference date a date that would be appropriate for the holding of the applicable annual general meeting.

10.3

Calling of Meetings of Shareholders

The directors may, whenever they think fit, call a meeting of shareholders.

10.4

Notice for Meetings of Shareholders

The Company must send notice of the date, time and location of any meeting of shareholders, in the manner provided in these Articles, or in such other manner, if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting, to each director and to the auditor of the Company, unless these Articles otherwise provide, at least the following number of days before the meeting:

(1)

if and for so long as the Company is a public company, 21 days;

(2)

otherwise, 10 days.

10.5

Record Date for Notice

The directors may set a date as the record date for the purpose of determining shareholders entitled to notice of any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. The record date must not precede the date on which the meeting is held by fewer than:

(1)

if and for so long as the Company is a public company, 21 days;

(2)

otherwise, 10 days.

If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

10.6

Record Date for Voting

The directors may set a date as the record date for the purpose of determining shareholders entitled to vote at any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Business Corporations Act, by more than four months. If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

10.7

Failure to Give Notice and Waiver of Notice

The accidental omission to send notice of any meeting to, or the non-receipt of any notice by, any of the persons entitled to notice does not invalidate any proceedings at that meeting. Any person entitled to notice of a meeting of shareholders may, in writing or otherwise, waive or reduce the period of notice of such meeting.

10.8

Notice of Special Business at Meetings of Shareholders

If a meeting of shareholders is to consider special business within the meaning of Article 11.1, the notice of meeting must:

(1)

state the general nature of the special business; and

(2)

if the special business includes considering, approving, ratifying, adopting or authorizing any document or the signing of or giving of effect to any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection by shareholders:

(a)

at the meeting; or

(b)

at the Company's records office, or at such other reasonably accessible location in British Columbia as is specified in the notice, during statutory business hours on any one or more specified days before the day set for the holding of the meeting.

11.

PROCEEDINGS AT MEETINGS OF SHAREHOLDERS

11.1

Special Business

At a meeting of shareholders, the following business is special business:

(1)

at a meeting of shareholders that is not an annual general meeting, all business is special business except business relating to the conduct of or voting at the meeting;

(2)

at an annual general meeting, all business is special business except for the following:

(a)

business relating to the conduct of or voting at the meeting;

(b)

consideration of any financial statements of the Company presented to the meeting;

(c)

consideration of any reports of the directors or auditor;

(d)

the setting or changing of the number of directors;

(e)

the election or appointment of directors;

(f)

the appointment of an auditor;

(g)

the setting of the remuneration of an auditor;

(h)

business arising out of a report of the directors not requiring the passing of a special resolution or an exceptional resolution;

(i)

any other business which, under these Articles or the Business Corporations Act, may be transacted at a meeting of shareholders without prior notice of the business being given to the shareholders.

11.2

Special Majority

The majority of votes required for the Company to pass a special resolution at a meeting of shareholders is two-thirds of the votes cast on the resolution.

11.3

Quorum

Subject to the special rights and restrictions attached to the shares of any class or series of shares, the quorum for the transaction of business at a meeting of shareholders is two persons who are, or who represent by proxy, shareholders who, in the aggregate, hold at least 5% of the issued shares entitled to be voted at the meeting.

11.4

One Shareholder May Constitute Quorum

If there is only one shareholder entitled to vote at a meeting of shareholders:

(1)

the quorum is one person who is, or who represents by proxy, that shareholder, and

(2)

that shareholder, present in person or by proxy, may constitute the meeting.

11.5

Other Persons May Attend

The directors, the president (if any), the secretary (if any), the assistant secretary (if any), any lawyer for the Company, the auditor of the Company and any other persons invited by the directors are entitled to attend any meeting of shareholders, but if any of those persons does attend a meeting of shareholders, that person is not to be counted in the quorum and is not entitled to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at the meeting.

11.6

Requirement of Quorum

No business, other than the election of a chair of the meeting and the adjournment of the meeting, may be transacted at any meeting of shareholders unless a quorum of shareholders entitled to vote is present at the commencement of the meeting, but such quorum need not be present throughout the meeting.

11.7

Lack of Quorum

If, within one-half hour from the time set for the holding of a meeting of shareholders, a quorum is not present:

(1)

in the case of a general meeting requisitioned by shareholders, the meeting is dissolved, and

(2)

in the case of any other meeting of shareholders, the meeting stands adjourned to the same day in the next week at the same time and place.

11.8

Lack of Quorum at Succeeding Meeting

If, at the meeting to which the meeting referred to in Article 11.7(2) was adjourned, a quorum is not present within one-half hour from the time set for the holding of the meeting, the person or persons present and being, or representing by proxy, one or more shareholders entitled to attend and vote at the meeting constitute a quorum.

11.9

Chair

The following individual is entitled to preside as chair at a meeting of shareholders:

(1)

the chair of the board, if any; or

(2)

if the chair of the board is absent or unwilling to act as chair of the meeting, the president, if any.

11.10

Selection of Alternate Chair

If, at any meeting of shareholders, there is no chair of the board or president present within 15 minutes after the time set for holding the meeting, or if the chair of the board and the president are unwilling to act as chair of the meeting, or if the chair of the board and the president have advised the secretary, if any, or any director present at the meeting, that they will not be present at the meeting, the directors present must choose one of their number to be chair of the meeting or if all of the directors present decline to take the chair or fail to so choose or if no director is present, the shareholders entitled to vote at the meeting who are present in person or by proxy may choose any person present at the meeting to chair the meeting.

11.11

Adjournments

The chair of a meeting of shareholders may, and if so directed by the meeting must, adjourn the meeting from time to time and from place to place, but no business may be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

11.12

Notice of Adjourned Meeting

It is not necessary to give any notice of an adjourned meeting or of the business to be transacted at an adjourned meeting of shareholders except that, when a meeting is adjourned for 30 days or more, notice of the adjourned meeting must be given as in the case of the original meeting.

11.13

Decisions by Show of Hands or Poll

Subject to the Business Corporations Act, every motion put to a vote at a meeting of shareholders will be decided on a show of hands unless a poll, before or on the declaration of the result of the vote by show of hands, is directed by the chair or demanded by at least one shareholder entitled to vote who is present in person or by proxy.

11.14

Declaration of Result

The chair of a meeting of shareholders must declare to the meeting the decision on every question in accordance with the result of the show of hands or the poll, as the case may be, and that decision must be entered in the minutes of the meeting. A declaration of the chair that a resolution is carried by the necessary majority or is defeated is, unless a poll is directed by the chair or demanded under Article 11.13, conclusive evidence without proof of the number or proportion of the votes recorded in favour of or against the resolution.

11.15

Motion Need Not be Seconded

No motion proposed at a meeting of shareholders need be seconded unless the chair of the meeting rules otherwise, and the chair of any meeting of shareholders is entitled to propose or second a motion.

11.16

Casting Vote

In case of an equality of votes, the chair of a meeting of shareholders does not, either on a show of hands or on a poll, have a second or casting vote in addition to the vote or votes to which the chair may be entitled as a shareholder.

11.17

Manner of Taking Poll

Subject to Article 11.18, if a poll is duly demanded at a meeting of shareholders:

(1)

the poll must be taken:

(a)

at the meeting, or within seven days after the date of the meeting, as the chair of the meeting directs; and

(b)

in the manner, at the time and at the place that the chair of the meeting directs;

(2)

the result of the poll is deemed to be the decision of the meeting at which the poll is demanded; and

(3)

the demand for the poll may be withdrawn by the person who demanded it.

11.18

Demand for Poll on Adjournment

A poll demanded at a meeting of shareholders on a question of adjournment must be taken immediately at the meeting.

11.19

Chair Must Resolve Dispute

In the case of any dispute as to the admission or rejection of a vote given on a poll, the chair of the meeting must determine the dispute, and his or her determination made in good faith is final and conclusive.

11.20

Casting of Votes

On a poll, a shareholder entitled to more than one vote need not cast all the votes in the same way.

11.21

Demand for Poll

No poll may be demanded in respect of the vote by which a chair of a meeting of shareholders is elected.

11.22

Demand for Poll Not to Prevent Continuance of Meeting

The demand for a poll at a meeting of shareholders does not, unless the chair of the meeting so rules, prevent the continuation of a meeting for the transaction of any business other than the question on which a poll has been demanded.

11.23

Retention of Ballots and Proxies

The Company must, for at least three months after a meeting of shareholders, keep each ballot cast on a poll and each proxy voted at the meeting, and, during that period, make them available for inspection during normal business hours by any shareholder or proxyholder entitled to vote at the meeting. At the end of such three month period, the Company may destroy such ballots and proxies.

12.

VOTES OF SHAREHOLDERS

12.1

Number of Votes by Shareholder or by Shares

Subject to any special rights or restrictions attached to any shares and to the restrictions imposed on joint shareholders under Article 12.3:

(1)

on a vote by show of hands, every person present who is a shareholder or proxy holder and entitled to vote on the matter has one vote; and

(2)

on a poll, every shareholder entitled to vote on the matter has one vote in respect of each share entitled to be voted on the matter and held by that shareholder and may exercise that vote either in person or by proxy.

12.2

Votes of Persons in Representative Capacity

A person who is not a shareholder may vote at a meeting of shareholders, whether on a show of hands or on a poll, and may appoint a proxy holder to act at the meeting, if, before doing so, the person satisfies the chair of the meeting, or the directors, that the person is a legal personal representative or a trustee in bankruptcy for a shareholder who is entitled to vote at the meeting.

12.3

Votes by Joint Holders

If there are joint shareholders registered in respect of any share:

(1)

any one of the joint shareholders may vote at any meeting, either personally or by proxy, in respect of the share as if that joint shareholder were solely entitled to it; or

(2)

if more than one of the joint shareholders is present at any meeting, personally or by proxy, and more than one of them votes in respect of that share, then only the vote of the joint shareholder present whose name stands first on the central securities register in respect of the share will be counted.

12.4

Legal Personal Representatives as Joint Shareholders

Two or more legal personal representatives of a shareholder in whose sole name any share is registered are, for the purposes of Article 12.3, deemed to be joint shareholders.

12.5

Representative of a Corporate Shareholder

If a corporation, that is not a subsidiary of the Company, is a shareholder, that corporation may appoint a person to act as its representative at any meeting of shareholders of the Company, and:

(1)

for that purpose, the instrument appointing a representative must:

(a)

be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice for the receipt of proxies, or if no number of days is specified, two business days before the day set for the holding of the meeting; or

(b)

be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting;

(2)

if a representative is appointed under this Article 12.5:

(a)

the representative is entitled to exercise in respect of and at that meeting the same rights on behalf of the corporation that the representative represents as that corporation could exercise if it were a shareholder who is an individual, including, without limitation, the right to appoint a proxy holder; and

(b)

the representative, if present at the meeting, is to be counted for the purpose of forming a quorum and is deemed to be a shareholder present in person at the meeting.

Evidence of the appointment of any such representative may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages.

12.6

Proxy Provisions Do Not Apply to all Companies

If and for so long as the Company is a public company or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply, Articles 12.7 to 12.15 apply only insofar as they are not inconsistent with any securities legislation in any province or territory of Canada or in the federal jurisdiction of the United States or in any states of the United States that is applicable to the Company and insofar as they are not inconsistent with the regulations and rules made and promulgated under that legislation and all administrative policy statements, blanket orders and rulings, notices and other administrative directions issued by securities committees or similar authorities appointed under that legislation.

12.7

Appointment of Proxy Holders

Every shareholder of the Company, including a corporation that is a shareholder but not a subsidiary of the Company, entitled to vote at a meeting of shareholders of the Company may, by proxy, appoint one or more (but not more than five) proxy holders to attend and act at the meeting in the manner, to the extent and with the powers conferred by the proxy.

12.8

Alternate Proxy Holders

A shareholder may appoint one or more alternate proxy holders to act in the place of an absent proxy holder.

12.9

When Proxy Holder Need Not Be Shareholder

A person must not be appointed as a proxy holder unless the person is a shareholder, although a person who is not a shareholder may be appointed as a proxy holder if:

(1)

the person appointing the proxy holder is a corporation or a representative of a corporation appointed under Article 12.5;

(2)

the Company has at the time of the meeting for which the proxy holder is to be appointed only one shareholder entitled to vote at the meeting; or

(3)

the shareholders present in person or by proxy at and entitled to vote at the meeting for which the proxy holder is to be appointed, by a resolution on which the proxy holder is not entitled to vote but in respect of which the proxy holder is to be counted in the quorum, permit the proxy holder to attend and vote at the meeting.

12.10

Deposit of Proxy

A proxy for a meeting of shareholders must:

(1)

be received at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice, or if no number of days is specified, two business days before the day set for the holding of the meeting; or

(2)

unless the notice provides otherwise, be provided, at the meeting, to the chair of the meeting or to a person designated by the chair of the meeting.

A proxy may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages.

12.11

Validity of Proxy Vote

A vote given in accordance with the terms of a proxy is valid notwithstanding the death or incapacity of the shareholder giving the proxy and despite the revocation of the proxy or the revocation of the authority under which the proxy is given, unless notice in writing of that death, incapacity or revocation is received:

(1)

at the registered office of the Company, at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or

(2)

by the chair of the meeting, before the vote is taken.

12.12

Form of Proxy

A proxy, whether for a specified meeting or otherwise, must be either in the following form or in any other form approved by the directors or the chair of the meeting:

[name of company] 
(the Company)

The undersigned, being a shareholder of the Company, hereby appoints [name] or, failing that person, [name], as proxy holder for the undersigned to attend, act and vote for and on behalf of the undersigned at the meeting of shareholders of the Company to be held on [month, day, year] and at any adjournment of that meeting.

Number of shares in respect of which this proxy is given (if no number is specified, then this proxy if given in respect of all shares registered in the name of the shareholder):______________.

Signed [month, day, year]

[Signature of shareholder]

[Name of shareholder-  printed]

12.13

Revocation of Proxy

Subject to Article 12.14, every proxy may be revoked by an instrument in writing that is:

(1)

received at the registered office of the Company at any time up to and including the last business day before the day set for the holding of the meeting at which the proxy is to be used; or

(2)

provided at the meeting to the chair of the meeting.

12.14

Revocation of Proxy Must Be Signed

An instrument referred to in Article 12.13 must be signed as follows:

(1)

if the shareholder for whom the proxy holder is appointed is an individual, the instrument must be signed by the shareholder or his or her legal personal representative or trustee in bankruptcy;

(2)

if the shareholder for whom the proxy holder is appointed is a corporation, the instrument must be signed by the corporation or by a representative appointed for the corporation under Article 12.5.

12.15

Production of Evidence of Authority to Vote

The chair of any meeting of shareholders may, but need not, inquire into the authority of any person to vote at the meeting and may, but need not, demand from that person production of evidence as to the existence of the authority to vote.

13.

DIRECTORS

13.1

Number of Directors

The number of directors, excluding additional directors appointed under Article 14.8, is set at:

(1)

if the Company is a public company, the greater of three and the most recently set of:

(a)

the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and

(b)

the number of directors set under Article 14.4;

(2)

if the Company is not a public company, the most recently set of:

(a)

the number of directors set by ordinary resolution (whether or not previous notice of the resolution was given); and

(b)

the number of directors set under Article 14.4.

13.2

Change in Number of Directors

If the number of directors is set under Articles 13.1(1)(a) or 13.1(2)(a):

(1)

the shareholders may elect or appoint the directors needed to fill any vacancies in the board of directors up to that number;

(2)

if the shareholders do not elect or appoint the directors needed to fill any vacancies in the board of directors up to that number contemporaneously with the setting of that number, then the directors may appoint, or the shareholders may elect or appoint, directors to fill those vacancies.

13.3

Directors' Acts Valid Despite Vacancy

An act or proceeding of the directors is not invalid merely because fewer than the number of directors set or otherwise required under these Articles is in office.

13.4

Qualifications of Directors

A director is not required to hold a share in the capital of the Company as qualification for his or her office but must be qualified as required by the Business Corporations Act to become, act or continue to act as a director.

13.5

Remuneration of Directors

The directors are entitled to the remuneration for acting as directors, if any, as the directors may from time to time determine. If the directors so decide, the remuneration of the directors, if any, will be determined by the shareholders. That remuneration may be in addition to any salary or other remuneration paid to any officer or employee of the Company as such, who is also a director.

13.6

Reimbursement of Expenses of Directors

The Company must reimburse each director for the reasonable expenses that he or she may incur in and about the business of the Company.

13.7

Special Remuneration for Directors

If any director performs any professional or other services for the Company that in the opinion of the directors are outside the ordinary duties of a director, or if any director is otherwise specially occupied in or about the Company's business, he or she may be paid remuneration fixed by the directors, or, at the option of that director, fixed by ordinary resolution, and such remuneration may be either in addition to, or in substitution for, any other remuneration that he or she may be entitled to receive.

13.8

Gratuity, Pension or Allowance on Retirement of Director

Unless otherwise determined by ordinary resolution, the directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any director who has held any salaried office or place of profit with the Company or to his or her spouse or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

14.

ELECTION AND REMOVAL OF DIRECTORS

14.1

Election at Annual General Meeting

At every annual general meeting and in every unanimous resolution contemplated by Article 10.2:

(1)

the shareholders entitled to vote at the annual general meeting for the election of directors must elect, or in the unanimous resolution appoint, a board of directors consisting of the number of directors for the time being set under these Articles; and

(2)

all the directors cease to hold office immediately before the election or appointment of directors under paragraph (1), but are eligible for re-election or re-appointment.

14.2

Consent to be a Director

No election, appointment or designation of an individual as a director is valid unless:

(1)

that individual consents to be a director in the manner provided for in the Business Corporations Act; or

(2)

that individual is elected or appointed at a meeting at which the individual is present and the individual does not refuse, at the meeting, to be a director.

14.3

Failure to Elect or Appoint Directors

If:

(1)

the Company fails to hold an annual general meeting, and all the shareholders who are entitled to vote at an annual general meeting fail to pass the unanimous resolution contemplated by Article 10.2, on or before the date by which the annual general meeting is required to be held under the Business Corporations Act; or

(2)

the shareholders fail, at the annual general meeting or in the unanimous resolution contemplated by Article 10.2, to elect or appoint any directors;

then each director then in office continues to hold office until the earlier of:

(3)

when his or her successor is elected or appointed; and

(4)

when he or she otherwise ceases to hold office under the Business Corporations Act or these Articles.

14.4

Places of Retiring Directors Not Filled

If, at any meeting of shareholders at which there should be an election of directors, the places of any of the retiring directors are not filled by that election, those retiring directors who are not re-elected and who are asked by the newly elected directors to continue in office will, if willing to do so, continue in office to complete the number of directors for the time being set pursuant to these Articles until further new directors are elected at a meeting of shareholders convened for that purpose. If any such election or continuance of directors does not result in the election or continuance of the number of directors for the time being set pursuant to these Articles, the number of directors of the Company is deemed to be set at the number of directors actually elected or continued in office.

14.5

Directors May Fill Casual Vacancies,

Any casual vacancy occurring in the board of directors may be filled by the directors.

14.6

Remaining Directors Power to Act

The directors may act notwithstanding any vacancy in the board of directors, but if the Company has fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the directors may only act for the purpose of appointing directors up to that number or of summoning a meeting of shareholders for the purpose of filling any vacancies on the board of directors or, subject to the Business Corporations Act, for any other purpose.

14.7

Shareholders May Fill Vacancies

If the Company has no directors or fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the shareholders may elect or appoint directors to fill any vacancies on the board of directors.

14.8

Additional Directors

Notwithstanding Articles 13.1 and 13.2, between annual general meetings or unanimous resolutions contemplated by Article 10.2, the directors may appoint one or more additional directors, but the number of additional directors appointed under this Article 14.8 must not at any time exceed one-third of the number of the current directors who were elected or appointed as directors other than under this Article 14.8.  Any director so appointed ceases to hold office immediately before the next election or appointment of directors under Article 14.1(1), but is eligible for re-election or re-appointment.

14.9

Ceasing to be a Director

A director ceases to be a director when:

(1)

the term of office of the director expires;

(2)

the director dies;

(3)

the director resigns as a director by notice in writing provided to the Company or a lawyer for the Company; or

(4)

the director is removed from office pursuant to Articles 14.10 or 14.11.

14.10

Removal of Director by Shareholders

The Company may remove any director before the expiration of his or her term of office by special resolution. In that event, the shareholders may elect, or appoint by ordinary resolution, a director to fill the resulting vacancy. If the shareholders do not elect or appoint a director to fill the resulting vacancy contemporaneously with the removal, then the directors may appoint or the shareholders may elect, or appoint by ordinary resolution, a director to fill that vacancy.

14.11

Removal of Director by Directors

The directors may remove any director before the expiration of his or her term of office if the director is convicted of an indictable offence, or if the director ceases to be qualified to act as a director of a company and does not promptly resign, and the directors may appoint a director to fill the resulting vacancy.

15.

ALTERNATE DIRECTORS

15.1

Appointment of Alternate Director

Any director (an appointor) may by notice in writing received by the Company appoint any person (an appointee) who is qualified to act as a director to be his or her alternate to act in his or her place at meetings of the directors or committees of the directors at which the appointor is not present unless (in the case of an appointee who is not a director) the directors have reasonably disapproved the appointment of such person as an alternate director and have given notice to that effect to his or her appointor within a reasonable time after the notice of appointment is received by the Company.

15.2

Notice of Meetings

Every alternate director so appointed is entitled to notice of meetings of the directors and of committees of the directors of which his or her appointor is a member and to attend and vote as a director at any such meetings at which his or her appointor is not present.

15.3

Alternate for More Than One Director Attending Meetings

A person may be appointed as an alternate director by more than one director, and an alternate director:

(1)

will be counted in determining the quorum for a meeting of directors once for each of his or her appointors and, in the case of an appointee who is also a director, once more in that capacity;

(2)

has a separate vote at a meeting of directors for each of his or her appointors and, in the case of an appointee who is also a director, an additional vote in that capacity;

(3)

will be counted in determining the quorum for a meeting of a committee of directors once for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, once more in that capacity;

(4)

has a separate vote at a meeting of a committee of directors for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, an additional vote in that capacity.

15.4

Consent Resolutions

Every alternate director, if authorized by the notice appointing him or her, may sign in place of his or her appointor any resolutions to be consented to in writing.

15.5

Alternate Director Not an Agent

Every alternate director is deemed not to be the agent of his or her appointor.

15.6

Revocation of Appointment of Alternate Director

An appointor may at any time, by notice in writing received by the Company, revoke the appointment of an alternate director appointed by him or her.

15.7

Ceasing to be an Alternate Director

The appointment of an alternate director ceases when:

(1)

his or her appointor ceases to be a director and is not promptly re-elected or re-appointed;

(2)

the alternate director dies;

(3)

the alternate director resigns as an alternate director by notice in writing provided to the Company or a lawyer for the Company;

(4)

the alternate director ceases to be qualified to act as a director; or

(5)

his or her appointor revokes the appointment of the alternate director.

15.8

Remuneration and Expenses of Alternate Director

The Company may reimburse an alternate director for the reasonable expenses that would be properly reimbursed if he or she were a director, and the alternate director is entitled to receive from the Company such proportion, if any, of the remuneration otherwise payable to the appointor as the appointor may from time to time direct.

16.

POWERS AND DUTIES OF DIRECTORS

16.1

Powers of Management

The directors must, subject to the Business Corporations Act and these Articles, manage or supervise the management of the business and affairs of the Company and have the authority to exercise all such powers of the Company as are not, by the Business Corporations Act or by these Articles, required to be exercised by the shareholders of the Company.

16.2

Appointment of Attorney of Company

The directors may from time to time, by power of attorney or other instrument, under seal if so required by law, appoint any person to be the attorney of the Company for such purposes, and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors under these Articles and excepting the power to fill vacancies in the board of directors, to remove a director, to change the membership of, or fill vacancies in, any committee of the directors, to appoint or remove officers appointed by the directors and to declare dividends) and for such period, and with such remuneration and subject to such conditions as the directors may think fit. Any such power of attorney may contain such provisions for the protection or convenience of persons dealing with such attorney as the directors think fit. Any such attorney may be authorized by the directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in him or her.

17.

INTERESTS OF DIRECTORS AND OFFICERS

17.1

Obligation to Account for Profits

A director or senior officer who holds a disclosable interest (as that term is used in the Business Corporations Act) in a contract or transaction into which the Company has entered or proposes to enter is liable to account to the Company for any profit that accrues to the director or senior officer under or as a result of the contract or transaction only if and to the extent provided in the Business Corporations Act.

17.2

Restrictions on Voting by Reason of Interest

A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter is not entitled to vote on any directors' resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution.

17.3

Interested Director Counted in Quorum

A director who holds a disclosable interest in a contract or transaction into which the Company has entered or proposes to enter and who is present at the meeting of directors at which the contract or transaction is considered for approval may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered at the meeting.

17.4

Disclosure of Conflict of Interest or Property

A director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual's duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by the Business Corporations Act.

17.5

Director Holding Other Office in the Company

A director may hold any office or place of profit with the Company, other than the office of auditor of the Company, in addition to his or her office of director for the period and on the terms (as to remuneration or otherwise) that the directors may determine.

17.6

No Disqualification

No director or intended director is disqualified by his or her office from contracting with the Company either with regard to the holding of any office or place of profit the director holds with the Company or as vendor, purchaser or otherwise, and no contract or transaction entered into by or on behalf of the Company in which a director is in any way interested is liable to be voided for that reason.

17.7

Professional Services by Director or Officer

Subject to the Business Corporations Act, a director or officer, or any person in which a director or officer has an interest, may act in a professional capacity for the Company, except as auditor of the Company, and the director or officer or such person is entitled to remuneration for professional services as if that director or officer were not a director or officer.

17.8

Director or Officer in Other Corporations

A director or officer may be or become a director, officer or employee of, or otherwise interested in, any person in which the Company may be interested as a shareholder or otherwise, and, subject to the Business Corporations Act, the director or officer is not accountable to the Company for any remuneration or other benefits received by him or her as director, officer or employee of, or from his or her interest in, such other person.

18.

PROCEEDINGS OF DIRECTORS

18.1

Meetings of Directors

The directors may meet together for the conduct of business, adjourn and otherwise regulate their meetings as they think fit, and meetings of the directors held at regular intervals may be held at the place, at the time and on the notice, if any, as the directors may from time to time determine.

18.2

Voting at Meetings

Questions arising at any meeting of directors are to be decided by a majority of votes and, in the case of an equality of votes, the chair of the meeting does not have a second or casting vote.

18.3

Chair of Meetings

The following individual is entitled to preside as chair at a meeting of directors:

(1)

the chair of the board, if any;

(2)

in the absence of the chair of the board, the president, if any, if the president is a director; or

(3)

any other director chosen by the directors if:

(a)

neither the chair of the board nor the president, if a director, is present at the meeting within 15 minutes after the time set for holding the meeting;

(b)

neither the chair of the board nor the president, if a director, is willing to chair the meeting; or

(c)

the chair of the board and the president, if a director, have advised the secretary, if any, or any other director, that they will not be present at the meeting.

18.4

Meetings by Telephone or Other Communications Medium

A director may participate in a meeting of the directors or of any committee of the directors in person or by telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other. A director may participate in a meeting of the directors or of any committee of the directors by a communications medium other than telephone if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other and if all directors who wish to participate in the meeting agree to such participation. A director who participates in a meeting in a manner contemplated by this Article 18.4 is deemed for all purposes of the Business Corporations Act and these Articles to be present at the meeting and to have agreed to participate in that manner.

18.5

Calling of Meetings

A director may, and the secretary or an assistant secretary of the Company, if any, on the request of a director must, call a meeting of the directors at any time.

18.6

Notice of Meetings,

Other than for meetings held at regular intervals as determined by the directors pursuant to Article 18.1, reasonable notice of each meeting of the directors, specifying the place, day and time of that meeting must be given to each of the directors and the alternate directors by any method set out in Article 24.1 or orally or by telephone.

18.7

When Notice Not Required

It is not necessary to give notice of a meeting of the directors to a director or an alternate director if:

(1)

the meeting is to be held immediately following a meeting of shareholders at which that director was elected or appointed, or is the meeting of the directors at which that director is appointed; or

(2)

the director or alternate director, as the case may be, has waived notice of the meeting.

18.8

Meeting Valid Despite Failure to Give Notice

The accidental omission to give notice of any meeting of directors to, or the non-receipt of any notice by, any director or alternate director, does not invalidate any proceedings at that meeting.

18.9

Waiver of Notice of Meetings

Any director or alternate director may send to the Company a document signed by him or her waiving notice of any past, present or future meeting or meetings of the directors and may at any time withdraw that waiver with respect to meetings held after that withdrawal. After sending a waiver with respect to all future meetings and until that waiver is withdrawn, no notice of any meeting of the directors need be given to that director and, unless the director otherwise requires by notice in writing to the Company, to his or her alternate director, and all meetings of the directors so held are deemed not to be improperly called or constituted by reason of notice not having been given to such director or alternate director.

18.10

Quorum

The quorum necessary for the transaction of the business of the directors may be set by the directors and, if not so set, is deemed to be set at two directors or, if the number of directors is set at one, is deemed to be set at one director, and that director may constitute a meeting.

18.11

Validity of Acts Where Appointment Defective

Subject to the Business Corporations Act, an act of a director or officer is not invalid merely because of an irregularity in the election or appointment or a defect in the qualification of that director or officer.

18.12

Consent Resolutions in Writing

A resolution of the directors or of any committee of the directors may be passed without a meeting:

(1)

in all cases, if each of the directors entitled to vote on the resolution consents to it in writing; or

(2)

in the case of a resolution to approve a contract or transaction in respect of which a director has disclosed that he or she has or may have a disclosable interest, if each of the other directors who are entitled to vote on the resolution consents to it in writing.

A consent in writing under this Article may be by signed document, fax, email or any other method of transmitting legibly recorded messages.  A consent in writing  may be in two or more counterparts which together are deemed to constitute one consent in writing.  A resolution of the directors or of any committee of the directors passed in accordance with this Article 18.12 is effective on the date stated in the consent in writing or on the latest date stated on any counterpart and is deemed to be a proceeding at a meeting of directors or of the committee of the directors and to be as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors that satisfies all the requirements of the Business Corporations Act and all the requirements of these Articles relating to meetings of the directors or of a committee of the directors.

19.

EXECUTIVE AND OTHER COMMITTEES

19.1

Appointment and Powers of Executive Committee

The directors may, by resolution, appoint an executive committee consisting of the director or directors that they consider appropriate, and this committee has, during the intervals between meetings of the board of directors, all of the directors' powers, except:

(1)

the power to fill vacancies in the board of directors;

(2)

the power to remove a director;

(3)

the power to change the membership of, or fill vacancies in, any committee of the directors; and

(4)

such other powers, if any, as may be set out in the resolution or any subsequent directors' resolution.

19.2

Appointment and Powers of Other Committees

The directors may, by resolution:

(1)

appoint one or more committees (other than the executive committee) consisting of the director or directors that they consider appropriate;

(2)

delegate to a committee appointed under paragraph (1) any of the directors' powers, except:

(a)

the power to fill vacancies in the board of directors;

(b)

the power to remove a director;

(c)

the power to change the membership of, or fill vacancies in, any committee of the directors; and

(d)

the power to appoint or remove officers appointed by the directors; and

(3)

make any delegation referred to in paragraph (2) subject to the conditions set out in the resolution or any subsequent directors' resolution.

19.3

Obligations of Committees

Any committee appointed under Articles 19.1 or 19.2, in the exercise of the powers delegated to it, must:

(1)

conform to any rules that may from time to time be imposed on it by the directors; and

(2)

report every act or thing done in exercise of those powers at such times as the directors may require.

19.4

Powers of Board

The directors may, at any time, with respect to a committee appointed under Articles 19.1 or 19.2:

(1)

revoke or alter the authority given to the committee, or override a decision made by the committee, except as to acts done before such revocation, alteration or overriding;

(2)

terminate the appointment of, or change the membership of, the committee; and

(3)

fill vacancies in the committee.

19.5

Committee Meetings

Subject to Article 19.3(1) and unless the directors otherwise provide in the resolution appointing the committee or in any subsequent resolution, with respect to a committee appointed under Articles 19.1 or 19.2:

(1)

the committee may meet and adjourn as it thinks proper;

(2)

the committee may elect a chair of its meetings but, if no chair of a meeting is elected, or if at a meeting the chair of the meeting is not present within 15 minutes after the time set for holding the meeting, the directors present who are members of the committee may choose one of their number to chair the meeting;

(3)

a majority of the members of the committee constitutes a quorum of the committee; and

(4)

questions arising at any meeting of the committee are determined by a majority of votes of the members present, and in case of an equality of votes, the chair of the meeting does not have a second or casting vote.

20.

OFFICERS

20.1

Directors May Appoint Officers

The directors may, from time to time, appoint such officers, if any, as the directors determine and the directors may, at any time, terminate any such appointment.

20.2

Functions, Duties and Powers of Officers

The directors may, for each officer:

(1)

determine the functions and duties of the officer;

(2)

entrust to and confer on the officer any of the powers exercisable by the directors on such terms and conditions and with such restrictions as the directors think fit; and

(3)

revoke, withdraw, alter or vary all or any of the functions, duties and powers of the officer.

20.3

Qualifications

No officer may be appointed unless that officer is qualified in accordance with the Business Corporations Act.  One person may hold more than one position as an officer of the Company. Any person appointed as the chair of the board or as a managing director must be a director. Any other officer need not be a director.

20.4

Remuneration and Terms of Appointment

All appointments of officers are to be made on the terms and conditions and at the remuneration (whether by way of salary, fee, commission, participation in profits or otherwise) that the directors thinks fit and are subject to termination at the pleasure of the directors, and an officer may in addition to such remuneration be entitled to receive, after he or she ceases to hold such office or leaves the employment of the Company, a pension or gratuity.

21.

INDEMNIFICATION

21.1

Definitions

In this Article 21:

(1)

eligible penalty means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;

(2)

eligible proceeding means a legal proceeding or investigative action, whether current, threatened, pending or completed, in which a director, former director or alternate director of the Company (an eligible party) or any of the heirs and legal personal representatives of the eligible party, by reason of the eligible party being or having been a director or alternate director of the Company:

(a)

is or may be joined as a party; or

(b)

is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding;

(3)

expenses has the meaning set out in the Business Corporations Act.

21.2

Mandatory Indemnification of Directors and Former Directors

Subject to the Business Corporations Act, the Company must indemnify a director, former director or alternate director of the Company and his or her heirs and legal personal representatives against all eligible penalties to which such person is or may be liable, and the Company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding.  Each director and alternate director is deemed to have contracted with the Company on the terms of the indemnity contained in this Article 21.2.

21.3

Indemnification of Other Persons

Subject to any restrictions in the Business Corporations Act, the Company may indemnify any person.

21.4

Non-Compliance with Business Corporations Act

The failure of a director, alternate director or officer of the Company to comply with the Business Corporations Act or these Articles does not invalidate any indemnity to which he or she is entitled under this Part.

21.5

Company May Purchase Insurance

The Company may purchase and maintain insurance for the benefit of any person (or his or her heirs or legal personal representatives) who:

(1)

is or was a director, alternate director, officer, employee or agent of the Company;

(2)

is or was a director, alternate director, officer, employee or agent of a corporation at a time when the corporation is or was an affiliate of the Company;

(3)

at the request of the Company, is or was a director, alternate director, officer, employee or agent of a corporation or of a partnership, trust, joint venture or other unincorporated entity;

(4)

at the request of the Company, holds or held a position equivalent to that of a director, alternate director or officer of a partnership, trust, joint venture or other unincorporated entity;

against any liability incurred by him or her as such director, alternate director, officer, employee or agent or person who holds or held such equivalent position.

22.

DIVIDENDS

22.1

Payment of Dividends Subject to Special Rights

The provisions of this Article 22 are subject to the rights, if any, of shareholders holding shares with special rights as to dividends.

22.2

Declaration of Dividends

Subject to the Business Corporations Act, the directors may from time to time declare and authorize payment of such dividends as they may deem advisable.

22.3

No Notice Required

The directors need not give notice to any shareholder of any declaration under Article 22.2.

22.4

Record Date

The directors may set a date as the record date for the purpose of determining shareholders entitled to receive payment of a dividend. The record date must not precede the date on which the dividend is to be paid by more than two months. If no record date is set, the record date is 5 p.m. on the date on which the directors pass the resolution declaring the dividend.

22.5

Manner of Paying Dividend

A resolution declaring a dividend may direct payment of the dividend wholly or partly by the distribution of specific assets or of fully paid shares or of bonds, debentures or other securities of the Company, or in any one or more of those ways.

22.6

Settlement of Difficulties

If any difficulty arises in regard to a distribution under Article 22.5, the directors may settle the difficulty as they deem advisable, and, in particular, may:

(1)

set the value for distribution of specific assets;

(2)

determine that cash payments in substitution for all or any part of the specific assets to which any shareholders are entitled may be made to any shareholders on the basis of the value so fixed in order to adjust the rights of all parties; and

(3)

vest any such specific assets in trustees for the persons entitled to the dividend.

22.7

When Dividend Payable

Any dividend may be made payable on such date as is fixed by the directors.

22.8

Dividends to be Paid in Accordance with Number of Shares

All dividends on shares of any class or series of shares must be declared and paid according to the number of such shares held.

22.9

Receipt by Joint Shareholders

If several persons are joint shareholders of any share, any one of them may give an effective receipt for any dividend, bonus or other money payable in respect of the share.

22.10

Dividend Bears No Interest

No dividend bears interest against the Company.

22.11

Fractional Dividends

If a dividend to which a shareholder is entitled includes a fraction of the smallest monetary unit of the currency of the dividend, that fraction may be disregarded in making payment of the dividend and that payment represents full payment of the dividend.

22.12

Payment of Dividends

Any dividend or other distribution payable in cash in respect of shares may be paid by cheque, made payable to the order of the person to whom it is sent, and mailed to the address of the shareholder, or in the case of joint shareholders, to the address of the joint shareholder who is first named on the central securities register, or to the person and to the address the shareholder or joint shareholders may direct in writing. The mailing of such cheque will, to the extent of the sum represented by the cheque (plus the amount of the tax required by law to be deducted), discharge all liability for the dividend unless such cheque is not paid on presentation or the amount of tax so deducted is not paid to the appropriate taxing authority.

22.13

Capitalization of Surplus

Notwithstanding anything contained in these Articles, the directors may from time to time capitalize any surplus of the Company and may from time to time issue, as fully paid, shares or any bonds, debentures or other securities of the Company as a dividend representing the surplus or any part of the surplus.

23.

ACCOUNTING RECORDS

23.1

Recording of Financial Affairs

The directors must cause adequate accounting records to be kept to record properly the financial affairs and condition of the Company and to comply with the Business Corporations Act.

23.2

Inspection of Accounting Records

Unless the directors determine otherwise, or unless otherwise determined by ordinary resolution, no shareholder of the Company is entitled to inspect or obtain a copy of any accounting records of the Company.

24.

NOTICES

24.1

Method of Giving Notice

Unless the Business Corporations Act or these Articles provides otherwise, a notice, statement, report or other record required or permitted by the Business Corporations Act or these Articles to be sent by or to a person may be sent by any one of the following methods:

(1)

mail addressed to the person at the applicable address for that person as follows:

(a)

for a record mailed to a shareholder, the shareholder's registered address;

(b)

for a record mailed to a director or officer, the prescribed address for mailing shown for the director or officer in the records kept by the Company or the mailing address provided by the recipient for the sending of that record or records of that class;

(c)

in any other case, the mailing address of the intended recipient;

(2)

delivery at the applicable address for that person as follows, addressed to the person:

(a)

for a record delivered to a shareholder, the shareholder's registered address;

(b)

for a record delivered to a director or officer, the prescribed address for delivery shown for the director or officer in the records kept by the Company or the delivery address provided by the recipient for the sending of that record or records of that class;

(c)

in any other case, the delivery address of the intended recipient;

(3)

sending the record by fax to the fax number provided by the intended recipient for the sending of that record or records of that class;

(4)

sending the record by email to the email address provided by the intended recipient for the sending of that record or records of that class;

(5)

physical delivery to the intended recipient.

24.2

Deemed Receipt of Mailing

A record that is mailed to a person by ordinary mail to the applicable address for that person referred to in Article 24.1 is deemed to be received by the person to whom it was mailed on the day, Saturdays, Sundays and holidays excepted, following the date of mailing.

24.3

Certificate of Sending

A certificate signed by the secretary, if any, or other officer of the Company or of any other corporation acting in that behalf for the Company stating that a notice, statement, report or other record was addressed as required by Article 24.1, prepaid and mailed or otherwise sent as permitted by Article 24.1 is conclusive evidence of that fact.

24.4

Notice to Joint Shareholders

A notice, statement, report or other record may be provided by the Company to the joint shareholders of a share by providing the notice to the joint shareholder first named in the central securities register in respect of the share.

24.5

Notice to Trustees

A notice, statement, report or other record may be provided by the Company to the persons entitled to a share in consequence of the death, bankruptcy or incapacity of a shareholder by:

(1)

mailing the record, addressed to them:

(a)

by name, by the title of the legal personal representative of the deceased or incapacitated shareholder, by the title of trustee of the bankrupt shareholder or by any similar description; and

(b)

at the address, if any, supplied to the Company for that purpose by the persons claiming to be so entitled; or

(2)

if an address referred to in paragraph (1)(b) has not been supplied to the Company, by giving the notice in a manner in which it might have been given if the death, bankruptcy or incapacity had not occurred.

25.

SEAL

25.1

Who May Attest Seal

Except as provided in Articles 25.2 and 25.3, the Company's seal, if any, must not be impressed on any record except when that impression is attested by the signatures of:

(1)

any two directors;

(2)

any officer, together with any director;

(3)

if the Company only has one director, that director; or

(4)

any one or more directors or officers or persons as may be determined by the directors.

25.2

Sealing Copies

For the purpose of certifying under seal a certificate of incumbency of the directors or officers of the Company or a true copy of any resolution or other document, despite Article 25.1, the impression of the seal may be attested by the signature of any director or officer.

25.3

Mechanical Reproduction of Seal

The directors may authorize the seal to be impressed by third parties on share certificates or bonds, debentures or other securities of the Company as they may determine appropriate from time to time. To enable the seal to be impressed on any share certificates or bonds, debentures or other securities of the Company, whether in definitive or interim form, on which facsimiles of any of the signatures of the directors or officers of the Company are, in accordance with the Business Corporations Act or these Articles, printed or otherwise mechanically reproduced, there may be delivered to the person employed to engrave, lithograph or print such definitive or interim share certificates or bonds, debentures or other securities one or more unmounted dies reproducing the seal and the chair of the board or any senior officer together with the secretary, treasurer, secretary-treasurer, an assistant secretary, an assistant treasurer or an assistant secretary-treasurer may in writing authorize such person to cause the seal to be impressed on such definitive or interim share certificates or bonds, debentures or other securities by the use of such dies. Share certificates or bonds, debentures or other securities to which the seal has been so impressed are for all purposes deemed to be under and to bear the seal impressed on them.

26.

PROHIBITIONS

26.1

Definitions

In this Article 26:

(1)

designated security means:

(a)

a voting security of the Company;

(b)

a security of the Company that is not a debt security and that carries a residual right to participate in the earnings of the Company or, on the liquidation or winding up of the Company, in its assets; or

(c)

a security of the Company convertible, directly or indirectly, into a security described in paragraph (a) or (b);

(2)

security has the meaning assigned in the Securities Act(British Columbia);

(3)

voting security means a security of the Company that:

(a)

is not a debt security, and

(b)

carries a voting right either under all circumstances or under some circumstances that have occurred and are continuing.

26.2

Application

Article 26.3 does not apply to the Company if and for so long as it is a public company or a pre-existing reporting company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply.

26.3

Consent Required for Transfer of Shares or Designated Securities

No share or designated security may be sold, transferred or otherwise disposed of without the consent of the directors and the directors are not required to give any reason for refusing to consent to any such sale, transfer or other disposition.







---





|INTERNATIONAL KRL RESOURCES CORP.
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
MAY 31, 2005, 2004 AND 2003
(Expressed in Canadian Dollars)
|--------------------------------------------------------------------------------------------------------------------------------------



---

[f2005financialstatementik002.gif]









AUDITORS REPORT



To the Shareholders of

International KRL Resources Corp.

(An Exploration Stage Company)

We have audited the balance sheets of International KRL Resources Corp. (An Exploration Stage Company) as at May 31, 2005 and 2004, and the statements of operations and deficit, and cash flows and the schedule of deferred exploration and development costs for the years ended May 31, 2005, 2004 and 2003. These financial statements are the responsibility of the Companys management. 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. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at May 31, 2005 and 2004 and the results of its operations and its cash flows for the years ended May 31, 2005, 2004 and 2003 in accordance with Canadian generally accepted accounting principles.



/s/ Manning Elliott



Chartered Accountants

Vancouver, British Columbia

September 20, 2005





COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA-U.S. REPORTING CONFLICT



In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when the financial statements are affected by going concern considerations such as described in Note 1 to the financial statements. Our report to the shareholders, dated September 20, 2005, is expressed in accordance with Canadian reporting standards which do not permit a reference to such considerations in the Auditors Report when the consideration is adequately disclosed in the financial statements.



/s/ Manning Elliott



CHARTERED ACCOUNTANTS

Vancouver, British Columbia

September 20, 2005



---





INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

BALANCE SHEETS

(Expressed in Canadian Dollars)





|                                                                     |   | May 31      |   | May 31     
|-------------------------------------------------------------------- | - | ----------- | - | -----------
|                                                                     |   | 2005        |   | 2004       
|                                                                     |   |             |   |            
|ASSETS                                                               |   |             |   |            
|CURRENT ASSETS                                                       |   |             |   |            
|Cash                                                                 | $ | 74,281      | $ | 477,809    
|Cash and deposits committed for mineral exploration (Notes 8 and 10) |   | 110,150     |   |           
|Short-term investment committed for mineral exploration              |   | 1,200,000   |   |           
|Marketable securities (Note 3)                                       |   | 27,000      |   |           
|Prepaid expenses and deposits                                        |   | 26,289      |   | 15,168     
|Due from related parties (Note 7)                                    |   | 17,904      |   | 33,095     
|Mining exploration tax credit receivable                             |   | 16,368      |   |           
|Amounts Receivable                                                   |   | 23,029      |   | 32,555     
|                                                                     |   |             |   |            
|                                                                     |   | 1,495,021   |   | 558,627    
|PROPERTY AND EQUIPMENT (Note 5)                                      |   | 51,212      |   | 48,062     
|MINERAL PROPERTIES (Note 6)                                          |   | 4,023,276   |   | 3,148,356  
|                                                                     |   |             |   |            
|                                                                     | $ | 5,569,509   | $ | 3,755,045  
|                                                                     |   |             |   |            
|LIABILITIES                                                          |   |             |   |            
|CURRENT LIABILITIES                                                  |   |             |   |            
|Accounts payable and accrued liabilities                             | $ | 50,140      | $ | 78,124     
|Due to related parties (Note 7)                                      |   | 5,103       |   | 53         
|                                                                     |   |             |   |            
|                                                                     |   | 55,243      |   | 78,177     
|                                                                     |   |             |   |            
|                                                                     |   |             |   |            
|SHAREHOLDERS' EQUITY                                                 |   |             |   |            
|SHARE CAPITAL (Note 8)                                               |   | 11,459,894  |   | 9,090,852  
|CONTRIBUTED SURPLUS                                                  |   | 369,899     |   | 42,112     
|DEFICIT                                                              |   | (6,315,527) |   | (5,456,096)
|                                                                     |   |             |   |            
|                                                                     |   | 5,514,266   |   | 3,676,868  
|                                                                     |   |             |   |            
|                                                                     | $ | 5,569,509   | $ | 3,755,045  



NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS (Note 1)

COMMITMENTS (Notes 6, and 10)

SUBSEQUENT EVENTS (Note 11)

Approved on Behalf of the Board:



|Seamus Young         |  | Judith Mazvihwa        
|---------------------- |  | -------------------------
|Seamus Young, Director |  | Judith Mazvihwa, Director



(The Accompanying Notes are an Integral Part of these Financial Statements)



---





INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

STATEMENTS OF OPERATIONS AND DEFICIT

(Expressed in Canadian Dollars)





|                                                 |   | For the Years Ended May 31
|------------------------------------------------ | - | --------------------------
|                                                 |   | 2005                      
|                                                 |   |                           
|REVENUE                                          | $ |                          
|                                                 |   |                           
|EXPENSES                                         |   |                           
|Accounting and legal                             |   | 29,470                    
|Administration salaries                          |   | 80,155                    
|Amortization                                     |   | 3,739                     
|Financing fees and expenses                      |   | 250,404                   
|Investor relations                               |   | 40,949                    
|Management fees (Note 7)                         |   | 29,600                    
|Office and miscellaneous                         |   | 61,433                    
|Promotion and travel                             |   | 41,207                    
|Stock exchange and filing fees                   |   | 16,504                    
|Stock-based compensation (Note 8)                |   | 327,787                   
|Transfer agent                                   |   | 6,268                     
|Operator management fees                         |   |                          
|Gain on option of property                       |   | (50,085)                  
|Loss on write-off of mineral properties (Note 6) |   | 18,000                    
|Other (gains) and losses                         |   | 4,000                     
|                                                 |   |                           
|TOTAL EXPENSES                                   |   | 859,431                   
|                                                 |   |                           
|NET LOSS FOR THE YEAR                            |   | 859,431                   
|                                                 |   |                           
|DEFICIT - BEGINNING OF YEAR                      |   | 5,456,096                 
|                                                 |   |                           
|DEFICIT - END OF YEAR                            | $ | 6,315,527                 
|                                                 |   |                           
|NET LOSS PER SHARE - Basic and Diluted           | $ | (0.03)                    
|                                                 |   |                           
|WEIGHTED AVERAGE SHARES OUTSTANDING              |   | 25,696,000                
|                                                 |   |                           



(The Accompanying Notes are an Integral Part of these Financial Statements)



---





INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

STATEMENTS OF CASH FLOWS

(Expressed in Canadian Dollars)





|                                                        |   | For the Years Ended May 31
|------------------------------------------------------- | - | --------------------------
|                                                        |   | 2005                      
|OPERATING ACTIVITIES                                    |   |                           
|Net Loss for the Year                                   | $ | (859,431)                 
|Adjustments to reconcile net loss to net cash           |   |                           
|Amortization                                            |   | 3,739                     
|Stock-based compensation                                |   | 387,079                   
|Gains and losses                                        |   | (28,085)                  
|                                                        |   |                           
|                                                        |   | (496,698)                 
|Changes in non-cash working capital items               |   |                           
|                                                        |   |                           
|Prepaid expenses and deposits                           |   | (11,121)                  
|Mining exploration tax credits                          |   | (16,368)                  
|Due from related parties                                |   | 15,191                    
|Other current assets                                    |   | 9,526                     
|Accounts payable and accrued liabilities                |   | (27,984)                  
|Due to related parties                                  |   | 5,050                     
|                                                        |   |                           
|NET CASH USED IN OPERATING ACTIVITIES                   |   | (522,404)                 
|                                                        |   |                           
|FINANCING ACTIVITIES                                    |   |                           
|                                                        |   |                           
|Issue of share capital for cash                         |   | 2,264,750                 
|                                                        |   |                           
|NET CASH PROVIDED BY FINANCING ACTIVITIES               |   | 2,264,750                 
|                                                        |   |                           
|INVESTING ACTIVITIES                                    |   |                           
|                                                        |   |                           
|Short-term investment                                   |   | (1,200,000)               
|Acquisition of property and equipment                   |   | (7,971)                   
|Proceeds on disposal of property and equipment          |   |                          
|Acquisition of mineral properties                       |   | (61,770)                  
|Deferred exploration and development costs              |   | (790,983)                 
|Mineral property option proceeds                        |   | 25,000                    
|                                                        |   |                           
|NET CASH USED IN INVESTING ACTIVITIES                   |   | (2,035,724)               
|                                                        |   |                           
|INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS        |   | (293,378)                 
|                                                        |   |                           
|CASH AND CASH EQUIVALENTS  BEGINNING OF THE YEAR       |   | 477,809                   
|                                                        |   |                           
|CASH AND CASH EQUIVALENTS  END OF THE YEAR             | $ | 184,431                   
|                                                        |   |                           
|CASH AND CASH EQUIVALENTS CONSIST OF:                   |   |                           
|Cash                                                    | $ | 74,281                    
|Cash committed for mineral exploration (Notes 8 and 10) |   | 110,150                   
|                                                        |   |                           
|                                                        | $ | 184,431                   
|                                                        |   |                           













(The Accompanying Notes are an Integral Part of these Financial Statements)



---





INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

STATEMENTS OF CASH FLOWS

(Expressed in Canadian Dollars)





SUPPLEMENTAL CASH FLOW INFORMATION



|SUPPLEMENTAL CASH-FLOW INFORMATION                       |  |        |  |        |  |  
|-------------------------------------------------------- |  | ------ |  | ------ |  | -
|Interest paid on debt                                    |  |       |  |       |  | 
|Income tax paid                                          |  |       |  |       |  | 
|                                                         |  |        |  |        |  |  
|SUPPLEMENTAL NON-CASH FINANCING AND INVESTING ACTIVITIES |  |        |  |        |  |  
|Issue of share capital for mineral properties            |  | 35,000 |  | 29,000 |  | 
|Issue of share capital for house purchase option         |  | 10,000 |  |       |  | 
|Issue of share capital for consultants                   |  | 6,000  |  |       |  | 
|Mineral property costs recovered as stock payments       |  | 5,915  |  |       |  | 





(The Accompanying Notes are an Integral Part of these Financial Statements)



---





INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

SCHEDULES OF DEFERRED EXPLORATION AND DEVELOPMENT COSTS

(Expressed in Canadian Dollars)



|                                         |   | For the Year Ended May 31, 2005
|---------------------------------------- | - | -------------------------------
|                                         |   | Copper Hill                    
|EXPLORATION AND DEVELOPMENT COSTS        |   |                                
|Accommodation and meals                  | $ | 39,639                         
|Amortization of field-use equipment      |   | 11,082                         
|Assays                                   |   | 65,903                         
|Drafting                                 |   | 3,552                          
|Drilling                                 |   | 239,082                        
|Geological wages, fees and costs         |   | 153,148                        
|Geophysics                               |   | 5,999                          
|License and recording fees               |   | 3,289                          
|Supplies and communication               |   | 43,708                         
|Support wages                            |   | 115,294                        
|Travel and vehicle expense               |   | 54,700                         
|Less: Mining exploration tax credits     |   |                               
|                                         |   |                                
|TOTAL COSTS INCURRED DURING THE YEAR     |   | 735,396                        
|                                         |   |                                
|Recoveries  option payments received    |   |                               
|                                         |   |                                
|BALANCE - BEGINNING OF YEAR              |   | 2,631,476                      
|                                         |   |                                
|BALANCE - END OF YEAR                    | $ | 3,366,872                      
|                                         |   |                                
|                                         |   | For the Year Ended May 31, 2004
|                                         |   | Copper Hill                    
|EXPLORATION AND DEVELOPMENT COSTS        |   |                                
|Accommodation and meals                  | $ | 42,687                         
|Amortization of field-use equipment      |   | 13,131                         
|Assays                                   |   | 18,657                         
|Drafting                                 |   | 9,214                          
|Drilling                                 |   | 227,882                        
|Geological wages, fees and costs         |   | 117,306                        
|Geophysics                               |   | 128,746                        
|License and recording fees               |   | 2,312                          
|Supplies and communication               |   | 4,458                          
|Support wages                            |   | 33,628                         
|Travel and vehicle expense               |   | 22,073                         
|                                         |   |                                
|TOTAL COSTS INCURRED DURING THE YEAR     |   | 620,094                        
|                                         |   |                                
|Expenditures funded by property optionee |   | (112,500)                      
|                                         |   |                                
|                                         |   | 507,594                        
|                                         |   |                                
|BALANCE - BEGINNING OF YEAR              |   | 2,123,882                      
|                                         |   |                                
|BALANCE - END OF YEAR                    | $ | 2,631,476                      



(The Accompanying Notes are an Integral Part of these Financial Statements)



---

INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2005 AND 2004

(Expressed in Canadian Dollars)







1.

NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS

International KRL Resources Corp. (the Company) was incorporated in the Province of British Columbia and is primarily engaged in the acquisition, exploration and development of mineral properties throughout Canada. The Company is a public company listed on the TSX Venture Exchange.

The Company is an exploration stage company. The exploration activities of the Company have been primarily funded by the issuance of share capital. The continued operations of the Company are dependent on its ability to obtain sufficient equity financing and financial support from related parties and to generate profitable operations in the future. The Company has working capital of $1,439,778 and an accumulated deficit of $6,325,019 as at May 31, 2005. There is no guarantee that the Company will be able to raise any additional equity financing to continue its exploration projects over and above working capital as stated.

These financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. Failure to continue as a going concern would require that stated amounts of assets and liabilities be reflected on a liquidation basis, which will differ from the going concern basis.





2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)

Basis of presentation

The financial statements of the Company are prepared in accordance with Canadian generally accepted accounting principles.

(b)

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

(c)

Marketable Securities

Marketable securities are recorded at cost. The carried amount is reduced to market value where there has been a decline in value below cost, that is other than temporary.

(d)

Loss Per Share

Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the Year. The Company applies the treasury stock method in calculating diluted EPS. Diluted EPS excludes all dilutive potential common shares if their effect is anti-dilutive. Loss per share information does not include the effect of any potential common shares, as their effect would be anti-dilutive.

(e)

Mineral Properties and Deferred Expenditures

The Company is in the exploration stage with respect to its investment in natural resource properties and capitalizes all costs related to an exploration project in accordance with Emerging Issues Committee (EIC) Abstract No. 126, Accounting by Mining Enterprises for Exploration Costs and Accounting Guideline No. 11 (AcG-11), Enterprises in the Development Stage issued by the Canadian Institute of Chartered Accountants. The Company capitalizes all costs related to the acquisition and continuing exploration of mineral properties. If the mineral properties are otherwise impaired, the related capitalized costs are charged to operations. If any of the Company's mineral properties attains commercial production, capitalized costs will be amortized on a unit of production basis. The Company does not accrue the estimated future costs of maintaining its mineral properties in good standing.







---

INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2005 AND 2004

(Expressed in Canadian Dollars)







2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(f)

Use of Estimates

The preparation of financial statements in accordance with Canadian generally accepted accounting principles requires management to make estimates and assumptions based on currently available information. Such estimates and assumptions may affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses during the year. Actual results could differ from the estimates and assumptions used.

(g)

Long-lived assets

The Company monitors the recoverability of long-lived assets, based on factors such as current market value, future asset utilization, business climate and future undiscounted cash flows expected to result from the use of the related assets. The Company's policy is to record an impairment loss in the year when it is determined that the carrying amount of the assets may not be recoverable. The impairment loss is calculated as the amount by which the carrying amount of the assets exceeds the undiscounted estimated future cash flows from the asset.

(h)

Property and Equipment

Property and equipment are recorded at cost less accumulated amortization. Amortization is calculated using the declining balance method at the following rates:

|Office and field equipment |  | 20%
|-------------------------- |  | ---
|Computer equipment         |  | 30%
|Vehicle                    |  | 30%
|Software                   |  | 50%

In the year of acquisition, amortization is recorded at one-half the above rates.

(i)

Income taxes

The Company follows the asset and liability method of accounting for income taxes. Future income tax assets and liabilities are determined based on temporary differences between the accounting and taxes bases of existing assets and liabilities, and are measured using the tax rates expected to apply when these differences reverse. A valuation allowance is recorded against any future tax asset if it is more likely than not that the asset will not be realized.

(j)

Stock-Based Compensation

The Company recognizes stock-based compensation expense in accordance with CICA Handbook Section 3870 Stock-based Compensation and Other Stock-based Payments. When stock or stock options are issued to employees or non-employees, compensation expense is recognized based on the fair value of the stock or stock options issued.

(k)

Stock Issuance Costs

The Company charges all costs relating to issuing shares and raising capital directly to operations.







---

INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2005 AND 2004

(Expressed in Canadian Dollars)







2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(l)

Flow-through Shares

The Company has adopted EIC-146, which is effective for all flow-through share transactions initiated after March 19, 2004. Canadian tax legislation permits a company to issue securities referred to as flow-through shares whereby the investor may claim the tax deductions arising from the related resource expenditures. When resource expenditures are renounced to the investors and the Company has reasonable assurance that the expenditures will be completed, a future income tax liability is recognized and the shareholders equity is reduced.

If the Company has sufficient unused tax loss carry-forwards to offset all or part of this future income tax liability and no future income tax assets have been previously recognized for these carry-forwards, a portion, of such unrecognized losses, is recorded as income up to the amount of the future income tax liability that was previously recognized on the renounced expenditures.

(m)

Comparative Figures

Certain comparative figures have been reclassified to conform to the current years presentation.



3.

MARKETABLE SECURITIES

Marketable securities, recorded at a cost of $27,000, had a quoted market value of $27,000 at May 31, 2005. In 2005 marketable securities valued at $31,000 were received for option payments and written down to a market value at year end of $27,000.



4.

FINANCIAL INSTRUMENTS

The Company's financial instruments consist of cash, marketable securities, prepaid and other current assets, accounts payable and accrued liabilities and advances to and from related parties. In management's opinion the company is not exposed to significant interest rate, currency exchange rate or credit risk arising from these financial instruments. The fair values of these financial instruments approximate their carrying values because of their current nature. The company is not party to any derivative instruments.



5.

PROPERTY AND EQUIPMENT

|                   |   |        |   |              |   | May 31 2005 |   | May 31 2004
|------------------ | - | ------ | - | ------------ | - | ----------- | - | -----------
|                   |   |        |   | Accumulated  |   | Net Book    |   | Net Book   
|                   |   | Cost   |   | Amortization |   | Value       |   | Value      
|                   |   |        |   |              |   |             |   |            
|Crew house option  | $ | 10,000 | $ |             | $ | 10,000      | $ |           
|Field equipment    |   | 5,916  |   | 2,162        |   | 3,754       |   | 3,315      
|Office equipment   |   | 10,164 |   | 2,922        |   | 7,242       |   | 5,301      
|Computer equipment |   | 16,599 |   | 9,265        |   | 7,334       |   | 9,250      
|Vehicle            |   | 35,525 |   | 14,388       |   | 21,137      |   | 30,196     
|Software           |   | 2,327  |   | 582          |   | 1,745       |   |            
|                   |   |        |   |              |   |             |   |            
|                   | $ | 80,531 | $ | 29,319       | $ | 51,212      | $ | 48,062     
|                   |   |        |   |              |   |             |   |            









---

INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2005 AND 2004

(Expressed in Canadian Dollars)







6.

MINERAL PROPERTIES

|                                    |   | May 31, 2005     
|----------------------------------- | - | -----------------
|                                    |   | Acquisition
Costs
|                                    |   |                  
|(a)
Copper Hill Project, Ontario    | $ | 516,620          
|(b)
Nor Property, Yukon             |   | 73,665           
|(c)
Carswell Property, Saskatchewan |   |                 
|(d)
Bear River Project, B.C.        |   | 1                
|                                    |   |                  
|                                    | $ | 590,286          
|                                    |   |                  



|                                    |   | May 31, 2004     
|----------------------------------- | - | -----------------
|                                    |   | Acquisition
Costs
|                                    |   |                  
|(a)
Copper Hill Project, Ontario    | $ | 515,586          
|(b)
Nor Property, Yukon             |   |                 
|(c)
Carswell Property, Saskatchewan |   |                 
|(d)
Bear River Project, B.C.        |   | 1                
|                                    |   |                  
|                                    | $ | 515,587          
|                                    |   |                  

(a)

Copper Hill Project, Ontario

(i)

By various agreements ranging in date from December 11, 1991 to February 4, 2005 and staking, the Company holds a total of 853 claim units of approximately 20 hectares each including 510 in which the Company has a 100% interest. The Company has 158 claims, or 343 units, with various net smelter returns ("NSR's") ranging between 1% and 3%. The Company has the right to buy-back 50% of the NSR's at prices ranging from $100,000 to $1,000,000 and the right of first refusal on the remaining 50%. The NSR's are contained in nineteen separate agreements without any perimeter clauses.

Included in the above is a 100% interest in 4 mining leases totalling 20 mineral claims located in the MacMurchy, Natal and Knight Townships of Ontario.

During the year, the Company staked an additional 2 claims, representing 4 units, in the Leonard Township contiguous to the Companys Copper Hill Project. During the year, the Company re-staked various other claims, which upon filing were re-evaluated from 133 units to 139 units.

(ii)

Pursuant to an agreement dated January 22, 2001 the Company had an option to acquire 15 claims, totalling 30 units in the MacMurchy, Tyrrell and Knight townships. Pursuant to an amending agreement dated February 4, 2005, this option was converted to a 100% ownership interest in the claims, in consideration of the issuance of 50,000 common shares, at a fair value of $0.14 per share, for total consideration of $7,000. The interest is subject to a 2% NSR retained by the vendors. The Company has the right to purchase 50% of the NSR within 4 years of the commencement of commercial production by paying $1,000,000. The Company has a further right of first refusal on the remaining 50% of the NSR.

(iii)

Pursuant to an Option Agreement dated February 4, 2004, the Company granted an option to Hemlo North Shore Inc. (Hemlo) to acquire 50% of the Companys interest in the Decker Claim group of the Copper Hill property. During 2004, Hemlo funded $125,000 of exploration, as an option payment. In November of 2004, the agreement was terminated, due to Hemlos failure to make the second option payment.







---

INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2005 AND 2004

(Expressed in Canadian Dollars)







6.

MINERAL PROPERTIES (continued)

(a)

Copper Hill Project, Ontario (continued)

(iv)

Pursuant to an agreement dated June 3, 2003, the Company acquired 4 mineral claims representing 39 claim units in Tyrrell and Leonard townships of Ontario, in exchange for 60,000 common shares, at a fair value of $0.20 per share and $6,000 in cash, for total consideration of $18,000. On April 12, 2005, after an unsuccessful prospecting program, the property was returned to the vendors and the acquisition costs of $18,000 were written off. An additional 5 claims, representing 63 units, contiguous to this property that had been acquired through staking, were also abandoned at that time.

(v)

Pursuant to an agreement dated December 1, 2003, the Company re-negotiated its interest in 43 mineral claims from a 17.9% interest to a 100% interest in exchange for 100,000 common shares at a fair value of $0.17 per share for total consideration of $17,000. The mineral claims are located in the Knight and Natal Townships of Ontario.

(vi)

Future commitments under certain option agreements include issuing 5,000 shares upon regulatory acceptance of a technical report recommending a second phase exploration work program on 1 mineral claim located in the Knight Township and making annual advance royalty payments of $10,000 commencing on completion of a bankable feasibility study and continuing until commencement of commercial production with regard to 13 mineral claims located in the Knight and Natal Townships, acquired by an option agreement dated February 4, 1994. The payments shall be applied as a credit against the NSR royalty payable on these claims.

(b)

Nor Property, Yukon Territory

Pursuant to an Option Agreement dated October 28, 2004 the Company acquired the right to earn a 100% interest, subject to a 2% NSR Royalty, in 52 mineral claims in the Dawson Mining District, Yukon Territory. In order to exercise the option, the Company must pay a total of up to $207,500 cash consideration and issue a total of 1,000,000 shares as follows:

Cash consideration:

(i)

$7,500 paid within 5 days of agreement;

(ii)

a further $20,000 paid on June 1, 2005;

(iii)

a further $30,000 to be paid on December 1, 2005;

(iv)

a further $40,000 to be paid on December 1, 2006;

(v)

a further $50,000 to be paid December 1, 2007; and

(vi)

a further $60,000 to be paid December 1, 2008.



If at any time the shares of the Company trade, for 10 days, at $1 or more, all further cash payments will be deemed to have been satisfied.

Share consideration:

(i)

200,000 shares issued in December, 2004;

(ii)

a further 200,000 shares issued on December 1, 2005;

(iii)

a further 200,000 shares to be issued on December 1, 2006;

(iv)

a further 200,000 shares to be issued on December 1, 2007; and

(v)

a further 200,000 shares to be issued on December 1, 2008.

The Company will have the right to purchase 50% of the NSR royalty retained by the Optionor for a purchase price of $2,000,000 and the right of first refusal on the remaining 50%.







---

INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2005 AND 2004

(Expressed in Canadian Dollars)







6.

MINERAL PROPERTIES (continued)

(b)

Nor Property, Yukon Territory (continued)

During the year, the Company staked an additional 154 claims, to bring the total number of claims to 206. These claims are subject to the same NSR terms as the option agreement claims.

(c)

Carswell Property, Saskatchewan

During October, 2004, the Company staked 1 claim, consisting of 5,970 acres in the Athabasca Basin area of Saskatchewan.

Pursuant to an Option Agreement dated March 2, 2005, the Company granted an option to ESO Uranium Corp. (formerly Essendon Solutions Inc.) to acquire 50% of the Companys interest in the Carswell Property. In order to exercise the option, ESO must pay the Company a total of $25,000 cash, issue a total of 200,000 shares and expend a total of $100,000 on exploration as follows:

[i]

$25,000 paid on or before March 19, 2005;

[ii]

100,000 shares issued on or before March 19, 2005;

[iii]

50,000 shares to be issued on or before March 14, 2006;

[iii]

50,000 shares to be issued on or before March 14, 2007;

[iv]

$25,000 to be expended on exploration before March 14, 2006;

[v]

a further $25,000 to be expended on exploration before March 14, 2007;

[vi]

a further $25,000 to be expended on exploration before March 14, 2008; and

[vii]

a further $25,000 to be expended on exploration before March 14, 2009.

(d)

Bear River Property, British Columbia

The Company owns a 100% interest in 3 mineral claims representing 31 units, located in the Skeena Mining Division of British Columbia. One of these claims is subject to a 4% NSR Royalty.





7.

RELATED PARTY TRANSACTIONS AND BALANCES

During the years ended March 31, 2005 and 2004, the Company was involved in the following related party transactions:

(a)

Management fees totalling $29,600 (2004 - $32,500; 2003 - $60,000) and exploration and development costs totalling $36,800 (2004  $35,100; 2003 - Nil), were paid to a corporation controlled by the President of the Company.

(b)

Accounting fees totalling $Nil (2004 - $21,267; 2003 - $20,388) were paid to the secretary of the Company.

(c)

Geological consulting fees totalling $Nil (2004  Nil; 2003 - $3,445) were paid to a director of the Company.

All of the following amounts, due to and from the Company [(b) to (e)], are unsecured, non-interest bearing and have no specific terms of repayment:

(d)

An amount of $5,000 (2004 - $25,000) was due from a director at the end of the year, for shares issued and recorded as subscription receivable in the prior year.

(e)

Amounts due from related parties of $6,697 (2004 - $6,697) represent a loan to a director.

(f)

Amounts due to related parties of $5,103 (2004  $200 due from) represent amounts owing to a corporation controlled by the President, of the Company, for management fees and other costs.

(g)

Amounts due from related parties of $11,207 (2004  Nil) represent amounts due from a company with a majority of common directors and a common president, for reimbursement of shared office costs and other expenditures.







---

INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2005 AND 2004

(Expressed in Canadian Dollars)







7.

RELATED PARTY TRANSACTIONS AND BALANCES (continued)

(h)

During the prior year, the Company entered into a lease agreement with a relative of the President for use of a house located in Gowganda, Ontario. The house serves as the base for the exploration programs being conducted by the Company on the nearby Copper Hill Property. The lease was extended, subsequent to the year end, to June 15, 2006. Lease payments were $2,000 per month for a total of $24,000 (2004  11,000) paid during the year. In addition, during the year, the Company issued 50,000 common shares, at a value of $0.20 each, for total compensation of $10,000, for an option, to purchase the house for $90,000, expiring, after extension, on June 15, 2006.

All of the above noted transactions were recorded at their exchange amount and, with the exception of advances to directors and officers, have been made in the normal course of operations.





8.

SHARE CAPITAL

The authorized share capital of the Company consists of 100,000,000 common shares without par value.

|                                           | May 31
2005      |  | May 31
2004
|------------------------------------------ | ---------------- |  | -----------
|                                           | Number
of shares |  | Amount
$   
|                                           |                  |  |            
|Balance, beginning of year                 | 22,708,306       |  | 9,090,852  
|                                           |                  |  |            
|Shares issued for:                         |                  |  |            
|                                           |                  |  |            
|Cash                                       | 11,981,667       |  | 2,244,750  
|Mineral properties (Note 8(a)(v))          | 250,000          |  | 35,000     
|Agents fee (Notes 8(a)(i)(ii))             | 355,283          |  | 53,292     
|Consulting fees (Note 8(a)(vi)             |                 |  | 6,000      
|Crew house purchase option (Note 8(a)(iv)) | 50,000           |  | 10,000     
|Add: subscriptions paid                    |                 |  | 20,000     
|Less: subscriptions receivable             |                 |  |           
|                                           |                  |  |            
|Balance, end of year                       | 35,345,256       |  | 11,459,894 
|                                           |                  |  |            

(a)

Transactions for the issue of Share Capital during the Year Ended May 31, 2005

(i)

During the year, the Company completed the second tranche of a brokered private placement financing and issued 1,900,000 flow-through units at $0.20 per unit for total cash consideration of $380,000. Each flow-through unit consisted of: (i) one flow-through share, (ii) one-half of one transferable warrant entitling the holder of one whole warrant to purchase one non-flow-through common share at a price of $0.40 on or before May 19, 2006 and (iii) one-half of one transferable warrant entitling the holder of one whole warrant to purchase one non-flow-through common share at a price of $0.80 on or before May 19, 2007.







---

INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2005 AND 2004

(Expressed in Canadian Dollars)







8.

SHARE CAPITAL (continued)

(a)

Transactions for the Issue of Share Capital during the Year Ended May 31, 2005 (continued)

Pursuant to the financing, a commission of 8% of the gross proceeds was payable to the agent, part of which consisted of 22,293 units valued at $0.15 per unit. Each such unit had the same securities, terms and conditions as the non-flow-through units of the first tranche, of the financing, as described in paragraph (ii) below. In addition, the agent was granted an option to purchase up to 285,000 units at a price of $0.20 per unit expiring May 19, 2007. Each unit consisted of one non-flow-through common share and one non-transferable warrant entitling the holder to purchase one non-flow-through common share at a price of $0.40 on or before May 19, 2006 or at a price of $0.80 on or before May 19, 2007.

Pursuant to this financing, the Company became committed to incur $379,620 of Canadian Exploration Expenditures within 2 years of the agreement dates. No expenditures were incurred during the year that could be applied to these agreements. At May 31, 2005, the Company's commitment remained at $379,620.

(ii)

During the year, the Company completed the first tranche of the brokered private placement financing, partly described above in paragraph (i), and issued 4,950,000 flow-through units at $0.20 per unit and 3,031,667 non-flow-through units at $0.15 per unit for total cash consideration of $1,444,750. Each flow-through unit consisted of: (i) one flow-through share, (ii) one-half of one transferable warrant entitling the holder of one whole warrant to purchase one non-flow-through common share at a price of $0.40 on or before April 12, 2006 and (iii) one-half of one transferable warrant entitling the holder of one whole warrant to purchase one non-flow-through common share at a price of $0.80 on or before April 12, 2007. Each non-flow-through unit consisted of: (i) one non-flow-through common share, (ii) one-half of one transferable warrant entitling the holder of one whole warrant to purchase one non-flow-through common share at a price of $0.35 on or before April 12, 2006 and (iii) one-half of one transferable warrant entitling the holder of one whole warrant to purchase one non-flow-through common share at a price of $0.75 on or before April 12, 2007.

Pursuant to the financing, a commission of 8% of the gross proceeds was payable to the agent, part of which consisted of 332,990 units valued at $0.15 per unit. Each such unit had the same securities, terms and conditions as the non-flow-through units of the financing. In addition, the agent was granted an option to purchase up to 1,197,250 units at a price of $0.20, expiring April 12, 2007. Each such unit consists of one non-flow-through common share and one non-transferable warrant entitling the holder to purchase one non-flow-through common share at a price of $0.40 on or before April 12, 2006 or at a price of $0.80 on or before April 12, 2007.

Pursuant to this financing, the Company became committed to incur $989,010 of Canadian Exploration Expenditures within 2 years of the agreement dates. During the year, the Company incurred $58,480 of eligible expenditures, none of which has been renounced. At May 31, 2005, the Company's remaining commitment was $930,530.

(iii)

During the year, the Company completed a private placement financing and issued 2,100,000 flow-through units at $0.20 per unit for total cash consideration of $420,000. Each unit consisted of one flow-through share and one-half of one share purchase warrant. One full warrant entitles the purchaser to acquire one additional non-flow-through common share. The warrants have an exercise price of $0.25 per share on or before August 16, 2005. In addition, the Company paid a corporate financing fee consisting of an 8% commission of $33,600, a $5,000 administration fee and issued 315,000 common share purchase warrants to the agents in connection with this offering. The agents warrants have the same terms as the warrants.

Pursuant to this financing, the Company became committed to incur $420,000 of Canadian Exploration Expenditures within 2 years of the agreement dates. During the year, the Company incurred $420,000 of eligible expenditures, which were renounced to shareholders, as of December 31, 2004. At May 31, 2005, the Company's remaining commitment was $Nil.







---

INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2005 AND 2004

(Expressed in Canadian Dollars)







8.

SHARE CAPITAL (continued)

(a)

Transactions for the Issue of Share Capital during the Year Ended May 31, 2005 (continued)

(iv)

During the year, the Company issued 50,000 shares, pursuant to an option agreement to purchase a House in Gowganda Ontario.

(v)

During the year, the Company issued 250,000 shares, pursuant to property acquisition option agreements.

(vi)

In lieu of cash payment, consulting fees to a non-related party were settled with shares which were already issued in the prior year and recorded in subscriptions receivable.

(a)

Transactions for the Issue of Share Capital during the Year Ended May 31, 2004

(i)

The Company completed a financing pursuant to a Short Form Offering Document and issued 729,000 flow-through units at $0.15 per unit and 2,126,500 non-flow-through units for total cash consideration of $428,325. Each flow-through unit consisted of 1 flow-through share and 1/2 share purchase warrant. Each non-flow-through unit consisted of 1 share and 1 share purchase warrant. One whole warrant entitles the purchaser to purchase one additional non-flow-through common share at a price of $0.18 on or before October 17, 2004. In addition, 100,000 common shares and 571,100 agents purchase warrants, with the same terms, were issued as a corporate financing fee.

(ii)

The Company completed a private placement financing and issued of 815,000 flow-through units at $0.20 per unit and 4,000,000 non-flow-through units at $0.20 per unit for total cash consideration of $963,000. Each flow-through unit consisted of 1 flow-through share and 1 share purchase warrant, which entitles the holder to purchase one additional non-flow-through common share a price of $0.20, exercisable on or before January 29, 2005. Each non-flow-through unit consisted of 1 share and 1 share purchase warrant, which entitles the holder to purchase one additional non-flow-through common share at a price of $0.20, exercisable on or before January 29, 2006. Under the terms of the issue, warrants acquired with the non-flow-through units may not be exercised if they result in the purchaser owing greater than 20% of the outstanding common shares of the Company. In addition, 100,000 common shares were issued in consideration of the agents waiver of its right of first refusal.

(iii)

The Company issued 248,760 common shares as a result of the exercise of share purchase warrants at a price of $0.18 for total cash consideration of $172,100.

(iv)

The Company issued 151,500 common shares as a result of the exercise of incentive stock options at a price of $0.20 for total cash consideration of $30,300.

(v)

The Company issued 160,000 shares pursuant to property acquisition option agreements.

(a)

Stock Options

The Company currently has no long-term incentive plans other than incentive stock options granted from time to time by the Board of Directors in accordance with the Companys stock option plan. Under the terms of this plan the Company is limited in the number of options it can grant to 10% of issued and outstanding shares.







---

INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2005 AND 2004

(Expressed in Canadian Dollars)







8.

SHARE CAPITAL (continued)

(c)

Stock Options (continued)

A summary of the Companys stock options, excluding options granted to financing agents, outstanding as at May 31, 2005 and 2004 and changes during the years then ended, is as follows:

|                      | Number
of shares |  | Weighted Average Exercise Price
$
|--------------------- | ---------------- |  | ---------------------------------
|                      |                  |  |                                  
|Balance, May 31, 2003 | 990,000          |  | 0.21                             
|                      |                  |  |                                  
|Granted               | 1,345,000        |  | 0.21                             
|Exercised             | (151,500)        |  | 0.20                             
|Forfeited/cancelled   | (708,500)        |  | 0.21                             
|                      |                  |  |                                  
|Balance, May 31, 2004 | 1,475,000        |  | 0.22                             
|                      |                  |  |                                  
|Granted               | 950,000          |  | 0.21                             
|Forfeited/cancelled   | (530,000)        |  | 0.26                             
|                      |                  |  |                                  
|Balance, May 31, 2005 | 1,895,000        |  | 0.21                             
|                      |                  |  |                                  

The following table summarizes information about the stock options outstanding at May 31, 2005.

|Outstanding     |                    | Exercisable
|--------------- | ------------------ | -----------
|Exercise Prices | Number
outstanding |            
|                |                    |            
|$0.20           | 1,595,000          |            
|$0.25           | 300,000            |            
|                |                    |            
|                | 1,895,000          |            
|                |                    |            

In addition to the above, the Company granted the following options to financing agents during the year ended May 31, 2005, none of which have been exercised.

|Agents Options granted and outstanding
|---------------------------------------
|Exercise Prices                        
|                                       
|$0.20                                  
|$0.20                                  
|                                       
|                                       
|                                       

The shares subject to the above agents options have warrants attached, with the same expiry dates, exercisable for an additional share at an exercise price of $0.40 up to a year before expiry and $0.80 during the final year before expiry.

The fair value of incentive stock options granted and fully vested during the year was $327,787 and was recognized as compensation expense in the current year and recorded in equity as contributed surplus relating to stock options granted.







---

INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2005 AND 2004

(Expressed in Canadian Dollars)







8.

SHARE CAPITAL (continued)

(c)

Stock Options (continued)

The fair value of options granted, including agents options, was estimated using the Black-Scholes option pricing model assuming no expected dividends and the following weighted average assumptions:

|                        |  | Options      
|----------------------- |  | -------------
|                        |  | Interest rate
|                        |  |              
|Year ended May 31, 2005 |  | 3.08%        
|                        |  |              
|                        |  |              
|Year ended May 31, 2004 |  | 2.9%         
|                        |  |              

The weighted average grant date fair value of options granted during the year ended May 31, 2005 was $0.12 (during the year ended May 31, 2004 - $0.03).

(b)

Warrants

The following table summarizes the continuity of the Companys non-agents warrants:

|                               | Number of shares |  | Weighted average
exercise price
$
|------------------------------ | ---------------- |  | ---------------------------------
|                               |                  |  |                                  
|Balance, May 31, 2003          | 2,664,167        |  | 0.25                             
|                               |                  |  |                                  
|Issued with private placements | 7,306,000        |  | 0.19                             
|Exercised                      | (40,000)         |  | (0.18)                           
|Expired                        | (125,000)        |  | (0.25)                           
|                               |                  |  |                                  
|Balance, May 31, 2004          | 9,805,167        |  | 0.20                             
|                               |                  |  |                                  
|Issued with private placements | 10,931,667       |  | 0.55                             
|Expired                        | (4,990,167)      |  | 0.22                             
|                               |                  |  |                                  
|Balance, May 31, 2005          | 15,746,667       |  | 0.44                             
|                               |                  |  |                                  

The following table summarizes the Companys non-agents warrants outstanding at May 31, 2005:

|Number
of warrants |  | Exercise
Price
$ |  | Expiry
Date      |                               
|------------------ |  | ---------------- |  | ---------------- | ------------------------------
|                   |  |                  |  |                  |                               
|815,000            |  | 0.20             |  | July 28, 2005    | Extended from January 28, 2005
|1,050,000          |  | 0.25             |  | August 16, 2005  |                               
|4,000,000          |  | 0.20             |  | January 28, 2006 |                               
|1,515,834          |  | 0.35             |  | April 12, 2006   |                               
|1,515,833          |  | 0.75             |  | April 12, 2007   |                               
|2,475,000          |  | 0.40             |  | April 12, 2006   |                               
|2,475,000          |  | 0.80             |  | April 12, 2007   |                               
|950,000            |  | 0.40             |  | May 19, 2006     |                               
|950,000            |  | 0.80             |  | May 19, 2007     |                               
|                   |  |                  |  |                  |                               
|15,746,667         |  |                  |  |                  |                               
|                   |  |                  |  |                  |                               









---

INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2005 AND 2004

(Expressed in Canadian Dollars)







8.

SHARE CAPITAL (continued)

(c)

Agents Warrants Issued as Financing Fees

The following table summarizes the continuity of the Companys agents warrants:

|                               | Number of shares |  | Weighted average
exercise price
$
|------------------------------ | ---------------- |  | ---------------------------------
|                               |                  |  |                                  
|Balance, May 31, 2003          | 1,065,667        |  | 0.25                             
|Issued with private placements | 571,100          |  | 0.15                             
|Exercised                      | (208,760)        |  | (0.15)                           
|Expired                        |                 |  |                                 
|                               |                  |  |                                  
|Balance, May 31, 2004          | 1,428,007        |  | 0.23                             
|                               |                  |  |                                  
|Issued with private placements | 670,283          |  | 0.41                             
|Expired                        | (1,428,007)      |  | 0.23                             
|                               |                  |  |                                  
|Balance May 31, 2005           | 670,283          |  | 0.41                             
|                               |                  |  |                                  

The following table summarizes the Companys agents warrants, outstanding at May 31, 2005:

|Number
of warrants |  | Exercise
Price
$ |  | Expiry
Date    
|------------------ |  | ---------------- |  | ---------------
|                   |  |                  |  |                
|315,000            |  | 0.25             |  | August 16, 2005
|166,495            |  | 0.35             |  | April 12, 2006 
|11,147             |  | 0.35             |  | May 19, 2006   
|166,495            |  | 0.75             |  | April 12, 2007 
|11,147             |  | 0.75             |  | May 19, 2007   
|                   |  |                  |  |                
|670,283            |  |                  |  |                
|                   |  |                  |  |                

In addition, 1,482,250 additional warrants may be issued upon exercise of agents options listed in Note 8(c).





9.

INCOME TAXES

The tax effect (computed by applying the combined Canadian federal and provincial statutory rate of 35.62% (2004 -35.62%) of the significant temporary differences, which comprise future tax assets and liabilities, are as follows:

|                                     |   | 2005        |   | 2004       
|------------------------------------ | - | ----------- | - | -----------
|                                     |   |             |   |            
|Future income tax assets             |   |             |   |            
|                                     |   |             |   |            
|Resources pools                      | $ | 785,000     | $ | 690,000    
|Non-capital losses carried forward   |   | 940,000     |   | 917,000    
|                                     |   |             |   |            
|Total gross future income tax assets |   | 1,725,000   |   | 1,607,000  
|Valuation allowance                  |   | (1,725,000) |   | (1,607,000)
|                                     |   |             |   |            
|Net future income tax asset          | $ |            | $ |           
|                                     |   |             |   |            







---

INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2005 AND 2004

(Expressed in Canadian Dollars)







9.

INCOME TAXES (continued)

At May 31, 2005 the Company had non-capital losses of $2,640,000 to carry forward to reduce future years taxable income, expiring as follows:

|     |  | $         |  |      |  | $      
|---- |  | --------- |  | ---- |  | -------
|2006 |  | 1,386,000 |  | 2010 |  | 315,000
|2007 |  | 138,000   |  | 2014 |  | 289,000
|2008 |  | 118,000   |  | 2015 |  | 281,000
|2009 |  | 113,000   |  |      |  |        

At May 31, 2005, the Company had cumulative Canadian Exploration Expenses of approximately $1,171,000 which are deductible 100% against future years taxable income and have no expiry date.

At May 31, 2005, the Company had cumulative Canadian Development Expenses of approximately $1,033,000 which are deductible 30% against future years taxable income and have no expiry date.

In assessing the realizability of future tax assets, management considers whether it is more likely than not that some portion of all of the future tax assets will not be realized. The ultimate realization of future tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of future tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. The amount of future tax asset considered realizable could change materially in the near term based on future taxable income during the carry forward period.





10.

COMMITMENTS

(a)

During the year, the Company entered into an office lease expiring March 31, 2007 at $3,642 per month. Minimum lease payments are as follows:

|2006 | $ 43,706
|---- | --------
|2007 | 36,422  
|     |         
|     | $ 80,128
|     |         

A total of 50% of the above lease minimum payments are charged to a second public company on a month to month basis.

(b)

During the year, the Company extended a lease agreement for the use of a crew house located in Gowganda, Ontario. A further extension, subsequent to the year end extended the lease to June 2006. The Company is committed to lease payments of $2,000 per month expiring June, 2006 as follows:

|2006 | $ 24,000
|---- | --------
|2007 | 1,000   
|     |         
|     | $ 25,000
|     |         

(c)

Pursuant to flow-through share agreements entered into during the year, the Company was committed to expend the proceeds on eligible mineral exploration. See Note 6(a).

(d)

See additional mineral exploration commitments subsequent to the year end, Note 11(a).







---

INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2005 AND 2004

(Expressed in Canadian Dollars)







11.

MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)

The Company prepares its financial statements in accordance with accounting principles generally accepted in Canada (Canadian GAAP), which differ in certain respects from those principles that the Company would have followed had its financial statements been prepared in accordance with accounting principles generally accepted in the United States (US GAAP). The material differences between Canadian and US GAAP, which affect the Companys financial statements, are described below, and their effect on the financial statements is summarized as follows:

|                                                                                           |   | 2005        |   | 2004        |   | 2003                  
|------------------------------------------------------------------------------------------ | - | ----------- | - | ----------- | - | ----------------------
|                                                                                           |   |             |   |             |   |                       
|Loss in accordance with Canadian GAAP                                                      | $ | (859,431)   | $ | (520,094)   | $ | (410,918)             
|                                                                                           |   |             |   |             |   |                       
|Deduct:                                                                                    |   |             |   |             |   |                       
|Unproven property interests and deferred expenditures incurred in the year and capitalized |   | (852,753)   |   | (513,818)   |   | (569,655)             
|Mineral properties written off                                                             |   | 18,000      |   |            |   |                      
|Stock based compensation                                                                   |   |            |   |            |   | (12,570)              
|                                                                                           |   |             |   |             |   |                       
|Loss in accordance with US GAAP                                                            | $ | (1,694,184) | $ | (1,033,912) | $ | (993,143)             
|                                                                                           |   |             |   |             |   |                       
|Loss per share (US GAAP)                                                                   | $ | (0.07)      | $ | (0.06)      | $ | (0.09)          (0.09)
|                                                                                           |   |             |   |             |   |                       
|                                                                                           |   | #           |   | #           |   | #                     
|                                                                                           |   |             |   |             |   |                       
|Weighted average shares outstanding (US GAAP)                                              |   | 25,696,000  |   | 17,971,000  |   | 10,704,000            
|                                                                                           |   |             |   |             |   |                       



|Statement of Cash Flows in Accordance with US GAAP              |   |             |   |             |   |          
|--------------------------------------------------------------- | - | ----------- | - | ----------- | - | ---------
|                                                                |   |             |   |             |   |          
|                                                                |   | 2005        |   | 2004        |   | 2003     
|Cash flows from operating activities                            |   |             |   |             |   |          
|                                                                |   |             |   |             |   |          
|Net Loss                                                        | $ | (1,694,184) | $ | (1,033,912) | $ | (993,143)
|                                                                |   |             |   |             |   |          
|Adjustments to reconcile net loss to cash                       |   |             |   |             |   |          
|Amortization                                                    |   | 3,739       |   | 1,974       |   | 4,281    
|Stock-based compensation                                        |   | 327,787     |   | 39,722      |   | 12,750   
|Financing fees paid with stock                                  |   | 59,292      |   | 35,000      |   |         
|Gain on disposal of fixed assets                                |   | (46,085)    |   | (4,616)     |   |         
|Unproven property interests and deferred expenditures           |   | 852,753     |   | 513,818     |   | 569,655  
|                                                                |   |             |   |             |   |          
|Changes in operating assets and liabilities                     |   |             |   |             |   |          
|                                                                |   |             |   |             |   |          
|(Increase) decrease in mining exploration tax credits           |   | (16,368)    |   |            |   |         
|(Increase) decrease in due from related parties                 |   | 15,191      |   | (33,095)    |   | 2,413    
|(Increase) decrease in prepaid expenses and deposits            |   | (11,121)    |   | 14,450      |   | (29,617) 
|(Increase) in other current assets                              |   | 9,526       |   | (2,939)     |   | (28,337) 
|Increase (decrease) in accounts payable and accrued liabilities |   | (27,984)    |   | (10,255)    |   | 50,124   
|Increase (decrease) in due to related parties                   |   | 5,050       |   | (9,432)     |   | 7,829    
|                                                                |   |             |   |             |   |          
|Net Cash to Operating Activities                                |   | (522,404)   |   | (489,285)   |   | (404,225)
|                                                                |   |             |   |             |   |          







---

INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2005 AND 2004

(Expressed in Canadian Dollars)







11.

MATERIAL DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP) (continued)

|Statement of Cash Flows in Accordance with US GAAP (continued) |   |             |   |          
|-------------------------------------------------------------- | - | ----------- | - | ---------
|                                                               |   |             |   |          
|                                                               |   | 2005        |   | 2004     
|                                                               |   |             |   |          
|Cash flows from financing activities                           |   |             |   |          
|                                                               |   |             |   |          
|Share subscriptions received                                   |   |            |   | 12,500   
|Issue of share capital for cash                                |   | 2,264,750   |   | 1,469,102
|                                                               |   |             |   |          
|Net Cash from Financing Activities                             |   | 2,264,750   |   | 1,481,602
|                                                               |   |             |   |          
|Cash flows to investing activities                             |   |             |   |          
|                                                               |   |             |   |          
|Short-term investment                                          |   | (1,200,000) |   |         
|Acquisition of property and equipment                          |   | (7,971)     |   | (47,508) 
|Proceeds on disposal of property and equipment                 |   |            |   | 10,945   
|Acquisition of mineral properties                              |   | (61,770)    |   | (6,000)  
|Amortization for mineral exploration                           |   | 11,082      |   | 13,131   
|Deferred exploration and development costs                     |   | (802,065)   |   | (507,818)
|Mineral property option proceeds                               |   | 25,000      |   |         
|                                                               |   |             |   |          
|Net Cash to Investing Activities                               |   | (2,035,724) |   | (537,250)
|                                                               |   |             |   |          
|Increase in Cash and Cash equivalents                          |   | (293,378)   |   | 455,067  
|                                                               |   |             |   |          
|Cash and Cash equivalents  Beginning of Year                  |   | 477,809     |   | 22,742   
|                                                               |   |             |   |          
|Cash and Cash equivalents  End of Year                        | $ | 184,431     | $ | 477,809  
|                                                               |   |             |   |          



|                                                                            |   | 2005        |   | 2004        |   | 2003       
|--------------------------------------------------------------------------- | - | ----------- | - | ----------- | - | -----------
|                                                                            |   |             |   |             |   |            
|Shareholders equity  Canadian GAAP                                        | $ | 5,514,266   | $ | 3,676,868   | $ | 2,611,639  
|                                                                            |   |             |   |             |   |            
|Option interests and deferred exploration expenditures                      |   | (4,023,276) |   | (3,148,356) |   | (2,605,538)
|                                                                            |   |             |   |             |   |            
|Shareholders equity  US GAAP                                              | $ | 1,490,990   | $ | 528,512     | $ | 6,101      
|                                                                            |   |             |   |             |   |            
|Option interests and deferred exploration expenditures  Canadian GAAP      | $ | 4,023,276   | $ | 3,148,356   | $ | 2,605,538  
|Option interests and deferred exploration expenditures expensed per US GAAP |   | (4,023,276) |   | (3,148,356) |   | (2,605,538)
|                                                                            |   |             |   |             |   |            
|Option interests and deferred exploration expenditures  US GAAP            | $ |            | $ |            | $ |           



Under Canadian GAAP, companies have the option to defer exploration expenditures on prospective properties until such time as it is determined that further work is not warranted, at which point capitalized costs would be written off. Under US GAAP, all exploration expenditures are expensed until an independent feasibility study has determined that the property is capable of commercial production. At this stage, the Company has not yet identified economically recoverable reserves on any of its interests. Accordingly, under US GAAP, all exploration costs incurred are expensed.







---

INTERNATIONAL KRL RESOURCES CORP.

(An Exploration Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED MAY 31, 2005 AND 2004

(Expressed in Canadian Dollars)







12.

SUBSEQUENT EVENTS

Subsequent to May 31, 2005:

(a)

The Company completed a brokered private placement financing and issued 650,000 non-flow-through units at $0.20 per unit and 1,250,000 flow-through units at $0.25 per unit for total cash consideration of $442,500. Each non-flow-through unit consisted of one non-flow-through common share and one transferable warrant entitling the holder to purchase one non-flow-through common share at a price of $0.30 on or before August 6, 2006. Each flow-through unit consisted of one flow-through share and one transferable warrant entitling the holder to purchase one non-flow-through common share at a price of $0.50 on or before August 3, 2007.

Pursuant to the financing, a commission of 8% of the gross proceeds was payable to the agent, part of which consisted of 19,470 units valued at $0.20 per unit. Each such unit had the same securities, terms and conditions as the non-flow-through units of the financing. In addition, the agent was granted an option to purchase up to 190,000 units at a price of $0.25, expiring August 3, 2007. Each such unit consists of one non-flow-through common share and one non-transferable warrant entitling the holder to purchase one non-flow-through common share at a price of $0.50 on or before August 3, 2007.

Pursuant to this financing, the Company became committed to incur $312,375 of Canadian Exploration Expenditures within 2 years of the agreement dates.

(b)

The Company completed a private placement financing and issued 2,075,000 non-flow-through units at $0.20 per unit for total cash consideration of $415,000. Each unit consisted of one non-flow-through common share and one non-transferable warrant entitling the holder to purchase one non-flow-through common share at a price of $0.30 on or before August 3, 2006.

(c)

The Company granted 1,000,000 incentive stock options to directors with an exercise price of $0.25 per share, exercisable until July 8, 2007.

(d)

Subsequent to year end, the Company granted 100,000 incentive stock options to a consultant with an exercise price of $0.25 per share, exercisable until August 30, 2007.

(e)

The Company committed, upon approval of the TSX Venture Exchange, to grant 1,000,000 incentive stock options to a director with an exercise price of $0.45 per share for 500,000 common shares and $0.60 per share for the balance, exercisable for two years from the grant date.







---





Exhibit 12.1



I, Seamus Young, Chief Executive Officer, certify that:



1. I have reviewed this Annual Report on Form 20-F of: International KRL Resources Corp.;





2. Based on my knowledge, this report does not contain any untrue statement of

a material fact or omit to state a material fact necessary to make the

statements made, in light of the circumstances under which such statements

were made, not misleading with respect to the period covered by this

Annual Report;



3. Based on my knowledge, the financial statements, and other financial

information included in this report, fairly present in all material

respects the financial condition, results of operations and cash flows of

the company as of, and for, the periods presented in this report;





Date: November 30, 2005



Seamus Young

Chief Executive Officer



---





Exhibit 12.2



I, Judith T. Mazvihwa, Chief Financial Officer, certify that:



1. I have reviewed this Annual Report on Form 20-F of:   International KRL Resources Corp.;



2. Based on my knowledge, this report does not contain any untrue statement of

a material fact or omit to state a material fact necessary to make the

statements made, in light of the circumstances under which such statements

were made, not misleading with respect to the period covered by this

Annual Report;



3. Based on my knowledge, the financial statements, and other financial

information included in this report, fairly present in all material

respects the financial condition, results of operations and cash flows of

the company as of, and for, the periods presented in this report;





Date: November 30, 2005



Judith T. Mazvihwa

Chief Financial Officer



---





EXHIBIT 13.1



Certification of Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350,

as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



In connection with the Annual Report of International KRL Resources Corp., a company organized under the British Columbia Company Act (the Company) on Form 20-F as filed with the Securities and Exchange Commission on the date hereof (the Report), the undersigned, Seamus Young, President/CEO/Director of the Company, certifies, pursuant to 18 U.S.C. (S) 1350, as adopted pursuant to (S) 906 of the Sarbanes-Oxley Act of 2002, that:



(1)  The Report fully complies with the requirements of section 13(a) or

15(d) of the Securities Exchange Act of 1934; and



(2)  The information contained in the Report fairly presents, in all

material respects, the financial condition and result of operations

of the Company.



/s/ Seamus Young

Seamus Young, President/CEO/Director



Date: November 30, 2005













---





EXHIBIT 13.2



Certification of Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350,

as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



In connection with the Annual Report of International KRL Resources Corp., a company organized under the British Columbia Company Act (the Company) on Form 20-F as filed with the Securities and Exchange Commission on the date hereof (the Report), the undersigned, Judith T. Mazvihwa, CFO/Director of the Company, certifies, pursuant to 18 U.S.C. (S) 1350, as adopted pursuant to (S) 906 of the Sarbanes-Oxley Act of 2002, that:



(1)  The Report fully complies with the requirements of section 13(a) or

15(d) of the Securities Exchange Act of 1934; and



(2)  The information contained in the Report fairly presents, in all

material respects, the financial condition and result of operations

of the Company.



/s/ Judith T. Mazvihwa

Judith T. Mazvihwa, CFO/Director



Date: November 30, 2005



---











SIGNATURE PAGE











Pursuant to the requirements of Section 12g of the Securities Exchange Act of 1934, the Registrant certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.



International KRL Resources Corp.; SEC File No. 0-50902

Registrant











Dated: November 30, 2005  By /s/ Seamus Young____________________

Seamus Young, President/Director





Dated: November 30, 2005  By /s/ Judith T. Mazvihwa_______________

Judith T. Mazvihwa, Director