RUBICON
      MINERALS CORPORATION





Management’s
      Discussion & Analysis





For
      the Year Ended December 31, 2007
















































Suite
      1540 – 800 West Pender Street, Vancouver  BC V6C 2V6


Tel:
      604.623.3333   Toll free:
      1.866.365.4706   Fax:  604.623.3355   E-mail:
      rubicon@rubiconminerals.com


www.rubiconminerals.com


--


INTRODUCTION





This
      Management Discussion and Analysis (“MD&A”) dated March 31, 2008 includes
      financial information from, and should be read in conjunction with, the audited
      consolidated financial statements for the fiscal year ended December 31,
      2007.  Please refer to the cautionary notices at the end of this
      MD&A, especially in regard to forward looking
      statements.   Rubicon Minerals Corporation (the “Company”)
      reports its financial position, results of operations and cash flows in
      accordance with Canadian generally accepted accounting principles (“GAAP”) in
      Canadian dollars.  Please see note 17 of the audited consolidated
      financial statements of the Company for a reconciliation between Canadian and
      United States GAAP.





Rubicon
      Minerals Corporation is a Canadian based mineral exploration-stage company
      that
      explores for commercially viable gold and base metal deposits.  In
      addition the Company selectively invests in other mineral exploration and
      resource companies which the Company deems to be of merit.





The
      Company’s key assets are in the Red Lake gold camp, in the Province of
      Ontario.  In addition, the Company has recently acquired significant
      land packages in Alaska, USA and Nevada, USA as described below under
      highlights.  The Company does not have any assets or mineral
      properties that are in production or that contain a reserve.





The
      Company is a reporting issuer in the provinces of British Columbia, Alberta,
      Ontario and Quebec in Canada as well as with the SEC in the United
      States.  The Company’s common shares trade on the TSX in Canada under
      the symbol ‘RMX’ and on the American Stock Exchange in the United States under
      the symbol ‘RBY’.





HIGHLIGHTS





McEwen
      Acquisition and
      Financing





On
      May
      18th, 2007 the Company closed the McEwen acquisition and financing, with Rob
      McEwen (“McEwen”) and associated companies.  Mr. McEwen was the former
      Chairman and CEO of Goldcorp Inc.  Pursuant to the acquisition
      agreement, the Company acquired from Evanachan Limited, a 513,000 acre property
      in Alaska surrounding the world-class Pogo Gold Mine and from Lexam Explorations
      Inc., a 225,000 acre property in the northeastern part of
      Nevada.  Rubicon issued approximately 31.4 million shares for the
      Alaska properties at a deemed price of $0.70 per share and approximately 8.6
      million shares for the Nevada properties at a deemed price of $0.70 per share.
      In addition, McEwen made a $10 million private placement in the Company and
      secured subscriptions for a further $5 million by other
      parties.   In all, a total of 21,428,564 financing units were
      subscribed for at a price of $0.70 per unit.  The price was based on
      the average of the closing prices of the Company’s shares on the TSE, on the 5
      days immediately prior to the agreement date.  Each unit included one
      common share and one half of one warrant.  One whole warrant is
      exercisable at $1.50 for one additional common share for a period of 2 years
      from the date of the financing.





Further
      details of the transactions are available on Sedar in the material change report
      of May 28, 2007.





$10.4
      Million
      Financing





On
      October 25, 2007, the Company signed an agreement with Research Capital Corp.
      for a $10,000,080, bought deal, flow-through share financing.  The
      Company agreed to issue 4,651,200 flow-through shares at a price of $2.15 per
      share, a 21% premium above the $1.78 closing price of the Company’s stock the
      day prior to the agreement.  An all share commission is to be paid to
      the underwriter amounting to 7% of the value of the bought deal financing at
      a
      deemed share price of $1.78 per share totaling 393,261 shares.  In
      addition, the Directors of the Company have authorized a further 186,047
      flow-through shares to be issued to other investors under the same terms for
      further proceeds of $400,000.  This portion of the financing is not
      subject to a commission.





Under
      the
      terms of the subscription agreements all funds from the financing will be spent
      on Canadian exploration expenditures on the Company’s Ontario properties before
      the end of 2008.  These expenditures will be renounced to the
      investors for the 2007 tax year.





Further
      details of the transaction are available on Sedar in the material change report
      of November 2, 2007.





Red
      Lake
      Exploration





100%
      Controlled
      Projects





2007
      Exploration Highlights - Phoenix
      Gold Project





The
      Phoenix Gold Zone was discovered by Rubicon in 2004.  Since that time,
      the zone has been tested through drilling at an average 30-metre spacing over
      a
      strike length of 500 metres and to a depth of 200 metres. The zone remains
      open
      at depth and along strike for expansion.





On
      January 29, 2007, the Company announced an expansion of its exploration programs
      on its 100% controlled Phoenix Gold Project to include a surface drilling of
      deep footwall targets and an evaluation of further exploration from
      underground.  The Phoenix Gold Project has significant physical assets
      including the McFinley shaft which currently extends to a depth of 450 feet
      (137
      metres). To follow up currently known zones and to gain better access to deep
      drill targets, surface drill programs could be supplemented by underground
      drilling to afford year-round drill access. Accordingly, a review of the
      permitting and cost/benefit analysis to allow exploration from underground
      is
      ongoing.





To
      the
      end of December 2007 the Company has incurred nearly $2.6 million in exploration
      expenditures, completing 13,705 metres of drilling on its 100% owned Phoenix
      Gold Project.  Interim results were returned and released June 19,
      2007 and further results were released July 30th,
      2007.
      Each of the three new target areas drilled to date have intersected gold-bearing
      zones and are open for follow-up drilling:





1)
      North
      Peninsula Target: A total of twelve holes have tested the North Peninsula
      Target, on four east-southeasterly oriented sections, spaced approximately
      50
      metres apart.  Recent results, including 14.65 g/t gold over 0.80
      metres, 9.49 g/t gold over 1.00 metre, 5.94 g/t gold over 2.15 metres and 1.25
      g/t gold over 7.65 metres, continue to indicate the overall robust nature and
      continuation of the gold mineralization at depth and along strike.





The
      North
      Peninsula Target is characterized by two distinct gold zones:





i)
            The
                Lower Zone has returned assays that include 34.14 g/t gold over 1.00
                metre, 28.07 g/t gold over 0.90 metres, 10.59 g/t gold over 1.57
                metres
                (incl. 16.90 g/t gold over 0.92 metres), 10.46 g/t gold over 1.50
                metres
                (incl. 25.60 g/t gold over 0.50 metres), and 9.49 g/t gold over 1.00
                metres. Technical details of the zone are summarized
                below:





The
      Lower
      Zone, currently intersected between 230 metres and 380 metres below surface
      occurs within a package of intensely altered mafic rocks, capped by ultramafic
      units.  Alteration is characterized by intense silicification, biotite
      alteration and arsenopyrite replacement (locally up to fifty percent of the
      interval) of carbonate veins over widths ranging from four to nine
      metres.  The overall thickness of the Lower Zone varies from 50 to 80
      metres.





The
      structural relationship of the ultramafic rocks, acting as a barrier to gold
      bearing fluids and capping the underlying mafic rocks, is considered a very
      prospective setting for gold mineralization.  The intense style of
      alteration, the structural relationship of the ultramafic and mafic rocks,
      and
      the gold mineralization point to a number of striking similarities to documented
      zones from the Red Lake Mine (Goldcorp).





ii)
            The
                Upper Zone has returned assays which include 14.65 g/t gold over
                0.80
                metres, 9.90 g/t gold over 1.30 metres, 5.94 g/t gold over 2.15 metres
                (incl. 9.42 g/t gold over 1.15 metres)  and 4.44 g/t gold over
                1.30 metres. Technical details of the zone are summarized
                below:





The
      Upper
      Zone, situated less than 120 metres below surface, is developed within variably
      altered mafic volcanic rocks, characterized by the presence of intense biotite
      alteration, colloform/crustiform, quartz-carbonate veining and varying amounts
      of sulphides, including five to ten percent arsenopyrite.  A westerly
      dipping fault zone associated with the gold bearing zone has been observed
      in
      all of the drill holes completed on the North Peninsula Target to
      date.  The style of the gold mineralization, alteration and the
      presence of an intense fault zone, which acts as a conduit for the gold bearing
      fluids, is very similar to the setting of the gold mineralization observed
      at
      the Phoenix Gold Target, 1500 metres to the northeast.  The Phoenix
      Gold target has 67 significant drill intercepts, averaging 10.66 g/t gold over
      2.00 metres and is currently defined over a strike length of 500 metres and
      to a
      depth of 200 metres.  A resource estimate has not been calculated for
      the Phoenix Zone, to date.








2)West
      Mine Target: The West Mine Target is located west of the historical underground
      workings at the Phoenix Project and has previously (see news release dated
      June
      19, 2007) returned 42.99 g/t gold over 1.55 metres, from a fault zone containing
      visible gold.  WMT-07-02, drilled 30 metres to the south, intersected
      the same structure however it did not contain any significant gold
      grades.  Based on the gold mineralization observed to date and the
      moderate to strong alteration associated with this fault zone, this area
      continues to be a prospective target for follow up drilling.





3)
      KZ
      Target: 2.89 g/t gold over 9.00 metres (incl. 9.60 g/t gold over 1.00 metre
      and
      7.29 g/t gold over 1.00 metre) and 5.41 g/t gold over 2.40 metres. The KZ Target
      has been intersected in two drill holes, KZ-07-01 and KZ-07-02. Intersected
      at a
      shallow depth of 80 to 100 metres below surface, the gold mineralization is
      hosted by a package of intensely silicified and fuchsite altered ultramafic
      rocks. Although the style of gold mineralization at the KZ Target is different
      than the North Peninsula Target, it is also situated in the vicinity of a
      north-trending, regional-scale, geophysical discordance that is interpreted
      to
      be a major fault zone. This second major fault zone is approximately 800 metres
      northeast of the North Peninsula Zone fault and is parallel to it. The presence
      of significant fault zones in close proximity to the mineralization described
      above is considered significant. Elsewhere on the property, at the Phoenix
      Zone,
      where 67 drill holes have been completed from surface to approximately 250
      metres below surface, gold mineralization and fault zones are intimately
      associated.





4)
      Deep
      Footwall Target: 23.55 g/t gold over 1.00m. Occurring at a vertical depth of
      1,250 metres this zone represents the deepest gold intercept on the Phoenix
      Project to date. The gold is hosted in a 15 metre thick package of altered
      and
      mineralized mafic volcanic rocks within highly deformed ultramafic rocks. The
      Deep Footwall Target was intersected at the eastern side of the property and
      is
      interpreted to dip westwards. Since this is the first drill hole that has tested
      this target area, true widths of gold-bearing zones are not yet known. The
      geological environment of the Deep Footwall contact is analogous to the Red
      Lake
      Mine High Grade Zone, where ultramafic rocks overlie mafic volcanic rocks and
      act as a 'trap' for gold bearing fluids. With the exception of this drill hole,
      this target area is completely untested at depth and along strike (>2,500
      metres).





Subsequent
      to the closing of a brokered flow through financing of $10 million announced
      on
      November 15, 2008, the company revised its plans to drill a minimum of 10,000m
      on the Phoenix property in 2008.  This will include a series of
      property-wide deep drill holes to test targets up to 1000 metres below surface
      where no previous drilling has been carried out.





On
      March
      31, 2008, the Company announced further results from the F2 Zone from which
      drill hole F2-07 returned 8.0 metres (26.5 feet) grading 36.50 g/t gold (1.06
      oz/ton). This hole was a follow up to previously reported high-grade assays
      from
      the initial three discovery holes drilled in this area (see news release dated
      March 12, 2008). Reported intercepts are core lengths. Determination of true
      thicknesses will require additional drilling.





Adams
      Lake
      Property





The
      Company considers the project to be strategically located in the
      camp.  Exploration plans for 2008 include a 10,000m drill program to
      commence during the second quarter of 2008.  During the months of
      September and October 2007, the company completed soil sampling survey over
      priority target areas on the property to aid in potential drill
      targeting.  Results of the soil sampling survey have identified high
      priority drill targets.  The gold anomalies in soils appear to be
      closely correlated with major faults and known surface gold showings,
      particularly the fold nose itself which represents prime structural sites for
      Red Lake-style gold mineralization. Soil anomalies are interpreted as high
      level
      'leakage' into younger rocks overlying more prospective Balmer assemblage rocks
      which, four kilometres to the west, host the world class Red Lake
      Mine.





East
      Bay
      Property





The
      Company has vested (as of January 30, 2007) 100% interest in 25 unpatented
      mining claims (44 units: Herbert Option and Seargeant Option).  During
      2004, Wolfden Resources Ltd., as operator, funded a $0.6 million drilling
      exploration program on the East Bay West (4 claims) where anomalous gold up
      to
      8.75 g/t over 0.54 metres was returned along with thick intervals of anomalous
      gold of 0.59 g/t over 40.5 metres and 0.74 g/t over 28.2
      metres.  Wolfden subsequently elected not to continue with its option
      on this project.





The
      project occupies four-kilometres of strike length of the East Bay Trend,
      immediately adjacent to and on strike of the GAZ zone (an inferred resource
      of
      1.4 million tonnes grading 8.0 g/t gold controlled by Goldcorp/Premier Gold).
      The East Bay claims are underlain by the East Bay ultramafic body, an important
      unit associated with gold elsewhere along the trend, including at Rubicon's
      Phoenix Gold Project. Plans are to advance East Bay exploration with a 10,000m
      drill program in 2008.





Partnered
      Projects





McCuaig
      JV
      Property





The
      Joint
      Venture (Rubicon Minerals Corp. 60% and Golden Tag Resources 40%) completed
      a
      1,172 metre (one drill hole plus a wedge hole) on the McCuaig Project, incurring
      $222,450 in expenditures during February-March 2007.  A 935 metre
      initial mother hole intersected a 26-metre section (interpreted as greater
      than
      90% true thickness) of intensely veined and altered basalts at 844 metres
      downhole.  The zone contains variable amounts of sulphides including
      trace to 2% fine-grained arsenopyrite and anomalous gold.  Visible
      gold occurs in a 4.5-metre thick (interpreted as greater than 90% true
      thickness) shear containing arsenopyrite at the base of the altered
      zone.  The geological setting is considered to be analogous to the
      Bruce Channel mineralization currently being explored at the adjacent Gold
      Eagle
      Mines discovery and also to the setting of the major gold deposits of the
      camp.





A
      secondary hole, (MC-07-01AW), was wedged off the mother hole from 822 metres
      to
      produce a second cut through the altered zone. Assay results returned 4.24
      g/t
      gold over 1.7 metres in the mother hole and 15.65 g/t gold over 1.55 metres,
      in
      the wedge hole. Both gold intercepts occur within an identifiable structure
      at
      the base of the vein zone. The two intercepts demonstrate good continuity within
      the shear structure which is open along strike and down dip.





The
      intercept is interpreted to be down dip of the No. 1 vein at the adjacent
      McKenzie Mine. This mine produced 651,000 ounces of gold between 1935 and 1966.
      However unlike the No. 1 vein, which was developed within granite, the McCuaig
      structure is within Balmer mafic volcanics which, elsewhere in the camp, are
      host to significant gold deposits.





On
      May 8,
      2007 the Joint Venture announced plans to conduct a $1.5M drill exploration
      program to follow-up on the 15.65 g/t over 1.55 metre winter
      intercept.  The program was designed to test for gold associated with
      the greater than 20 metre wide gold bearing alteration zone.  Drilling
      commenced in late June and a total of 7307.75m was completed by the end of
      October.  Assays returned thick (up to 10 metres) anomalous low grade
      gold sections (100+ ppb) with local veined and visible gold-bearing sections
      developed within intrusive and Balmer assemblage rocks. These include 9.30
      g/t
      gold over 0.75 metres, part of a section averaging 2.13 g/t gold over 4.7 metres
      and 5.05g/t gold over 0.7 metres, part of a section averaging 1.03 g/t gold
      over
      9.25 metres. These results are hosted in the margin of a quartz veined diorite
      intrusive. Drilling has also confirmed the presence of major NE trending fault
      zones up to 16 metres thick which represent important regional features for
      possible follow up.





DMC
      Property





In
      November, 2005, the Company signed an option agreement on its DMC property
      whereby Agnico-Eagle Mines Ltd. (Agnico) has the option to acquire a 51%
      interest in the property by spending $2.25 million in exploration costs over
      a
      three year period, including a firm commitment to spend $500,000 in exploration
      in the first year of the agreement (completed).  Agnico-Eagle Mines
      Ltd. is required to make cash payments totaling $110,000 including a $25,000
      firm commitment in the first year (completed).  Upon vesting,
      Agnico-Eagle will have a further option to increase its interest up to
      65%.





During
      2006, Agnico funded a 3,832 metre drill program on the DMC property and incurred
      a total of $676,893 in exploration expenditures.  The program
      identified a permissive gold bearing environment on the project.  In
      February 2007, Agnico funded $282,694 in exploration expenditures by completing
      a Phase I, three hole, 1399-metre drill program on the property.  All
      three holes intersected zones containing visible gold, the most significant
      returned 57.37 g/t gold over 0.5 metres associated with a 10 cm quartz vein
      containing visible gold.





During
      September and October of 2007, Agnico-Eagle Mines Ltd. funded a 1455m drill
      program on the property to follow-up anomalous gold results returned from the
      2007 Q1 program. This program fulfilled the second year expenditure requirements
      under the terms of the Option Agreement.  To complete the third year
      commitment to the Agreement Agnico was required to spend $1.0M prior to January
      25, 2009 and make a cash payment of $50,000 prior to January 25, 2008 which
      would vest their 51% interest in the property.  Subsequent to year end
      Agnico advised Rubicon that it would not maintain its option on the DMC
      property.





Red
      Lake North
      Property





The
      Company has optioned a 55% interest in 47 unpatented mining claims (329 units)
      known as the Red Lake Project located in Bateman, Black Bear, Coli Lake and
      McDonough Townships to Solitaire Minerals Corporation (“Solitaire”). Under terms
      of the Letter Agreement dated April 18, 2006 (effective date of the Agreement
      is
      May 1, 2006), Solitaire must incur $2,500,000 over 4 years, make a an initial
      cash payment of $5,000 (completed) and issue to the Company 50,000 shares of
      Solitaire (completed) to earn a 55% interest in the property.  The
      property is subject to a sliding scale NSR of 1.75% to 2.5% depending on the
      price of gold.





Sidace
      area claims:


In
      January of 2007 Solitaire incurred $113,795 in exploration expenditures, to
      extend a 2006 drill hole to 1791 metres in the north-eastern portion of the
      property to test for higher grade gold zones down-dip of the Main Discovery
      Zone
      (MDZ) located on the adjacent Goldcorp/Planet Exploration Inc. property. The
      style of mineralization reported on the adjacent property is consistent with
      locally thick gold zones developed within folded quartz-sericite schist which
      are reported to exhibit an increase in both gold grade and thickness with depth
      (analogous with the Hemlo deposit).  The hole was completed to 1956
      metres below surface prior to yearend and intersected 123 metres (core length)
      of permissive schist units characterized by significant alumina- and
      potassium-rich minerals (white feldspar, sillimanite, garnet, sericite and
      biotite), variable amounts of pyrite and pyrrhotite (trace to 5%) and local
      sphalerite, stibnite and galena (trace to 3%). This stratigraphy is interpreted
      to be the equivalent of the stratigraphy host to the MDZ on adjacent
      claims.  Assays returned for a 50.4 metre section of sericite-bearing
      schist indicate a thick section of elevated gold (0.74 g/t over 36.1 metres)
      including 3.42 g/t gold over 4.6 metres and individual assays up to 7.7 g/t
      gold
      over 1.0 metre. The drill hole was completed to a depth of 2269m in early 2008
      and remained in the anomalous gold-bearing sericite schist unit to the claim
      boundary.  Follow-up drill recommendations are being considered
      subject to partner approval and drill availability.





Main
      Block claims:


During
      August and September 2007, Solitaire Minerals Corp. funded a 2703m drill program
      on the Main Block Claims of the Red Lake North Property.  Hole
      RLN-07-07 intersected a 500-metre thick section of moderate to strong biotite
      and sericite alteration within the stratigraphy. This altered section is
      interpreted to be the southwest extension of the Sidace Lake area stratigraphy,
      located five kilometres to the northeast of the Main Block claims, which in
      that
      area is host to an extensively drilled gold discovery (the 'MDZ') controlled
      by
      Goldcorp Inc. / Planet Exploration Inc. Visible gold in hole RLN-07-07 is
      observed at 387 metres down the hole within the altered section. The interval
      returned 9.70 g/t gold over 1.4 metres (including 19.95 g/t gold over 0.65
      metres).  The presence of visible gold associated with the broad zones
      of biotite and sericite alteration indicates a geological setting that warrants
      further exploration.





Humlin
      Property





The
      Company has optioned a 55% interest in 19 unpatented mining claims (216 units)
      known as the Humlin Project located in Fairlie Township to Solitaire Minerals
      Corporation (“Solitaire”).  Under terms of the Letter Agreement dated
      April 18, 2006 (Effective Date of the Agreement is May 1, 2006), Solitaire
      must
      incur $2,500,000 over 4 years, make a an initial cash payment of $5000
      (completed) and issue to the Company 50,000 shares of Solitaire (completed)
      to
      earn a 55% interest in the property.  The property is subject to a
      sliding scale NSR of 1.75% to 2.0% depending on the price of gold, including
      the
      underlying Hammell Agreement.





During
      the first year of the agreement exploration expenditures in the amount of
      $250,000 are a firm and binding commitment.  A 2007 winter drill
      program consisting of 1380 metres was completed in February 2007 completing
      the
      first year commitment.  No significant assays were
      returned.





No
      work
      was conducted in the remainder of 2007, but exploration plans currently are
      being formulated for the second year of the option agreement as Solitaire must
      spend $400,000 to maintain the option in good standing prior to April 30, 2008
      (subsequently extended to the end of 2008 to accommodate drill schedules and
      availability).





English
      Royalty
      Division





The
      English Royalty Division refers to Rubicon’s active program of acquiring mineral
      properties for the purpose of optioning out to other mining exploration
      companies.  As such, it provides the Company with an ongoing revenue
      stream of cash and shares and a residual royalty position in all the properties
      acquired.





During
      the year ended December 31, 2007, the Company finalized 26 new property
      agreements and spent $498,805 on acquisition and maintenance costs and recovered
      $885,500 in cash and shares.





Future
      Exploration
      Plans





Pursuant
      to the McEwen property acquisition and financing, the Company increased its
      treasury by $15 million and additionally acquired large land packages in Alaska
      and Nevada. With the proceeds of the financing, Rubicon plans to complete a
      $5
      million exploration budget in Red Lake before May, 2008. The Company also closed
      a $10M bought deal flow through financing in November of
      2007.   Proceeds from the flow-through private placements will be
      used to incur CEE with respect to the ongoing exploration and development of
      the
      Company's Red Lake mineral property or other Ontario-based mineral
      projects.  The Company plans to drill a minimum of 40,000 metres on
      its Red Lake projects, including a minimum 30,000 metres (with the balance
      in
      contingency) on its 100% controlled projects exclusive of partner funded
      programs.





Qualified
      Person


The
      2007
      exploration work in Red Lake is supervised by Terry Bursey, P.Geo., the
      Qualified Person under the definition of NI 43-101.  All assays were
      conducted on sawn NQ2 or NQ-sized half core sections.  Assays are
      processed by ALS Chemex Labs, Accurassay Laboratories and/or SGS Minerals
      Services using the metallic screen fire assay procedure, fire assay or fire
      assay gravimetric finish. Standards and blanks were included at regular
      intervals in each sample batch.  Gold standards were prepared by CDN
      Resource Laboratories Ltd.




ALASKA
      EXPLORATION





During
      the second quarter, Rubicon acquired a 512,960 acre land package in Alaska,
      southeast of Fairbanks, pursuant to the McEwen transaction discussed above.
      The
      lands surround the world class Pogo Gold Deposit, which has reported reserves
      of
      3.62 million ounce gold (7.7 million tons grading 0.47 opt as of 12/31/05 (7.0
      million tonnes @ 16.12 gpt)) owned by Sumitomo Minerals (60%) and Teck-Cominco
      (40%) – see www.teckcominco.com
      for further details of the deposit. Approximately 2/3 of the package is 100%
      owned by Rubicon (New Horizon Claims) and the other 1/3 consists of lands
      subject to an option agreement with Rimfire Minerals Corporation that allows
      the
      Company to earn up to a 75% interest (see website www.rubiconminerals.com
      for property map). The exploration targets are high- grade gold deposits of
      the
      Pogo type. The Pogo deposit has a distinctive geochemical expression (gold,
      bismuth, arsenic) and was discovered as a result of drill-testing stream silt
      anomalies and a multi element soil anomaly.





Rimfire
      Option





Under
      the
      terms of the Rimfire option agreement, Rubicon must complete expenditures
      totaling US$4.8 million in exploration over six years to earn a 60% interest
      in
      five properties. Upon vesting, Rubicon may obtain a further 10% interest in
      the
      properties by completing a feasibility study, and at Rimfire's election, may
      obtain an additional 5% (for a total of 75%) by providing a project financing
      loan to be repaid from Rimfire’s free cash flow upon production.





Exploration
      during the Year





Rubicon's
      summer 2007 Alaska exploration program focused on the 100% owned New Horizon
      Claims and the Rimfire joint venture claims - Rubicon can earn up to 75%. A
      total of four holes (1105.4m) were drilled in the Maple Leaf Area on the New
      Horizon Claims and seven holes (1749.7m) were drilled on the Rimfire option.
      Weakly anomalous gold mineralization was returned over narrow intervals at
      both
      Maple Leaf and California North. No further work is planned for the Maple Leaf
      Area at this time, however additional drilling is warranted at California North
      (Rimfire option) where a 45 ft thick qtz-aspy zone indicates the presence of
      a
      large hydrothermal system. This area is considered to be on strike with the
      main
      Pogo geochemical anomaly. IP and magnetics may assist in targeting additional
      drill holes.





This
      project is at a relatively early stage and plans for 2008 include the completion
      of the systematic soil auger sampling program that was initiated in 2007,
      reconnaissance mapping and prospecting over high priority target areas south
      and
      west of Teck's soil geochemical anomalies (priority drill target's for Teck
      west
      of the Pogo Mine) and an estimated 2000 metres of drilling. All work will be
      carried out under and managed by Avalon Development with at least one Rubicon
      geologist assigned to the project.





Rubicon
      has spent approximately $2.5 million on the Alaska projects to date and the
      planned expenditures for 2008 are an additional $2.5 million inclusive of land
      hold costs.





The
      Alaska projects are under the supervision of Curt Freeman, MS., PGeo, Qualified
      Person as defined by NI 43-101.





NEVADA
      EXPLORATION





During
      the second quarter, Rubicon acquired a 225,000 acre land package in Elko County,
      Northeastern Nevada pursuant to the McEwen transaction discussed
      above.  Exploration of this property is in the preliminary
      stage.  Lexam Explorations Inc., a McEwen controlled company, from
      whom the property was acquired, had previously carried out approximate $1
      million worth of exploration.  Pursuant to the McEwen acquisition and
      financing agreements, Rubicon must spend $500,000 exploring the property before
      mid May 2008.  A data compilation was initiated in September which
      will lead to recommendations for follow up exploration projects.





RISKS
      AND UNCERTAINTIES





The
      success of the Company depends upon a number of factors, many of which are
      beyond our control.  Typical risk factors and uncertainties, among
      others, include political risks, financing risks, title risks, commodity prices,
      exchange rate risks, operating and environmental hazards encountered in the
      exploration, development and mining business and changing laws and public
      policies.  Risk factors are more fully described in our Annual
      Information Form, on file at www.sedar.com
      .





Additional
      information on the Company, including our Annual Information Form and other
      public filings, are available on SEDAR at www.sedar.com.





SELECTED
      ANNUAL INFORMATION (based on Canadian GAAP)





Fiscal
                Year ended
            2007
            2006
            2005Interest
                and miscellaneous income
            $941,330
            $355,300
            $82,232Gain
                on sale of investments
            $7,822
            $128,880
            $76,765Net
                loss
            $2,216,381
            $3,787,920
            $3,644,284Basic
                and diluted net loss per share
            $.02
            $0.05
            $0.06Total
                assets
            $101,017,670
            $31,885,579
            $33,320,369Total
                long-term financial liabilities (Non-controlling  interest and
                stock compensation)
            $Nil
            $Nil
            $407,479Cash
                dividends
            Nil
            Nil
            Nil





The
      major
      factors that caused significant variations in net loss were the recording of
      stock-based compensation after stocks options are granted, the write-down of
      properties based on a periodic review of such properties, gains on sales of
      investments and tax recoveries recorded on the renunciation of exploration
      expenditures to flow-through share holders.  The flow-through share
      tax recovery was recorded for the first time in 2005 due to pronouncement
      EIC-146 issued by the CICA in 2004 and adopted by the Company in
      2005.  In 2006 the plan of arrangement increased administrative
      expenses considerably. The significant increase in total assets of approximately
      $70 million in 2007 arose from the McEwen acquisition and financing (see note
      2), wherein the Company acquired approximately $40 million in mineral properties
      and $15 million in cash. None of these factors have identifiable
      trends.





OPERATING
      RESULTS





Fiscal
      year ended December 31, 2007 compared to Fiscal year ended December 31,
      2006





For
      the
      fiscal year 2007, the Company incurred a net loss of $2.2 million ($0.02 per
      share) compared to a net loss of $3.8 million ($0.05 per share) incurred in
      fiscal year 2006, a decrease in net loss of $1.6 million.





For
      the
      fiscal year 2007, the Company recorded other comprehensive income of $341,053,
      compared to nil in the prior year.  Comprehensive loss (the total of
      the net loss and the other comprehensive loss) for the fiscal year 2007 was
      $1.8
      million compared to $3.8 million in the prior year comparative period, a
      decrease in comprehensive loss of $2 million.


The
      decrease in loss was due to the net effect of some expense categories increasing
      and some decreasing.  In general, savings were made from the sharing
      of office resources, accounting and investor relations costs with Paragon
      Minerals Corporation.     Significant items making up
      this change were as follows:





·
            Professional
                fees were higher by $71,762 caused by increased legal fees, SOX evaluation
                fees, and accounting advice and services arising out of the McEwen
                financing issues.


·
            Salary
                expense was higher by $247,399 due to a combination of increased
                staffing
                from the prior year, salary increases and other staff
                issues.


·
            Re-organization
                costs from the December 2006 plan of arrangement were concentrated
                in that
                year and so were $860,748 lower in the current
                period.


·
            Write
                off of mineral properties was lower by $34,127 in the current
                year.  On average, the Company’s portfolio of properties is
                improving in quality.


·
            Interest
                income was higher by $586,030 due to interest earned on money received
                in
                the 10.4 million (net) financing of October 2007 and the $15 million
                dollar McEwen financing of May
                2007.


·
            Option
                receipts in excess of property costs which represent amounts received
                from
                optionees of the Company’s properties was lower by $131,197. This line
                item is now mostly ERD option receipts in excess of acquisition
                costs.  Although gross receipts were higher in 2007, high
                staking costs caused a net reduction in receipts over
                costs.


·
            Gains
                on investment sales were down by $134,502 due to a more aggressive
                policy
                on liquidating small holdings of exploration
                companies.


·
            Loss
                in equity investments was lower by $1,262,939. The lower loss was
                due to
                distribution, in the prior year of the Africo Resources Ltd. investment,
                to shareholders under the December 2006 Plan of Arrangement.  In
                the current year the Company has only recorded its share of losses
                in
                Constantine Metal Resources Ltd. to July 10 which were significantly
                less.  The Company has no equity accounted investments as of
                December 31, 2007.


·
            Future
                income tax recovery was lower by $453,840 because there was no
                renunciation of flow-through share expenditures in the current
                year.


·
            Effective
                January 1, 2007, the Company adopted section 1530 of the CICA handbook
                which introduces new standards for reporting and display of comprehensive
                income. Other comprehensive income for the fiscal year 2007 was $341,053
                (2006 - Nil). The income was the cumulative effect of recognizing
                unrealized gains of $784,505 on the Company’s portfolio of junior mining
                stocks – mostly caused by the recognition of unrealized gains in the value
                of Constantine Metal Resources Ltd on it ceasing to be an equity
                investment.  This gain was offset by unrealized losses of
                $423,600 on re-valuation of the company’s option rights associated with
                Africo Resources Ltd. Africo’s share price dropped significantly in the
                period.  See the discussion under “Changes in Accounting
                Policies and Initial Adoption” for a detailed discussion on the adoption
                of the accounting policy.





Fiscal
      year ended December 31, 2006 compared to Fiscal year ended December 31,
      2005





For
      the
      fiscal year 2006, the Company incurred a net loss of 3.8 million ($0.05 per
      share) compared to a net loss of $3.6 million ($0.08 per share) incurred in
      fiscal year 2005, an increase in net loss of $140,000.





The
      increase was the net effect of some items increase and some
      decreasing.  Significant items making up this change were as
      follows:





·
            Investor
                relations expense increased by $96,000 due, for the most part, to
                the
                printing and mailing costs, to all shareholders, of the 500 page
                management information circular.  The circular included a
                detailed description of the proposed plan of
                arrangement.


·
            Salary
                expense was higher by $155,000 due to a combination of bonus accruals
                at
                year end, salary increases in some cases and staff increases in
                accounting.


·
            Stock
                based compensation was down by $463,000 as only two option grants
                were
                made in the year.


·
            Re-organization
                costs represent the costs associated with the plan of arrangement,
                (mostly
                legal) the planning for which carried on through much of the
                year.


·
            Property
                write-offs were down by $1.5 million as several properties were dropped
                in
                the prior year, whereas only the Berg, Newfoundland property was
                dropped
                in 2006.


·
            Interest
                income was up by $273,000 over the prior year due to interest earned
                on
                money received in the 10.6 million (net) financing of April
                2006.


·
            Option
                receipts and administration fees in excess of property costs were
                up by
                $329,000 and represent amounts received from optionees of the Company’s
                properties, in excess of costs incurred to date by
                Rubicon.


·
            Gain
                on sale of investments was up by $194,000.  In 2006, this
                represented sale of junior mining stocks received from optionees
                of the
                Company’s properties including ERD properties and also a gain of $142,000
                on shares received pursuant to the Toquima plan of
                arrangement.


·
            Debt
                settlements in the prior year were in regard to costs incurred by
                Toquima
                Minerals in its failed IPO.


·
            The
                increase in loss on equity investments of $1.05 million is mostly
                the
                result of increased losses recorded by Africo Resources Ltd. and
                revisions
                to prior year estimates.  The Company’s investment in Africo was
                distributed to its shareholders under the Plan of Arrangement in
                December.  $90,000 of the equity loss represents the Company’s
                interest in the losses of Constantine Metal Resources Ltd. since
                July of
                2006, in which the Company has held a 24% during the
                year.


·
            Current
                income tax expense of $152,000 represents taxes owing in the Company’s
                subsidiary, for profits on mineral property option
                receipts.


·
            The
                non-cash, future income tax recovery item reflects the reinstatement
                of
                unrecorded prior tax loss benefits, due to the renunciation of
                flow-through share expenditures.  This generally is a reflection
                of the amount of flow share financings completed in the prior
                year.





SUMMARY
      OF QUARTERLY RESULTS (Based on Canadian GAAP)





Quarter
            
            2007
              Fourth
            
            
            2007
              Third
            
            
            2007
              Second
            
            
            2007
              First
            
            
            2006
              Fourth
            
            
            2006
              Third
            
            
            2006
              Second
            
            
            2006
              First$
            
            
            
            $
            
            
            
            $
            
            
            
            $
            
            
            
            $
            
            
            
            $
            
            
            
            $
            
            
            
            $Interest
                and miscellaneous income
            
            
            381,017
            
            
            
            218,638
            
            
            
            313,598
            
            
            
            115,975
            
            
            
            90,265
            
            
            
            130,740
            
            
            
            114,689
            
            
            
            19,567Gain
                (loss) on sale of investments
            
            
            (165,503
            )
            
            
            (11,687
            )
            
            
            12,500
            
            
            
            37,396
            
            
            
            (35,525
            )
            
            
            135,929
            
            
            
            -
            
            
            
            99,589Net
                loss
            
            
            230,576
            
            
            
            355,458
            
            
            
            441,774
            
            
            
            788,869
            
            
            
            354,376
            
            
            
            1,216,314
            
            
            
            1,479,280
            
            
            
            306,471Basic
                and fully diluted net loss per share
            
            
            0.00
            
            
            
            0.00
            
            
            
            0.00
            
            
            
            0.01
            
            
            
            0.01
            
            
            
            0.02
            
            
            
            0.02
            
            
            
            0.01





Prior
      to
      the 2006 fourth quarter, significant losses were accrued from Rubicon’s equity
      interest in Africo Resources Ltd.  These losses ceased to accrue upon
      the distribution of that investment to the Company’s shareholders, early in the
      2006 fourth quarter.  During 2006 and early 2007, the costs of the
      December 2006 Plan of Arrangement also increased expenses
      significantly.  Other factors causing significant variations included
      the recording of stock based compensation and the write-off of abandoned mineral
      properties.  These other factors do not have identifiable
      trends.





LIQUIDITY
      AND CAPITAL RESOURCES





Liquidity
      and Capital Resources – Fiscal year ended December 31, 2007.





The
      Company had working capital of $30.8 million as at December 31, 2007 compared
      to
      $11.5 million as at December 31, 2006.  This increase is largely due
      to two financings described below under financing activities.  The
      Company’s investment policy is to invest excess funds only in bankers
      acceptances guaranteed by major Canadian banks or instruments of equivalent
      or
      better security. None of the Company’s funds were invested in asset backed
      commercial paper during the year.





Cash
      used
      in operations decreased by $1.7 million from $3.3 million down to $1.5
      million.  The major factors causing this were the high cost of the
      2006 plan of arrangement and the increase in interest revenue from the increased
      treasury.





Financing
      Activities





On
      May
      18, 2007, the Company closed the McEwen financing, issuing 21,428,564 units
      at
      $0.70 per unit for gross proceeds of $15 million.  Each unit included
      a 1⁄2 warrant that entitles the holder of a full warrant to purchase 1 common
      share for $1.50 for a period of 2 years.





On
      November 15, 2007 the Company closed a bought deal flow-through share private
      placement, issuing 4,651,200 shares at $2.15 per share for gross proceeds of
      $10
      million.  This price was a 21% premium over the prior close of
      $1.78.  The Company became committed to spend these funds on Canadian
      Exploration Expenditures which will be renounced to the investors for tax
      deduction purposes.





In
      addition, during the fiscal year ended December 31, 2007, the Company issued
      3,152,792 (2006 – 2,128,813) common shares from the exercise of warrants and
      agents options for cash proceeds of $1,238,360 (2006 – $1,779,452) and issued
      1,547,374 (2006 – 668,628) common shares from the exercise of options for cash
      proceeds of $1,099,365 (2006 – $740,925) for total net cash proceeds of
      $27,737,051 (2006 - $13,828,600) including the October 2007 $10.4 million
      financing.





Other
      sources of funds included recovery of exploration costs from optionees of the
      Company’s properties and option payments received - $2,844,874 (2006 –
$1,742,082) including $481,142 in option share payments.





The
      Company currently has sufficient funds to meet its working capital requirements
      and other requirements for the next 24 months.





Other
      future sources of capital include the Africo option/warrant
      obligation.  Under this term of the Plan of Arrangement, Africo held
      back from distribution to Rubicon shareholders approximately 625,000 shares
      of
      its capital for the exercise of Africo Plan of Arrangement options and warrants,
      outstanding at the completion of the plan of arrangement.  Pursuant to
      the Plan, proceeds from these exercises will be returned to
      Rubicon.  Where options or warrants are forfeited or allowed to
      expire, Rubicon may exercise them for Africo shares at no cost.  The
      exercise of these instruments, by their holders, or the value of Africo shares
      received, is dependent upon future Africo share prices and in the case of
      warrants, Rubicon and Paragon share prices.  There can be no assurance
      that the current valuation of this asset will eventually be received. The fair
      value, to Rubicon, of these options and warrants was $2.1 million at December
      31, 2006.  During the year, Rubicon received cash proceeds of
      $1,128,163 from exercises of these Africo options and plan of arrangement
      warrants. In addition, the Company received 45,408 Africo shares at no cost,
      (market value $97,627 at December 31, 2007) due to the expiration without
      exercise of certain options and warrants. An additional reduction in value
      of
      the remaining unexercised Africo options to $439,629 as of December 31, 2007
      was
      caused by a reduction in the share price of Africo shares during the fiscal
      year.





Investing
      Activities – Fiscal year ended December 31, 2007.





For
      the
      fiscal year ending December 31, 2007, the Company spent $11.4 million in cash
      on
      mineral property acquisition and exploration.  Of that amount the
      Company recovered $2,844,874 of exploration expenditures and option payments
      from optionees of the Company’s properties in cash.  In addition, the
      Company received $163,789 in exploration administration fees from joint venture
      partners and 333,399 in share option payments.  Total recoveries were
      $3,342,062.





OFF-BALANCE
      SHEET ARRANGEMENTS





The
      Company does not have any off-balance sheet arrangements other than what is
      disclosed under commitments in note 14 of the consolidated financial statements
      of the Company.





COMMITMENTS





Pursuant
      to the McEwen agreement, the Company became committed to spend $5 million on
      the
      Alaska properties before May 18, 2009 including sufficient funds to maintain
      the
      Rimfire option in good standing to May 18, 2008.





At
      December 31, 2007, the Company has $224,502 (2006 - $303,960) in remaining
      lease
      payments for the use of its Vancouver office to September, 2010.





At
      December 31, 2007, the Company is committed to incur $9,984,996 (2006 - nil;
      2005 - 112,497) in eligible exploration expenditures in order to complete
      obligations entered into pursuant to flow-through share purchase
      agreements.





The
      Company is required to make certain cash and share option payments and incur
      exploration costs to maintain its mineral properties in good
      standing.  These payments and costs are at the Company’s discretion
      and are based upon available financial resources and the exploration merits
      of
      the mineral properties which are evaluated on a periodic basis.





TRANSACTIONS
      WITH RELATED PARTIES





Paragon
      Minerals
      Corporation





Paragon
      Minerals Corporation (“Paragon”) is the spin-off company that acquired Rubicon’s
      Newfoundland mineral properties under the plan of
      arrangement.  Paragon shares offices and office expenses with Rubicon
      and at the period-end, had one common director (two at December 31, 2006) and
      shared the CFO and office support staff.  In addition, the CEO of
      Paragon provided management services to Rubicon on a part time basis to the
      end
      of December 2007.





As
      at
      December 31, 2007, Paragon owed the Company $76,049 (2006 - $20,443) for shared
      and reimbursable costs.  This balance is included in amounts
      receivable net of $6,574 (2006 - $4,899) owing to Paragon for expense
      reimbursements.





Legal
      services





David
      Reid is a director of the Company and a partner at the law firm Davis
      LLP.  For the fiscal year ended December 31, 2007, Davis LLP invoiced
      the Company $913,422 (2006 - $729,706).  Significant events requiring
      legal services during the period included completion of the December plan of
      arrangement and legal work relating to the McEwen acquisition and
      financing.  At the period end, $nil (2006 - $91,324) remained
      outstanding for accrued legal fees to Davis LLP.





See
      note
      10, “Related Party Transactions”, in the consolidated financial statements for
      additional information on related party transactions with the
      Company.





CRITICAL
      ACCOUNTING ESTIMATES





The
      Company’s accounting policies are described in detail in Note 4 of the
      consolidated financial statements for the year ended December 31,
      2007.  The Company considers the following policies to be most
      critical in understanding its financial results:





Use
      of
      estimates





The
      preparation of financial statements in conformity with generally accepted
      accounting policies requires management of the Company to make 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.  These estimates are based on
      past experience, industry trends and known commitments and events.  By
      their nature, these estimates are subject to measurement uncertainty and the
      effects on the financial statements of changes in such estimates in future
      periods could be significant.  Actual results will likely differ from
      those estimates.





Carrying
      value of mineral
      property costs





The
      Company has capitalized the cost of acquiring mineral property interests and
      on-going exploration and maintenance costs.  Capitalized property
      costs are expensed in the period in which the Company determines that the
      mineral property interests have no future economic value.  Capitalized
      property costs may also be written down if future cash flow, including potential
      sales proceeds and option payments, related to the property are estimated to
      be
      less than the carrying value of the property.  The Company reviews the
      carrying value of its mineral properties periodically, and whenever events
      or
      changes in circumstances indicate the carrying value may not be recoverable,
      reductions in the carrying value of each property would be recorded to the
      extent that the carrying value of the investment exceeds the property’s
      estimated fair value.





Stock-based
      compensation





The
      Company has adopted the fair value based method of accounting for stock option
      and compensatory warrant awards granted to directors, employees and
      consultants.  Under this method, the fair value of stock options is
      calculated at the date of grant or vesting and is expensed, capitalized or
      recorded as share issue costs over the vesting period, with the offsetting
      credit to contributed surplus.  If the stock options are exercised,
      the proceeds are credited to share capital.





The
      Company uses the Black-Scholes option pricing model to calculate the fair value
      of stock options and compensatory warrants granted.  This model is
      subject to various assumptions.  The assumptions the Company makes
      will likely change from time to time.  At the time the fair value is
      determined, the methodology the Company uses is based on historical information,
      as well as anticipated future events.





Flow-through
      share
      renunciations, CICA Emerging Issues Committee - 146





The
      Company follows the CICA Emerging Issues Committee recommendations for
      accounting for renunciation of flow-through shares. Upon the renunciation of
      flow-through shares, a future income tax liability is recognized and shareholder
      equity is reduced.  In the case where the company has written-down
      future tax assets arising from loss carryforwards or deductible temporary
      differences, then those write-downs are reversed in the amount of the future
      tax
      liability arising from the renunciation.  The credit side of the entry
      is recorded on the income statement.





CHANGES
      IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION





Comprehensive
      Income, CICA
      Handbook Section 1530





Effective
      January 1, 2007 the Company adopted section 1530 which introduces new standards
      for reporting and display of comprehensive income.  Comprehensive
      income is the change in equity (net assets) of an enterprise during a reporting
      period from transactions and other events and circumstances from non-owner
      sources.  It includes all changes in equity during a period except
      those resulting from investments by owners and distributions to
      owners.





Equity,
      CICA Handbook
      Section 3251





Effective
      January 1, 2007, the Company adopted new handbook Section 3251 which establishes
      standards for the presentation of equity and changes in equity during a
      reporting period as a result of the comprehensive income reporting requirements
      of new Section 1530.





Financial
      Instruments, CICA
      Handbook Section 3855





Effective
      January 1, 2007, the Company adopted new handbook Section 3855 which prescribes
      when a financial asset, financial liability, or non-financial derivative is
      to
      be recognized on the balance sheet and whether fair value or cost-based measures
      are used. It also specifies how financial instrument gains and losses are to
      be
      presented.





Pursuant
      to these new standards, the Company has included a new statement of
      comprehensive income with its financial statements and has applied fair value
      accounting to certain of its financial instruments.  This has resulted
      in the recognition of unrealized gains and losses as other comprehensive income
      or loss which appear on the statement of comprehensive income or
      loss.





New
      Accounting Pronouncements





The
      following pronouncements recently issued by the Canadian Institute of Chartered
      Accountants (“CICA”) will likely impact the Company’s future accounting
      policies:





(a)           
      CICA Handbook Section 1535 - Capital Disclosures





This
      standard requires disclosure of an entity’s objectives, policies and processes
      for managing capital, quantitative data about what the entity regards as capital
      and whether the entity has complied with any capital requirements and, if it
      has
      not complied, the consequences of such non-compliance. This standard is
      effective for the Company for interim and annual periods relating to fiscal
      years beginning on or after January 1, 2008. The Company is currently evaluating
      the effects of adopting this standard.


--


(b)           
      Financial Instruments - Disclosure (Section 3862) and Presentation (Section
      3863)





These
      standards replace CICA 3861, Financial Instruments - Disclosure and
      Presentation. They increase the disclosures currently required, which will
      enable users to evaluate the significance of financial instruments for an
      entity’s financial position and performance, including disclosures about fair
      value. In addition, disclosure is required of qualitative and quantitative
      information about exposure to risks arising from financial instruments,
      including specified minimum disclosures about credit risk, liquidity risk and
      market risk. The quantitative disclosures must provide information about the
      extent to which the entity is exposed to risk, based on information provided
      internally to the entity’s key management personnel. This standard is effective
      for the Company for interim and annual periods beginning on or after January
      1,
      2008. The Company expects that its disclosures will be expanded to incorporate
      the additional requirements.





(c)           
      International Financial Reporting Standards (“IFRS”)





In
      February 2008 the Canadian Accounting Standards Board announced 2011 as the
      changeover date for publicly-listed companies to use IFRS, replacing Canada’s
      own generally accepted accounting principles. The specific implementation is
      set
      for interim and annual financial statements relating to fiscal years beginning
      on or after January 1, 2011. The transition date of January 1, 2011 will require
      restatement for comparative purposes of amounts reported by the Company for
      the
      year ended December 31, 2010. While the Company has begun assessing the adoption
      of IFRS for 2011, the financial reporting impact of the transition to IFRS
      cannot be reasonably estimated at this time.





OUTSTANDING
      SHARE DATA





As
      at
      March 25, 2007, the Company had the following common shares, stock options
      and
      warrants outstanding:





Common
                shares
            
            
            147,881,501Stock
                options
            
            
            4,853,250Warrants
            
            
            10,714,271Fully
                diluted shares outstanding
            
            
            163,449,022





DISCLOSURE
      CONTROLS AND PROCEDURES





The
      CEO
      and CFO have evaluated the effectiveness of the Company’s disclosure controls
      and procedures and have concluded, based on their evaluation, that they were
      effective as of December 31, 2007 to provide reasonable assurance that all
      material information relating to the Company and its consolidated subsidiary
      will be made known to management and disclosed in accordance with applicable
      securities regulations.





MANAGEMENT'S
      ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING





The
      Company's  management  is  responsible  for  establishing  and  maintaining
      adequate  internal  control
      over  financial  reporting.  Any system of
      internal control over financial reporting, no matter how well designed, has
      inherent limitations.  Therefore,  even
      those  systems  determined  to be
      effective  can
      provide  only  reasonable   assurance  with  respect  to  financial   statement
      preparation and presentation.





Management
      has used the Committee of Sponsoring Organizations of the Treadway Commission
      (COSO) framework to evaluate the effectiveness of the Company's internal control
      over financial reporting. Based on this assessment, management has concluded
      that as at December 31, 2007, the Company's internal control over financial
      reporting was effective.





The
      Company’s auditor, De Visser Gray LLP, has audited the Company’s internal
      control over financial reporting as at December 31, 2007 and their opinion
      and
      report is included with our annual consolidated financial
      statements.





CHANGES
      IN INTERNAL CONTROL OVER FINANCIAL REPORTING





There
      have been no changes in
      the  Company's  internal  control
      over  financial reporting  during  the
      year  ended  December  31,  2007,  that
      have  materially affected,  or are reasonably likely to
      materially  affect, its internal control over financial
      reporting.








CAUTIONARY
      NOTICES







The
      Company’s consolidated financial statements for the year ended December 31, 2007
      and this accompanying MD&A contain statements that constitute
“forward-looking statements” within the meaning of Section 21E of the Securities
      Exchange Act of 1934.  Forward-looking statements often, but not
      always, are identified by the use of words such as “seek”, “anticipate”, “believe”,
      “plan”, “estimate”, “expect”, “targeting” and “intend” and statements that an
      event or result “may”, “will”,“should”, “could”, or “might” occur or be
      achieved and other similar expressions.  Forward-looking statements in
      this MD&A include statements regarding the Company’s future exploration
      plans and expenditures, the satisfaction of rights and performance of
      obligations under agreements to which the Company is a part, the ability of
      the
      Company to hire and retain employees and consultants and estimated
      administrative assessment and other expenses. The forward-looking statements
      that are contained in this MD&A involve a number of risks and
      uncertainties.  As a consequence, actual results might differ
      materially from results forecast or suggested in these forward-looking
      statements.  Some of these risks and uncertainties are identified
      under the heading “RISKS AND
      UNCERTAINTIES” in this MD&A.  Additional information
      regarding these factors and other important factors that could cause results
      to
      differ materially may be referred to as part of particular forward-looking
      statements.  The forward-looking statements are qualified in their
      entirety by reference to the important factors discussed under the heading
“Risk
      Factors” and to those that may be discussed as part of particular
      forward-looking statements.  Forward-looking statements involve known
      and unknown risks, uncertainties, assumptions and other factors that may cause
      the actual results, performance or achievements of the Company to be materially
      different from any future results, performance or achievements expressed or
      implied by the forward-looking statements.  Factors that could cause
      the actual results to differ include market prices, exploration success,
      continued availability of capital and financing, inability to obtain required
      regulatory approvals and general market conditions.  These statements
      are based on a number of assumptions, including assumptions regarding general
      market conditions, the timing and receipt of regulatory approvals, the ability
      of the Company and other relevant parties to satisfy regulatory requirements,
      the availability of financing for proposed transactions and programs on
      reasonable terms and the ability of third-party service providers to deliver
      services in a timely manner.  Forward-looking statements contained
      herein are made as of the date of this MD&A and the Company disclaims any
      obligation to update any forward-looking statements, whether as a result of
      new
      information, future events or results or otherwise.  There can be no
      assurance that forward-looking statements will prove to be accurate, as actual
      results and future events could differ materially from those anticipated in
      such
      statements.  Accordingly, readers should not place undue reliance on
      forward-looking statements.