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UNITED STATESSECURITIES AND EXCHANGE COMMISSION
  Washington, D.C.
20549

FORM 20-F
  SEC File No.
**001-31799**

(Mark One)

[   ] Registration statement pursuant to Section 12(b)
or (g) of the Securities Exchange Act of 1934 or

[X] Annual report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

For the fiscal year ended January 31, 2012or

[   ] Transition report pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934

For the transition period from _________________ to
_________________

[   ] Shell Company Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934.

Date of event requiring this shell company report
_______________________

ROUGE RESOURCES LTD.(Exact name of registrant as specified in this charter)

British Columbia, Canada(Jurisdiction of
incorporation or organization)

#203-409 Granville Street, VancouverBritish
Columbia, V6C 1T2, Canada(Address of principal executive
offices)

|Darcy Krell                                   | Copies to:                                            
|--------------------------------------------- | ------------------------------------------------------
|(Tel) 604-831-2739                            | Thomas E. Puzzo, Esq.                                 
|(Fax) 604-831-2735                            | Law Offices of Thomas E. Puzzo, PLLC                  
|(Name, Telephone, Email and/or Facsimile      | 4216 NE 70thStreet                                    
|number and Address of Company Contact Person) | Seattle, Washington 98115                             
|                                              | Phone No.: (206) 522-2256 Fax No: (206)
      260-0111

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

|None                  | None                                       
|--------------------- | -------------------------------------------
|(Title of each class) | (Name of each exchange on which registered)

1

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

Common Shares Without Par Value
  (Title of Class)

Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act:

None
  (Title of Class)

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.40,565,171 Common Shares

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

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

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

Indicate by check mark wether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).[   ] Yes     [X] No (Not Required)

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

Large accelerated filer [   ]
    Accelerated filer [   ]
    Non-accelerated filer [X]


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

|U.S. GAAP [   ] | International Financial
      Reporting Standards as issued | Other [X]
|--------------- | ----------------------------------------------------------- | ---------
|                | by the International Accounting
      Standards Board [   ] |          

If Other has been checked in response to previous question,
indicate by check mark which financial statement item the registrant has elected
to follow.Item 17 [X]     Item 18 [   ].

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

2

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TABLE OF CONTENTS

|                           |                                                       | PAGE
|-------------------------- | ----------------------------------------------------- | ----
|                           |                                                       |     
|FORWARD-LOOKING STATEMENTS | 5                                                    
|**PART I**                
|                           |                                                       |     
|ITEM 1.                    | Identity of Directors, Senior Management and Advisors |     
|                           | 1.1 Directors and Senior Management                   | 6   
|                           | 1.2 Advisors                                          | 6   
|                           | 1.3 Auditor                                           | 7   
|                           |                                                       |     
|ITEM 2.                    | Offer Statistics and Expected Timetable               | 7   
|                           |                                                       |     
|ITEM 3.                    | Key Information                                       |     
|                           | 3.1 Selected Financial Data                           | 7   
|                           | 3.2 Capitalization and Indebtedness                   | 8   
|                           | 3.3 Reasons for the Offer and Use of Proceeds         | 8   
|                           | 3.4 Risk Factors                                      | 9   
|                           |                                                       |     
|ITEM 4.                    | Information on the Company                            |     
|                           | 4.1 History and Development                           | 14  
|                           | 4.2 Mineral Property Interests                        | 16  
|                           | 4.3 Competition                                       | 34  
|                           | 4.4 Management & Employees                            | 35  
|                           | 4.5 Environmental Regulations                         | 35  
|                           |                                                       |     
|ITEM 4A.                   | Unresolved Staff Comments                             | 36  
|                           |                                                       |     
|ITEM 5.                    | Operating and Financial Review and Prospects          |     
|                           | 5.1 Operating Results                                 | 36  
|                           | 5.2 Liquidity and Capital Resources                   | 37  
|                           | 5.3 Off-balance sheet arrangements                    | 38  
|                           |                                                       |     
|ITEM 6.                    | Directors, Senior Officers and Employees              |     
|                           | 6.1 Directors and Senior Officers                     | 39  
|                           | 6.2 Compensation of Directors and Senior Officers     | 40  
|                           | 6.3 Board Practices                                   | 42  
|                           | 6.4 Employees                                         | 42  
|                           | 6.5 Share Ownership of Directors and Senior Officers  | 42  
|                           |                                                       |     
|ITEM 7.                    | Major Shareholders and Related Party Transactions     |     
|                           | 7.1 Beneficial Ownership                              | 42  
|                           | 7.2 Related Party Transactions                        | 43  
|                           | 7.3 Interests of Experts and Counsel                  | 44  
|                           |                                                       |     
|ITEM 8.                    | Financial Information                                 |     
|                           | 8.1 Legal Proceedings                                 | 44  
|                           | 8.2 Subsequent Events                                 | 44  
|                           |                                                       |     
|ITEM 9.                    | The Offer and Listing                                 |     
|                           | 9.1 Offer and Listing Details                         | 44  

3

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|             |                                                                                    | PAGE
|------------ | ---------------------------------------------------------------------------------- | ----
|ITEM 10.     | Additional Information                                                             |     
|             | 10.1 Share Capital                                                                 | 46  
|             | 10.2 Memorandum and Articles of Association                                        | 47  
|             | 10.3 Material Contracts                                                            | 48  
|             | 10.4 Exchange Controls and other Limitations Affecting Security
      Holders      | 48  
|             | 10.5 Canadian Federal Income Tax Consequences to U.S. Investors                    | 49  
|             | 10.6 United States Federal Income Tax Consequences to U.S.
      Investors         | 49  
|             | 10.7 Statements by Experts                                                         | 52  
|             | 10.8 Documents on Display                                                          | 52  
|             | 10.9 Subsidiary Information                                                        | 53  
|ITEM 11.     | Quantitative and Qualitative Disclosures About Market Risk                         | 53  
|ITEM 12.     | Descriptions of Securities Other than Equity Securities                            |     
|             | 12.1 Warrants                                                                      | 54  
|             | 12.2 Stock Options                                                                 | 54  
|**PART II** 
|ITEM 13.     | Defaults, Dividend Arrearages and Delinquencies                                    | 54  
|ITEM 14.     | Material Modifications to the Rights of Security Holders
      and Use of Proceeds | 54  
|ITEM 15      | Controls and Procedures                                                            |     
|             | 15.1 Disclosure Controls and Procedures                                            | 54  
|             | 15.2 Managements Annual Report on Internal Control
      over Financial Reporting | 54  
|             | 15.3 Auditors Attestation Report                                                  | 55  
|             | 15.4 Changes in Internal Control over Financial Reporting                          | 55  
|ITEM 16      | (Reserved)                                                                         | 55  
|ITEM 16A     | Audit Committee Financial Expert                                                   | 55  
|ITEM 16B     | Code of Ethics                                                                     | 56  
|ITEM 16C     | Public Accountant Fees and Services                                                | 56  
|ITEM 16D     | Exemptions from the listing Standards for Audit Committees                         | 56  
|ITEM 16E     | Purchases of Equity Securities by the Issuer and Affiliated
      Purchasers       | 56  
|ITEM 16F     | Change in Registrants Certifying Accountant                                       | 57  
|ITEM 16G     | Corporate Governance                                                               | 57  
|ITEM 16H     | Mine Safety Disclosure                                                             | 57  
|**PART III**
|ITEM 17.     | Financial Statements                                                               | 57  
|ITEM 18.     | Exhibits                                                                           | 57  
|SIGNATURE    | 58                                                                                

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FORWARD-LOOKING STATEMENTS

This Annual Report on Form 20-F and exhibits attached hereto
contain forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and Canadian securities laws. Such
forward-looking statements concern the Companys plans for its properties,
operations and other matters. T hese statements relate to analyses and other
information that are based on forecasts of future results, estimates of amounts
not yet determinable and assumptions of management. Statements concerning
estimates of mineral resources and reserves may also be deemed to constitute
forward-looking statements to the extent that they involve estimates of the
mineralization that will be encountered if the property is developed, and in the
case of mineral reserves, such statements reflect the conclusion based on
certain assumptions that the mineral deposit can be economically exploited. Any
statements that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions or future
events or performance (often, but not always, using words or phrases such as
expects or does not expect, is expected, anticipates or does not
anticipate, plans, estimates or intends, or stating that certain actions,
events or results may, could, would, might or will be taken, occur or
be achieved) are not statements of historical fact and may be forward-looking
statements. Forward-looking statements are subject to a variety of risks and
uncertainties, which could cause actual events or results to differ from those
reflected in the forward-looking statements, including, without limitation:

- risks related to the outcome of legal proceedings;
- risks related to failure to obtain adequate financing on a timely basis
  and on acceptable terms;
- political and regulatory risks associated with mining and exploration;
- risks related to the maintenance of exchange listings;
- risks related to environmental regulation and liability;
- the potential for delays in exploration or development activities;
- the uncertainty of profitability based upon the Companys history of
  losses;
- risks and uncertainties relating to the interpretation of drill results,
  the geology, grade and continuity of mineral deposits;
- risks related to the inherent uncertainty of production and cost estimates
  and the potential for unexpected costs and expenses;
- results of prefeasibility and feasibility studies, and the possibility
  that future exploration, development or mining results will not be consistent
  with the Companys expectations;
- risks related to gold price and other commodity price fluctuations

This list is not exhaustive of the factors that may affect our
forward-looking statements. Some of the important risks and uncertainties that
could affect forward-looking statements are described in this Annual Report on
Form 20-F under Description of the Business Risk Factors. Should one
or more of these risks and uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
described in forward-looking statements. Forward-looking statements are made
based on managements beliefs, estimates and opinions on the date the statements
are made. Investors are cautioned against attributing undue certainty to
forward-looking statements.

5

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PART I

ITEM
1.                    
Identity of Directors, Senior Management and Advisors

1.1 Directors and Senior
Management:

Linda J. Smith #203-409 Granville Street, Vancouver,
      British Columbia, V0R 1X0, Canada
    President, Chief Executive Officer and DirectorDarcy T. Krell #203-409 Granville Street, Vancouver,
      British Columbia, V0R 1X0, Canada
    Secretary, General Manager and DirectorJ. Ronald McGregor #203-409 Granville Street,
      Vancouver, British Columbia, V0R 1X0, Canada
    Chief Financial Officer, DirectorBrian A. Lueck #203-409 Granville Street, Vancouver,
      British Columbia, V0R 1X0, Canada
    DirectorMark H. Holden #203-409 Granville Street, Vancouver
      British Columbia, V0R 1X0, Canada
    DirectorSteven J. Chan #203-409 Granville Street, Vancouver,
      British Columbia, V0R 1X0, Canada
    DirectorJames O. Burns #203-409 Granville Street, Vancouver,
      British Columbia, V0R 1X0, Canada
    Director


1.2 Advisors:

Doug Eacrett, Barrister & Solicitor, Suite 203 
      409 Granville St, Vancouver BC, Canada V6C 1T2
    Company LawyerDale Rondeau C/o Thomas Rondeau, LLP, Business Lawyers
      Suite 300  576 Seymour St, Vancouver, British Columbia, V6B 3K1,
      Canada
    Special Canadian Securities CounselThomas E. Puzzo, Esq. Law Offices of Thomas E. Puzzo,
      PLLC 382344thAve. NE, Seattle, Washington 98105, USA
    Special US Securities CounselMs. Caitlin Jeffs, H.B.Sc., P.Geo, Mr. Michael
      Thompson, H.B.Sc., P.Geo, C/o Fladgate Exploration Consulting
      Corporation 195 Park Avenue, Thunder Bay Ontario, P7B 1B9, Canada.
    Consulting GeologistsMr. Andre M Pouwels, P. Geo., 4900 Mariposa Court,
      Richmond BC, Canada V7C 2J9
    Consulting Geologist


6

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1.3 Auditor:

Dale Matheson Carr-Hilton Labonte LLP, Chartered
      Accountants, Suite 1500  1140 West Pender Street, Vancouver BC,
      Canada V6E 4G1
    Replaced Morgan & Company for the year
      ended January 31, 2009 forward.


Our auditors are members in good standing with the Institute of
Chartered Accountants of British Columbia and are registered with the Canadian
Public Accountability Board (CPAB) and the Public Company Accounting Oversight
Board - United States (PCAOB).

ITEM
2.                    
Offer Statistics and Expected Timetable

Not applicable

ITEM
3.                    
Key Information

3.1 Selected Financial Data

The following tables show selected financial data of the
Company derived from our audited financial statements. The data should be read
in conjunction with our audited financial statements for the fiscal years ended
January 31, 2012, 2011 and 2010 included as an exhibit in this annual report.
Our audited financial statements for the fiscal years ended January 31, 2009 and
2008 are not included in this annual report.

Our financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) issued by the International
Accounting Standards Board (IASB) along with interpretations of the
International Financial Reporting Interpretations Committee (IFRIC). This is
the Companys first set of annual financial statements prepared in accordance
with IFRS.

The disclosures concerning the transition from Canadian
Generally Accepted Accounting Principles (Canadian GAAP) to IFRS are provided
in Note 15 to the January 31, 2012 audited financial statements contained
hereinAll amounts are expressed in Canadian dollars.

The Company has reviewed recently issued accounting
pronouncements and plans to adopt those that are applicable to it. It does not
expect the adoption of these pronouncements to have a material impact on its
financial position, results of operations or cash flows.

The financial data below is presented in accordance with IFRS
in Cdn $ for the years ended January 31.

IFRS (in Cdn $)
    2012
    2011
    2010
    2009
    2008Comprehensive loss
    ($279,284)
    ($255,692)
    ($118,922)
    ($195,335)
    ($156,658)Comprehensive loss per share
    ($0.01)
    ($0.01)
    ($0.01)
    ($0.05)
    ($0.28)*Cash dividends per share
    Nil
    Nil
    Nil
    Nil
    NilTotal assets
    $243,140
    $364,036
    $169,424
    $101,485
    $90,043Long term debt
    $39,676
    Nil
    Nil
    Nil
    NilAccumulated deficit
    ($3,272,837)
    ($2,993,553)
    ($2,737,861)
    ($2,618,939)
    ($2,423,604)Capital stock
    $3,110,796
    $3,110,796
    $1,613,471
    $1,613,471
    $1,113,471Shareholders equity (deficiency)
    ($108,684)
    $170,600
    ($971,033)
    ($952,111)
    ($1,256,776)Weighted average number    of
      shares outstanding
    40,565,171
    33,578,870
    10,565,171
    3,597,958
  565,171*


*Reflects retroactive consolidation of
issued and outstanding shares on a one-for-ten basis (1:10) in October,
2007.

Note  Certain figures above have been
modified to reflect the disclosure for year ended January 31, 2012

7

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Since June 1, 1970, the government of Canada permitted a
floating exchange rate to determine the value of the Canadian dollar compared to
the United States dollar. On May 28, 2012, the exchange rate in effect was
C$1.00 = US$0.9765. This exchange rate is based on the noon buying rates in New
York City, for cable transfers in Canadian dollars, as certified for customs
purposes by the Federal Reserve Bank of New York. For the past five fiscal years
and the past six months ended January 31, 2012, the following exchange rates
were in effect for United States dollars stated in Canadian dollars:

Years Ended
    Actual Year End Exchange RateJanuary 31, 2012 (ie. Cdn$1.00 = US$0.99)
    $0.99January 31, 2011
    $1.00January 31, 2010
    $0.93January 31, 2009
    $0.81January 31, 2008
    $1.00Months Ended
    Average Month End Exchange RateJanuary 31, 2012 (ie. Cdn$1.00 = US$0.9926)
    $0.9926December 31, 2011
    $0.9793November 31, 2011
    $0.9727October 31, 2011
    $0.9978September 30, 2011
    $0.9680August 31, 2011
    $1.0206


3.2    
 Capitalization and Indebtedness

The following table sets forth our indebtedness and
capitalization as at January 31, 2012 in Canadian dollars:

US GAAP
    IFRSIndebtednessShort term debt (unsecured and non-interest
      bearing)
    $312,148
    $312,148Long term debt
    $39,676
    $39,676Total
    $351,821
    $351,824Shareholders Equity (Deficiency)Share capital
    $3,110,796
    $3,110,796APIC/ Contributed surplus
    -
    $ 53,357Accumulated deficit
    ($3,396,066)
    ($3,272,837)Total
    ($285,269)
    $ 108,684


3.3     
Reasons for the Offer and Use of Proceeds

Not applicable

8

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3.4    
 Risk Factors

Any investment in our common shares involves a high degree of
risk. You should consider carefully the following information before you decide
to buy our common shares. If any of the events discussed in the following risk
factors actually occurs, our business, financial condition or results of
operations would likely suffer. In this case, the market price of our common
shares could decline, and you could lose all or part of your investment in our
shares The following is a list of all known material risks relating to our
business and an investment in our common shares:

We have a history of losses. Our inability to achieve
profitability will negatively impact any investment in our shares.We
have incurred losses in our business operations since inception, and we expect
that we will continue to incur losses for the foreseeable future. From March 31,
1988, the date of incorporation, to January 31, 2012, we have incurred losses
totaling $3,272,837 under IFRS. Very few junior resource companies ever become
profitable. Failure to achieve and maintain profitability may adversely affect
the market price of our common stock.

We have limited financial resources and no source of
operating cash flow. If we are unable to generate revenue, our business may
fail.We have limited financial resources, no source of operating cash
flow and no other commitments for additional funding for further exploration of
our mineral property interests. Failure to obtain such additional financing
could result in delay or indefinite postponement of further exploration and
ultimately the failure of our business.

Very few mineral properties are ultimately developed into
producing mines. If we are unable to prove that a mineral reserve exists on our
mineral property interests, our business may fail. The business of
exploration for minerals and mining involves a high degree of risk. Few
properties that are explored are ultimately developed into producing mines. At
present, our mineral properties have no known body of commercial ore. Most
exploration projects do not result in the discovery of commercially mineable
deposits of ore.

Substantial expenditures are required for us to establish ore
reserves through drilling, to develop metallurgical processes, to extract the
metal from the ore and, in the case of new properties, to develop the mining and
processing facilities and infrastructure at any site chosen for mining.

It is unknown whether we will discover minerals in sufficient
quantities to justify commercial operations or that we can obtain the funds
required for development on a timely basis. The probability of an individual
mineral exploration prospect ever containing reserves is extremely remote. It is
unlikely that the property contains reserves, so any funds expended on the
property will most likely be lost.

Our auditors have expressed substantial doubt about our
ability to continue as a going concern, and if we do not obtain additional
financing, our business will fail.As at January 31, 2012, we had cash
balance of $17,823. Our ability to continue as a going concern is dependent upon
the company raising sufficient financing to complete exploration and development
activities, upon the discovery of economically recoverable reserves, and upon
future profitable operations or proceeds from disposition of resource property
interests. The Company has not to date determined whether its mineral property
interests contain economically recoverable resources. The Companys ability to
continue operations and exploration activities as a going concern is dependent
upon its ability to obtain additional funding. While the Company has been
successful in obtaining its required funding in the past, there is no assurance
that sufficient funds will be available to the Company in the future. The
Company has no assurance that such financing will be available or be available
on favorable terms. Factors that could affect the availability of financing
include the progress and results of the Dotted Lake project, investor
perceptions and expectations and the global financial and metals markets. The
Company will require additional financing through, but not limited to, the
issuance of additional equity in order to fund its ongoing exploration. There
can be no assurance the Company will be successful in this endeavor. These
financial statements do not include adjustments that would be necessary should
the company be unable to continue as a going concern.

9

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Due to the speculative nature of mineral property
exploration, there is substantial risk that no commercially viable mineral
deposits will be found on our Dotted Lake property or other mineral properties
that we acquire. In order for us to even commence mining operations we
face a number of challenges which include finding qualified professionals to
conduct our exploration program, obtaining adequate financing to continue our
exploration program, locating a viable mineral body, partnering with a senior
mining company, obtaining mining permits, and ultimately selling minerals in
order to generate revenue. Moreover, exploration for commercially viable mineral
deposits is highly speculative in nature and involves substantial risk that no
viable mineral deposits will be located on any of our present or future mineral
properties. There is a substantial risk that the exploration program that we
will conduct on the Dotted Lake project may not result in the discovery of any
significant mineralization, and therefore no commercial viable mineral deposit.
There are numerous geological features that we may encounter that would limit
our ability to locate mineralization or that could interfere with our
exploration programs as planned, resulting in unsuccessful exploration efforts.
In such a case, we may incur significant costs associated with an exploration
program, without any benefit. This would likely result in a decrease in the
value of our common stock.

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

- the global credit/liquidity crisis could impact the cost and availability
  of financing and our overall liquidity;
- the volatility of the gold price may impact our future revenues, profits
  and cash flow;
- volatile energy prices, commodity and consumables prices and currency
  exchange rates impact potential production costs; and
- the devaluation and volatility of global stock markets impacts the
  valuation of our equity securities, which may impact our ability to raise
  funds through the issuance of equity.

These factors could have a material adverse effect on our
financial condition and results of operations.

Mineral exploration involves a high degree of risk against
which we are not currently insured. If an environmental liability was incurred,
it may irreparably harm our business.Unusual or unexpected rock
formations, formation pressures, fires, power outages, labour disruptions,
flooding, cave-ins, landslides and the inability to obtain suitable or adequate
machinery, equipment or labour are risks involved in the operation of mines and
the conduct of exploration programs.

It is not always possible to fully insure against such risks
and we may decide not to take out insurance against such risks as a result of
high premiums or other reasons. Should such liabilities arise, they could reduce
or eliminate any future profitability and result in increasing costs and a
decline in the value of our common stock. We do not currently maintain insurance
against environmental risks relating to our mineral property interests.

If title to our mineral property interests is disputed, we
may lose our business assets and our business may fail.Our mineral
property interests may be subject to prior unregistered agreements or transfers
or aboriginal land claims and title may be affected by undetected defects. There
is a risk that the property boundaries could be challenged. In such
circumstances, we will incur costs defending our title to our mineral property
interests and may lose our interest in the claims, causing our business to fail.
The Company has investigated and believes it has good title to its properties.
However, there is no guarantee that adverse claims to title will not arise in
the future, nor can the Company express an opinion on how difficult the
resolution of such claims would be.

The Option Agreement pursuant to which we acquired our interest
in the Lampson Lake Property provides that we must make payments to the
Optionors on certain dates. If we fail to make such payments in a timely
fashion, we may lose our interest in the Lampson Lake Property. The legal nature
of aboriginal land claims, in particular, is a matter of considerable complexity. The impact of any such claim
on our ownership interest in our properties cannot be predicted with any degree
of certainty and no assurance can be given that a broad recognition of
aboriginal rights in the area in which the properties optioned by us are
located, by way of a negotiated settlement or judicial pronouncement, would not
have an adverse effect on our activities. Even in the absence of such
recognition, we may at some point be required to negotiate with first nations in
order to facilitate exploration and development work on the properties optioned
by us.

10

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We may require permits and licenses that we may not be able
to obtain. If we are unable to obtain such permits and licenses, our business
plan will fail.Our current or future operations, including exploration
and development activities and the commencement and continuation of commercial
production, require licenses, permits or other approvals from various federal,
provincial and/or local governmental authorities and such operations are or will
be governed by laws and regulations relating to prospecting, development,
mining, production, exports, taxes, labour standards, occupational health and
safety, waste disposal, toxic substances, land use, water use, environmental
protection, aboriginal land claims and other matters. We believe that it is in
substantial compliance with all material laws and regulations which currently
apply to our activities. There can be no assurance, however, that we will obtain
on reasonable terms or at all the permits and approvals, and the renewals
thereof, which we may require for the conduct of our current or future
operations or that compliance with applicable laws, regulations, permits and
approvals will not have an adverse effect on any mining project which the Issuer
may undertake. Possible changes to mineral tax legislation and, regulations
could cause additional expenses, capital expenditures, restrictions and delay on
the Issuers planned exploration and operations, the extent of which cannot be
predicted. Failure to comply with applicable laws, regulations and permitting
requirements may result in enforcement actions thereunder, including orders
issued by regulatory or judicial authorities causing operations to cease or be
curtailed, and may include corrective measures requiring capital expenditures,
installation of additional equipment, or remedial actions. Parties engaged in
mining operations 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 violations of applicable laws or regulations.

We will be required to obtain work permits from the Ontario
Ministry of Northern Development and Mines for any subsequent exploration work
that results in a physical disturbance to the land if the program calls for the
disturbance of more than 10,000 square meters of the property surface, or such
areas that would total that amount when combined. A work permit is also required
for the erection of structures on the property. There is no charge to obtain a
work permit under the Mining Act.

Mineral prices fluctuate widely. A decrease in mineral
prices may prevent us from raising the capital necessary to continue our
business plan in the future. As well, low mineral prices will reduce the value
of any reserve we discover on our mineral property interests.Factors
beyond our control may affect the marketability of any minerals we discover.
Metal prices have fluctuated widely, particularly in recent years. Our ability
to raise capital for continuing exploration of our mineral property interests
depends to a large degree on the market price for metals generally, as well as
for gold in particular. In addition, the value of any reserve we discover on the
Dotted Lake property will fluctuate depending on current metal prices. Low metal
prices may make it uneconomical to commence production on our mineral property
interests, if a reserve is established, of which there is no guarantee.

The resource industry is very competitive. The competitive
nature of the business may increase our cost of operations and prevent us from
obtaining interests in additional mineral properties.The resource
industry is intensely competitive in all its phases. We compete with many
companies possessing greater financial resources and technical facilities than
us for the acquisition of mineral concessions, claims, leases and other mineral
interests as well as for the recruitment and retention of qualified
employees.

In conducting exploration on our mineral property interests,
we will be subject to environmental regulations. In addition, our operations may
be adversely affected by changes in environmental regulations. A significant
change in such regulations may prevent us from proceeding with our business
plan. 
Our operations are subject to environmental regulations
promulgated by government agencies from time to time. Environmental legislation
provides for restrictions and prohibitions on spills, release or emissions of
various substances produced in association with certain mining industry
operations, such as seepage from tailings disposal areas, which would result in environmental pollution. A breach
of such legislation may result in the imposition of fines and penalties. In
addition, certain types of operations require the submission and approval of
environmental impact assessments. Environmental legislation is evolving in a
manner which means that standards, enforcement, fines and penalties for
non-compliance are more stringent. Environmental assessments of proposed
projects carry a heightened degree of responsibility for us and our directors,
officers and consultants. The cost of compliance with changes in governmental
regulations has a potential to reduce the profitability of our operations. We do
not maintain environmental liability insurance.

11

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When our exploration program on our mineral property interests
proceeds to the drilling stage, we may be required to post small bonds if the
rights of a private land owner may be affected. We may also be required to file
statements of work with the Ministry of Northern Development and Mines. We will
also be required to undertake remediation work on any exploration that results
in physical disturbance to the land. The cost of remediation work will vary
according to the degree of physical disturbance.

Our listed securities are subject to penny stock regulation,
which may impede an investors ability to purchase our common shares.The price of our common stock is below $5.00 per share and is subject to
"penny stock" regulation. "Penny stock" rules impose additional sales practice
requirements on broker-dealers who sell such securities to persons other than
established customers and accredited investors (generally those with assets in
excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together
with a spouse). For transactions covered by these rules, the broker-dealer must
make a special suitability determination for the purchase of such securities and
have received the purchaser's written consent to the transaction prior to the
purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the transaction, of a
disclosure schedule prescribed by the Commission relating to the penny stock
market. The broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative and current quotations for the
securities. Finally, monthly statements must be sent disclosing recent price
information on the limited market in penny stocks. Consequently, the "penny
stock" rules may restrict the ability of broker-dealers to sell our shares of
common stock. The market price of our shares would likely suffer as a
result.

We rely on the technical and financial skills and
contributions of our management team, the loss of any one of which may adversely
impact our business.Our success will be largely dependent, in part, on
the services of our senior management and directors whose contributions include
both technical and financial skills and assistance. We have not purchased any
key man insurance, nor have we entered into any non-competition or
non-disclosure agreements with any of our directors, officers or key employees
and have no current plans to do so. We may hire consultants and others for
geological and technical expertise but there is no guarantee that we will be
able to retain personnel with sufficient technical expertise to carry out the
future development of our properties.

Some of our directors are or will be directors of other
companies, which could result in conflicts of interest.Certain of our
directors, officers and other members of management do, and may in the future,
serve as directors, officers, promoters and members of management of other
companies and, therefore, it is possible that a conflict may arise between their
duties as a director, officer, promoter or member of our management team and
their duties as a director, officer, promoter or member of management of such
other companies. Our directors and officers are aware of the laws governing
accountability of directors and officers for corporate opportunity and the
requirement of directors to disclose conflicts of interest. We will rely upon
these laws in respect of any directors and officers conflicts of interest or
in respect of any breaches of duty by any of our directors or officers.

12

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Enforcement of US legal process may be difficult.All members of our Board of Directors and management reside in Canada
and our address for service is a Canadian address. Accordingly, investors will
not be able to:

| | i)   | effect legal process upon us or upon individuals related
      to us within the United States;                                                             
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                            
| | ii)  | enforce judgments obtained in United States courts
      against us based upon the civil liability provisions of the United States
      securities law; or
| |      |                                                                                                                                                            
| | iii) | enforce United States court judgments based upon the
      civil liability provisions of the United States federal securities
    law.                     

However, investors may commence original actions against us,
our directors and officers and our experts in British Columbia courts. However,
as our sole mineral property asset is located in Ontario, additional legal
proceedings would need to be commenced in that province in order to satisfy any
judgment.

Investors may not be able to seek judgment in British Columbia
or Ontario if the court determines that it is unable to rule in a matter that
involves determinations respecting United States securities laws. In such
circumstances, investors would be prevented from obtaining judgment that is
enforceable against us.

As we are incorporated pursuant to the laws of British
Columbia, duties of our directors and officers, and the ability of shareholders
to initiate a lawsuit on our behalf, are governed by the British ColumbiaBusiness Corporations Act.

Currency fluctuations may increase the costs of doing
business for us.The Company's offices and primary activities are
currently located in Canada and commodities are sold in international markets at
prices denominated in US dollars. However, some of the costs associated with the
Company's activities in Canada may be denominated in currencies other than the
US dollar. Any appreciation of these currencies vis-a-vis the US dollar could
increase the Company's cost of doing business in these countries. In addition,
the US dollar is subject to fluctuation in value vis-a-vis the Canadian dollar.
The Company does not utilize hedging programs to mitigate the effect of currency
movements.

We may, in the future, issue additional common shares, which
would reduce investors percent of ownership and may dilute our share value.Our Memorandum (charter document) authorized the issuance of an
unlimited number of common shares. As of May 28, 2012, the Company had
40,565,171 common shares outstanding. We may issue an unlimited number of
additional common shares. The future issuance of common shares may result in
substantial dilution in the percentage of our common shares held by our then
existing shareholders. We may value any common shares issued in the future on an
arbitrary basis. The issuance of common shares for future services or
acquisitions or other corporate actions may have the effect of diluting the
value of the shares held by our investors, and might have an adverse effect on
any trading market for our common shares.

If we lose our Foreign Private Issuer status in the U.S.,
our operating costs will increase.The Company is required to determine
its foreign private issuer status (as defined in Rule 3b-4(c) under the U.S.
Securities and Exchange Act of 1934 (as amended) for the purposes of U.S.
securities law) (the Exchange Act), annually at the end of its second fiscal
quarter. Although more than 50% of its voting securities were held by U.S.
residents as of the last business day of its most recently completed second
fiscal quarter, the Company is still considered a foreign private issuer as it
met the following conditions: (i) a majority of its executive officers and
directors, taken separately, are non-U.S. citizens or residents, (ii) more than
50% of its assets are located outside the U.S., and (iii) the business of the
Company is principally administered outside the U.S. The Company may in the
future lose its foreign private issuer status if it fails to meet any of the
aforementioned criteria.

The regulatory and compliance costs to the Company under U.S.
securities laws as a U.S. domestic issuer may be significantly more than the
costs the Company incurs as a Canadian foreign private issuer eligible to use
the multijurisdictional disclosure system. If the Company is not a foreign
private issuer it would be required to file periodic and current reports and
registration statements on U.S. domestic issuer forms with the SEC, which are
more detailed and extensive than the forms available to a foreign private
issuer. This could have a materially adverse impact on the Companys corporate
overhead costs and its ability to raise future financing.

13

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Because we do not intend to pay any cash dividends on our
common shares, our shareholders will not be able to receive a return on their
shares unless they sell them.We intend to retain any future earnings to
finance the development and expansion of our business. We do not anticipate
paying any cash dividends on our common stock in the foreseeable future. Unless
we pay dividends, our shareholders will not be able to receive a return on their
shares unless they sell them. There is no assurance that shareholders will be
able to sell shares when desired.

ITEM
4                    
Information on the Company

4.1     
History and Development

Rouge Resources Ltd (the Company or We or the Issuer) was
incorporated under the name Gemstar Resources Ltd on March 31, 1988, pursuant
to the provisions of the Company Act (British Columbia). In March 2006,
the Company was transitioned to the Business Corporations Act (British
Columbia). On March 25, 2008, the Company changed its name to Rouge Resources
Ltd.; consolidated its outstanding share capital on a one new for ten old
(1:10) share basis; and increased its authorized share capital from 10 million
shares without par value to an unlimited number of shares without par value.
This resulted in all share and per share information in the financial statements
being presented on a retroactive basis as if the share consolidation took place
at the beginning of all years presented.

The Company has been a reporting issuer in British Columbia and
Alberta since April 3, 1989 and became a foreign private issuer in the United
States pursuant to filings with the US Securities and Exchange Commission on or
about January 5, 2005. As a fully reporting issuer, the Companys shares are
quoted on the OTCQB operated by OTC Markets Group, Inc. in the United States
under the stock symbol ROUGF. The Companys registered and records office
address is located at 203 - 409 Granville St., Vancouver, British Columbia, V6C
1T2 and our telephone number is (604) 831-2739.

Description of the Business

The Issuer is a mineral exploration company focused on the
exploration of certain mining claims located in the Thunder Bay Mining District
of North Central Ontario, Canada, called theDotted Lake Property. The
Dotted Lake Property has been the only focus of the Issuers exploration
activities to date.

The material events in the development of the Issuers current
business over the last three fiscal years to the date of this Annual Report are
summarized as follows:

- In March 2008, the Issuer consolidated its share capital on a 10 for 1
  basis and changed its name from Gemstar Resources Ltd. to Rouge Resources Ltd.
- In May 2008, the Issuer hired Caitlin Jeffs, P.Geo, of Fladgate Exploration
  Consulting Corporation as consulting geologist to conduct a soil sampling
  program on the Dotted Lake Property.
- On August 5, 2008, Caitlin Jeffs, P.Geo completed an internal report of the
  results of the Issuers soil sampling program, indicating the possibility of
  both anomalous gold and anomalous zinc mineralization in two of the 47 samples
  collected and analyzed during the program.
- On December 24, 2008, the Issuer announced the closing of a non-brokered
  private placement of 10,000,000 units at $0.05 per unit for gross proceeds of
  $500,000 before share issue costs. Each unit was comprised of one Share of the
  Issuer and one additional non-transferable share purchase warrant, each
  warrant entitling the holder to acquire one additional Share of the Issuer at
  a price of $0.10 per share for two years from the date of closing. Proceeds of
  the private placement were used for exploration expenditures on the Issuers
  property, operating expenses and general working capital purposes.

14

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- In October 2009, the Issuer expanded its holdings in the Dotted Lake
  Property to a 100% interest in a total of ten claims of 82 units by staking.
  Shortly thereafter, the Issuer commenced a new soil sampling program in
  accordance with the report dated August 5, 2008.
- On May 13, 2010, the Issuer announced the closing of a non-brokered private
  placement of 30,000,000 units at a price of $0.05 per unit for gross proceeds
  of $1,500,000 before share issue costs. Each unit was comprised of one Share
  of the Issuer and one non-transferable share purchase warrant, each warrant
  entitling the holder to acquire one additional Share of the Issuer at a price
  of $0.10 per share for two years from the date of closing. Proceeds of the
  private placement were used for repayment of related party loans, exploration
  expenditures on the Original Dotted Lake Property, on-going operating expenses
  and general working capital purposes.
- On April 20, 2010, the Issuer entered into an Option Agreement with certain
  Ontario prospectors to acquire a 100% undivided interest in the Lampson Lake
  Property, subject to certain royalty interests when and if future revenue is
  generated. Exercise of the Option requires the Issuer to pay a total of
  $60,000 to the vendors over a period of three years of which $35,000 has been
  paid to date.
- On September 7, 2010, the Issuers independent consulting geologists
  completed a NI 43-101 compliant Technical Report, detailing all work completed
  on the Dotted Lake Property to date and recommendations for further
  exploration work.
- On October 25, 2010, the Issuer announced the resignations of Shannon
  Krell, Ryan Krell and Ivan Martinez from its board of directors and the
  appointment of Brian A Lueck and Mark H. Holden in their stead as independent
  directors.
- On November 30, 2010, a revised version of its NI 43-101 Technical Report
  was completed by the authors and delivered to the Issuer.
- At the December 13, 2011 Annual General Meeting of shareholders, three new
  directors were elected: J. Ronald McGregor, Steven J. Chan and James O. Burns.
  Subsequently, Mr. J. Ronald McGregor was appointed Chief Financial Officer of
  the Issuer to replace Mr. Darcy T. Krell.
- In February 2012, the Issuer entered into an agreement to defer $39,676 in
  debt owed to a professional advisor which amount has been converted from a
  short term to a long term liability. This amount is now due on or after July
  31, 2013.

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

Since the Company is in the exploration stage, it has no
current revenues nor has it earned any since inception. There is no assurance
that a commercially viable mineral deposit exists on our Mineral Property
Interests. Further exploration is required before a final evaluation of the
economic feasibility can be determined. Significant additional financing and
considerable time will be required before our mineral claim can be explored and,
if warranted, developed into a commercial enterprise.

15

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4.2     
Mineral Property Interests

The following table summarizes the amounts expended on
the original Dotted Lake Property, including option payments on the Lampson Lake
claims, (The Property) as at January 31, 2012 and 2011:

|                                 |   |         |  |   |         |  |   | Total for   |  |   | Total for   | 
|-------------------------------- | - | ------- |  | - | ------- |  | - | ----------- |  | - | ----------- | 
|                                 |   |         |  |   |         |  |   | year ended  |  |   | year ended  | 
|                                 |   | Dotted  |  |   | Lampson |  |   | January 31, |  |   | January 31, | 
|                                 |   | Lake    |  |   | Lake    |  |   | 2012        |  |   | 2011        | 
|Property acquisition costs       |   |         |  |   |         |  |   |             |  |   |             | 
|Balance, beginning of period     | $ | 15,261  |  | $ | 9,033   |  | $ | 24,294      |  | $ | 15,261      | 
|Additions                        |   | -       |  |   | 12,000  |  |   | 12,000      |  |   | 9,033       | 
|Balance, end of
      period     | $ | 15,261  |  | $ | 21,033  |  | $ | 36,294      |  | $ | 24,294      | 
|                                 |   |         |  |   |         |  |   |             |  |   |             | 
|Exploration and evaluation costs |   |         |  |   |         |  |   |             |  |   |             | 
|Balance, beginning of period     | $ | 176,585 |  | $ | -       |  | $ | 176,585     |  | $ | 90,530      | 
|Additions                        |   |         |  |   |         |  |   |             |  |   |             | 
|Drilling and related costs       |   |         |  |   |         |  |   |             |  |   | 57,832      | 
|                                 |   |         |  |   |         |  |   |             |  |   |             | 
|Field and camp costs             |   |         |  |   |         |  |   |             |  |   | 213         | 
|Geological consulting            |   |         |  |   |         |  |   |             |  |   | 16,099      | 
|Project administration           |   |         |  |   |         |  |   |             |  |   | 6,754       | 
|Travel and accommodation         |   |         |  |   |         |  |   |             |  |   | 5,157       | 
|                                 |   | -       |  |   | -       |  |   | -           |  |   | 86,055      | 
|Balance, end of
      period     | $ | 176,585 |  | $ | -       |  | $ | 176,585     |  | $ | 176,585     | 
|Total, end of period             | $ | 191,846 |  | $ | 21,033  |  | $ | 212,879     |  | $ | 200,879     | 

The original Dotted Lake Property was originally comprised of
one claim acquired by the Company in 2001 at a cost of $200,000. The claim was
allowed to lapse in late calendar 2002 and accordingly was written off during
year ended January 31, 2003. It was re-staked by the Company in March 2003 which
was less expensive than completing the exploration work assessment during the
extreme winter weather conditions existing at the time. Since then, the Company
has conducted certain acquisition and exploration activities on the Property;
completed a National Instrument 43-101 compliant geological report; and kept its
mineral interests in The Property in good standing with the Ontario Ministry of
Northern Development and Mines (MNDM) for future exploration. In October 2009,
the Company expanded its 100% owned holdings in the original Property from a
single 15-unit claim to ten claims of 82 units by means of staking at a cost of
approximately $11,000. Title to the Property was originally held in trust for
the Company by a Company officer and director, Mr. Darcy T. Krell.

On April 20, 2010, the Company entered into an option agreement
with local prospectors (the Optionors) regarding the Lampson Lake Property, an
additional two claims comprising 22 units. adjacent to The Dotted Lake Property.
The Company has an exclusive option to purchase 100% interest in these two
claims by making option payments totaling $60,000 as follows: $7,000 paid on
April 20, 2010 when the agreement was signed; $12,000 paid on April 20, 2011;
$16,000 paid on April 20, 2012 subsequent to the current year end; and $25,000
payable on April 20, 2013. These claims are subject to a 2% net smelter royalty
(NSR) in favour of the Optionors on one claim and with respect to the other, a
combination of a 2% NSR in favour of the Optionors and a 1% NSR on any metals
and/or a 1% Net Sales Return royalty payable to Ontario Exploration Company
(OEC) on any precious stones recovered from the property. The Company has the
right to buy back 1% of the NSR in favour of the Optioners for $1,000,000 and to
buy back three-quarters 3/4 of 1% of the royalty vested with OEC over 10 years
on an increasing scale from $15,000 to $750,000. In anticipation of meeting the
final payment schedule, title was transferred by the Optionors to Mr. Darcy T.
Krell on July 13, 2010 in trust for the Company.

Mr. Krell transferred title to the Dotted Lake Property to the
Company on January 27, 2012. After final payment for the Lampson Lake option on
April 20, 2013, the Companys holdings will then total 12 claims of 104 mining
units on 1,683 hectares. The Dotted Lake Property is currently in
good standing with the MNDM with due dates for work credits to be applied on
claim anniversary dates ranging from November 17, 2012 to March 14,
2013.

16

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The Company continues to monitor claims in the Dotted Lake area
and may make additional acquisitions from time to time when management considers
the claim to be strategic or otherwise a potential benefit to the Company.

Technical Report

The following discussion regarding the Dotted Lake Property
with the exception of the information set out in Table 1 below, is taken from
the NI 43-101 compliant Technical Report dated September 7, 2010 (as revised on
November 30, 2010) prepared by Caitlin Jeffs H. B.Sc., P.Geo. and Michael
Thompson H. B.Sc., P.Geo. of Fladgate Exploration Consulting Corporation of
Thunder Bay, Ontario. The full text of the Technical Report is available for
review at the registered office of the Company at Suite 203-409 Granville
Street, Vancouver, BC V6C 1T2 and may also be accessed online, under the
Companys profile on the website: www.sec.gov/edgar. The information in the
table entitled Table 1 Claims Details below has been derived from a mineral
tenure search dated April 24, 2012 conducted through the online database of the
MNDM website.

Property Description and Location The Dotted Lake
Property is located in the southeast part of the Black River Area Township and
the southwest corner of the Olga Lake Township within the Thunder Bay Mining
Division of Northwestern Ontario, Canada (Figure 1). The Dotted Lake Property
lies 45 km south of the town of Manitouwadge on NTS Sheet 42C13. The centre of
the Dotted Lake Property has approximate geographic coordinates of 48°5426N,
85°4550W (UTM NAD83 Zone 16N 590,597mE, 5,416,050mN). The Dotted Lake Property
is comprised of 12 mining claims totaling 104 units and covering 1683 hectares
oriented approximately east west, 8.5 km long by roughly 2 km wide in an
irregular shape (Table 1).

The Dotted Lake Property is an exploration stage property.
There have been no improvements or mining activities conducted on the property
and no permanent structures have been built on the property. There have been no
mineral resource estimations completed on the Dotted Lake Property. Work on the
property in the past three years has identified gold mineralization hosted in
sulphide rich shear bands in granitoid rock.

The Issuer has not applied for any environmental or work
permits on the Dotted Lake Property. There are no environmental or work permits
required by law in Ontario for the exploration activities described or proposed
in the Technical Report. Stripping and trenching on mining claims in Ontario is
allowed without permits so long as the stripped area is under 10,000 square
metres. A Permit to Take Water is required by the Ministry of Environment in
Ontario if more than 50,000 litres of water is taken in one day, this amount
would only be taken if multiple drills were active on a property at one
time.

The authors of the Technical Report are not aware of any
outstanding environmental liabilities attached to the Dotted Lake Property and
there is no reason to believe there should be any. There has been no active
mining or processing on the Dotted Lake Property.

The Dotted Lake Property was initially registered in the name
of 1179406 Ontario Ltd., a private Ontario company owned by Mr. R.J. Reukl, in
trust for Gemstar Resources Ltd. (the Issuers former name) However, on April 8,
2009 the claim was transferred into the name of Darcy T. Krell, an officer and
director of the Issuer, in trust for the Issuer. The registration of the Dotted
Lake Property in the name of the Issuer was recorded on January 27, 2012.

The authors of the Technical Report verified titles and work
summaries of the claims at the MNDM website. In order to maintain the claims in
good standing, $400 of work is required per year per 16 hectare claim unit. The
Dotted Lake Property claims (including the Lampson Lake Property) require
approximately $41,000 of work in order to keep the claims in good standing each
year. Work credits can be banked and used in future years. As of the date of the
Technical Report, the Issuer had $7,323 banked for future credits and has spent
$91,585 on a trenching and prospecting program that had not yet been submitted
for assessment. Under the MNDM system, each claim comes due on the anniversary
of the date the claim was recorded, therefore not all claims will come due on
the same day in 2012 and 2013 (Table 1).

17

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The Dotted Lake Property claims are outlined in Table 1 below
and shown on Figure 1 and Figure 2. The property claim boundaries were located
by records provided from Ontarios MNDM website.

Table 1  Dotted Lake Property Claims

Mining
        Claim No.
      Township/Area
      Units
      Date Recorded
      Date Due for Work Credits to be applied
      $ Work Required/Year3011450 (i)
      Black
        River
      15
      14-Mar-03
      14-Mar-13
      $6,0004245668 (ii)
      Black
        River
      6
      6-Mar-09
      6-Mar-13
      $1,8694246254 (ii)
      Black
        River
      16
      21-Apr-09
      21-Apr-13
      $6,4004252412 (iii)
      Black
        River
      12
      17-Nov-09
      17-Nov-12
      $4,8004252413 (iii)
      Black
        River
      12
      17-Nov-09
      17-Nov-12
      $4,8004252414 (iii)
      Black
        River
      2
      17-Nov-09
      17-Nov-12
      $8004252415 (iii)
      Black
        River
      2
      17-Nov-09
      17-Nov-12
      $8004252416 (iii)
      Black
        River
      1
      17-Nov-09
      17-Nov-12
      $4004252417 (iii)
      Black
        River
      2
      17-Nov-09
      17-Nov-12
      $8004252418 (iii)
      Olga
        Lake
      12
      17-Nov-09
      17-Nov-12
      $4,8004252419 (iii)
      Olga
        Lake
      12
      17-Nov-09
      17-Nov-12
      $4,8004252420 (iii)
      Olga
        Lake
      12
      17-Nov-09
      17-Nov-12
      $4,800Totals
      104
      
      $41,069


|(i)   | Issuers original claim re-staked in March
2003.                                                                                                                                                                                                                                                               
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                
|(ii)  | Lampson Lake Property optioned by the Issuer on April 20,
      2010. Title was transferred to Darcy T. Krell in trust for the Issuer on
      July 13, 2010 pending final option payment due on April 20, 2013. Title
      was subsequently transferred to the Issuer and recorded on January 27,
      2012.
|      |                                                                                                                                                                                                                                                                                                                
|(iii) | Staked by Darcy T. Krell on behalf of the Issuer in
      October 2009. Title was transferred from Mr. Krell to the Issuer on
      January 27, 2012.                                                                                                                                                          

Accessibility, Local Resources and Infrastructure
The Dotted Lake Property is situated in Northwestern Ontario and includes
the north end of Dotted Lake. The property is not road accessible, but a newly
constructed trail crossing the property to the northwest shoreline of Dotted
Lake is suitable for ATVs and wide enough for drill mobilization. The closest
road is a logging road situated approximately 1 km north of the claims. This
logging road branches east from Highway 614 at a point either 31 km south of
Manitouwadge or 19.2 km north of the junction of Highway 614 with Highway 17,
the TransCanada Highway. A blazed trail, starting at a distance of 8.2 km from
Highway 614 along this logging road, leads into the property to the north end of
Dotted Lake (Figure 2).

The nearest towns are Manitouwadge 26 km to the north, Marathon
45 km to the southwest and White River 42 km to the southeast. A pool of skilled
labour for mining and exploration is present in the communities of Manitouwadge,
Marathon and White River. All three communities have housing and facilities for
educational, commercial and leisure activities. The city of Thunder Bay, 400 km
to the west, is the nearest large regional population centre with many services
and amenities for industrial, educational and leisure activities. The nearest
railroad is the Canadian Pacific Railroad 20 km to the south along the
TransCanada Highway. A Hydro One high voltage power transmission line passes 18
km south of the Dotted Lake Property.

18

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Figure 1 - Dotted Lake Claims Location in the Province of
  Ontario

19

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Figure2DottedLakeClaims

Climate and Physiography The climate is
characterized by long cold winters and hot summers. Average daily temperatures
in summer range from 10° to 24°C and from 0° to -22°C in the winter months. In
general, soil sampling, geological mapping and trenching programs are limited to
the summer months. Snow cover and freezing conditions prevail from mid-November
until late April and make transportation through the property easier for large
equipment during the months when swampy wet ground is frozen and easier to move
across.

The Dotted Lake Property is covered by lakes, swamps and low
wooded hills. Elevations on the property vary from 380 to 450 m above sea level.
A steep slope that is difficult to move down or up crosses the centre of the
property in a north easterly direction. Vegetation is typical for a mixed boreal
forest and the dominant tree species are spruce, balsam, jackpine, birch and
poplar.

History

****1. ****Previous
Exploration Programs High-grade zinc mineralization was first discovered
on the Dotted Lake Property by trapper/prospector A. Fairservice in 1957 and is
known as the Fairservice zinc showing. Initial work consisted of hand dug
trenches and pits. A grab sample from the showing reported by Smyk contained
9.44% Zn, 0.012% Cu and 0.006 oz/ton gold. Since then the claims have been held
by a variety of parties and several campaigns of AEM, and magnetic surveys have
covered the property. Several campaigns of ground surveys along cut lines
included VLF-EM, ground magnetics, HLEM, soil sampling and geological mapping
have also been performed on the property.

The area has seen several periods of exploration. Initially the
interest in the area was sparked by the Fairservice discovery and resulted in
two companies exploring the property in the late 1950s and through the
1960s.

20

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Table 2  Past Exploration at Dotted Lake

Year
      Operator
      Work
      PrincipalReference1957
    A. Fairservice
    Discovery of
      Fairservice showing, sampling and trenching
    MNDMF Mineral Deposits Inventory
      (MDI)1964-1967
    Irish Copper Mines Ltd.
    Airborne EM and
      Magnetic Survey
    Rattew, A.R., 19651968
    Ontario Department of Mines
    Geological mapping
      of Black River area
    Milne, V.G., 19681982-1983
    Clear Mines Ltd.
    Geology, soil
      sampling (577 samples), ground magnetics and VLF ground surveys (15km),
      AEM by Aerodat (1,1570 square kilometres)
    Symonds, D.F e.a., 1983 Scott
      Hogg, R.L., 19831988
    McLaughlin Mines Ltd.
    Soil sampling (120
      samples), analysed for gold, silver and PGE
    Ven Huizen, G.L., 19881989-1991
    Noranda
    Ground HLEM, VLF
      and Magnetic surveys over 1km by 5km along 100m to 200m spaced lines.
      Diamond Drilling 3 holes, 502m
    Degagne, P., 1991 Walmsley, T.,
      19911991
    Ontario Geological Survey
    Mapping,
      description and sampling Fairservice showing
    McKay, D., 19942005
    Gemstar Resources Ltd.
    Airborne VLF and
      Magnetic survey 100km 2/50m spaced lines
    Berrie, C., 20052005
    Gemstar Resources Ltd.
    Ground Magnetic,
      VLF and line cutting 15km
    Private Report2008
    Gemstar Resources Ltd.
    Soil Sampling
      Program (3 traverses, 47 samples)
    Jeffs, C., 20082009
    Ontario Exploration Corporation
    Line cutting (5km
      grid), Magnetic and VLF-EM survey over 5km (400 samples at 12.5m
      intervals), Prospecting, 32 grab samples
    Griggs, H., 20092009
    Rouge Resources Ltd.
    Soil Sampling
      Program (5 traverse lines with 200m spacing; 61 samples with 50m spacing)
    Jeffs, C., 20102010
    Rouge Resources Ltd.
    Trenching and
      Prospecting, four trenches
    Internal Information


****2. ****Significant
Exploration Results

*****a.******1950s-1960s*

In 1965 Irish Copper Mines Limited carried out an airborne EM
survey in the White Lake area which covered the north western arms of Dotted
Lake. Although a number of EM anomalies were encountered in the area, they were
all very weak and only one conductive zone was interpreted as a possible sulfide
conductor. This conductive zone was the only anomalous feature recommended for
ground follow up.

A combined EM and Magnetics airborne geophysical survey was
conducted in 1965 for Carravelle Mines Ltd. by Selco Exploration Co. on the
Pulfa Prospect, between Black River in the west and White Lake in the east. The
objective of this survey was to test the ground for unknown mineral or bedrock
conductors. This survey was done as part of a larger survey which covered
territory adjoining to the Pulfa Group of claims, with a total area of
approximately 83 square miles and included the entire Dotted Lake Property. More
detailed airborne surveys were completed in later years.

b.1980s-1990s

In 1983 Clear Mines Ltd. systematically soil sampled and mapped
over the area of the Fairservice showing covering a 2 km by 1 km area. Airborne
magnetic and EM surveys encompassing 1,570 square kilometres, including the Dotted Lake area, were performed by contractor Aerodat Ltd. for
Clear Mines Ltd. Several EM anomalies were detected but none over the
Fairservice showing. The geochemical survey showed scattered anomalies for
copper, zinc and lead.

21

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The most comprehensive geophysical groundwork was completed by
Noranda in 1991. Systematic VLF, magnetic and multi-frequency HLEM surveys were
completed on 100 m to 200 m spaced lines over a 1 km by 5 km area. The
Fairservice showing was found to be located on the western terminus of a 2.6 km
long linear conductor/magnetic high. Noranda drilled three holes on this trend.
The drilling, which included a hole at the Fairservice showing, did not
intersect any significant mineralization but indicated that the long linear
anomaly was possibly caused by magnetite and pyrrhotite bearing iron formation
with local sphalerite at the Fairservice showing.

*****c.******2000s*

In 2005, the Issuer, then known as Gemstar Resources Ltd.,
completed an airborne magnetic survey covering the central portion of the
present claim block, followed by ground VLF and magnetic survey over the
northwestern side of Dotted Lake including the area of the Fairservice
showing.

The results of this survey are outlined in an operations report
by Terraquest Ltd. Note that the title of that report states that an airborne
magnetic and VLF-EM survey was completed, but no VLF data was processed. The
report includes a digital terrain model and three magnetic maps (total magnetic
intensity map, a vertical magnetic derivative map and the measured horizontal
gradient). Apart from the contoured maps, no other interpretative comments or
material were provided in the report.

Ground VLF-EM and magnetic surveys were completed on cut lines
in the north central portion of the property. One hundred metre spaced lines
were cut in March of 2005 and a total of 16.5 km were surveyed from April 6 to
10, 2005. Magnetic and VLF readings were recorded every 12.5 m. The survey is
the subject of a report titled: Geophysical Report for Gemstar Resources Ltd.
on the Dotted Lake Property, Black River Area authored by J.C. Grant CET, FGAC,
May 2005. The report describes the specifications of the survey and has an
interpretative section that relates the VLF conductors and magnetic features to
their possible causes.

In 2008 a soil sampling program was carried out on the 3011450
claim area. This project entailed sampling B horizon soils every 50 m intervals
over three 1 km long traverse lines trending north northwest approximately
perpendicular to the main trend of structures in the region.

A second soil sampling program in 2009 was carried out on the
Dotted Lake Property over the 3011450 claim area. This project entailed sampling
B horizon soils every 50 m intervals over five 500 m long traverse lines
trending north northwest approximately perpendicular to the main trend of
structures in the region. The B horizon was taken to follow up on anomalous
results from the 2008 soil sampling program to try and determine a clear trend
in anomalous mineralization and also to confirm that the anomaly returned during
the 2008 program was not a discrete occurrence.

In 2009 OEC contracted Katrine Exploration and Development to
carry out a line cutting program just south of Lampson Lake (currently included
as part of the western half of the Dotted Lake Property). A grid was established
of 5 line kilometres of cut grid lines, spaced at 100 m intervals. A magnetic
and VLF EM survey was performed by Larder Geophysics over the cut grid. A total
of 5 line kilometres of magnetometer/VLF EM survey was read, consisting of
approximately 400 magnetometer VLF EM readings with a 12.5 m sample interval.
Assays from the 2009 OEC funding proved to provide little encouragement in base
metals. The best values returned from sampling were 781 ppm Cu and 425 ppm Zn.
One sample returned a value of 2.33 g/t Au, approximately 300 m south of Lampson
Lake and appears to lie along a presumed shear zone. The sample was described as
mafic volcanic, altered, intense biotite, sheared, 3-5% pyrite and
non-magnetic.

A trenching and prospecting program was completed by Fladgate
Exploration for the Issuer in 2010. Four trenches were cut following up on soil
anomalies returned in the 2008 and 2009 programs and prospecting.

22

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Geological Setting

****1. ****Regional and Local
Geography Information on the regional and area geology is mainly from
government sources, maps and reports. The property is situated in the Wawa
sub-province of the Superior province of the Canadian Shield. All rocks are of
Archaean age, with the exception of Proterozoic diabase dykes. The claims cover
a portion of the north eastern part of the Schreiber-Hemlo Greenstone Belt. The
eastern segment is subdivided into the 2.77 billion year old Hemlo-Black River
assemblage to the northeast and the 2.7 billion year old Heron Bay Assemblage to
the southwest. The assemblages are separated by the Lake Superior-Hemlo fault
zone. The primary rock type of the Hemlo-Greenstone Black River assemblage is
mafic volcanics. Felsic and intermediate volcanic rocks and clastics overlie the
mafic volcanics. The belt is intruded by numerous felsic granitoids. Several
stages of regional folding occurred in the belt, the latest stage is the most
pervasive and occurred contemporaneous to, or predated, the intrusion of the
granitoid bodies.

****2.**** Property
Geology Local geological data is taken from government reports and from
exploration work by Clear Mines Ltd. and also from drill holes completed by
Noranda in 1991 and are supplemented by a report prepared by Andre M. Pauwels in
December 2005 for the Issuer, then known as Gemstar Resources Ltd.

The predominant rock type in the Dotted Lake arm is foliated,
fine grained, dark green, amphibole rich metavolcanic rock. Medium and coarse
grained amphibolites are less common and occasional remnant pillow textures have
been observed indicating a submarine depositional environment. Small sills and
dykes of granitoid rocks are common in the volcanic rocks. A few thin (1 cm to
30 cm) layers of intermediate to felsic volcanic tuffs were observed in the area
just north of Dotted Lake in the general vicinity of the Fairservice zinc
showing. Magnetite, pyrrhotite-rich and garnetiferous amphibolitic iron
formation is reported from drill holes 2 and 3 drilled by Noranda and contains
massive sphalerite at the Fairservice zinc showing. These horizons, although
volumetrically a small proportion of the rocks in the area, appear to be
continuous along strike within the metavolcanic rocks according to geophysical
surveys. Foliation of the metavolcanic rock is persistently east-northeasterly
trending within an isoclinal syncline within the metavolcanics of the Dotted
Lake Arm. This syncline appears to plunge to the west-southwest. The
metamorphism within the belt is amphibolite grade.

The eastern portion of the claims contain a mafic and
ultramafic intrusive complex of gabbro, peridotite and serpentinized peridotite
intruded along the southern flank of the mafic volcanics. Ground magnetic
surveys in the area indicate that this complex extends 800m further to the west
than indicated on the mapping done by the Ontario Geological Survey. This area
is covered by overburden. Granitoid rocks of the Dotted Lake Batholith cover the
southern portion of the property. The granatoids are pink to light pink in
colour, foliated and medium grained, and appear to intrude both the
metavolcanics and mafic/ultramafic rocks.

Table 3  Dotted Lake Property potential VMS style deposit

GeneralVMSCharacteristics
      ObservationsatFair service/DottedLakeDepositional Environment Marine volcanism
    Depositional Environment Marine
      pillow basalts predominate in the area.Bimodal (felsic-mafic) volcanic succession
    Mainly mafic metavolcanics-minor felsic volcanic
      component at and near the showing.Host horizon grades laterally into exhalative horizon.
    The Fairservice showing is within an exhalite horizon
      (iron formation) that can be traced over at least 2.4km.Mineralization Concordant bands of massive
      sulphides, chalcopyrite, pyrite, sphalerite, galena.
    Mineralization Coarsely banded sphalerite
      concordant with strike - mineralization over 10m strike length, little or
      no chalcopyrite, no galena, small amounts of pyrite.


23

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GeneralVMSCharacteristics
      ObservationsatFair service/DottedLakeFootwall Alteration Large zones of
      alteration are developed in the footwall below the main mineralization.
    Footwall Alteration No large zones
      observed. Minor alteration around the mineralization at Fairservice. Rocks
      have regional metamorphic grade of amphibolite facies.


Recent gold results on the property discussed in the section
below titled Mineralization indicate there is potential for a new deposit
style on the Dotted Lake Property. The gold mineralization does not appear to be
Hemlo style as the host lithology is felsic and not mafic and there is no
anomalous arsenic, mercury or molybdenum which are all key elements associated
with the gold at the Hemlo Deposit. Preliminary observations indicate the
potential for a sheared Archean granitoid type deposit similar to that of the
Hammond Reef deposit currently being evaluated by Osisko Mining. It must be
stressed that this is a preliminary conclusion based on limited observations and
data. More exploration work is required to expand on these results.

Mineralization Mineralization at the Dotted Lake
Property was first discovered at the Fairservice zinc showing. The showing was
described in detail by M. Smyk. According to Smyk, the showing is hosted within
a narrow band (up to 80 cm wide) of iron formation within mafic volcanic rock.
It is described as follows:

> The mineralized zone occurs in the mafic volcanics
>       and is oriented parallel to both the host rock foliation and the elongation
>       direction of the pillows. The host metavolcanics become noticeably altered
>       within 1 m of the mineralized zone.

The mineralization is further described to be exposed over a
maximum 20 m length and to contain sphalerite, magnetite, amphibole and
disseminated garnet. The southern contact of the mineralization is a 1 m to 2 m
thin felsic dyke, in part with the appearance of fissile sericite schist. The
mineralization was interpreted by McKay to be hosted by iron formation which can
be seen in intermittent outcrops over 200 m to the east of the showing. Grab
samples from this iron formation reported by Smyk showed low anomalous zinc
values.

Several rock samples at the Ontario Geological Survey in
Thunder Bay show a 2 cm band of massive, coarsely crystalline, dark brown
sphalerite (35%) adjacent to well aligned coarse grains of magnetite (25%)
intermixed with coarse crystals of sphalerite and a matrix of dark green
amphibole and chlorite (40%) and a small amount of disseminated phyrrotite and
chalcopyrite. A grab sample reported by Smyk contained 9.44% Zn, 0.012% Cu, and
0.006 oz per ton gold.

One other zinc occurrence hosted in iron formation is reported
from the Dotted Lake Arm. This occurrence, called the Brinklow zinc showing, is
located approximately 6 km to the southwest of the Fairservice zinc showing and
2.5 km west of the Dotted Lake Property boundary. The Brinklow showing was
drilled by Noranda in 1994 with no significant results.

The occurrence of massive sulphide bands hosted in an
exhalative sedimentary unit within sea floor volcanic rocks with a component of
intermediate to felsic volcanic rock classifies the mineralization as a
metamorphosed volcanogenic massive sulphide (VMS) type of occurrence.

During the 2010 trenching program a new zone of mineralization
was discovered in trench Tr-10-4. This zone consists of a narrow (approximately
30 cm wide) sheared granitoid rock, with 5-10% pyrite, strong sericite and trace
of arsenopyrite. A grab sample taken from this rock unit returned a grade of
16.95 ppmAu, 218 ppmZn and 7.7 ppm Ag. The same unit was
channel sampled later on as part of Tr-10-4 channel sampling and returned an
assay of 9.02 ppmAu, 859 ppmZn and 1.2 ppm Ag over 0.40
m. This shear zone appears to be related to shearing noted in the northern part
of the property, following the same east-west trend.

Exploration

Since 2008 Fladgate Exploration has conducted three exploration
campaigns consisting of soil sampling, rock sampling, prospecting and trenching
programs on behalf of the Issuer on the Dotted Lake Property.

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****1.**** Soil Sampling May
2008 During the period of May 21 to May 25, 2008 work carried out by
Fladgate Exploration on the Dotted Lake Property included soil sampling of the
3011450 claim area. This project entailed sampling B horizon soils every 50 m
intervals over three 1 km long traverse lines spaced 200 metres apart. A total
of 47 samples were collected and analyzed for base and precious metals. Two
samples, 01-01 and sample 01-03 (see Figure 4) assayed 0.484 ppm Au and 0.144
ppm Au respectively. The two anomalous samples are approximately 80 metres apart
and do not indicate clearly if there is significant strike length to the
mineralization or any clear trend in the strike direction (Figure 4).

****2. ****Soil Sampling
September 2009 During the period September 11 to September 14, 2009 work
carried out by Fladgate Exploration on the Dotted Lake Property included soil
sampling of the 3011450 claim area (see Figure 4). This project entailed
sampling B horizon soils on 50 meter intervals over five 500 m long traverse
lines spaced 200 m apart trending north northwest approximately perpendicular to
the main trend of structures in the region. The subsoil B horizon was taken to
follow up on anomalous results from the 2008 soil sampling program to try and
determine a clear trend in anomalous mineralization and also to confirm that the
anomaly returned during the 2008 program was not a discrete occurrence.

A total of 61 samples were collected and analyzed for base and
precious metals. One high grade gold result, sample 3-29 assayed 0.234 ppm Au.
The sample is one line west of the high grade gold results returned in the 2008
soil sampling program showing a possible east west trend to the gold anomalies
and indicating a potential gold target in the bedrock below. Anomalous zinc was
noted along the same trend in sample 4-41 located at 590,579 east and 5,416,197
north assaying 1,200 ppm Zn (Figure 4).

25

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Figure4SoilSampleResults

26

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****3. ****Trenching
2010During May 25 to June 5, 2010, the exploration program carried out
by Fladgate Exploration over the Dotted Lake Property included prospecting,
stripping/trenching, channel sampling and trench mapping. The goal of this
program was to expose and test the bed rock in the vicinity of the location of
the encouraging soil anomalies encountered in 2008 and 2009. Limited additional
prospecting samples provided a cursory examination of other areas of the
property as well.

Four trenches and approximately 8 km of access trail were
completed between May 25 and June 5, 2010. The proposed trench targets were
determined based on the historical data and soil anomalies highlighted in the
2008 and 2009 soil sampling programs. Trench locations are shown on Figure 5.
Trenches were generally oriented in a south-north direction, perpendicular to
the east-west trend of the bedrock. The exposed rock was washed using
high-pressure water pump, then geologically mapped and channel sampled. Sample
locations were tagged with aluminum tags with the appropriate samplenumber.



Figure 5 - Trench Locations

A total of 339 m of trenching was completed in a series of four
trenches during May 25 to June 5, 2010. Three of the trenches, Tr-10-1, Tr-10-2
and Tr-10-3 were completed in the area of the Fairservice zinc showing. The
fourth trench, Tr-10-4, was excavated in the vicinity of gold soil anomalies
from 2008 and 2009 soil sampling. The trenches were excavated to an average
depth of 0.5 -2 m and a width of 4 m exposing a total surface of 1356
m2. A summary of the trenching is set out below:

27

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Table 4  Trench Summary

Trench No.
    Length
      (m)
    Width
      (m)
    Depth of
      over burden (m)
    Surface
      Area (m2)Trench 1
    17
    4
    0.5
    68Trench 2
    152
    4
    1
    608Trench 3
    23
    4
    1
    92Trench 4
    147
    4
    2
    588


Mapping was completed between May 30 to June 6, and June 12 to
16, 2010, at a scale of 1:100. Trenches Tr-10-1, Tr-10-2 and Tr-10-3 exposed
mainly metavolcanic rocks and series of quartz feldspar porphyry and
granodioritic dykes running approximately east-west. The metamorphism for the
most part is of amphibole grade. The fourth trench, Tr-10-4 exposed granodiorite
and gneissic- porphyritic rocks with narrow shear zones. The shear zones are 0.1
to 3.0 m wide, trend roughly east west, are pyrite rich with predominantly
gneissic characteristics.

****a. ****Trench Tr-10-1
Trench Tr-10-1 is 17 metres long and 4 metres wide and is predominantly
foliated amphibolized mafic volcanics with moderately stretched pillow selvages,
local isolated white quartz veins parallel to the strike, disseminated pyrite
and trace of chalcopyrite. The key elements of this trench are a fault trending
at 296° with a minor displacement and a 2.1 m wide shear zone within the mafic
volcanics. The shearing is described as strong with traces of sericite, local
disseminated fine grained red garnets, massive pyrite and rusty quartz veins.
This trench is cross cut by two quartz feldspar porphyry dykes at 260°. These
dykes are white, fine grained, with traces of pyrite.

A total of 15 channel samples were cut and assayed for gold and
zinc. The shear zone appears well mineralized due to significant amounts of
pyrite but no significant gold or zinc values were returned from the samples.

****b.****Trench Tr-10-2 Trench
Tr-10-2 is 152 m long and 4 m wide, located to the immediate west of the
Fairservice zinc showing and exposed garntiferous amphibolitic iron formation,
metavolcanics and a series of granitoid dykes. The iron formation is described
as green, medium grained with fibrous amphibole matrix with up to 10% fine
grained red garnets, minor narrow local bands of sphalerite, and up to 5%
pyrite. The rest of the trench consists of a series of metavolcanics
(amphibolite and amphibolized mafic pillows), granitoid dykes and gabbro dykes.
There are also minor faults and fractures noted in this trench.

A total of 77 channel samples were taken from trench Tr-10-2
  and tested for gold and zinc. One sample returned a relatively elevated zinc
  value of 1010 ppm.

****c. ****Trench Tr-10-3
Trench Tr-10-3 is 23 m long and 4 m wide and exposes mainly metavolcanic and
massive gabbro. There is also minor shearing near the southern portion of the
trench. The metavolcanic unit is described as fine grained, amphibolized, well
foliated, locally sheared with trace to 2% pyrite. The gabbro unit is massive
with medium grained hornblende and a narrow quartz feldspar porphyry dyke near
the upper part of the trench. The quartz feldspar porphry dyke is identical to
the ones in Tr-10-1 and Tr-10-2. A total of 11 channel samples were cut and
assayed on Tr-10-3, but no significant values were returned.

****d. ****Trench Tr-10-4
Trench Tr-10- 4 is located approximately 500 m south east of Fairservice
zinc showing and it is 147 m long by 4 m wide with an average depth of 2 m. Due
to the rubbly bedrock and deeply pocketed shear zones, the extent of cleaning in
this trench was limited. This trench was located near the soil sampling
anomalies returned in the 2008-2009 exploration programs. Trench Tr-10-4 is
predominantly granite, granodiorite (some are gneissic) and quartz monzonite.
The only well mineralized portions of this trench are two narrow, 30-40 cm wide,
shear zones with up to 10% pyrite, strong sericite alteration and local patchy
translucent quartz eyes.

A total of 41 channel samples were cut and assayed for gold and
zinc. The channel samples from trench Tr-10-4 returned two significant samples
in sheared, mineralized granodiorite, one of which returned 9.02 ppm Au and 859
ppm Zn over 0.40 m and another that returned 1.14 ppm Au over 1.00 m.
Significant portions of the trench in the area around the two mineralized samples were unable to be
channelled due to intense shearing and rubbly rock creating deep sections of the
trench that Fladgate was unable to clean and channel sample. There is a
possibility that in these areas of intense shearing there could be more
mineralization.

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****4.**** Significant
Results Significant assays from the exploration programs run by the
Issuer from 2008-2009 have been summarized in Table 5 below:

Table 5  Significant Assay Results

Soil Samples
    Sample
      ID
    Year
    Au
      ppm
    Zn
      ppm01-01
    2008
    0.484
    4301-03
    2008
    0.144
    5303-29
    2009
    0.234
    7303-32
    2009
    0.062
    4204-41
    2009
    0.009
    1215Rock Samples
    Sample
      ID
    Year
    Au
      ppm
    Zn
      ppmTr-10-4 H073934
    2010
    9.02
    859Prospecting I920008
    2010
    16.95
    218


****5. ****Prospecting
Prospecting the Dotted Lake Property was also incorporated during the period
of the trenching program, and was mostly focused in the vicinity of the soil
anomalies to investigate and confirm the trench targets. A total of 11 rock
samples were collected as part of the prospecting on claims 3011450, 4245668,
4252415 and 4246254. Prospecting sample I920008 (see Table 5) returned Au 16.95
ppm, Zn 218 ppm and Ag 7.7 ppm near the 2008-2009 soil anomalies. This sample
was taken from trench Tr-10-4 location as a rock sample during the excavation.

****6. ****Expenditures on
the Issuer's Dotted Lake PropertyThe Issuer has spent
approximately $161,636 in exploration work on the Dotted Lake Property since
re-acquiring the first claim in 2003, with $107,000 of that amount having been
spent within the three years preceding the date of the Technical Report.

Table 6  Dotted Lake Exploration Expenditures 2007-2010

Item
    CDN$
    CommentsAccommodation
    $6,474
    Hotel while in the fieldAssays
    $9,781
    ALS ChemexEquipment rental
    $28,410
    Trenching and Road Building, channel cutting saw
      and cleaning pumpsField supplies
    $925
    Bags, trays, etc.Labour
    $53,980
    Geologists, project manager, and geotechs.Meals
    $1,361
    Meals for geologists and geotechs while in the
      fieldTravel and transportation
    $3,121
    Trucks and Mob-deMob of excavatorATV's
    $2,950
    ATV's for access to propertyTotal
    $107,002


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****7. ****Dotted Lake
Exploration Targets Two significant targets exist on the Dotted Lake
Property, the Fairservice zinc target and the newly discovered gold zone.

Drilling

The Issuer has had no drilling completed on the Dotted Lake
Property. Historically three diamond drillholes were completed by Noranda in
1991. The drilling is listed in Table 2 and results are discussed in the section
titled History.

Sampling Method and Approach

In the past three years the Issuer has completed three
exploration programs on the Dotted Lake Property all managed by Fladgate
Exploration. The exploration programs included both rock and soil sampling.

****1. ****Soil Sampling
A total of 109 soil samples were collected by Fladgate Exploration on the
3011450 claim of the Dotted Lake Property during the soil sampling programs
completed in 2008-2009. During the 2008 soil sampling program samples were taken
every 50 m on 200 m spaced lines. The spacing of the sampling lines and sample
locations along lines was applicable for an initial exploration program
assessing the property for an anomalous mineralization covering large areas of
the property. A second soil sampling program was completed in 2009 to target
anomalies returned in the 2008 program. In 2009 samples were taken every 50
metres on 200 metre spaced lines. The lines were between the 2008 sampling lines
making a grid of samples taken every 50 metres on 100 metre spaced lines. The
soil sampling program run in 2009 added tighter spacing to the sampling grid
required to help further identify the nature of the anomalous mineralization
discovered during the 2008 soil sampling program.

Samples were taken with a soil sampling auger and were between
100 and 400 grams. B horizon soils were taken wherever possible and some A and B
horizon samples were taken when necessary. Samples were placed in a brown Kraft
bag, the sample ID was written on the bag and also written in a notebook with a
description including a location. Wherever soil was not present outcrop
descriptions were noted. Records were kept of slope, vegetation and soil
descriptions for each sample location.

The initial sample spacing from the Issuers 2008 soil sampling
program was at a 200 metre sample line spacing suitable for an initial
exploration program targeted at identifying any anomalous mineralization. The
soil sampling assays returned anomalous gold and zinc mineralization, but did
not clearly outline a specific strike of mineralization. The 2009 soil sampling
program closed the soil sample lines to 100 metre spacing which returned further
anomalous mineralization and identified a possible strike. Soil sampling has
proven to be a useful exploration tool and could be used to expand on gold
mineralization discovered during the 2010 trenching program. A similar soil
sampling program could be useful in identifying any further mineralization on a
property wide scale, but once again a second program might be necessary to
infill soil sampling lines at tighter spacing in areas that return anomalous
results.

****2. ****Channel
Sampling From May 25 to June 17, 2010 channel sampling was carried out
by Fladgate Exploration Consulting Corporation, utilizing a Stihl quick-cut
rock saw. Two continuous parallel cuts on the outcrop were sawed then chipped
out using a chisel. Each sample was placed in a thick plastic sample bag with
the sample number clearly written on the outside of the bag with permanent
marker and one portion of a three part sampling ticket placed inside. Each
sample was sealed with a cable strap. The location of the samples was noted in
the sample book and on the trench map. A total of 142 channel samples taken from
the trenches including QA/QC samples, were tagged and bagged and shipped to ALS
Chemex in Thunder Bay, Ontario by Fladgate Exploration personnel. All the
collected samples were in the custody of Fladgate staff at all times. All the
samples were assayed using ICP method. Assays were analyzed for a suite of 35
elements, including copper, gold, silver and zinc. Gold samples above 10 ppm
were analyzed again using fire assay with an atomic absorption finish
method.

30

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Sample Preparation, Analysis and Security Fladgate
Exploration has managed the Issuers last three exploration programs on the
Dotted Lake Property and implemented a similar QA/QC procedure for all three
programs.

For the two soil sampling programs run in 2008 and 2009 all
samples were sealed in a brown Kraft bag tied with orange flagging tape with the
sample number clearly written in black marker on the outside of the bag. The
sample number, description and UTM location was written in a field notebook. All
samples were transported from the field location to Fladgates offices in
Thunder Bay and hung in a secure building to dry. Once the soil samples were
dry, they were transported to the ALS Chemex prep laboratory in Thunder Bay by
Fladgate personnel.

Before the samples were taken to ALS Chemex for analysis, QA/QC
samples were inserted into the sample series approximately every 25 samples. For
the soil samples no QA/QC samples were submitted during the 2008 program and
only blank samples were submitted for the 2009 program. For blank material, pure
silica sand was obtained from Accurassay Laboratories in Thunder Bay. During the
2009 soil sampling program, insufficient amounts of silica sand were submitted
and the lab was unable to run both the multi element ICP package and the
precious metals analysis. As a result, only the multi-element analysis was
completed and therefore no gold results are available. In the future better care
must be taken with QA/QC procedures.

All soil samples were analyzed using a 33 element four acid
digestion ICP method and Pt, Pd, Au fire assay with ICP finish analysis (ALS
Chemex codes MEICP-61 and PGM-ICP23).

During the trenching and prospecting program completed in 2010
all samples were cut utilizing a Stihl quick-cut rock saw. Two continuous
parallel cuts on the outcrop were sawed then chipped out using a chisel. Each
sample was placed in a thick plastic sample bag with the sample number clearly
written on the outside in of the bag with permanent marker and one portion of a
three part sampling ticket placed inside. Each sample was sealed with a cable
strap. Samples were then transported to Thunder Bay by Fladgate personnel and
delivered directly to the ALS Chemex prep laboratory in Thunder Bay.

ALS Chemex Laboratories in Thunder Bay was used for assaying
the samples taken during the trenching program in 2010. All trenching and
prospecting samples were analyzed using a 35 element aqua regia ICP method and
Au fire assay with ICP finish analysis (ALS Chemex codes MEICP-41 and Au-ICP21).
One gold assay returned a value greater than 10 ppm and was analyzed using fire
assay with atomic absorption finish.

The quality measures taken to insure the accuracy of the
assaying and analytical procedures during the trenching program included four
QA/QC samples inserted in the batch of samples. The QA/QC samples consisted of
blank samples and gold standard samples. The blank samples consisted of a piece
of granite from Nelson Granite in Vermillion Bay, ON. The gold standard samples
were purchased from RockLabs Limited in Aukland, New Zealand. Only one standard
type was used, SL-34, which was a mid grade gold standard with a recommended
value of 5.893 ppm (Table 7).

A total of 2 standard reference samples were submitted for
assay during the 2010 trenching program. Standard sample H073944 returned a gold
value at 5.85 ppm, and sample H073945 returned a gold value of 5.58 ppm. Sample
H073945 returned a value 0.256 ppm lower than the recommended value for the
SL-34 standard, and sample H073944 was at the lower end of the +/- 5% bracket
considered acceptable for the SL-34 standard (Table 8). It is possible the lab
had a low bias for the samples assayed during the 2010 sampling program, but not
enough standards were submitted to return a statistically relevant dataset. In
future programs, specifically drilling programs, a more comprehensive QA/QC
program should be implemented.

A total of 2 Blank samples, H073943 and H073946, were also sent
for assay during the 2010 trenching program, which both were returned with a
gold value of <0.001 ppm.

31

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Table 7  QA/QC Reference Samples Summary

TypeofReference Material
      Number **of**Standardssent
      Label
      Element
      Recommended Value
      95%ConfidenceLevelLow
      HighGold Standard
      2
      SL-34
      Gold
      5.893 ppm
      5.836 ppm
      5.950 ppm


Table 8  Trenching QA/QC Standard Sample Results

Standard Reference Sample ID
    Sample ID
    Assay Result (ppm)SL-34
    H073944
    5.85H073945
    5.58


The QA/QC procedures implemented during these early stage
exploration programs would not be sufficient for a drill program that could
potentially be used in a resource estimate in the future. If further exploration
work is done on the Dotted Lake Property a more comprehensive QA/QC procedure
will be necessary.

All samples collected during exploration programs run in the
last three years have been sent to ALS Chemex for analysis. ALS Chemex has an
ISO 9001:2000 certification at all of its laboratories in Canada. ISO, the
International Organization for Standardization, is an internationally accepted
organization for certifying quality management systems where an organization has
demonstrated and documented their processes to consistently provide products
that meet applicable regulatory and customer requirements.

Data Verification The Technical Report relies mostly
on historic data and reports and little documentation is available about past
practices of data verification. No pulps or samples, apart from a few specimen
samples remain available. More recent surveys, done on behalf of the Issuer in
previous years, appear to have been technically well executed and the reporting
and methods and results are discussed in more detail in the Technical Report.

The three most recent exploration programs have assay
certificates from a certified laboratory and the programs were managed by one of
the co-authors, Caitlin Jeffs.

Adjacent Properties There are no mineralized
properties or valid claims immediately adjacent to the Dotted Lake Property. The
closest property is the Black Fox Property owned by Lund Gold Corp. located
approximately 3 kilometres due south of the southern border of the Dotted Lake
Property. The Black Fox Property has minimal exposed outcrop and was only
sporadically explored before the Ontario government conducted airborne
geophysical surveys over the region in 1999. According to the Lund Gold website,
government geologists discovered high-grade float near the centre of the
property, with samples returning consistent results ranging from 165 to 189 g/t
gold. The altered float samples consisted of fragile angular blocs that are
assumed proximal to their source location.

Mineral Processing and Metallurgical Testing No
mineral processing or metallurgical testing has been done on samples from the
Dotted Lake Property to date.

Mineral Resource and Reserve Estimates No mineral
resources or mineral reserves have been located on the Dotted Lake Property.

Other Relevant Data and Information 
All available
and relevant technical reports and data relating to the Dotted Lake Property
have been reviewed by the authors and the parts relevant to the evaluation of
the Dotted Lake Property have been used to compose the Technical Report. The authors of the Technical Report are not
aware of any information not used for the Technical Report the omission of which
could make the Technical Report erroneous or misleading.

32

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Interpretations and Conclusions The Issuer has held
the Dotted Lake Property since 2003 and has been slowly advancing the
exploration work to determine the potential of the ground.

Exploration work to date has included airborne and ground
geophysics in 2005, soil sampling in 2008 and 2009 and prospecting and trenching
in 2010. The Issuer has spent a total of $161,636 in exploration on the property
between 2003 and August of 2010 of which $107,000 was spent between May 2008 and
August 2010.

The soil sampling programs completed in 2008 and 2009 were
intended to evaluate the property for further mineralization and potentially to
expand on the known zinc mineralization at the Fairservice zinc showing. The
soil sampling successfully outlined previously undetected gold mineralization,
but was not successful in expanding on the Fairservice zinc showing. Soil
sampling has proven to be a valuable tool on this property and could be used to
further explore the new claims acquired since the 2009 soil sampling program was
completed.

The sampling procedure used during the exploration completed in
2008, 2009 and 2010 was adequate for initial exploration work, but any future
programs should include a more thorough QA/QC procedure including a variety of
check samples such as duplicate samples, reruns of sample pulps, a variety of
standard samples including low and high grade gold and blank samples. Security
of the samples and the procedures of marking sample identification and locations
were sufficient and these practices should be continued in any further
exploration programs.

The Dotted Lake Property should be considered to be an early
stage exploration project upon which the Issuer should continue to conduct
further exploration in order to gain a further understanding of the nature and
extent of the gold mineralization exposed in trench Tr-10-4.

Recommendations 
  The Dotted Lake Property lies in an underexplored area of the Schrieber-Hemlo
  greenstone belt which is host to the Hemlo Gold deposit.

Based on the positive results from the Issuers initial
exploration work, it is recommended to continue working on the property to fully
define the gold potential. The Issuers next phase of exploration should
continue to outline the strike extent and width of the gold mineralization
uncovered in the past three years exploration programs. It is recommended to
initially explore the property by further soil sampling, prospecting and
trenching.

The initial soil sampling programs completed in 2008 and 2009
successfully indicated the location of previously undiscovered gold
mineralization. It is recommended by Fladgate to conduct another soil sampling
program covering all of the newly acquired claims. Continuing with the
previously used spacing of 200 m spaced lines with 50 m spaced samples would
require approximately 1200 samples to cover all of the newly acquired
claims.

Trenching completed during the 2010 exploration program was
limited to four metre wide strip trenching appropriate for following up on an
ill-defined soil sampling target. During the 2010 program multiple significant
results were discovered. Two of those significant results were located in the
northern edge of trench Tr-10-4. The alteration associated with the
mineralization was not completely exposed during the trenching, and only a four
metre wide swath of the strike extent was exposed. Further exposure of this
mineralized zone is recommended to discover if the mineralized zones continues
to the north and also to uncover readily exposed strike extent of the
mineralization to observe if the mineralization is a constant width and
continuous along strike. Once results from the expanded soil sampling program
recommended have been analyzed further trenching targets should be explored. A
second phase of exploration is recommended, pending positive results from the
trenching and soil sampling. The second phase will consist of approximately 1500
m of diamond drilling to test gold mineralization discovered on surface.

33

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The budget for the two phases of exploration is summarized in
Table 9.

Table 9  Budget for proposed exploration on Dotted Lake
Property

Budget Item
      Total (CAD$)
      CommentsExploration (Phase 1) Property wide soils and further
        trenchingConsulting geologist
      $52,000
      Consulting geologist at $650/dayGeotechnicians
      $39,000
      Geotechnician at $325/dayTruck and ATV Rental and Fuel
      $22,000
      Truck at $75/day and ATV at $125/dayHeavy Equipment Rental
      $30,000
      Trench digging at $140/hourAssays
      $45,500
      Assaying at $35/sampleRoom and board
      $17,500
      $125/day per geo & tech10% contingency for miscellaneous items
      $20,600
      Field supplies etc.Subtotal (Phase 1):
      $226,600Exploration (Phase 2) 1500 metres of diamond
        drillingConsulting geologist
      $52,000
      Consulting geologist at $650/dayGeotechnicians
      $16,250
      Geotechnician at $325/dayRoom and board
      $12,500
      $125/day per geo & techTruck and Fuel
      $6,250
      Truck at $75/day +fuelLogging Shack w/saw
      $2,500
      $1500/monthHeavy equipment rental
      $10,000
      Building drill pads and access roadsAssays
      $18,375
      Assaying at $35/sampleDiamond Drilling
      $165,000
      Diamond drilling at $110/metre10% contingency for miscellaneous items
      $28,288
      Field supplies etc.Subtotal (Phase 2):
      $311,163Total CAD$ (Both Phases)
      $537,763


Figure 2 - Dotted Lake Claims

4.3      Competition

The mineral property exploration business, in general, is
intensely competitive and there is no assurance that even if commercial
quantities of ore are discovered, a ready market will exist for the sale of
same. Numerous factors beyond our control may affect the marketability of any
minerals discovered. These factors include market fluctuations, the proximity
and capacity of natural resource markets and processing equipment, government
regulations relating to prices, taxes, royalties, land tenure, land use,
importing and exporting of minerals, environmental protection, etc. The exact
effect of these factors cannot be accurately predicted, but in combination they
may make it very difficult to realize an adequate return on investment.

34

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We compete with many companies possessing greater financial
resources and technical capabilities than we have regarding the acquisition of
mineral concessions, claims, leases and other mineral interests as well as for
the recruitment and retention of qualified staff.

4.4      Management and Employees

We do not have any employees other than our directors and
officers. When required, we retain geological, financial and other consultants
on a contract basis in order to keep overhead expenses to a minimum.

We are party to an amended agreement dated August 1, 2008 with
Mr. Darcy Krell, our Secretary and General Manager, who is engaged to perform
certain management and administrative functions on our behalf for a fee of
$7,500 per month, including $5,000 for management fees and $2,500 for office
rent. Mr. Krell is the husband of our President and CEO, Ms. Linda Smith.

We retain Mr. Krell to arrange and negotiate mineral property
acquisitions and exploration contracts (subject to director approval); arrange
for and secure financings for the company; arrange for the payment of all
company obligations and the collection of all receivables, if any; establish and
maintain suitable banking relationships; ensure the maintenance of proper
accounting records and compliance with all statutory reporting requirements; and
administer corporate inquiries and correspondence as required.

4.5      Environmental Regulations

We will be required to comply with all regulations, rules and
directives of governmental authorities and agencies applicable to the
exploration of minerals in Canada generally, and in the Province of Ontario,
specifically. Under these laws, prior to production, we have the right to
explore the property, subject only to a notice of work which may entail posting
a bond. To date, we have not been required to post a bond with respect to our
exploration activities on the Dotted Lake property.

In addition, production of minerals in Ontario will require
prior approval of applicable governmental regulatory agencies. We can provide no
assurance to investors that such approvals will be obtained. The cost and delay
involved in attempting to obtain such approvals is unknown at this time.

We have budgeted for regulatory compliance costs as part of our
operations. We will have to incur the cost of reclamation and environmental
mediation for all exploration work undertaken. The amount of these costs is also
unknown at this time as we do not know the extent of future exploration.

Permits and regulations will control all aspects of any
production program, if the project continues to that stage, because of the
potential impact on the environment. Examples of regulatory requirements
include:

| | i)   | Water discharge will have to meet water
  standards;                                                                               
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                    
| | ii)  | Dust generation will have to be minimal or otherwise
      re-mediated;                                                            
| |      |                                                                                                                                    
| | iii) | Dumping of material on the surface will have to be
      re-contoured and re-vegetated;                                            
| |      |                                                                                                                                    
| | iv)  | An assessment of all material to be left on the surface
      will need to be environmentally benign;                              
| |      |                                                                                                                                    
| | v)   | Ground water will have to be monitored for any potential
      contaminants;                                                       
| |      |                                                                                                                                    
| | vi)  | The socio-economic impact of the project will have to be
      evaluated and if deemed negative, will have to be re-mediated;
  and
| |      |                                                                                                                                    
| | vii) | There will have to be an impact report of the work on the
      local fauna and flora.                                             

35

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We did not require any government authorization to proceed with
Phase 1 of the exploration program recommended in our 43-101 technical
evaluation report since it has caused little, if any, physical disturbance of
the land to date. However, we will be required to obtain work permits from the
Ontario Ministry of Northern Development and Mines for the Phase 2 drilling
program and any subsequent exploration work that results in a physical
disturbance to the land should we decide to proceed. If more than 10,000 square
meters of property surface are affected, or such areas that would total that
amount when combined, a work permit is required. There is no charge to obtain a
work permit under the Mining Act.

When our exploration program proceeds to the drilling stage, we
may be required to post small performance bonds if the rights of a private land
owner may be affected. We may also be required to file statements of work with
the Ministry of Northern Development and Mines and to undertake remediation work
on any exploration that results in physical disturbance to the land. The cost of
remediation work will vary according to the degree of physical disturbance.

ITEM
4A.                  Unresolved
Staff Comments

None.

ITEM
5.                    
Operating and Financial Review and
Prospects(stated in Canadian $ under IFRS)

5.1      Operating Results

We are an exploration stage company currently owning 10 claims
of 82 mining units on the Dotted Lake property located in north-central Ontario,
Canada with an option to purchase an additional 2 claims of 12 mining units on
the adjacent Lampson Lake property. No revenue has been realized to date.

The following table summarizes information taken from our
audited financial statements and presented in accordance with IFRS as at and for
the years ended January 31:

2012
    2011
    2010FINANCIAL POSITIONTotal Assets
    $ 243,140
    $ 364,036
    $ 169,424Total Liabilities
    $ 351,824
    $ 193,436
    $ 1,140,457Accumulated Deficit
    $ (3,272,837)
    $ (2,993,553)
    $ (2,737,861)OPERATIONSTotal Revenues
    Nil
    Nil
    NilComprehensive Loss
    $ (279,284)
    $ (255,692)
    $ (118,922)Comprehensive Loss per share
    $ (0.01)
    $ (0.01)
    $ (0.01)


36

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The following table summarizes results of operations for the
years ended January 31 and should be read in conjunction with the audited
financial statements contained herein:

|                                       |   | 2012     |   |   | 2011     |   |   | 2010     |  
|-------------------------------------- | - | -------- | - | - | -------- | - | - | -------- | -
|                                       |   |          |   |   |          |   |   |          |  
|Revenue                                | $ | Nil      |   | $ | Nil      |   | $ | Nil      |  
|                                       |   |          |   |   |          |   |   |          |  
|Expenses                               |   |          |   |   |          |   |   |          |  
|Amortization and
      accretion       | $ | 1,008    |   | $ | 15,365   |   | $ | 14,561   |  
|Management fees                        |   | 60,000   |   |   | 60,000   |   |   | 60,000   |  
|Listing application fees
      & exp.  |   | 90,507   |   |   | 41,003   |   |   | -        |  
|Office
      administration and travel |   | 64,022   |   |   | 69,589   |   |   | 44,395   |  
|Professional fees                      |   | 47,387   |   |   | 54,506   |   |   | 40,339   |  
|Transfer
      agent and filing fees   |   | 16,360   |   |   | 15,229   |   |   | 11,308   |  
|Total expenses                         |   | (279,284 | ) |   | (255,692 | ) |   | (170,603 | )
|Accounts
      payable write-off       |   | -        |   |   | -        |   |   | 51,681   |  
|                                       |   |          |   |   |          |   |   |          |  
|Net and comprehensive loss             | $ | (279,284 | ) | $ | (255,692 | ) | $ | (118,922 | )

Revenue

The Company is in the exploration stage and has not generated
any revenues since inception.

Comprehensive loss

The Company reported a comprehensive loss of $279,284 for year
ended January 31, 2012 compared to a net loss of $255,692 for the previous year.
This $23,592 increase in net loss resulted from the following:

| | - | $14,357 decrease in amortization due to expiry of
      promissory note accretion                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | - | $49,504 increase in listing application fees and expenses
      due to intensity of documentation required by our lawyer and regulatory
      authorities                                               
| | - | $5,567 decrease in office administration and travel
      expenses mainly due to overhead reductions                                                                                                    
| | - | $7,119 decrease in professional fees (legal, audit and
      accounting) primarily due concentration of time and effort by company
      lawyer on the listing application charged to a separate account
| | - | $1,131 increase in transfer agent and filing fees                                                                                                                                                       

5.2      Liquidity and Capital
Resources

|The following table summarizes the working capital (deficiency)
    as at January 31:
|-------------------------------------------------------------------------------------
|Working Capital (Deficiency)                                                         
|                                                                                     
|Current assets                                                                       
|Current
      liabilities                                                            
|                                                                                     
|Working
      capital (deficiency)                                                   

During the year ended January 31, 2012, the working capital
deficiency increased to $291,374 from $40,065 primarily due to decrease in cash
balance and increase in amounts due to related party both resulting from the
funding requirements of on-going operating losses.

37

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The following table summarizes cash flows for the years ended
January 31:

|Cash Flows                                |   | 2012     |   |   | 2011     |   |   | 2010     |  
|----------------------------------------- | - | -------- | - | - | -------- | - | - | -------- | -
|                                          |   |          |   |   |          |   |   |          |  
|Net cash used in operating activities     | $ | (258,591 | ) | $ | (224,963 | ) | $ | (157,733 | )
|Net cash used in investing activities     |   | (12,709  | ) |   | (97,119  | ) |   | (20,446  | )
|Net cash provided by financing activities |   | 144,171  |   |   | 413,411  |   |   | 226,946  |  
|                                          |   |          |   |   |          |   |   |          |  
|Increase (decrease) in cash               | $ | (127,129 | ) | $ | 91,329   |   | $ | 48,767   |  
|                                          |   |          |   |   |          |   |   |          |  
|Cash, beginning                           |   | 144,952  |   |   | 53,623   |   |   | 4,856    |  
|                                          |   |          |   |   |          |   |   |          |  
|Cash, end                                 | $ | 17,823   |   | $ | 144,952  |   | $ | 53,623   |  

At January 31, 2012, the Companys cash position was $17,823
compared to $144,952 at January 31, 2011. The $127,129 decrease in cash for year
ended January 31, 2012 (2012 period) and the $91,329 increase in cash for year
ended January 31, 2011 (2011 period) resulted from the following cash flow
activities:

| | (i)   | Net cash used in operating activities of $258,591 in 2012
      period and $224,963 in 2011 period was due in both periods to on-going
      operating losses adjusted for relatively minor non-cash items and changes
      in non-cash working capital items.                                                                                                                                                                                                         
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (ii)  | Net cash used in investing activities of $12,709 in 2012
      period was primarily due to scheduled payment of $12,000 under the
      exclusive option agreement to purchase the Lampson Lake Property. The
      $97,119 expended in 2011 period was primarily due to prospecting,
      trenching and preparing the consulting geologists report on the Dotted
      Lake Property along with the $7,000 initial option payment on the Lampson
      Lake Property.
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | (iii) | Net cash provided by financing activities of $144,171 in
      the 2012 period was provided exclusively from related party funding of
      operating expenses. The $413,411 of net funding received in the 2011
      period was due to successful completion of a $1,500,000 private placement
      (excluding share subscriptions received in advance and modest share issue
      costs) offset by $983,914 of net repayments to related
  parties.                

See ITEM 8.2 below for subsequent events

5.3      Off-balance sheet arrangements

The Company has no off-balance sheet arrangements.

38

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ITEM
6.                    
Directors, Senior Officers and Employees

6.1      Directors and Senior Officers

Background information about our directors and senior officers
is shown below ss at January 31, 2012:

Name
      Position Held with the Company
      Age
      Date First Elected or
      AppointedLinda J. Smith
    President, Chief Executive
      Officer and Director
    62
    October 27, 2000Darcy T. Krell
    Secretary, General Manager and
      Director
    63
    October 10, 2008J. Ronald McGregor
    Chief Financial Officer and
      Director
    68
    December 13, 2011Brian A. Lueck
    Director
    51
    October 25, 2010Mark H. Holden
    Director
    53
    October 25, 2010Steven J. Chan
    Director
    47
    December 13, 2011James O. Burns
    Director
    80
    December 13, 2011


There are no arrangements or undertakings between any of our
directors or executive officers, pursuant to being selected as a director or
senior officer. However, there is a family relationship between two of our
officers in that Ms. Linda Smith and Mr. Darcy Krell are husband and wife. The
following describes the business experience of our directors and senior
officers, including other directorships held in reporting companies:

Linda SmithMs. Linda Smith has acted as our
president, CEO and one of our directors since October 27, 2000 to present. She
spends approximately 10% of her time assisting Mr. Darcy Krell in providing
management services to us for which she receives no compensation.

Ms. Smith acted as Blue Lightning Ventures Inc.s president and
director from October 1999 to July 2004. She also acted in the same capacities
for Big Bar Gold Corporation from June 1999 to April 2003; for Candorado
Operating Company Ltd. from June 2000 to November 2001; and for East-West
Petroleum Corp. (formerly Algorithm Media Inc.) from December 2005 to December
2009. All of these companies are British Columbia and Alberta reporting
corporations and involved in mineral property exploration.

Ms. Smith was also employed as a part-time dental assistant
from May 1995 to October 2002.

Darcy Krell Mr. Krell has served the Issuer in
several capacities, including as the Issuers corporate secretary since March
31, 2005 and a director since October 10, 2008. He has acted as the general
manager of the Issuer since November 1, 2000. Mr. Krell also served as the
Issuers CFO from October 10, 2008 to January 9, 2012. He has been a private
investor in various public and private companies since 1996. He has extensive
business experience but has no professional training or technical credentials in
the field of mineral property exploration or development. He spends
approximately 35% of his time on the business of the Issuer.

39

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Mr. Krell also acted as a director of Big Bar Gold Corporation
from March 2000 to April 2004 and Blue Lightning Ventures Inc. from March 2002
to July 2004. In addition, Mr. Krell acted as a director of Algorithm Media Inc.
from December 2005 to January 2010. All of these companies are Alberta and
British Columbia reporting companies and involved in mineral property
exploration.

Ronald McGregor Mr. McGregor has been contract
controller for the Issuer since December 2006; President of AYL Enterprises
Ltd., a private company providing contract controller services to public
companies, since September 1996. He has also been a senior accounting instructor
at BCIT since January 1997. Mr. McGregor devotes approximately 20% of his time
to the business of the Issuer.

Brian LueckMr Lueck has been a Philippine resident
for more than 13 years and active in mineral exploration for more than 23 years.
Mr Lueck became President and Chief Operating Officer and a director of
Solfotara in 2008. He is also currently Chief Operating Officer and a director
of CDC (AIM: CDC). Prior thereto, he was a consulting geologist for Metals
Exploration plc from 2005 to 2008. He also was the President and a director of
Prospector International Resources Inc. (between 1998 and 2000) and Yukon Gold
Corp. and Alliance Pacific Gold Corp. (between 1994 and 1998). Mr Lueck was a
director of several Canadian public companies involved in mineral exploration,
including Lodestar Exploration Inc. and Regent Ventures Inc. from 1987 to 1992.
Mr Lueck received a B.S. in Geology from the University of British Columbia. He
is also a practicing member of the Association of Professional Engineers and
Geoscientists of British Columbia. Mr Lueck is currently chairman of Crazy Horse
Resources Inc. (TSX Venture Exchange: CZH) and a director of Otterburn
Resources.

Mark HoldenMr. Holden is a director of Otterburn
Resources Corporation (TSX Venture Exchange : OTB) since May 2010. Formerly, CEO
of Conversion Works Corporation from October 2010 - February 2011. Formerly
President and CEO of Hip Digital Media, an online music and media distribution
company, from September 2006 to April 2009 responsible for corporate vision and
operations. Previously, Mr. Holden was President of M Holden Productions Ltd.,
from 1998 to September 2006.

Steven ChanMr. Chan has been the CCO for
Wasco Management Inc. since September 2010. He is a director of several
companies listed on the Exchange including Abitibi Mining Corp.; Amador Gold
Corp.; Expedition Mining Inc.; Kermode Resources Ltd.; Klondike Gold Corp.;
Klondike Silver Corp.; La Ronge Gold Corp.; Lakewood Mining Co. Ltd., Sedex
Mining Corp.; and Zinccorp Resources Inc. He was Vice-President of Cambridge
House International Inc. from April 2000 to June 2010. Mr. Chan intends to
devote approximately 5% of his time to the business of the Issuer.

James BurnsMr. Burns is a retired businessman since
1998 following sale of his Northern Ontario hunting and fishing lodge which he
operated for many years. Mr. Burns intends to devote approximately 5% of his
time to the business of the Issuer.

None of the above individuals have entered into non-competition
  or non-disclosure agreements with the Company. Except as otherwise disclosed,
  none of the above individuals are employees or independent contractors of the
  Company.

40

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6.2      Compensation of Directors and senior
  officers

We are required, under applicable securities legislation in
  Canada, to disclose to our shareholders details of compensation paid to our
  directors and senior officers. The following fairly reflects all material
  information regarding compensation paid to our directors and senior officers for
  the fiscal years ended January 31 as follows

Summary Compensation Table

NAME ANDPRINCIPALPOSITION
      **YEAR**1
      ANNUAL COMPENSATION
      LONG-TERM COMPENSATIONSalary
      Bonus
      OtherAnnualCompen-sation
      Awards
      LTIPpayouts
      All OtherCompen-sationRestrictedStockAwards
      **Securities**UnderlyingOptions/SARsLinda Smith 
        as President, 
        CEO Officer 
        and Director
      2012 
        2011 
        2010
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        NilDarcy Krell, 
        as Secretary, 
        General 
        Manager, 
        CF O and 
        Director 4
      2012 
        2011 
        2010
      $60,0002
        $60,0002
        $60,0002
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      $30,0003
        $30,0003
        $30,0003Ronald 
        McGregor 
        as CFO and 
        Director 5
      2012 
        2011
      $23,492 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        NilMark Holden 
        as 
        Director 6
      2012 
        2011
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        NilBrian Lueck 
        as 
        Director 6
      2012 
        2011
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        NilSteven Chan 
        as 
        Director 7
      2012 
        2011
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        NilJames Burns 
        as 
        Director 7
      2012 
        2011
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil


| | 1 | February 1 to January 31.                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------
| | 2 | Represents management fees.                                                                                      
| | 3 | Represents amounts paid to Darcy Krell for rent
      of office facilities provided for the Company.             
| | 4 | Resigned as CFO on December 13, 2011.                                                                            
| | 5 | Appointed CFO and Director on December 31, 2011
      and will continue to earn fees on an hourly basis primarily
| |   | for accounting and financial reporting services
      as has been done since December 2006.                      
| | 6 | Appointed as Director on October 25, 2010                                                                        
| | 7 | Appointed Director on December 13, 2011.                                                                         

The Issuer has not paid any compensation for director services
per se in the fiscal years ended January 31, 2012, 2011 and 2010. The Issuer
paid for certain management and administrative services to Mr. Darcy T. Krell,
prior to him becoming a director of the Issuer in October 2008 in his capacity
as the Issuers Secretary, General Manager and Chief Financial Officer. The
management fees were $2,500 per month from February 1, 2002 to April 30, 2008,
when they were increased to $5,000 per month pursuant to an unwritten agreement
which was formalized by an amended management agreement between the Issuer and
Mr. Krell dated August 1, 2008. Under this agreement, home office rent increased from $1,500 to $2,500 per month;
however, the increased rent payments did not commence until February 1,
2009.

41

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6.3      Board Practices

Linda Smith was appointed President, CEO and director on
October 27, 2000. Darcy Krell was appointed director on October 10, 2008. Mark
Holden and Brian Lueck were appointed directors on October 25, 2010. Ronald
McGregor, Steven Chan and James Burns were appointed directors on December 31,
2011. The directors hold office until the next annual general meeting of the
shareholders at which time they may stand for re-election. We are required to
hold an annual general meeting once every calendar year and not longer than
thirteen months from the last annual general meeting. The last annual general
meeting was held in Vancouver, BC on December 13, 2011.

We have a three member audit committee of the Board but have
not appointed a compensation committee. Full text of the audit committee charter
is attached as an Exhibit.

6.4      Employees

We do not have any employees other than our directors and
officers. When required, we retain geological, financial and other
consultants.

6.5      Share Ownership of Directors and Senior
Officers

Our directors and officers own beneficially the following
securities of the Company as of the date of this annual report.

|            |  |                  |  |  |                    |  |  | Percentage of Issued and | 
|----------- |  | ---------------- |  |  | ------------------ |  |  | ------------------------ | 
|            |  | Number of Shares |  |  | Number of Warrants |  |  | Outstanding Shares       | 
|Linda Smith |  | 500,000          |  |  | 500,000            |  |  | 1.2%                     | 
|Darcy Krell |  | 500,000          |  |  | 500,000            |  |  | 1.2%                     | 
|Steven Chan |  | 2,700,000        |  |  | 2,000,000          |  |  | 6.7%                     | 
|James Burns |  | 2,000,000        |  |  | 2,000,000          |  |  | 4.9%                     | 
|            |  | 5,700,000        |  |  | 5,000,000          |  |  | 14.0%                    | 

The above percentages are based on the 40,565,171 common shares
issued and outstanding in our capital stock as of the date of this annual
report.

We have adopted a rolling stock option plan but to date no
stock options have been granted to our directors and officers and no stock
options are outstanding to the date of this annual report.

ITEM
7.                    
Major Shareholders and Related Party Transactions

7.1      Beneficial Ownership

As used in this section, the term "beneficial ownership" with
respect to a security is defined by Regulation 228.403 under the Securities
exchange Act of 1934, as amended, as consisting of: (1) any person who, directly
or indirectly, through any contract, arrangement, understanding, relationship or
otherwise has or shares voting power (which includes the power to vote, or to
direct the voting of such security) or investment power (which includes the
power to dispose, or to direct the disposition of, such security); and (2) any
person who, directly or indirectly, creates or uses a trust, proxy, power of attorney, pooling arrangement or
any other contract, arrangement or device with the purpose or effect of
divesting such person of beneficial ownership of a security or preventing the
vesting of such beneficial ownership.

42

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As of the date of this annual report, 40,565,171 common shares
  are issued and outstanding and we are authorized to issue an unlimited number
  of common shares without par value.

As of the date of this annual report, the following person
known to us was the beneficial owner of more than five percent of our
outstanding common shares.

Number of Shares
    Percentage of Issued andName of Shareholder
    Owned
    Outstanding SharesSteven Chan
    2,700,000
    6.7%


Each of our issued shares entitles the holder to one vote at
our annual general shareholder meetings. There are no disproportionate or
weighted voting privileges.

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

There are no arrangements which at a subsequent date may result
in a change in our control.

7.2      Related Party Transactions

The following related party payables to officers and directors
of the Company are unsecured, non-interest bearing and have no fixed term of
repayment as at January 31:

| |                                                  |   | 2012    |  |   | 2011    |  |   | 2010      | 
| | ------------------------------------------------ | - | ------- |  | - | ------- |  | - | --------- | 
| | Payable to directors and officers of the Company | $ | 254,118 |  | $ | 100,913 |  | $ | 1,069,901 | 

$9,041 payable to related parties has been transferred-in from
accounts payable for disclosure purposes in this table for year ended January
31, 2012.

Included in the amounts due to related parties at January 31,
  2010 is a convertible promissory note from an immediate family member of an
  officer of the Company in the amount of $41,827. The amount was non-interest
  bearing and is unsecured and the maturity date was January 1, 2011. The loan
  was fully repaid during the year end January 31, 2011.

The Company had the following transactions with officers and
directors of the Company during the years ended January 31:

| |                                             |   | 2012    |  |   | 2011   |  |   | 2010   | 
| | ------------------------------------------- | - | ------- |  | - | ------ |  | - | ------ | 
| | Accounting and financial reporting services | $ | 23,492  |  |   | -      |  |   | -      | 
| | Management services                         |   | 60,000  |  |   | 60,000 |  |   | 60,000 | 
| | Office rent                                 |   | 30,000  |  |   | 30,000 |  |   | 30,000 | 
| |                                             | $ | 113,492 |  | $ | 90,000 |  | $ | 90,000 | 

These transactions arer ecorded at the exchange amount, which
is the consideration agreed to between the related party.

43

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7.3      Interests of Experts and Counsel

Our experts and legal counsel have no direct or indirect
  interest in our properties nor our shareholdings and are not employed on a
  contingent basis.

ITEM
8.                    
Financial Information

The audited financial statements for the year ended January 31,
2012 are attached hereto as an exhibit and incorporated herein by reference.

8.1      Legal Proceedings

To the best of our knowledge there are no legal or arbitration
proceedings threatened, pending or in progress against us.

8.2      Subsequent Events

i) On February 6, 2012, the Company entered into an agreement
to defer $39,676 of debt owed to a professional advisor to a date beyond July
31, 2013. Accordingly, this amount has been reclassified from short term to a
long term liability of the Company as at January 31, 2012. The amount is
unsecured and non-interest bearing.

ii) On April 20, 2012, the Company made its third payment of
$16,000 pursuant to the option agreement dated April 20, 2010 regarding 100%
purchase of the Lampson Lake Property.

iii) On April 30, 2012, the 30,000,000 of share purchase warrants
  expired (see ITEM 10.1) .

iv) Subsequent to January 31, 2012, the Company applied to the
TSX Venture Exchange for the listing of its common shares. Conditional approval
was received on April 25, 2012. The listing is conditional on the fulfillment of
certain regulatory requirements and a private placement financing of up to
$1,200,000 from issuance of a maximum of 4,800,000 units at $0.25 per unit. Each
unit consists of one common share and one non-transferable share purchase
warrant. Each warrant will entitle the holder to acquire one additional common
share of the Company at a price of $0.40 per share for a period of one year from
the date of closing.

These securities have not been registered under the U.S. Securities
  Act of 1933, as amended, (the Securities Act) or any state securities
  laws, and unless so registered, the securities may not be offered or sold in
  the United States except pursuant to an exemption from, or in a transaction
  not subject to, the registration requirements of the Securities Act and applicable
  state securities laws. The Company plans to offer and issue the units and their
  underlying securities only to persons outside the United States pursuant to
  Regulation S, promulgated under the Securities Act. The financing was not closed
  on the date of the financial statements.

ITEM
9.                    
The Offer and Listing

We are currently a reporting issuer in both British Columbia
and Alberta and file as a foreign issuer with the United States Securities and
Exchange Commission. After filing and receipting a registration statement on
Form 20-F with the United States Securities and Exchange Commission, our common
shares were posted for trading on the Over-the-Counter Bulletin Board (OTC:BB)
in the United States under the symbol GMSRF on February 14, 2007. With the name
change to Rouge Resources Ltd., the trading symbol was changed to ROUGF
effective March 25, 2008. The shares are now quoted on the OTCQB operated by OTC
Markets Group, Inc. in the United States.

44

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The following table sets forth the high and low prices of our
common shares in US funds on a quarterly basis since trading began on the
OTCBB:

3 months ended
    High
    LowFebruary 14 to April 30, 2007
    No tradingJuly 31, 2007
    No tradingOctober 30, 2007
    $0.50
    $0.20January 31, 2008
    $0.70
    $0.10April 30, 2008
    $1.00
    $0.12July 31, 2008
    $0.13
    $0.10October 31, 2008
    $0.10
    $0.05January 31, 2009
    $0.07
    $0.06April 30, 2009
    $0.06
    $0.01July 31, 2009
    No tradingOctober 31, 2009
    No tradingJanuary 31, 2010
    No tradingApril 30, 2010
    No tradingJuly 31, 2010
    $0.30
    $0.30Oct 31, 2010
    $0.35
    $0.35January 31, 2011
    $0.35
    $0.35April 30, 2011
    $0.35
    $0.35July 31, 2011
    No tradingOctober 31, 2011
    $0.35
    $0.35January 31, 2012
    No tradingApril 30, 2012
    $0.50
    $0.35


Previously our common shares were traded on the Canadian
Venture Exchange and its predecessor, the Vancouver Stock Exchange, under the
symbol GMS before the name change to Rouge Resources Ltd. effective March 25,
2008. On July 12, 2001, our shares were suspended from trading on the Canadian
Venture Exchange due to failure to meet the Exchanges minimum working capital
requirements. The Canadian Venture Exchange (now called the TSX Venture
Exchange) required that listed companies have a minimum of $50,000 in
unallocated working capital. At that time, we did not meet this requirement and
trading in our shares was suspended.

The Cease Trade Orders issued against us on November 7, 2003 by
the Alberta Securities Commission (the ASC) and on January 14, 2004 by the
British Columbia Securities Commission (the BCSC) were lifted on August 18,
2006 by the BCSC and on August 23, 2006 by the ASC. These reactivation and
revocation orders resulted from the Company bringing its disclosure records
up-to-date on SEDAR (www.sedar.com); preparing
a new Evaluation Report regarding the merits of the Dotted Lake property dated
December 6, 2005; meeting all other regulatory requirements; and paying all
required fees and penalties.

The following table sets forth the high and low closing prices
in Canadian funds of our common shares during the time they traded through the
facilities of the Canadian Venture Exchange, and its predecessor, the Vancouver
Stock Exchange:

Period
    High
    LowFebruary 1, 1999 to January
      31, 2000
    $1.50
    $0.30February 1, 2000 to January 31, 2001
    $2.50
    $0.60February 1, 2001 to July 12,
      2001
    $1.00
    $0.60


45

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ITEM
10.                    
Additional Information

**10.1      Share Capital**

(i)Common Shares

AuthorizedUnlimited common shares without par
value

Issued and Outstanding
    
    Number ofshares
    
    
    AmountBalance, January 31, 2010
    
    10,565,171
    
    $
    1,613,471Private placement @ $0.05
      per share
    
    30,000,000
    
    
    1,500,000Share issue costs
    
    
    
    
    (2,675
    )Balance, January 31, 2011 and 2012
    
    40,565,171
    
    $
    3,110,796


During the year ended January 31, 2011, the Company completed a
non-brokered private placement of 30,000,000 units at $0.05 for total proceeds
of $1,500,000. Each unit consists of one common share and one non-transferable
share purchase warrant. Each warrant entitles the holder to acquire one
additional common share of the Company at a price of $0.10 per share for a
period of two years. No fair value was attributed to the warrants. Share
issuance costs of $2,675 were incurred in relation to this private
placement.

(ii) Share Purchase Warrants
    Number ofwarrantsBalance, January 31, 2010
    10,000,000Issued
    30,000,000Expired
    (10,000,000)Balance, January 31, 2011 and 2012
    30,000,000


The weighted average life for the share purchase warrants
outstanding at January 31, 2012 was 0.25 years. Subsequent to January 31, 2012,
the 30,000,000 warrants expired without exercised.

(iii) Stock Option Plan

The Companys stock option plan is in the form of a rolling
stock option plan, which provides that a committee of the Board of Directors may
from time to time, at its discretion, and in accordance with the Exchange
requirements, grant to directors, officers, employees and consultants to the
Company, non-transferable stock options to purchase common shares, provided that
the number of common shares reserved for issuance in any twelve month period
will not exceed 10% of the Companys issued and outstanding common shares. Such
options will be exercisable for a period of up to 5 years from the date of grant
at a price not less than the closing price of the Companys shares on the last
trading day before the grant of such options less any discount permitted by the
Exchange, but, in any event, not less than $0.10 per share

The number of common shares reserved for issuance to any one
optionee insider in any twelve month period will not exceed ten percent (10%) of
the issued and outstanding common shares and the number of common shares
reserved for issuance to any one employee or consultant will not exceed two
percent (2%) of the issued and outstanding common shares. Options may be
exercised no later than 90 days following cessation of the optionees position
with the Company or 30 days following cessation of an optionee conducting
investor relations activities position.

No stock options have been granted in current and prior years
and no stock options are currently outstanding.

46

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(iv)Equity component of convertible note, ie. Contributed
Surplus

Balance, January 31, 2012, 2011 and 2010
    $
    53,357


Other than the above securities, no other securities are
outstanding which are convertible into, or exchangeable for, the Companys
shares as currently foreseen.

10.2      Memorandum and Articles of Association

We were incorporated pursuant to the Company Actof
British Columbia by registration of our articles of incorporation and memorandum
on March 31, 1988 and were subsequently transitioned to the replacement
Business Corporations Actin March 2006. Pursuant to the provisions of
the Business Corporations Act, a company may conduct any business that it
is not restricted by the terms of its articles. Our articles contain no such
restrictions.

Our directors are required to disclose to the board of
directors the nature and extent of their interest in any proposed transaction or
contract and must thereafter refrain from voting in respect thereof. An
interested director may be counted in the quorum when a determination as to such
directors remuneration is being considered but may not vote in respect thereof.
The directors have an unlimited power to borrow money, issue debt obligations
and mortgage or charge our assets provided such actions are conducted bona fide
and in our best interests. There are no mandatory retirement ages for directors
or any required shareholdings.

All holders of common shares are entitled to receive dividends
out of assets legally available therefore at such times and in such amounts as
the board of directors may from time to time determine. All holders of common
shares will share equally on a per share basis in any dividend declared by the
board of directors. The dividend entitlement time limit will be fixed by the
board of directors at the time any such dividend is declared. Each outstanding
common share is entitled to one vote on all matters submitted to a vote of our
shareholders in general meeting. There are no cumulative voting rights attached
to any of our shares and, accordingly, the holders of more than half of the
shares represented at a general meeting can elect all of the directors to be
elected in a general meeting. All directors stand for re-election annually. Upon
any liquidation, dissolution or winding up, all common shareholders are entitled
to share ratably in all net assets available for distribution after payment to
creditors. The common shares are not convertible or redeemable and have no
preemptive, subscription or conversion rights. In the event of a merger or
consolidation, all common shareholders will be entitled to receive the same per
share consideration.

The rights of shareholders may only be altered by the
shareholders passing a special resolution at a general meeting. A special
resolution may only be passed when it has been circulated to all shareholders by
way of an information circular and then must be passed by seventy-five percent
of the votes cast at the general meeting.

The board of directors may call annual and extraordinary
general meetings when required. One or more shareholders holding in aggregate
five percent or more of our issued shares may requisition an extraordinary
meeting and the directors are required to hold such meeting within four months
of such requisition. Only registered shareholders or persons duly appointed by
proxy may be admitted to meetings unless otherwise permitted by the chairman of
the meeting.

There are no national limitations or restrictions on the right
to own our common shares.

There are no provisions in our articles of association that
would have the effect of delaying, deferring or preventing a change in
control.

There are no provisions in our articles of association that
establish any threshold for disclosure of ownership. However, the British
Columbia and Alberta Securities Commissions require that persons who are the
registered owners of, and/or have voting control over 10% or more of our common
shares must file insider reports disclosing securities holdings.

47

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10.3      Material Contracts

The following material contracts are currently outstanding:

|i)   | the Debt Deferral Agreement dated February 6, 2012
      between the Issuer and Gregory S. Yanke Law Corp. regarding the deferral
      of $39,676 of the Issuer debt to July 31, 2013 or later;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|ii)  | the amended management agreement with Mr. Darcy Krell
      dated August 1, 2008 . The management fees were $2,500 per month from
      February 1, 2002 to April 30, 2008, when they were increased to $5,000 per
      month due to more time and effort required to run the business pursuant to
      an unwritten agreement which was formalized by an amended management
      agreement between the Issuer and Mr. Krell dated August 1, 2008. Under
      this agreement, home office rent increased from $1,500 to $2,500 per
      month; however, the increased rent payments did not commence until
      February 1, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|iii) | the option agreement dated April 20, 2010 with certain
      Ontario prospectors to purchase two claims of the Lampson Lake Property,
      adjacent to the Dotted Lake Property. We have an exclusive option to
      purchase a 100% interest in these two claims by making option payments
      totaling $60,000 as follows: $7,000 paid on April 20, 2010 when the
      agreement was signed; $12,000 paid on April 20, 2011; $16,000 paid on
      April 20, 2012 subsequent to the current year end; and $25,000 payable on
      April 20, 2013. These claims are subject to a 2% net smelter royalty
      (NSR) in favour of the Optionors on one claim and with respect to the
      other, a combination of a 2% NSR in favour of the Optionors and a 1% NSR
      on any metals and/or a 1% Net Sales Return royalty payable to Ontario
      Exploration Company (OEC) on any precious stones recovered from the
      property. The Company has the right to buy back 1% of the NSR in favour of
      the Optioners for $1,000,000 and to buy back three-quarters 3/4 of 1% of
      the royalty vested with OEC over 10 years on an increasing scale from
      $15,000 to $750,000. In anticipation of meeting the final payment
      schedule, title was transferred by the Optionors to Mr. Darcy T. Krell on
      July 13, 2010 in trust for the Company.

10.4      Exchange Controls and Other Limitations
Affecting Security Holders

There is no law or governmental decree or regulation in Canada
that restricts the export or import of capital, or affects the remittance of
dividends, interest or other payments to a non-resident holder of common shares,
other than withholding tax requirements. See Item 10.5 below.

There is no limitation imposed by Canadian law or by our
constituent documents on the right of a non-resident to hold or vote common
shares, other than are provided in the Investment Canada Act (Canada). The
following summarizes the principal features of the Investment Canada Act
(Canada).

The Investment Canada Act (Canada) requires certain
"non-Canadian" individuals, governments, corporation or other entities who wish
to acquire a "Canadian business" (as defined in the Investment Canada Act), or
establish a "new Canadian business" (as defined in the Investment Canada Act) to
file either a notification or an application for review with a governmental
agency known as "Investment Canada". The Investment Canada Act requires that
certain acquisition of control of Canadian business by a "non-Canadian" must be
reviewed and approved by the Minister responsible for the Investment Canada Act
on the basis that the Minister is satisfied that the acquisition is "likely to
be of net benefit to Canada", having regard to criteria set forth in the
Investment Canada Act. Only acquisitions of control are reviewable under the
Investment Canada Act; however, the Investment Canada Act provides detailed
rules for the determination of whether control has been acquired and, pursuant
to those rules, the acquisition of one-third or more of the voting shares of a
corporation may, in some circumstances, be considered to constitute an
acquisition of control. Certain reviewable acquisitions of control may not be
implemented before being approved by the Minister; if the Minister does not
ultimately approve a reviewable acquisition, which has been completed, the
acquired Canadian business must be divested. Failure to comply with the review
provisions of the Investment Canada Act could result in, amongst other things,
an injunction or a court order directing disposition of assets of shares.

48

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10.5      Canadian Federal Income Tax Consequences to
U.S. Investors

A brief description of certain provisions of the tax treaty
between Canada and the United States is included below, together with a brief
outline of certain taxes, including withholding provisions to which United
States security holders are subject under existing laws and regulations of
Canada and United States; the consequences, if any, of state and local taxes are
not considered. The following information is general and security holders are
urged to seek the advice of their own tax advisors, tax counsel or accountants
with respect to the applicability or effect on their own individual
circumstances of not only the matters referred to herein, but also any state or
local taxes.

Canadian federal tax legislation generally requires a 25%
withholding from dividends paid or deemed to be paid to the Company's
nonresident shareholders. However, shareholders resident in the United States
will generally have this rate reduced to 15% through the tax treaty between
Canada and the United States. The amount of stock dividends paid to
non-residents of Canada will be subject to withholding tax at the same rate as
cash dividends. The amount of stock dividend (for tax purposes) would generally
be equal to the amount by which our stated capital has increased by reason of
the payment of such dividend. We will furnish additional tax information to
shareholders in the event of such a dividend. Interest paid or deemed to be paid
on our debt securities held by non-Canadian residents may also be subject to
Canadian withholding tax, depending upon the terms and provisions of such
securities and any applicable tax treaty. Under present legislation in the
United States, we are generally not subject to United States back up withholding
rules, which would require withholding at a rate of 20% on dividends and
interest paid to certain United States persons who have not provided us with a
taxpayer identification number.

Gains derived from a disposition of shares of the company by a
non-resident shareholder will be subject to tax in Canada only if not less than
25% of any class of our shares was owned by the nonresident shareholder and/or
persons with whom the nonresident did not deal at arm's length at any time
during the five-year period immediately preceding the disposition. In such cases
gains derived by a U.S. shareholder from a disposition of our shares would
likely be exempt from tax in Canada by virtue of the Canada-U.S. tax treaty.

10.6      United States Federal Income Tax Consequences
to U.S. Investors

The following general discussion sets forth a summary of the
material United States federal income tax consequences that are applicable to
the following persons who invest in and hold our common shares as capital assets
("U.S. Shareholders"): (i) citizens or residents (as specially defined for
federal income tax purposes) of the United States, (ii) corporations or
partnerships created or organized in the United States or under the laws of the
United States or of any state and (iii) estates or trust the income of which is
subject to United States federal income taxation regardless of its source. This
discussion does not deal with (a) all aspects of federal income taxation that
may be relevant to a particular U.S. Shareholder based on such U.S.
Shareholder's particular circumstances (including potential application of the
alternative minimum tax, (b) certain U.S. Investors subject to special treatment
under federal income tax laws or foreign individuals or entities, (c) U.S.
Investors owning directly or by attribution 10% or more of our common shares, or
(d) any aspect of state, local or non-United States tax laws. Additionally, the
following discussion assumes that the Company will not be classified as a
"foreign personal holding company" under the Internal Revenue Code of 1986 as
amended (the "Code").

Passive Foreign Investment Company

For any of our taxable years, if 75% or more of our gross
income is "passive income" (as defined in the Code) or if at least 50% of our
assets, by average fair market value (or adjusted income basis if the Company
elects), are assets that produce or are held for the production of passive
income, we will be deemed to be a Passive Foreign Investment Company ("PFIC").

A U.S. Shareholder of a PFIC is subject to special U.S. federal
income tax rules in Section 1291 to 1297 of the Code. As described below, these
provisions set forth two alternative tax regimes at the election of each such
U.S. Shareholder, depending upon whether the U.S. Shareholder elects to treat us
as a "qualified electing fund" (a QEF election").

49

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U.S. SHAREHOLDERS ARE STRONGLY URGED TO CONSIDER MAKING A
QEF ELECTION TO AVOID CERTAIN POTENTIALLY SIGNIFICANT ADVERSE U.S. TAX
CONSEQUENCES

The
QEF Election Alternative

Each U.S. Shareholder is strongly urged to consider making a
QEF Election because of the potential benefits of such election that are
discussed below, and because we anticipate that we will not have any earnings
and profits (as computed for United States federal income tax purposes) for the
current taxable year and little, if any, earnings and profits for any future
taxable year in which we are a PFIC. There can be no assurance, however, that
this will be the case. Accordingly, the timely making of the QEF election, as
discussed below, generally should, subject to the discussion below under "Other
PFIC Rules", avoid any significant adverse United State federal income tax
consequences resulting from any classification of us as a PFIC, although this
may depend on a particular U.S. Shareholder's particular circumstances.

A U.S. Shareholder who elects in a timely manner to treat us as
a QEF (an "Electing U.S. Shareholder") will be subject, under Section 1293 of
the Code, to current federal income tax for any taxable year in which we are a
PFIC (or is treated as a PFIC with respect to the U.S. Shareholder) on such
Electing U.S. Shareholder's pro-rata share of our (i) "net capital gain" (the
excess of net long-term capital gain over short-term capital loss), which will
be taxed as long-term capital gain to the Electing U.S. Shareholder and (ii)
"ordinary earnings" (the excess of earnings and profits over net capital gain),
which will be taxed as ordinary income to the Electing U.S. Shareholder, in each
case, for the shareholder's taxable year in which, or with which, our taxable
year ends, regardless of whether such amounts actually are distributed. An
Electing U.S. Shareholder, however, would not take into account any income with
respect to any of our taxable years for which we have no earnings and profits.
Adjustments are provided generally to prevent double taxation at the time of
later distributions on or dispositions of Common Shares.

The QEF election also allows the Electing U.S. Shareholder
to:

(i) generally treat any gain realized on the disposition of our
common shares (or deemed to be realized on the pledge of such shareholder's
common shares) as capital gain;

(ii) treat such shareholder's share of our net capital gain, if
any, as long-term capital gain instead of ordinary income;

(iii) probably (although in the absence of regulations this
matter is not free from doubt) retain in the case of an individual Electing U.S.
Shareholder, the "step-up" in the tax basis of Common Shares to the fair market
value of such shares on the date of such Electing U.S. Shareholder's death
(which would otherwise not be retained); and (iv) generally avoid interest
charges resulting from PFIC status altogether.

In the event we are deemed a PFIC, we intend to comply with the
reporting requirements prescribed by Treasury regulations. In particular, we
will maintain information so that our ordinary earnings and net capital gain may
be determined. However, future regulations may contain reporting and
record-keeping requirements that are so onerous that it would not be practicable
for us to comply. If, after review of the requirements, we decide not to comply
with the PFIC record-keeping requirements, we will so notify our
shareholders.

A QEF Election must be made by attaching the following
documents to the timely filed U.S. federal income tax return for the first
taxable year of the U.S. Shareholder in which or with which our taxable year
during which we were a PFIC and the U.S. Shareholder held (or was considered to
have held) common shares ends: (i) a "Shareholder Section 1295 Election
Statement" executed by the U.S. Shareholder, (ii) a "PFIC Annual Information
Statement" received by the U.S. Shareholder from us, and (iii) a Form 8621. In
addition, the Electing U.S. Shareholder must file a copy of the Shareholder
Section 1295 Election Statement with the Internal Revenue Center, PO Box 21086,
Philadelphia, PA 19114. In the case of common shares owned through a U.S entity,
the election is made at the entity level.

50

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The following six paragraphs apply to electing U.S.
shareholders:

(i)          
Dividends Paid on Common Shares:

Dividends paid on our common shares (including any Canadian
taxes withheld) to an Electing U.S. Shareholder will be treated as ordinary
dividend income for United States federal income tax purposes to the extent of
our current and accumulated earnings and profits (as computed for U.S. federal
income tax purposes) unless paid out of earnings and profits that were taxed to
the Electing U.S. Shareholder under the QEF rules. Such dividends generally will
not qualify for the dividends-received deduction available to corporations.
Amount in excess of such earnings and profits will be applied against the
Electing U.S. Shareholder's tax basis in the common shares, and to the extent in
excess of such tax basis, will be treated as gain from a sale or exchange of
such common shares.

(ii)         
Credit for Canadian Taxes Withheld:

Subject to the limitations set forth in Section 904 of the Code
(which generally restricts the availability of foreign tax credits to a U.S.
Shareholder's tax liability attributable to foreign-source income of the same
type as the income with respect to which the tax was imposed, as determined
under complex U.S. tax rules), the Canadian tax withheld or paid with respect to
dividends on the common shares generally may be taken as a foreign tax credit
against United States federal income taxes by an Electing U.S. Shareholder who
chooses to claim such a credit for the taxable year. Electing U.S. Shareholders
who do not choose to claim foreign tax credits for a taxable year may claim
United States tax deduction for such Canadian tax in such taxable year.

(iii)        
Disposition of Common Shares:

Any gain or loss on a sale or exchange of common shares by an
Electing U.S. Shareholder will be capital gain or loss, which will be long-term
capital gain or loss if the common shares have been held for more than one year,
and otherwise will be short-term capital or loss. The sale of common shares
through certain brokers may be subject to the information reporting and back-up
withholdings rules of the Code.

(iv)          The
Non-QEF Election Alternative

If a U.S. Shareholder does not timely make a QEF Election for
the first taxable year during which he holds (or is considered to hold) the
common shares in question and we are a PFIC (a "Non-electing U.S. Shareholder"),
then special rules under Section 1291 will apply to (i) gains realized on the
disposition (or deemed to be realized by reason of a pledge) of common shares,
and (ii) certain "excess distribution" (as defined in the Code) by us. We have
never made any distributions with respect to our common shares and we do not
anticipate making any such distribution in the foreseeable future.

A non-electing U.S. Shareholder generally would be required to
pro-rate all gains realized on the disposition of our common shares and all
excess distributions over such shareholder's entire holding period for the
common shares. All gains or excess distributions allocated to prior years of the
U.S. Shareholder (provided such U.S. Shareholder's holding period and beginning
after December 31, 1986 for which it was a PFIC) would be taxed at the highest
tax rates for each such prior year applicable to ordinary income. Special
foreign tax credit rules apply with respect to withholding taxes imposed on
amounts that are treated as excess distributions. The Non-electing U.S.
Shareholder also would be liable for interest on the foregoing tax liability for
each such prior year calculated as if such liability had been due with respect
to each such prior year. A Non-electing U.S. Shareholder that is not a
corporation must treat this interest charge as "personal interest" which is
non-deductible. The balance of the gain or the excess distribution will be
treated as ordinary income in the year of the disposition or distribution and no
interest charge will be incurred with respect to such balance.

If we are a PFIC for any taxable year during which a
non-electing U.S. Shareholder holds, or is considered to hold, our common
shares, then we will continue to be treated as a PFIC with respect to such
common shares, even if we no longer meet the definition of a PFIC. A
Non-electing U.S. Shareholder may determine this deemed PFIC status by electing
to recognize gain (which will be taxed under the rules discussed above for
Non-electing U.S. Shareholders) as if such common shares had been sold on the
last day of the last taxable year for which it was a PFIC. Certain other
elections are also available to Non-Electing U.S. Shareholders.

51

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(v)          
Other PFIC Rules

Certain special, generally adverse, rules will apply with
respect to our common shares while we are a PFIC, regardless of whether the
common shares are held, or considered to be held, by an Electing or Non-electing
U.S. Shareholder. For example, under Section 1297(b)(6) of the Code, a U.S.
Shareholder who uses PFIC stock as security for a loan (including a margin loan)
will, except as may be provided in regulations, be treated as having made a
taxable disposition of such stock. In addition, under Section 1291(f) of the
Code, the Treasury has authority to issue regulations that would treat as
taxable certain transfers that are generally not so treated, such as gifts,
exchanges pursuant to corporate reorganizations, and transfers at death,
although it is not clear that such authority extends to transfers by Electing
U.S. Shareholders.

(vi)          Future
Developments

The foregoing discussion is based on existing provisions of the
Code, existing and proposed regulations thereafter, and current administrative
rulings and court decisions, all of which are subject to change. Any such
changes could affect the validity of this discussion. In addition, the
implementation of certain aspects of the PFIC rules requires the issuance of
regulations which in many such instances have not yet been promulgated and which
may have retroactive effect. Furthermore, legislation has been proposed which
would replace the PFIC provisions with a consolidated anti-deferral regime.
While this legislation was vetoed, it may be re-introduced in subsequent
years.

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

10.7      Statements by Experts

We have placed reliance upon:

(i) our lawyer, Doug Eacrett, Barrister & Solicitor, Suite
203 - 409 Granville St, Vancouver BC, Canada V6C 1T2, as expert in Canadian
commercial law.

(ii) our special Canadian securities counsel, Dale Rondeau, C/o
Thomas Rondeau, LLP, Business Lawyers, Suite 300  576 Seymour St, Vancouver,
British Columbia, Canada, V6B 3K1, as expert in Canadian securities law.

(iii) our special US securities counsel, Thomas E. Puzzo, Esq.,
Law Offices of Thomas E. Puzzo, PLLC, 3823 44th Ave. NE, Seattle,
Washington 98105, USA, as expert in US securities law.

(iv) our consulting geologists, Ms Caitlin Jeffs,C/o
Fladgate Exploration Consulting Corp., 195 Park Avenue, Thunder Bay ON, Canada,
P7B 1B9, and Mr. Andre M Pouwels, P. Geo., 4900 Mariposa Court, Richmond BC,
Canada V7C 2J9, as expert in mineral exploration geology of precious and base
metals.

(v) our auditor, Dale Matheson Carr-Hilton Labonte LLP,
Chartered Accountants, Suite 1500  1140 West Pender Street, Vancouver BC,
Canada V6E 4G1, as expert in Canadian and US accounting, auditing and Canadian
income tax.

10.8      Documents on Display

You may review a copy of our filings with the SEC, including
exhibits and schedules filed with it, at the SEC's public reference facilities
at 100 F Street NE, Washington, D.C. 20549. You may call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. The SEC
maintains a Web site (HTTP://www.sec.gov/edgar) that contains reports, proxy
and information statements and other information regarding registrants that file
electronically with the SEC. We have made our filings with the SEC
electronically as a reporting foreign issuer.

52

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10.9      Subsidiary Information

Not applicable

ITEM
11.                    
Quantitative and Qualitative Disclosures about Market Risk

Market risk represents the risk of loss that may impact our
financial statements due to adverse changes in financial market prices and
rates, including credit risk, liquidity risk, foreign exchange risk and interest
rate risk..

We are engaged in the mineral exploration business and manage
related industry risk directly. We are potentially at risk for environmental
reclamation and fluctuations in commodity-based market prices associated with
resource property interests. We are of the opinion that we address environmental
risk and compliance in accordance with industry standards and specific project
environmental requirements. At present, the Company is not required to provide
for restoration and environmental obligations. Accordingly, no provision has
been made. However, there is no certainty that all environmental risks and
contingencies have been addressed.

The Company is exposed in varying degrees to a variety of
financial instrument related risks. The Board of Directors approves and monitors
the risk management processes, inclusive of documented investment policies,
counterparty limits, and controlling and reporting structures. The type of risk
exposure and the way in which such exposure is managed is provided as
follows:

Credit riskCredit risk is the risk that one party
to a financial instrument will fail to discharge an obligation and cause the
other party to incur a financial loss. The Companys primary exposure to credit
risk is on its cash held in bank accounts. The majority of cash is deposited in
bank accounts held with one major bank in Canada so there is a concentration of
credit risk. This risk is managed by using a major bank that is a high credit
quality financial institution as determined by rating agencies. The Companys
secondary exposure to risk is on its harmonized sales tax refundable which is
minimal since it is recoverable from the Canadian Government on its expenses and
purchases.

Liquidity riskLiquidity risk is the risk that the
Company will not be able to meet its financial obligations as they fall due. The
Company has a planning and budgeting process in place to help determine the
funds required to support the Companys normal operating requirements on an
ongoing basis. The Company ensures there are sufficient funds to meet on-going
business requirements, taking into account its current cash position and
potential funding sources.

Historically, the Company's source of funding has been either
the issuance of equity securities for cash, primarily through private
placements, or loans from directors and officers. The Companys access to
financing is always uncertain and there can be no assurance of continued access
to significant funding from these sources.

Foreign exchange riskForeign currency risk is the
risk that the fair values of future cash flows of a financial instrument will
fluctuate because they are denominated in currencies that differ from the
Companys functional currency. The Company only operates in Canada and is
therefore not exposed to foreign exchange risk arising from transactions
denominated in a foreign currency.

Interest rate riskInterest rate risk is the risk
that the fair value of future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. The Companys exposure to
interest rate risk relates to its ability to earn interest income on cash
balances at variable rates. Changes in short term interest rates will not have a
significant effect on the fair value of the Companys cash account.

Capital ManagementThe Company's policy is to
maintain a capital base sufficient to maintain investor and creditor confidence
and to sustain future development of the business. The capital structure of the
Company consists of share capital net of accumulated deficit.

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There have been no changes in the Company's approach to capital
management during the current fiscal year and the Company is not subject to any
externally imposed capital requirements.

ITEM
12.           Descriptions of
Securities Other than Equity Securities

12.1      Warrants

Refer to Item 10.1 (ii) above.

12.2      Stock Options

Refer to Item 10.1 (iii) above.

PART II

ITEM
13.           Defaults,
Dividend Arrearages and DelinquenciesNone

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

None

ITEM
15.           Controls and
Procedures

15.1      Disclosure Controls and Procedures

Under the supervision and with the participation of our
management, including our principal executive officer and principal financial
officer, we are responsible for conducting an evaluation of the effectiveness of
the design and operation of our internal controls and procedures, as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of
the end of the fiscal year covered by this report. Disclosure controls and
procedures means that the material information required to be included in our
Securities and Exchange Commission (SEC) reports is recorded, processed,
summarized and reported within the time periods specified in SEC rules and forms
relating to our company, including any consolidating subsidiaries, and was made
known to us by others within those entities, particularly during the period when
this report was being prepared. Based on this evaluation, our principal
executive officer and principal financial officer concluded as of the evaluation
date that our disclosure controls and procedures were effective as of January
31, 2012.

15.2      Managements Annual Report on Internal
Control over Financial Reporting

As of January 31, 2012, management assessed the effectiveness
of our internal control over financial reporting. The Company's management is
responsible for establishing and maintaining adequate internal control over
financial reporting for the Company. Internal control over financial reporting
is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities
Exchange Act of 1934, as amended, as a process designed by, or under the
supervision of, the Companys Chief Executive Officer and Chief Financial
Officer and effected by the Companys Board of Directors, management and other
personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with IFRS and includes those policies and procedures
that:

54

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i) Pertain to the maintenance of
records that in reasonable detail accurately and fairly reflect our transactions
and dispositions of our assets;

ii) Provide reasonable assurance our
transactions are recorded as necessary to permit preparation of our financial
statements in accordance with IFRS, and that receipts and expenditures are being
made only in accordance with authorizations of our management and directors; and

iii) Provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or
disposition of our assets that could have a material effect on the financial
statement.

In evaluating the effectiveness of our internal control over
financial reporting, our management used the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control Integrated Framework. Based on that evaluation, completed by Linda
Smith, our President and Chief Executive Officer, and Ronald McGregor, our Chief
Financial Officer, management concluded that, during the period covered by this
report, such internal controls and procedures were operating effectively
notwithstanding the inherent weakness of a small company having a very small
staff. This lack of segregation of duties is overcome by heavy reliance on
senior management during the review and approval process along with the annual
independent audit.

15.3      Auditors Attestation Report

The Company is not required to provide an auditors attestation
report on its internal control over financial reporting for the fiscal year
ended January 31, 2012. In this annual report , the Companys independent
registered auditor, Dale Matheson Carr-Hilton Labonte LLP, Chartered
Accountants, has not given an opinion on the effectiveness of the Companys
internal control over financial reporting for the fiscal year ended January 31,
2012, and has not issued an attestation report on the Companys internal control
over financial reporting.

All internal control systems, no matter how well designed, have
inherent limitations. Therefore, even those systems determined to be effective
can provide only reasonable assurance with respect to financial statement
preparations and presentations. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

15.4      Changes in Internal Control over Financial
Reporting

There were no changes in the Companys internal control over
financial reporting that occurred during the fiscal year ended January 31, 2012
that have materially affected, or that are reasonably likely to materially
affect, the Companys internal control over financial reporting.

ITEM
16           (Reserved)

ITEM 16A.       Audit
Committee Financial Expert

Audit Committee of the BoardOur audit committee is
comprised of Linda Smith, Steven Chan and James Burns. They undertake reviews of
our companys financial statements and determine the adequacy of internal
controls and other financial reporting matters. Messrs. Chan and Burns are
independent as the term is used in Rule 10A-3 of the Securities Exchange Act
of 1934, as amended. Ms. Smith is the President and CEO of the Company and
therefore is not an independent member of the audit committee

Audit Committee Financial ExpertOur audit committee
does not have a member that qualifies as an audit committee financial expert
as defined in Item 401(e) of Regulation S-B. The members of our audit committee
have primarily gained their financial education and experience through their
participation in the management of other private and publicly traded companies.

55

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Linda J. Smith, Steven J. Chan and James O. Burns consider
themselves financially literate, meaning that they have the ability to read
and understand a set of financial statements that present a breadth and level of
complexity of accounting issues that are generally comparable to the breadth and
complexity of the issues that can be reasonably expected to be raised by the
Issuers financial statements. Ms. Smith has been a director and officer of the
Issuer since October, 2000 and strengthens the continuity of the committee with
her knowledge of the Issuers financial and business history. Mr. Chan has and
continues to be extremely active in the junior exploration and mining industry
and has gained a wealth of experience through his involvement as a director of a
number of public companies including, in some instances, as a member of audit
committees. Mr. Burns is a retired businessman and brings to the committee
experience from the private sector, including through his ownership and
management of a fishing and hunting lodge in Northern Ontario.

ITEM 16B.       Code of Ethics

In its annual reports on Form 20-F for the fiscal years ended
January 31, 2011, 2010, 2009, 2008, 2007 and 2006 the Company erroneously
disclosed that,

Our board of directors has adopted a Code of Business
Conduct and Ethics that applies to, among other persons, members of our board of
directors, our companys officers including President, Chief Financial Officer,
contractors, consultants and advisors.

The Company, in fact, has never adopted a code of ethics that
applies to its principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions because the Board had found that the fiduciary duties placed on
individual directors by the Companys governing corporate legislation, the
common law, and the restrictions placed by applicable corporate legislation on
an individual directors participation in decisions of the Board in which the
director has an interest have been sufficient to ensure that the Board operates
independently of management and in the best interests of the Company and its
shareholders.

ITEM 16C.       Principal
Accountant Fees and Services

During the years ended January 31, 2012 and 2011, we paid fees
of $17, 250 and $17,500 respectively to our principal independent accountant for
professional services rendered in connection with the audits of our year-end
financial statements, our annual report filed on Form 20-F, and our corporate
income tax returns.

During fiscal years ended January 31, 2012 and 2011, we did not
incur any fees for professional services rendered by our principal independent
accountant for any of the following:

(i)****
information technology services including, but not limited to, operating or
supervising or managing our information or local area network or designing or
implementing a hardware or software system that aggregate source data underlying
the financial statements.

(ii)****
other non-assurance services including, but not limited to, actuarial services
or valuation services.

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

Not Applicable

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

Not Applicable

56

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ITEM 16F.        Change
in Registrants Certifying Accountant

Not Applicable

ITEM 16G.       
Corporate Governance

Not applicable.

ITEM 16H        Mine
Safety Disclosure

Not applicable

PART III

ITEM
17. Financial
Statements

Our financial statements for the years ended January 31, 2012,
2011 and 2010 were audited by Dale Matheson Carr-Hilton Labonte, Chartered
Accountants without reservation, as follows:

|Audit report dated May 28, 2012                                                      
|-------------------------------------------------------------------------------------
|Balance sheets as at January 31, 2012, 2011 and February 1,
      2010               
|Statements for the years ended January 31, 2012 and 2011                             
|Comprehensive Loss                                                                   
|Changes in
      Shareholders Equity (Deficiency)                                   
|Cash Flows                                                                           
|Notes to the financial statements for the years ended
      January 31, 2012 and 2011

All our financial statements are prepared in accordance with
IFRS and all figures are expressed in Canadian dollars.

ITEM
18.           ExhibitsThe
unmarked exhibits below are attached to this report.

| | Exhibit 1:    | Audited financial Statements
        (with audit report dated May 28, 2012)                                                                                      
| | ------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Exhibit 2:    | Certificate of Incorporation
        (March 31, 2008)*                                                                                                           
| | Exhibit 3:    | Memorandum and Articles of Association*                                                                                                                          
| | Exhibit 3A:   | Notice of Alteration of Articles
        of Association (Feb 25, 2008)**                                                                                         
| | Exhibit 3B:   | Certificate of name change (
        March 25, 2008)**                                                                                                           
| | Exhibit 4:    | Consent of Geologists (May 29,
    2012)                                                                                                                         
| | Exhibit 12.1: | Certification
        of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002                                               
| | Exhibit 12.2: | Certification
        of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002                                               
| | 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
| | 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

|*  | Previously filed with Form 20-F on September 16,
    2003
|-- | ---------------------------------------------------------
|** | Previously filed with Form 20-F on June 10,
  2009       

57

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SIGNATURE

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

|                    | ROUGE RESOURCES LTD.
|------------------- | --------------------
|                    |                     
|Dated: May 30, 2012 |                     
|                    | By:                 
|                    |                     
|                    |                     
|                    |                     

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