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UNITED STATESSECURITIES
AND EXCHANGE COMMISSIONWashington, D.C. 20549

Amendment No. 2 
to FORM 20-FSEC 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, 2010or

[   ] 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 70th Street                 
|number and Address of Company  Contact Person) | Seattle, Washington 98115           
|                                               | Telephone No.: (206) 522-2256       
|                                               | Facsimile 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)  

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)

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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. Yes [X]    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 [   ]    No [X] (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

II

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TABLE OF CONTENTS

|         |                                                       |                                                      | PAGE
|-------- | ----------------------------------------------------- | ---------------------------------------------------- | ----
|         |                                                       |                                                      |     
|PART I  
|         |                                                       |                                                      |     
|ITEM 1.  | Identity of Directors, Senior Management and Advisors |                                                     
|         |                                                       | 1.1 Directors and Senior Management                  | 1   
|         |                                                       | 1.2 Advisors                                         | 2   
|         |                                                       | 1.3 Auditor                                          | 2   
|         |                                                       |                                                      |     
|ITEM 2.  | Offer Statistics and Expected Timetable               | 2                                                   
|         |                                                       |                                                      |     
|ITEM 3.  | Key Information                                       |                                                     
|         |                                                       | 3.1 Selected Financial Data                          | 2   
|         |                                                       | 3.2 Capitalization and Indebtedness                  | 4   
|         |                                                       | 3.3 Reasons for the Offer and Use of Proceeds        | 4   
|         |                                                       | 3.4 Risk Factors                                     | 4   
|         |                                                       |                                                      |     
|ITEM 4.  | Information on the Company                            |                                                     
|         |                                                       | 4.1 History and Development                          | 9   
|         |                                                       | 4.2 Mineral Property Interests                       | 9   
|         |                                                       | 4.3 Competition                                      | 16  
|         |                                                       | 4.4 Management & Employees                           | 16  
|         |                                                       | 4.5 Environmental Regulations                        | 16  
|         |                                                       |                                                      |     
|ITEM 5.  | Operating and Financial Review and Prospects          |                                                     
|         |                                                       | 5.1 Results of Operations                            | 17  
|         |                                                       | 5.2 Liquidity and Capital Resources                  | 19  
|         |                                                       | 5.3 Off-balance sheet arrangements                   | 22  
|         |                                                       |                                                      |     
|ITEM 6.  | Directors, Senior Officers and Employees              |                                                     
|         |                                                       | 6.1 Directors and Senior Officers                    | 26  
|         |                                                       | 6.2 Compensation of Directors                        | 27  
|         |                                                       | 6.3 Board Practices                                  | 28  
|         |                                                       | 6.4 Employees                                        | 29  
|         |                                                       | 6.5 Share Ownership of Directors and Senior Officers | 29  
|         |                                                       |                                                      |     
|ITEM 7.  | Major Shareholders and Related Party Transactions     |                                                     
|         |                                                       | 7.1 Beneficial Ownership                             | 29  
|         |                                                       | 7.2 Related Party Transactions                       | 30  
|         |                                                       | 7.3 Interests of Experts and Counsel                 | 31  
|         |                                                       |                                                      |     
|ITEM 8.  | Financial Information                                 |                                                     
|         |                                                       | 8.1 Legal Proceedings                                | 31  
|         |                                                       | 8.2 Significant Changes                              | 31  
|         |                                                       |                                                      |     
|ITEM 9.  | The Offer and Listing                                 |                                                     
|         |                                                       | 9.1 Offer and Listing Details                        | 31  
|         |                                                       |                                                      |     
|ITEM 10. | Additional Information                                |                                                     
|         |                                                       | 10.1 Share Capital                                   | 33  
|         |                                                       | 10.2 Memorandum and Articles of Association          | 35  
|         |                                                       | 10.3 Material Contracts                              | 36  

III

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|               |                                                                                    | 10.4 Exchange Controls and
      other Limitations Affecting Security Holders | 36
|-------------- | ---------------------------------------------------------------------------------- | ----------------------------------------------------------------------------- | --
|               |                                                                                    | 10.5 Canadian Federal Income Tax Consequences
      to U.S. Investors         | 36
|               |                                                                                    | 10.6 United States Federal
      Income Tax Consequences to U.S. Investors    | 37
|               |                                                                                    | 10.7 Statements by Experts                                                    | 41
|               |                                                                                    | 10.8 Documents on Display                                                     | 41
|               |                                                                                    |                                                                               |   
|ITEM 11.       | Quantitative
      and Qualitative Disclosures About Market Risk                   | 41                                                                           
|               |                                                                                    |                                                                               |   
|ITEM 12.       | Descriptions
      of Securities Other than Equity Securities                      |                                                                              
|               |                                                                                    | 12.1 Warrants                                                                 | 42
|               |                                                                                    | 12.2 Stock Options                                                            | 42
|               |                                                                                    |                                                                               |   
|PART
      II 
|               |                                                                                    |                                                                               |   
|ITEM 13.       | Defaults, Dividend
      Arrearages and Delinquencies                              | 42                                                                           
|               |                                                                                    |                                                                               |   
|ITEM 14.       | Material Modifications
      to the Rights of Security Holders and Use of Proceeds | 42                                                                           
|               |                                                                                    |                                                                               |   
|ITEM 15        | Controls and
      Procedures                                                      | 43                                                                           
|               |                                                                                    |                                                                               |   
|ITEM 16A       | Audit Committee
      Financial Expert                                             | 45                                                                           
|               |                                                                                    |                                                                               |   
|ITEM 16B       | Code of Ethics                                                                     | 45                                                                           
|               |                                                                                    |                                                                               |   
|ITEM 16C       | Public Accountant
      Fees and Services                                          | 46                                                                           
|               |                                                                                    |                                                                               |   
|ITEM 16D       | Exemptions from
      the listing Standards for Audit Committees                   | 46                                                                           
|               |                                                                                    |                                                                               |   
|ITEM 16E       | Purchases of
      Equity Securities by the Issuer and Affiliated Purchasers       | 46                                                                           
|               |                                                                                    |                                                                               |   
|ITEM 16F       | Change in Registrants
      Certifying Accountant                                 | 46                                                                           
|               |                                                                                    |                                                                               |   
|ITEM 16G       | Corporate Governance                                                               | 46                                                                           
|               |                                                                                    |                                                                               |   
|PART
      III
|               |                                                                                    |                                                                               |   
|ITEM 17.       | Financial Statements                                                               | 47                                                                           
|               |                                                                                    |                                                                               |   
|ITEM 18.       | Exhibits                                                                           | 47                                                                           
|               |                                                                                    |                                                                               |   
|SIGNATURE      | 48                                                                                

IV

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FORWARD-LOOKING STATEMENTS

We caution you that certain important factors (including
without limitation those set forth in this Form 20-F) may affect our actual
results and could cause such results to differ materially from any
forward-looking statements that may be deemed to have been made in this Form
20-F annual report, or that are otherwise made by or on our behalf. For this
purpose, any statements contained in this annual report that are not statements
of historical fact may be deemed to be forward-looking statements. Without
limiting the generality of the foregoing, words such as may, except,
believe, anticipate, intend, could, estimate, or continue, or the
negative or other variations of comparable terminology, are intended to identify
forward-looking statements.

PART I

ITEM
1.                   
Identity of Directors, Senior Management and Advisors

1.1
Directors and Senior Management:

|Linda Smith #203-409 Granville Street, Vancouver
      British Columbia, V0R 1X0, Canada   | President, Chief Executive Officer and
    Director
|------------------------------------------------------------------------------------------ | ---------------------------------------------------
|Darcy Krell #203-409 Granville Street, Vancouver
      British Columbia, V0R 1X0, Canada   | Secretary, Chief Financial Officer and
    Director
|Shannon Krell #203-409 Granville Street, Vancouver
      British Columbia, V0R 1X0, Canada | Director                                           
|Ryan Krell #203-409 Granville Street, Vancouver British
      Columbia, V0R 1X0, Canada    | Director                                           
|Ivan Martinez #203-409 Granville Street, Vancouver
      British Columbia, V0R 1X0, Canada | Director                                           

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1.2Advisors:

|Doug Eacrett, Barrister & Solicitor, Suite 203 
      409 Granville St, Vancouver BC, Canada V6C 1T2                                        | Company Lawyer               
|-------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------
|Thomas E. Puzzo, Esq.
    Law Offices of Thomas E. Puzzo, PLLC
    4216 NE 70th Street, Seattle, Washington 98115, USA                       | Special US Securities Counsel
|Ms. Caitlin Jeffs, P.Geo, 48 Peter Street, Thunder Bay
      ON, Canada P7A 4H3, (part owner of Fladgate Exploration Consulting
      Corp.) | Consulting Geologist         
|Mr. Andre M Pouwels, P. Geo., 4900 Mariposa Court,
      Richmond BC, Canada V7C 2J9                                                         | Consulting Geologist         

1.3Auditor:

|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 set forth selected financial data of the
Company for the fiscal years ended January 31, 2010, 2009, 2008, 2007 and 2006.
We derived all figures from our financial statements, which were audited by our
independent auditor. This information should be read in conjunction with our
audited financial statements for the fiscal years ended January 31, 2010, 2009
and 2008 included in this annual report. Our audited financial statements for
the fiscal years ended January 31, 2007 and 2006 are not included in this annual
report.

Our audited financial statements and the table below have been
prepared in accordance with Canadian generally accepted accounting principles
(Canadian GAAP). A reconciliation to United States generally accepted
accounting principles (US GAAP) is included in Note 11 of our audited
financial statements in this annual report. All amounts are expressed in
Canadian dollars.

2

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The first table below presents this financial data for five
years in accordance with US GAAP. The second table presents the data in
accordance with Canadian GAAP.

US GAAP (in Cdn $)

|                                              | Year Ended January 31, 2010 | Year Ended January 31, 2009 | Year Ended January 31, 2008 | Year Ended January 31, 2007 | Year Ended January 31, 2006
|--------------------------------------------- | --------------------------- | --------------------------- | --------------------------- | --------------------------- | ---------------------------
|Net Operating Revenue                         | Nil                         | Nil                         | Nil                         | Nil                         | Nil                        
|Loss from operations                          | ($125,361)                  | ($198,370)                  | ($154,327)                  | ($181,066)                  | ($203,256)                 
|Loss per common share                         | ($0.01)                     | ($0.05)                     | ($0.28)*                    | ($0.32)*                    | ($0.36)*                   
|Total assets                                  | $67,839                     | $20,346                     | $23,810                     | $21,873                     | $34,856                    
|Shareholders deficiency                      | ($1,087,545)                | ($1,062,184)                | ($1,363,814)                | ($1,209,487)                | ($1,028,421)               
|Long term debt                                | Nil                         | Nil                         | Nil                         | Nil                         | $39,676                    
|Cash dividends per share                      | Nil                         | Nil                         | Nil                         | Nil                         | Nil                        
|Deficit                                       | ($2,804,875)                | ($2,679,514)                | ($2,481,144)                | ($2,326,817)                | ($2,145,751)               
|Capital stock                                 | $1,613,471                  | $1,613,471                  | $1,113,471                  | $1,113,471                  | $1,113,471                 
|Weighted average number of shares outstanding | 10,565,171                  | 3,597,958                   | 565,171*                    | 565,171*                    | 565,171*                   

Note  Certain figures above have been modified to reflect the
disclosure for year ended January 31, 2010

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

Canadian GAAP (in Cdn $)

|                                              | Fiscal Year ended
      January 31, 2010 | Fiscal Year ended
      January 31, 2009 | Fiscal Year ended
      January 31, 2008 | Fiscal Year ended
      January 31, 2007 | Fiscal Year ended
      January 31, 2006
|--------------------------------------------- | ---------------------------------------- | ---------------------------------------- | ---------------------------------------- | ---------------------------------------- | ----------------------------------------
|Net Operating Revenue                         | Nil                                      | Nil                                      | Nil                                      | Nil                                      | Nil                                     
|Loss from operations                          | ($118,922)                               | ($195,335)                               | ($156,658)                               | ($182,422)                               | ($138,379)                              
|Loss per common share                         | ($0.01)                                  | ($0.05)                                  | ($0.28)*                                 | ($0.32)*                                 | ($0.24)*                                
|Total assets                                  | $169,424                                 | $101,485                                 | $90,043                                  | $88,106                                  | $101,089                                
|Shareholders deficiency                      | ($971,033)                               | ($952,111)                               | ($1,256,776)                             | ($1,141,899)                             | ($959,477)                              
|Long term debt                                | Nil                                      | Nil                                      | Nil                                      | Nil                                      | $39,676                                 
|Cash dividends per share                      | Nil                                      | Nil                                      | Nil                                      | Nil                                      | Nil                                     
|Deficit                                       | ($2,737,861)                             | ($2,618,939)                             | ($2,423,604)                             | ($2,266,946)                             | ($2,084,524)                            
|Capital stock                                 | $1,613,471                               | $1,613,471                               | $1,113,471                               | $1,113,471                               | $1,113,471                              
|Weighted average number of shares outstanding | 10,565,171                               | 3,597,958                                | 565,171*                                 | 565,171*                                 | 565,171*                                

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 June 4, 2010, the exchange rate in effect was
C$1.00 = US$0.95. 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, 2010, the following exchange rates
were in effect for United States dollars exchanged into Canadian dollars:

3

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|Year Ended         | Actual Year End Exchange Rate        
|------------------ | -------------------------------------
|January 31, 2010   | $0.93                                
|January 31, 2009   | $0.81                                
|January 31, 2008   | $1.00                                
|January 31, 2007   | $0.85                                
|January 31, 2006   | $0.87                                
|                   |                                      
|Month Ended        | Average Month End Exchange
      Rate
|January 31, 2010   | $0.96                                
|December 31, 2009  | $0.95                                
|November 31, 2009  | $0.94                                
|October 31, 2009   | $0.95                                
|September 30, 2009 | $0.92                                
|August 31, 2009    | $0.92                                

3.2          Capitalization
and Indebtedness

The following table sets forth our indebtedness and
capitalization as at January 31, 2010 in Canadian dollars:

|                                                     | US GAAP      | Canadian GAAP
|---------------------------------------------------- | ------------ | -------------
|Indebtedness                                         |              |              
|Short term debt (unsecured and not
      guaranteed) | $1,155,384   | $1,140,457   
|Long term debt                                       | $Nil         | $Nil         
|Total                                                | $1,155,384   | $1, 140,457  
|                                                     |              |              
|Shareholders Deficiency                             |              |              
|Common shares                                        | $1,613,471   | $1,613,471   
|APIC/ Contributed surplus                            | $11,576      | $53,357      
|Accumulated deficit                                  | ($2,804,875) | ($2,737,861) 
|Total                                                | ($1,087,545) | ($971,033)   

3.3          Reasons
for the Offer and Use of Proceeds

Not Applicable

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:

4

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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, 1998, the date of incorporation, to January
31, 2010, we have incurred losses totalling C$2,804,875 under US GAAP and
$2,737,861 under Canadian GAAP. 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 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.

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

As at January 31, 2010, we had cash in the amount of $53,623.
Our ability to continue as a going concern is dependent upon the ability of
management to obtain sufficient financing. Subsequent to year ended January 31,
2010, management closed a private placement of 30,000,000 units for proceeds of
$1,500,000. There are no other specific commitments for investment in the
Company which raises doubt about the companys ability to continue as a going
concern. These financial statements do not include adjustments that would be
necessary should the company be unable to continue as a going concern.

5

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Because management has only limited experience in resource
exploration, the business has a higher risk of failure.

Our management has only limited experience in resource
exploration. None of our directors or officers has any significant technical
training or experience in resource exploration, starting or operating a mine.
With no direct training or experience in this sector, our management may not be
fully aware of many of the specific requirements related to working within the
industry. Their business decisions may not take into account standard
engineering or managerial approaches that mineral exploration companies with
qualified management commonly use. As a result, our operations, earnings and
ultimate financial success could suffer irreparable harm due to managements
lack of experience in this industry.

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 native 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.

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 operations may require licenses and permits from various
governmental authorities. If we are unable to obtain such licenses and permits,
we will not be able to continue exploration and development of our mineral
property interests and we may have to abandon our business plan.

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.

6

---

Metal prices fluctuate widely. A decrease in metal prices
may prevent us from raising the capital necessary to continue our business plan
in the future. As well, low metal 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.

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.

7

---

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.

Enforcement of legal process may be difficult.

All members of our Board of Directors and management reside in
Canada. As well, our address for service is a Canadian address. Accordingly,
investors will not be able to:

|1. | effect legal process upon us or upon individuals related
      to us within the United States;                                                             
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                            
|2. | enforce judgments obtained in United States courts
      against us based upon the civil liability provisions of the United States
      securities law; or
|   |                                                                                                                                                            
|3. | 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.

8

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ITEM
4                   Information
on the Company

4.1         
History and Development

We were incorporated under the name Gemstar Resources Ltd.
pursuant to the Company Act in the Province of British Columbia, Canada
by registration of our Memorandum and Articles of Association and the issuance
by the Registrar of Companies of a Certificate of Incorporation on March 31,
1988. In March 2006, we transitioned to the provinces Business Corporations
Act. In October, 2007, we changed our name to Rouge Resources Ltd.;
restructured our share capital by consolidating our issued and outstanding
common shares on a one for ten (1:10) basis; and increased our authorized share
capital from 10,000,000 common shares to an unlimited number 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.

We are a reporting issuer in both British Columbia and Alberta
and a foreign issuer in the United States with the Securities and Exchange
Commission. Our common shares are posted for trading on the Over-The-Counter:
Bulletin Board (OTC:BB) in the United States under the symbol ROUGF:OB.

We are engaged in the acquisition, exploration and, if
warranted, development of mineral resource properties. Our head office is
located at #203  409 Granville Street, Vancouver British Columbia, Canada, V6C
1T2 and our telephone number is (604) 831-2739.

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.

4.2Mineral
Property Interests

In fiscal 2001, we entered into an agreement to acquire 100%
interest in a single 15-unit mining claim, claim number 3011450, totaling 375 hectares, called the
Dotted Lake Property (the Property), located in the Thunder Bay Mining
District of North Central Ontario, Canada. Since then, we have conducted certain
acquisition and exploration activities described below; completed a 43-101
compliant geological report; expanded our claims on the Property; and kept our
Mineral Property Interests in good standing with the Ontario Ministry of
Northern Development and Mines for future exploration.

9

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As at January 31, 2010, the Company had incurred the following
expenditures on the Dotted Lake Property since inception:

|                           |   | January 31, |  |   | January 31, | 
|-------------------------- | - | ----------- |  | - | ----------- | 
|                           |   | 2010        |  |   | 2009        | 
|                           |   |             |  |   |             | 
|Mineral properties         |   |             |  |   |             | 
|Staking                    | $ | 15,261      |  | $ | 4,206       | 
|                           |   |             |  |   |             | 
|Deferred exploration costs |   |             |  |   |             | 
|Geological
      survey    |   | 69,736      |  |   | 64,236      | 
|Geological consulting fees |   | 20,794      |  |   | 16,903      | 
|                           |   | 90,530      |  |   | 81,139      | 
|                           |   |             |  |   |             | 
|                           | $ | 105,791     |  | $ | 85,345      | 

(i)
Location and Access

The Property is situated in north central Ontario,
approximately 50 kilometers northeast of Lake Superior and 260 kilometers
east-northeast of Thunder Bay. Manitouwadge (45 kilometers north), Marathon (45
kilometers southwest) and White River (50 kilometers southeast) are the closest
towns. The latter two communities are situated along Highway 17, part of the
Trans-Canada Highway network, while the property itself lies approximately 20
kilometers north of Highway 17.

Currently, there is no road access directly onto the Property
but drivable logging roads are within 1km. From Highway 614, located 13
kilometres north of Highway 17, a bush road leads seven kilometers
north-eastward to the southwest shore of Dead Otter Lake. From there, the
property may be conveniently reached by boat in summer and snowmobile in winter.
Alternatively, another bush road that connects with Highway 614, approximately
19.2 kilometers north of Highway 17, terminates 0.7 kilometers north of the
north claim boundary gas detailed in figure 2, below.

The Property experiences a temperate climate with moderate to
long cold winters and short warm to hot summers. Total annual precipitation is
about 1,000 millimeters, including over three meters of snow. Break up or freeze
up conditions may impinge upon exploration activities, but normally exploration
and mining may be conducted year round. However, it is more economical to
explore in spring and summer when access to and travel across the Property is
much easier because snow removal for surface exploration is not required.



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

10

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Figure 2 - Dotted Lake Claims

11

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(ii) Title
and Claim Status

Our original claim on the Property was staked in 2001 and then
re-staked in March 2003. In October, 2009, the Company expanded its 100% owned
holdings in the Property from a single 15-unit claim to ten claims of 82 units totaling 1312 hectares, by means of staking. The claims are now in good standing with the Ontario Ministry of Northern
Development for Mines and Forestry until March 14, 2011. 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 require $32,800 work in order to keep the claims in good standing each year.

From the beginning,  claim 3011450  was registered in the name of
1179406 Ontario Ltd., a private Ontario company owned by Mr. R.J. Reukl, in
trust as a convenience for us to help keep costs down since we were an extra-provincial claimholder in Ontario. However, on
April 8, 2009 the trust arrangement was changed from Mr. Reukl to Mr. D.T.
Krell, one of our directors, who now owns the claim in trust for us. We do not
have any third party obligations against the claims. All other  claims in table below were staked and registered in the name of  Mr. D.T. Krell who holds them in trust for us.

Subsequent  to the January 31, 2010 year end, on April 20, 2010, the Company entered into an  option to purchase agreement with local prospectors regarding an additional 2  claims of 22 units adjacent to the Dotted Lake Property, known as the Lampson Lake  Property.  The Company has an exclusive  option to purchase a 100% interest in claims 4245668 and 4246254 by making  option payments totalling $60,000 over the next 3 years as follows: $7,000 upon  signing the agreement which was paid on April 20, 2010; $12,000 on April 20,  2011; $16,000 on the April 20, 2012; and $25,000 on the April 20, 2013.  The claims are subject to a 3% net smelter  royalty when, and if, mineral exploration and development eventually leads to mining  revenue from the property.

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 Town 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 airport at Thunder Bay has daily  schedules flights to Toronto, Calgary and Winnipeg.  The nearest railroad is the CP Railroad 20km  to the south along the TransCanada Highway.   A high voltage power transmission line passes 18km south of the  property.

There is no assurance that a commercially viable mineral
  deposit exists on the Property and further exploration will be required before
  final evaluation of its economic feasibility.

|Mining Claim
      No. | Township/Area | Units | Date Recorded | Date Credits to be applied | $ Required/Year
|---------------------- | ------------- | ----- | ------------- | -------------------------- | ---------------
|3011450                | Black River   | 15    | 14-Mar-03     | 14-Mar-11                  | $6,000         
|4252412                | Black River   | 12    | 17-Nov-09     | 17-Nov-11                  | $4,800         
|4252413                | Black River   | 12    | 17-Nov-09     | 17-Nov-11                  | $4,800         
|4252414                | Black River   | 2     | 17-Nov-09     | 17-Nov-11                  | $800           
|4252415                | Black River   | 2     | 17-Nov-09     | 17-Nov-11                  | $800           
|4252416                | Black River   | 1     | 17-Nov-09     | 17-Nov-11                  | $400           
|4252417                | Olga Lake     | 2     | 17-Nov-09     | 17-Nov-11                  | $800           
|4252418                | Olga Lake     | 12    | 17-Nov-09     | 17-Nov-11                  | $4,800         
|4252419                | Olga Lake     | 12    | 17-Nov-09     | 17-Nov-11                  | $4,800         
|4252420                | Olga Lake     | 12    | 17-Nov-09     | 17-Nov-11                  | $4,800         

Property Geology

The  present claims cover an 8.4 km long portion of the Dotted Lake arm of the  Schrieber-Hemlo greenstone belt. 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 showing (Pauwels,  2005).  A small patch of intermediate  volcanics is indicated on Milne’s map (Milne 1968) in the same area and short  sections of felsic volcanic rocks were intersected in the Noranda drill holes  (Degagne 1991).  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 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 OGS Map 3086   (Siragusa 1986).  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.



12

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(iii)
  Previous Exploration

Several companies and individuals have conducted exploration
activities on various parts of the Property over many years. To date, no mineral
deposit has been delineated and, consequently, there has been no production from
the Property nor any reserve or resource estimated.

In fiscal 2002, we completed our initial acquisition of the
Property by paying $200,000 in cash to an unrelated private British Columbia
company called LCM Equity Inc. (LCM). We also advanced $152,000 to LCM for
planned exploration of the Property. All of these funds came from our officers
and immediate family members in the form of unsecured related party loans.

Near the end of calendar 2002, as a result of extreme weather
conditions, we were having difficulty undertaking our planned work program on
the Property, including the required assessment work to keep the claims in good
standing. Following discussion with our consulting geologist at the time, Mr
Andre Pauwels P. Geo, we decided it would be less expensive to allow the claim
to lapse and then re-stake it early the following year. As a result, the claim
was permitted to lapse and, consequently, the acquisition cost was written off
during the year ended January 31, 2003. Once the weather conditions improved,
our consulting geologist re-staked the claim on our behalf in March 2003 at a
cost of $4,206.

During the quarter ended April 30, 2005, we completed an
airborne VLF-EM survey of the mineral claim at a cost of $40,000 paid in full
from the $152,000 of exploration funds advanced to LCM per above. We were
searching for changes in the magnetic field over certain areas of the Property,
since Magnetic anomalies may result from accumulations of certain magnetic rocks
such as phrhotite, hematite and magnetite. These rock types are often found
alongside base metals such as copper, zinc and nickel, or precious metals such
as gold and silver.

A VLF-EM survey consists of two separate surveys: a Very Low
Frequency survey and an ElectroMagnetic survey. Very low frequency surveys use
radio waves to determine whether rocks on a mineral property conduct
electricity. Almost all of the precious and base metals that we seek are above
average conductors of electricity and will affect VLF readings. Electromagnetic
surveys involve measuring the strength of the earths magnetic field. Variations
in the magnetic readings on a property may indicate the increased likelihood of
precious or base minerals in the area.

Also, during the quarter ended April 30, 2005, we commissioned
and advanced $4,500 to our consulting geologist to complete an evaluation report
regarding the merits of the Property in accordance with Form 43-101 prescribed
by the regulatory authorities.

During the quarter ended July 31, 2005, we undertook a ground
VLF (Very Low Frequency) and magnetic survey over 100 meter spaced cut lines (15
km) at the north western side of the Property costing $14,636. Also, during this quarter, the $112,000
balance of funds advanced to LCM in fiscal 2002 was returned to us after we
discontinued using LCMs exploration services.

13

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Effective December 6, 2005, the 43-101 compliant evaluation
report was completed by our consulting geologist, Mr. Andre Pauwels, P.Geo., for
an additional cost of $7,097. The report recommended a two phase exploration
program with a total budget of $223,400 as follows:

- Phase 1 spending of $51,500 on geological surveys (see below)
to explore the exhalite horizon on the Property including a TDEM (Time Domain
Electromagnetic) survey centered at the Fairservice showing to test for massive
sulphides bodies at depth and to do research to delineate the possible western
extension of the exhalite horizon on the property. The TDEM survey is one of
several geophysical exploration methods. In the conventional TDEM survey, an
induction coil is used as the magnetometer which allows conductivity of rock
below the surface to be measured at greater depths.

|Planning , organization, supervision
      (senior geologist 9 days at $600 each) | $ | 5,400  | 
|--------------------------------------------------------------------------------- | - | ------ | 
|Line cutting (15 kilometers at $500 each)                                         | $ | 7,500  | 
|TDEM contract (12 kilometers at $1,500
      each)                                | $ | 18,000 | 
|Mobilization of TDEM crew                                                         | $ | 6,000  | 
|Supplemental VLF/HLEM ground surveys                                              | $ | 3,000  | 
|Research western area of the claims (senior geologist 6
      days at $600 each)  | $ | 3,600  | 
|Processing 2005 airborne VLF data                                                 | $ | 2,500  | 
|Drafting, travel costs and miscellaneous                                          | $ | 3,000  | 
|Contingency 5%                                                                    | $ | 2,500  | 
|                                                                                  |   |        | 
|Total                                                                             | $ | 51,500 | 

- Phase 2 spending of $171,900 on extensive targeted diamond
drilling (six holes) to determine the mineral content of rock below the surface
of the Property. Drillinginvolves extracting a long cylinder of rock,
known as a drill core, from the ground for analysis to determine the amount of
metal content at different depths. This phase will only be considered after
Phase I has proven successful.

|Contract price (1,000 meters at $85 per
      meter):                       | $ | 85,000  | 
|--------------------------------------------------------------------------- | - | ------- | 
|Drill mobilization and de-mobilization:                                     | $ | 15,000  | 
|Drill site preparation:                                                     | $ | 7,200   | 
|Core boxes and supplemental drill supplies:                                 | $ | 6,000   | 
|Assays (75 samples at $20):                                                 | $ | 1,500   | 
|Senior geologist supervision, organization, logging travel:                 | $ | 21,000  | 
|Field assistant for sampling and core
      handling (25 days at $200/day): | $ | 5,000   | 
|Report:                                                                     | $ | 5,000   | 
|Drafting:                                                                   | $ | 3,000   | 
|Domicile for geologist and field assistant:                                 | $ | 5,200   | 
|Transportation (rental of trucks and
      snowmobiles)                     | $ | 2,000   | 
|Supplies for sampling and surveys, sample transport:                        | $ | 2,000   | 
|Permitting and reclamation:                                                 | $ | 6,000   | 
|Contingency 5%:                                                             | $ | 8,000   | 
|                                                                            |   |         | 
|Total                                                                       | $ | 171,900 | 

14

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This 43-101 report is available under our public disclosures on
www.sedar.com.

During the years ended January 31, 2007 and 2008, we kept our
claim in good standing but did not conduct any work on the Property. In fiscal
2007, this was mainly due to the significant time, effort and cost required to
lift the cease trade orders initiated by the British Columbia and Alberta
Securities Commissions in late fiscal 2004, which was accomplished by August
2006.

In May 2008, we hired Caitlin Jeffs, P.Geo. as consulting
geologist and part owner of Fladgate Exploration Consulting to conduct a soil
sampling program on the Property to try and find a drilling target. The program
involved examining surface soil samples for base metal content which cost
$14,906. Their report dated August 5, 2008 indicated the possibility of some
gold and zinc mineralization in certain of the 47 samples collected.

(iv)
Current and Proposed Exploration

In October, 2009, the Company expanded its 100% owned holdings
  in the Dotted Lake Property from a single 15-unit claim to ten claims of 82
  units by means of additional staking at a cost of $11,055. At the same time,
  an additional $9,392 was expended on soil sampling in accordance with the Fladgate
  report of August 2008 which identified anomalous zinc with coincident gold anomalies.
  Further work has been recommended once again to expand on the anomalies.

At January 31, 2010, we had expended $105,791 exploring the
Property of which $15,261 related to staking and $90,530 to soil sampling,
geological surveys and consulting fees & expenses.

Subsequent to the January
  31, 2010 year end, we entered into an option agreement (the "Option") with local
  prospectors to purchase an additional 2 claims of 22 units adjacent to the
  Dotted Lake Property known as the Lampson Lake Property. Mr. Darcy Krell as
  Company director is the optionee to the agreement in trust for the Company.  We have an exclusive option to purchase a 100%
  interest in this new property by making option payments totaling $60,000 over
  the next 3 years as follows: $7,000 upon signing the agreement which has already
  been paid, $12,000 one year later, $16,000 two years later and $25,000 three
  years later. This new property is subject to a 3% net smelter royalty when and
  if mineral exploration and development eventually leads to mining revenue from
  the property.

Upon exercise of the Option, our holdings will then total 12
claims of 104 mining units on 1683 hectares which include some favourable rock
formations that host the Fairservice zinc occurrence. Soil samples taken from
this occurrence by previous operators have shown reasonable quantities of both
zinc and gold. Moreover, our modest soil sampling program on the original Dotted
Lake claim in the summer of 2008 and again in the Fall of 2009 noted anomalous
zinc with coincident gold anomalies a relatively short distance south of the
Fairservice zinc occurrence. Since further work has been recommended to expand
on the anomalies, we have asked Fladgate Exploration Consulting to conduct a
follow-up work program. This will include mapping, prospecting, soil sampling,
trenching and analyzing trhe new property over the next few months at an
estimated cost of $85,000.

Depending on the results, we remain committed to the phase 2
diamond drilling recommendations contained in our 43-101 compliant Evaluation
Report dated December 6, 2005.

v)      Sample  Collection, Preparation, and Analytical Procedures

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.  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).

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 property a more comprehensive QA/QC procedure will be necessary.

All samples collected during exploration programs run  in the last two 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

15

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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.

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 May 1, 2008 with Mr.
Darcy Krell, our Secretary and Chief Financial Officer, who is engaged to
perform certain management and administrative services 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, Ms. Linda Smith, and the father
of our director, Ms. Shannon Krell.

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.

16

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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:

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

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

5.1         
Results of Operations

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 and no revenue has been realized to date.

The following table shows selected information for the three
most recently completed fiscal years taken from our audited financial
statements:

17

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|                                | Year Ended January 31, 2010 | Year Ended January 31, 2009 | Year Ended January 31, 2008
|------------------------------- | --------------------------- | --------------------------- | ---------------------------
|FINANCIAL POSITION              |                             |                             |                            
|Total Assets                    | $ 169,424                   | $ 101,485                   | $ 90,043                   
|Total Liabilities (all current) | $ 1,140,457                 | $ 1,053,596                 | $ 1,346,819                
|Accumulated Deficit             | $ (2,737,861)               | $ (2,618,939)               | $                          
|OPERATIONS                      |                             |                             |                            
|Total Revenues                  | Nil                         | Nil                         | Nil                        
|Total Expenses / Net Loss       | $ (118,922)                 | $ (195,335)                 | $ (156,658)                
|Net Loss per Share              | $ (0.01)                    | $ (0.05)                    | $ ( 0.28)                  

The following results of operations should be read in
conjunction with the audited financial statements for the years ended January
31, 2010 and 2009:

|                                              |   | Year Ended       |   |   | Year Ended       |  
|--------------------------------------------- | - | ---------------- | - | - | ---------------- | -
|                                              |   | January 31, 2010 |   |   | January 31, 2009 |  
|Revenue                                       | $ | Nil              |   | $ | Nil              |  
|                                              |   |                  |   |   |                  |  
|Expenses                                      |   |                  |   |   |                  |  
|Amortization and accretion                    | $ | 14,562           |   | $ | 12,664           |  
|Management fees                               |   | 60,000           |   |   | 52,750           |  
|Office administration and travel              |   | 44,395           |   |   | 48,234           |  
|Professional fees                             |   | 40,338           |   |   | 70,055           |  
|Transfer agent and filing fees                |   | 11,308           |   |   | 11,632           |  
|                                              |   |                  |   |   |                  |  
|Sub-total                                     |   | (170,603         | ) |   | (195,335         | )
|Write-off accounts payable                    |   | 51,681           |   |   | -                |  
|                                              |   |                  |   |   |                  |  
|Net and Comprehensive Loss
      for the Year | $ | (118,922         | ) | $ | (195,335         | )

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

Net and Comprehensive LossThe Company
reported a net loss of $118,922 during the 2010 fiscal year compared to $195,335
during the 2009 fiscal year. This $76,413 decrease in net loss resulted from
lower operating expenses of $24,732 and an accounts payable write-off of $51,681
as follows:

|- | decrease of $3,839 in office administration and travel
      expenses primarily due to reduction in management travel.                                                                                                                      
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|- | decrease of $29,717 in professional fees (legal, audit
      and accounting) due to relatively low activity levels in 2010 and higher
      costs in 2009 from delayed billings of prior year which distorted the
      comparison somewhat.
|- | decrease of $324 in transfer agent and filing fees                                                                                                                                                                                          

18

---

|- | accounts payable write-off from
      2001 totaling $51,681
|- | -----------------------------------------------------------

partially offset by higher operating expenses as follows:

|- | increase of $1,898 in accretion of convertible promissory
      note due to re-calculation of the equity component following extension of
      the maturity date to January 31, 2011.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|- | increase of $7,250 in management fees following
      implementation of a new agreement                                                                                               

Write-off accounts payable

Ellis Foster  Chartered Accountants, our former auditor, commenced a British Columbia Supreme  Court action against us, Dalian Maple Leaf International School, Sherman  Investment Ltd. and Shu Liang Sherman Jen and Lan
Ying Li on October 19, 2001 in the amount of $51,681.

The claim alleged  that Ellis Foster provided accounting and audit services to the defendants in  connection with the preparation of financial statements relating to our  proposed acquisition of Dalian Maple Leaf International School.

We filed a  Statement of Defense in the action denying that we retained Ellis Foster to  provide accounting and audit services in connection with the preparation of  financial statements for Dalian Maple Leaf International School.  We further stated that the other defendants  are responsible for any fees incurred.

Since  Ellis Foster had not taken any steps to proceed with its legal claim against us  since November 23, 2001 and due to the seven year statute of limitations in BC,  we wrote off the entire debt during the year ended January 31, 2010.

5.2Liquidity and Capital Resources

|                                       |   | As At            |   |   | As At            |  
|-------------------------------------- | - | ---------------- | - | - | ---------------- | -
|(i) Working Capital
      (Deficiency) |   | January 31, 2010 |   |   | January 31, 2009 |  
|                                       |   |                  |   |   |                  |  
|Current assets                         | $ | 55,439           |   | $ | 7,392            |  
|Current liabilities                    |   | (1,140,457       | ) |   | (1,053,596       | )
|                                       |   |                  |   |   |                  |  
|Working capital (deficiency)           | $ | (1,085,018       | ) | $ | (1,046,204       | )

During the year ended January 31, 2010, the working capital
deficiency increased by $38,814 mainly due to decreased amounts owing to related
parties partially offset by larger bank balances.

19

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|(ii) Cash Flow                                  |   | Year Ended       |   |   | Year Ended       |  
|----------------------------------------------- | - | ---------------- | - | - | ---------------- | -
|                                                |   | January 31, 2010 |   |   | January 31, 2009 |  
|Net cash used in Operating
      Activities     | $ | (157,773         | ) | $ | (162,573         | )
|Net cash used in Investing Activities           |   | (20,446          | ) |   | (14,906          | )
|Net cash provided by
      Financing Activities |   | 226,946          |   |   | 176,336          |  
|Incr. (Decr.) in Cash during the Year           | $ | 48,767           |   | $ | (1,143           | )
|                                                |   |                  |   |   |                  |  
|Cash, Beginning of Year                         |   | 4,856            |   |   | 5,999            |  
|Cash, End of Year                               | $ | 53,623           |   | $ | 4,856            |  

At January 31, 2010, the Companys cash position was $53,623
compared to $4,856 at January 31, 2009. The $48,767 increase in cash in 2010 and
$1,143 decrease in cash in 2009 resulted from the following activities:

| | (i)   | Net cash used in operating activities of $157,773 in 2010
      and $162,573 in 2009 was primarily due to operating losses in both years
      along with a non-cash write-off of an old accounts payable in
  2010.                                                                                                         
| | ----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                              
| | (ii)  | Net cash used in investing activities of $20,446 in 2010
      and $14,906 in 2009 resulted from on- going expenditures on claim staking
      and soil sampling.                                                                                                                                                            
| |       |                                                                                                                                                                                                                                                                                                                              
| | (iii) | Net cash provided by financing activities of $226,946 in
      2010 and $176,336 in 2009. The 2009 funding came from related parties and
      share subscriptions from an early start to a new private placement. The
      2009 funding came from shares issued for cash net of loan re- payments to
      related parties.

(iii) Anticipated Cash Requirements

Over the next 12 months, the Company has estimated its minimum
cash requirements as follows:

20

---

| | Operating Expenses                         |   |         | 
| | ------------------------------------------ | - | ------- | 
| | Management fees                            | $ | 60,000  | 
| | Professional fees                          |   | 40,000  | 
| | General, administration and other expenses |   | 55,000  | 
| |                                            | $ | 155,000 | 
| | Mineral exploration                        |   | 85,000  | 
| |                                            |   |         | 
| | Total                                      | $ | 240,000 | 

Further exploration on our mineral property interests will be
managed over the next few months by our present consulting geologist, Fladgate
Exploration Consulting, at an estimated cost of $85,000 to expand on the
anomalous zinc and coincident gold anomalies noted from previous soil samples
tested. We also anticipate spending approximately $155,000 for on-going
management, professional fees and administration of our corporate affairs during
the ensuing twelve month period.

With no operating revenues to date, we continue to finance our
operations through the issuance of common shares and borrowings from related
parties. Accordingly on May 13, 2010, the Company announced the closing of a
private placement of 30,000,000 units at a price of $0.05 per unit for proceeds
of $1,500,000. As at January 31, 2010, $100,000 of this amount was recorded as
subscriptions received. 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.

There can be no assurance that additional financing will be
available when needed or, if available, on commercially reasonable terms. If we
are unable to obtain additional financing on a timely basis, either through
issuance of more common shares or obtaining additional advances from related
parties, we may not be able to meet our obligations as they come due and may be
forced to scale down or perhaps even cease business operations.

At January 31, 2010, we had total assets of $169,424 in
accordance with Canadian GAAP as follows: cash $53,623, GST receivable $1,816,
credit card deposit $6,900, mineral property interests $105,791 and computer
equipment $1,294. At the same date, we had total liabilities of $1,140,457
consisting of $70,556 in accounts payable and accrued liabilities and $1,069,901
in amounts due to related parties.

At January 31, 2010, we had accumulated $1,042,000 of
non-capital losses available for carry forward as deduction against future
taxable incomes (if any) which expire from 2015 to 2030.

To a significant extent, our ability to raise capital is also
affected by trends and uncertainties beyond our control. These include the
market prices for base and precious metals and results from our exploration
programs. Our ability to attain our business objectives may be significantly
impaired if prices for metals such as gold, copper and platinum fall or if
results from our intended exploration programs on our Mineral Property Interests
are unsuccessful.

21

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5.3          Off-balance sheet arrangements

The Company has no off-balance sheet arrangements.

22

---

Mineral Property Interests

Acquisition and exploration costs are accounted for in
  accordance with Canadian GAAP as disclosed in Note 2 of the financial
  statements. For US GAAP, acquisition costs are capitalized in accordance with
  EITF 04-2 and reviewed for impairment on a reporting period basis. For US GAAP,
  exploration costs are expensed as incurred. When it has been determined that a
  mineral interest can be economically developed as a result of establishing
  proven and probable reserves, the costs incurred to develop such property are
  capitalized.

Equity component of convertible note

Under Canadian GAAP, companies allocate the proceeds of
  issuance between the convertible debt component and the embedded conversion
  feature based on their fair values. Under US GAAP, the convertible note should
  be treated solely as a liability since the embedded conversion feature has no
  intrinsic value and accordingly does not meet the requirements of an equity
  component.

|a) | Effect on Balance Sheets
|-- | ------------------------

| |                                                   |   |            |   |   |            |  
| | ------------------------------------------------- | - | ---------- | - | - | ---------- | -
| |                                                   |   | 2010       |   |   | 2009       |  
| |                                                   |   |            |   |   |            |  
| | Mineral property interests                        |   |            |   |   |            |  
| | Per Canadian GAAP                                 | $ | 105,791    |   | $ | 85,345     |  
| | Deferred exploration costs
      written off      |   | (101,585   | ) |   | (81,139    | )
| | Per US GAAP                                       | $ | 4,206      |   | $ | 4,206      |  
| |                                                   |   |            |   |   |            |  
| | Liabilities                                       |   |            |   |   |            |  
| | Per Canadian GAAP                                 | $ | 1,140,457  |   |   | 1,053,596  |  
| | Equity portion of
      convertible note reversed |   | 53,357     |   |   | 53,367     |  
| | Accretion of convertible note
      reversed      |   | (38,430    | ) |   | (24,423    | )
| | Per
      US GAAP                                 |   | 1,155,384  |   |   | 1,082,530  |  
| |                                                   |   |            |   |   |            |  
| | Shareholders deficiency                          |   |            |   |   |            |  
| | Per Canadian GAAP                                 | $ | (971,033   | ) | $ | (952,111   | )
| | Deferred exploration
      costs written off      |   | (101,585   | ) |   | (81,139    | )
| | Equity
      portion of convertible note reversed |   | (53,357    | ) |   | (53,357    | )
| | Accretion of convertible note reversed            |   | 38,430     |   |   | 24,423     |  
| | Per US GAAP                                       | $ | (1,087,545 | ) | $ | (1,062,184 | )

23

---

|b) | Effect on Statements of Operations and Deficit
|-- | ----------------------------------------------

| |                                                                |   |          |   |   |          |   |   |          |  
| | -------------------------------------------------------------- | - | -------- | - | - | -------- | - | - | -------- | -
| |                                                                |   | 2010     |   |   | 2009     |   |   | 2008     |  
| |                                                                |   |          |   |   |          |   |   |          |  
| | Net and comprehensive loss for the year                        |   |          |   |   |          |   |   |          |  
| | Per Canadian GAAP                                              | $ | (118,922 | ) | $ | (195,335 | ) | $ | (156,658 | )
| | Deferred
      exploration costs written off                   |   | (20,446  | ) |   | (14,906  | ) |   | -        |  
| | Accretion of convertible note reversed                         |   | 14,007   |   |   | 11,871   |   |   | 2,331    |  
| | Per US GAAP                                                    | $ | (125,361 | ) | $ | (198,370 | ) | $ | (154,327 | )
| |                                                                |   |          |   |   |          |   |   |          |  
| | Net and comprehensive loss per common share, basic and diluted |   |          |   |   |          |   |   |          |  
| | Per Canadian GAAP                                              | $ | (0.01    | ) | $ | (0.05    | ) | $ | (0.28    | )
| | Per US GAAP                                                    | $ | (0.01    | ) | $ | (0.05    | ) | $ | (0.28    | )

|c) | Effect on Statements of Cash Flows
|-- | ----------------------------------

| |                                              |   |          |   |   |          |   |   |          |  
| | -------------------------------------------- | - | -------- | - | - | -------- | - | - | -------- | -
| |                                              |   | 2010     |   |   | 2009     |   |   | 2008     |  
| |                                              |   |          |   |   |          |   |   |          |  
| | Cash flows used in operating activities      |   |          |   |   |          |   |   |          |  
| | Per Canadian GAAP                            | $ | (157,733 | ) | $ | (162,523 | ) | $ | (180,512 | )
| | Deferred
      exploration costs written off |   | (20,446  | ) |   | (14,906  | ) |   | -        |  
| | Accretion of convertible note reversed       |   | 14,007   |   |   | 11,871   |   |   | 2,331    |  
| | Per US GAAP                                  | $ | (164,172 | ) | $ | (165,608 | ) | $ | (178,181 | )
| |                                              |   |          |   |   |          |   |   |          |  
| | Cash flows used in investing activities      |   |          |   |   |          |   |   |          |  
| | Per Canadian GAAP                            | $ | (20,446  | ) | $ | (14,906  | ) | $ | (2,662   | )
| | Deferred exploration costs
      written off |   | 20,446   |   |   | 14,906   |   |   | -        |  
| | Per US GAAP                                  | $ | -        |   | $ | -        |   | $ | (2,662   | )

24

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d) Recently Adopted Accounting Guidance

On February 1, 2009, the Company adopted authoritative guidance
  issued by the Financial Accounting Standards Board (FASB) on business
  combinations. The guidance retains the fundamental requirements that the
  acquisition method of accounting (previously referred to as the purchase method
  of accounting) be used for all business combinations, but requires a number of
  changes, including changes in the way assets and liabilities are recognized and
  measured as a result of business combinations. It also requires the
  capitalization of in-process research and development at fair value and requires
  the expensing of acquisition-related costs as incurred. The Company has
  completed no business combinations so the adoption of the new guidance did not
  affect our financial statements.

On February 1, 2009, the company adopted the authoritative
  guidance issued by the FASB that changes the accounting and reporting for
  non-controlling interests. Non-controlling interests are to be reported as a
  component of equity separate from the parent's equity, and purchases or sales of
  equity interests that do not result in a change in control are to be accounted
  for as equity transactions. In addition, net income attributable to a
  non-controlling interest is to be included in net income and, upon a loss of
  control, the interest sold, as well as any interest retained, is to be recorded
  at fair value with any gain or loss recognized in net income. The adoption of
  the new guidance did not affect the Companys financial statements.

During the year ended January 31, 2010, the FASB issued new
  codification standards which represent the source of authoritative U.S. GAAP
  recognized by the FASB to be applied by non-governmental entities. Rules and
  interpretive releases of the Securities and Exchange Commission (SEC) under
  authority of federal securities laws are also sources of authoritative GAAP for
  SEC registrants. The codification supersedes all non-SEC accounting and
  reporting standards that existed before the codification. All other
  non-grandfathered, non-SEC accounting literature not included in the
  codification is non-authoritative. The new codification standards were effective
  for the Companys third quarter ended October 31, 2009. The adoption of the new
  guidance did not affect the Companys financial statements.

e) Recent Accounting Guidance Not Yet Adopted

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.

25

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ITEM
6.                   Directors,
Senior Officers and Employees

6.1         
Directors and Senior Officers

As at January 31, 2010, our directors and senior officers,
their ages, positions held and duration of such, are as follows:

|Name            | Position Held with the Company                  | Age | Date First Elected or Appointed
|--------------- | ----------------------------------------------- | --- | -------------------------------
|Linda Smith (1) | President, Chief Executive Officer and Director | 61  | October 27, 2000               
|Darcy Krell (1) | Secretary, Chief Financial Officer and Director | 62  | October 10, 2008               
|Shannon Krell   | Director                                        | 33  | October 27, 2000               
|Ryan Krell      | Director                                        | 36  | November 13, 2008              
|Ivan Martinez   | Director                                        | 29  | November 13, 2008              

(1)Member of the Audit Committee

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 are family relationships among our directors and
officers in that Ms. Linda Smith and Mr. Darcy Krell are husband and wife and
Ms. Shannon Krell and Mr. Ryan Krell are their daughter and son.

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

Linda Smith

Ms. Linda Smith has acted as our president and one of our
directors since October 27, 2000 to present. She spends approximately 15% of her
time assisting Mr. Darcy Krell in providing management services to us and
receives no compensation for her services.

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 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 acted as our Secretary, Chief Financial Officer
and one of our directors since October 10, 2008 to present and has been a
private investor in various public and private companies since 1996. He is long on 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 our affairs.

26

---

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.

Shannon Krell

Ms. Shannon Krell has acted as one of our directors since
October 27, 2000 to present and spends approximately 5% of her time on our
affairs. She graduated with a Bachelors Degree in social sciences in May 2008
from the University of Victoria on Vancouver Island, BC.

She is currently working as a professional counselor for both
Vancouver Coastal Health and Aids Vancouver since January 2002 and October 2004
respectively. Ms. Krell has no professional training nor experience in the field
of mineral property exploration and development.

Ryan Krell

Mr. Ryan Krell has acted as one of our directors since November
13, 2008 to present and spends approximately 5% of his time on our affairs. He
graduated with a Business Administration diploma in January 2004 from Douglas
Community College in Vancouver, BC.

He acted as director of Blue Lightning Ventures Inc from August
1999 to November 2004. He is currently working as an Office Coordinator for
Vancouver Coastal Health since February 2004 and before that, part time as IWA
Canada union representative. Mr. Krell has no professional training nor
experience in the field of mineral property exploration and development.

Ivan Martinez

Mr. Martinez has acted as one of our directors since November
13, 2008 to present and spends approximately 5% of his time on our affairs. He
graduated with an Engineering Degree March 2005 from the Instituto Tecnologico
in Queretaro, Mexico.

He is currently working as Office Manager for Vancouver Coastal
Health since March 2009 and prior to that, as an engineer for Data Link
Technologies in Vancouver from February 2004 to November 2008 and for Dana
Mexico in Toluca Mexico from May 1999 to January 2004. Mr. Martinez has no
professional training nor experience in the field of mineral property
exploration and development.

6.2          Compensation
of Directors

We are required, under applicable securities legislation in
Canada, to disclose to our shareholders details of compensation paid to our
directors. The following fairly reflects all material information regarding
compensation paid to our directors for the fiscal years ended January 31, 2010
and 2009:

27

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Summary Compensation Table

|NAME AND PRINCIPAL POSITION                                                                                      | YEAR                                 | ANNUAL COMPENSATION         | LONG-TERM COMPENSATION
|---------------------------------------------------------------------------------------------------------------- | ------------------------------------ | --------------------------- | ----------------------
|Salary                                                                                                           | Bonus                                | Other Annual Compen- sation | Awards                
|Restricted Stock Awards                                                                                          | Securities Underlying Options/ SARs
|Linda Smith 
        as President,
        Chief
        Executive
        Officer and
        Director          | 2010 
        2009                   | Nil 
        Nil            | Nil 
        Nil      
|Darcy Krell, 
        as
        Secretary,
        Chief
        Financial
        Officer and
        Director | 2010 
        2009                   | $60,000 
        $52,750    | Nil 
        Nil      
|Shannon 
        Krell
        as
          
        Director                                                    | 2010 
        2009                   | Nil 
        Nil            | Nil 
        Nil      

We did not pay any compensation for director services per se in
the fiscal years ended January 31, 2010 and 2009. However, certain management
and administrative services are performed by Mr. Darcy Krell, our Secretary and
Chief Financial Officer, for a fee of $5,000 per month for management services
which are included in the above table. The management fees were increased from
$2,500 to $5,000 per month effective May 1, 2008 due to more time and effort
required to run the business.

6.3          Board
Practices

Linda Smith was appointed as our president and one of our
directors on October 27, 2000 and Darcy Krell and Shannon Krell were also
appointed as directors on the same date. The directors hold office until the
next annual general meeting of the shareholders at which time they may stand for
reelection. 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
14, 2009.

Our audit committee is comprised of Linda Smith and Darcy Krell
and we have not appointed a compensation committee.

28

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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
common shares as of the date of this annual report:

|                 |                        | Percentage of Issued and
|---------------- | ---------------------- | ------------------------
|                 | Number of Shares Owned | Outstanding Shares      
|                 |                        |                         
|Linda Smith *    | 500,000                | 1.2%                    
|Darcy Krell *    | 550,000                | 1.4%                    
|Shannon Krell ** | 500,000                | 1.2%                    
|Ryan Krell **    | 1,550,000              | 3.8%                    
|Ivan Martinez    | 2,000,000              | 4.9%                    
|                 | 5,100,000              | 12.5%                   

* Darcy Krell and Linda Smith are
husband and wife.** Shannon Krell and Ryan Krell are daughter and son of
Linda Smith and Darcy Krell.

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
..

In December 2006, we adopted an incentive 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.

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 persons
known to us were the beneficial owner of more than five percent of our
outstanding common shares.

29

---

|                    | Number of Shares | Percentage of Issued and
|------------------- | ---------------- | ------------------------
|Name of Shareholder | Owned            | Outstanding Shares      
|                    |                  |                         
|Ted Hayes           | 2,900,000        | 7.2%                    
|Steve Chen          | 2,700,000        | 6.7%                    
|                    | 5,600,000        | 13.9%                   

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

As at January 31, 2010, there were no balances or transactions
with any director, executive officer or beneficial holder of more than 5% of our
outstanding common stock, or any of their respective relatives, spouses,
associates or affiliates, which materially affected or will materially affect
us, except as follows:

| | a) | As at January 31, 2010, loans payable aggregating
      $1,069,901 (2009 - $928,948) are owing to officers of the Company and an
      immediate family member of an officer of the Company. These amounts are
      unsecured, non-interest bearing and have no specific terms of
      repayment.                                                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | Included in the amounts due to related parties is a
      convertible promissory note from an immediate family member of an officer
      of the Company in the amount of $41,827 (2009 - $77,820). The amount is
      non-interest bearing and is unsecured and the maturity date is January 1,
      2011. The note was convertible into 213,510 common shares of the Company
      prior to maturity at the holders option. During the year ended January
      31, 2010, $50,000 was repaid.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | Subsequent to January 31, 2010, all related party loans
      and advances were repaid from a $1,500,000 private placement.                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | b) | A director of the Company charged the following amounts
      to the Company during the years ended January
31:                                                                                                                                                                                                                                                                                                                                                                                   

|                |   | January 31, |  |   | January 31, |  |   | January 31, | 
|--------------- | - | ----------- |  | - | ----------- |  | - | ----------- | 
|                |   | 2010        |  |   | 2009        |  |   | 2008        | 
|                |   |             |  |   |             |  |   |             | 
|Management fees | $ | 60,000      |  | $ | 52,750      |  | $ | 30,000      | 
|Office rent     |   | 30,000      |  |   | 18,000      |  |   | 18,000      | 

All related party transactions are conducted in the normal
course of business and are recorded at their exchange amount, which is the
consideration agreed to between the parties.

30

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7.3          Interests
of Experts and Counsel

Our experts and legal counsel have no interest in our
shareholdings.

ITEM
8.                  
Financial Information

The audited financial statements for the year ended January 31,
2010 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         
Significant Changes

The following significant events took place subsequent to the
January31, 2010 year end:

a) On May 13, 2010, the Company announced the closing of a
private placement of 30,000,000 units at a price of $0.05 per unit for proceeds
of $1,500,000. As at January 31, 2010, $100,000 of this amount was recorded as
subscriptions received. 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.

b) Effective April 20, 2010, the Company entered into an option
agreement to purchase two claims of the Lampson Lake Property, adjacent to the
Dotted Lake Property. The Company has an option to purchase a 100% interest by
making option payments totalling $60,000 over the next 3 years as follows:
$7,000 upon signing the agreement (paid), $12,000 one year later, $16,000 two
years later and $25,000 three years later. The property is subject to a 3% net
smelter royalty.

ITEM
9.                   The
Offer and Listing

9.1          Offer
and Listing Details

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:OB on February 14, 2007. With the
name change to Rouge Resources Ltd., the trading symbol was changed to ROUGF:OB
effective March 26, 2008.

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
OTC:BB:

31

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|3 months ended                | High       | Low  
|----------------------------- | ---------- | -----
|February 14 to April 30, 2007 | No trading
|July 31, 2007                 | No trading
|October 30, 2007              | $0.50      | $0.20
|January 31, 2008              | $0.70      | $0.10
|April 30, 2008                | $1.00      | $0.12
|July 31, 2008                 | $0.13      | $0.10
|October 31, 2008              | $0.10      | $0.05
|January 31, 2009              | $0.07      | $0.06
|April 30, 2009                | $0.06      | $0.01
|July 31, 2009                 | No trading
|October 31, 2009              | No trading
|January 31, 2010              | No trading
|April 30, 2010                | No trading
|May 1 to May 31, 2010         | $0.10      | $0.06

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. 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) requires 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 43-101 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  | Low  
|------------------------------------------ | ----- | -----
|February 1, 1999 to January
      31, 2000 | $1.50 | $0.30
|February 1, 2000 to January 31, 2001       | $2.50 | $0.60
|February 1, 2001 to July 12,
      2001    | $1.00 | $0.60

32

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ITEM
10.          Additional
Information

10.1         
Share Capital

(i)Common Shares

Authorized

Unlimited common shares without par value

Issued and Outstanding

|                                          |  | January
      31, 2010 |  |   | January 31, 2009 | 
|----------------------------------------- |  | ---------------------- |  | - | ---------------- | 
|                                          |  | Number of              |  |   | Amount           | 
|                                          |  | shares                 |  |   |                  | 
|                                          |  |                        |  |   |                  | 
|Balance, beginning                        |  | 10,565,171             |  | $ | 1,613,471        | 
|Private placement
      @ $0.05 per share |  | -                      |  |   | -                | 
|                                          |  |                        |  |   |                  | 
|Balance, ending                           |  | 10,565,171             |  | $ | 1,613,471        | 

During the year ended January 31, 2008, the Company affected a
one for ten (1:10) share consolidation of its authorized, issued and outstanding
share capital resulting in all share and per share information in the financial
statements continued herein being presented on a retroactive basis as if the
share consolidation took place at the beginning of all years presented.
Accordingly, the issued and outstanding share capital was reduced from 5,651,714
to 565,171 common shares. After the share consolidation, the Company increased
its authorized share capital from 10,000,000 common shares to an unlimited
number without par value.

During the year ended January 31, 2009, the Company completed a
non-brokered private placement of 10 million units at $0.05 for total proceeds
of $500,000. Each unit consists of one common share and one non-transferable
share purchase warrant, each warrant entitling the holder to acquire one
additional common share of the Company at a price of $0.10 per share for two
years. No value was attributed to the warrants

During the year ended January 31, 2010, no shares were issued
by the Company.

Subsequent to the year ended January 31, 2010, the Company
announced the closing of a private placement of 30,000,000 units at a price of
$0.05 per unit for proceeds of $1,500,000. As at January 31, 2010, $100,000 of
this amount was recorded as subscriptions received. 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.

We do not hold any of our own shares and have no potential
obligations to increase our issued and outstanding share capital beyond the
above.

33

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(ii) Share Purchase Warrants

|Balance     |        | Balance     |          |              
|----------- | ------ | ----------- | -------- | -------------
|January 31, |        | January 31, | Exercise |              
|2009        | Issued | 2010        | Price    | Expiry       
|            |        |             |          |              
|10,000,000  | -      | 10,000,000  | $ 0.10   | June 30, 2010

As at January 31, 2010, the weighted average remaining life of
the share purchase warrants is 5 months and the weighted average exercise price
is $0.10.

(iii) Stock Option Plan

The Companys Stock Option Plan (the Plan) was adopted in
December 2006 and is administered under the following basic terms and
conditions:

|(a) | the maximum available for grant is up to 10% of the
      Companys issued shares outstanding at any one time;                                                                                                                                                                                                                                                                                                                                                                       
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(b) | Company employees, directors, officers and consultants
      are eligible to receive a grant of stock options provided that bona fide
      services have been rendered and that such services are not in connection
      with the offer or sale of securities in a capital-raising transaction.
      There is a 10% limitation of options granted in any one year to one
      specific employee, director or officer and a 2% annual limitation to one
      specific consultant;
|(c) | the grant price shall not be less than the market value
      of the shares at the time of grant less any discount permitted by the
      relevant regulatory authorities;                                                                                                                                                                                                                                                                                                           
|(d) | the exercise price shall be determined by a plan
      committee at the time of grant; and                                                                                                                                                                                                                                                                                                                                                                                           
|(e) | the option period shall not exceed five years from the
      date of grant.                                                                                                                                                                                                                                                                                                                                                                                                          

No stock options have been granted and accordingly no stock
options are outstanding at January 31, 2010 and 2009.

(iv)Contributed Surplus

|                                         |  | $      | 
|---------------------------------------- |  | ------ | 
|Balance, January 31, 2007                |  | 11,576 | 
|Equity component of convertible debt     |  | 41,781 | 
|                                         |  |        | 
|Balance, January 31, 2010, 2009 and 2008 |  | 53,357 | 

34

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10.2         
Memorandum and Articles of Association

We were incorporated pursuant to the Company Act of
British Columbia by registration of our articles of incorporation and memorandum
on March 31, 1988 and were subsequently transitioned to the replacement
Business Corporations Act in 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.

35

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10.3          Material
Contracts

We have only two material contracts currently outstanding as
follows: (i) the amended management agreement with Mr. Darcy Krell whereby
management fees increased from $2,500 to $5,000 per month effective May 1, 2008
due to more time and effort required to run the business; and (ii) the option
agreement dated April 20, 2010 to purchase two claims of the Lampson Lake
Property, adjacent to the Dotted Lake Property. We have an option to purchase a
100% interest by making option payments totalling $60,000 over the next 3 years
as follows: $7,000 upon signing the agreement (paid), $12,000 one year later,
$16,000 two years later and $25,000 three years later. The property is subject
to a 3% net smelter royalty.

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.

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.

36

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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").

37

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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").

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.

38

---

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.

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.

39

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(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.

(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.

40

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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
securities law.

(ii) our consulting geologists, Ms Caitlin Jeffs,48
Peter Street, Thunder Bay ON, Canada P7A 4H3, part owner of Fladgate Exploration
Consulting Corp., and Mr. Andre M Pouwels, P. Geo., 4900 Mariposa Court,
Richmond BC, Canada V7C 2J9, as experts in exploration geology of precious and
base metal mineral programs.

(iii) 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 and auditing matters and
Canadian income tax matters; and

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) 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.

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, foreign exchange, interest rates and liquidity.

We are engaged primarily 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. There is no certainty that
all environmental risks and contingencies have been addressed.

41

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We are also exposed in varying degrees to a variety of
financial instrument related risks as follows:

|(i)   | Credit 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. Our primary exposure to credit risk is in our
      cash accounts. This risk is managed through the use of a major financial
      institution which has high credit quality as determined by the rating
      agencies.                               
|----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                                                                                                                                                                                                                                                               
|(ii)  | Foreign exchange risk is the risk that we will be subject
      to foreign currency fluctuations in satisfying obligations related to its
      foreign activities. We operate primarily in Canada and therefore are not
      exposed to foreign exchange risk arising from transactions denominated in
      a foreign currency.                                                                                            
|      |                                                                                                                                                                                                                                                                                                                                                                                                                               
|(iii) | Interest rate risk is the risk that the fair value of
      future cash flow of a financial instrument will fluctuate because of
      changes in market interest rate. Our exposure to interest rate risk
      relates to our ability to earn interest income on cash balances at
      variable rates. The fair value of our cash account is relatively small and
      unaffected by changes in short term interest rates.
|      |                                                                                                                                                                                                                                                                                                                                                                                                                               
|(iv)  | Liquidity risk arises through the excess of financial
      obligations over available financial assets due at any point in time. Our
      objective in managing liquidity risk is to maintain sufficient readily
      available capital in order to meet our liquidity requirements.                                                                                                                                       

ITEM
12.          Descriptions of
Securities Other than Equity Securities

12.1          Warrants

Refer to Item 10.2 (ii) above.

12.2          Stock
Options

Refer to Item 10.2 (iii) above.

PART II

ITEM
13.          Defaults,
Dividend Arrearages and Delinquencies

None

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

None

42

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ITEM
15.          Controls and
Procedures

Disclosure Controls and Procedures

Under the supervision and with the participation of our
  management, including our principal executive officer and the 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, 2010.

Managements Annual Report on Internal Control over
  Financial Reporting

As of January 31, 2010, 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 GAAP in the United States of America and includes
  those policies and procedures that:

- Pertain to the maintenance of
  records that in reasonable detail accurately and fairly reflect our transactions
  and dispositions of our assets;
- Provide reasonable assurance
  our transactions are recorded as necessary to permit preparation of our
  financial statements in accordance with GAAP, and that receipts and expenditures
  are being made only in accordance with authorizations of our management and
  directors; and
- 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.

43

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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 Darcy Krell, Chief
  Financial Officer, management concluded that, during the period covered by this
  report, such internal controls and procedures were not effective to detect the
  inappropriate application of US GAAP rules as more fully described below.

This was due to deficiencies that existed in the design or
  operation of our internal controls over financial reporting that adversely
  affected our internal controls and that may be considered to be material
  weaknesses.

The matters involving internal controls and procedures that our
  management considered to be material weaknesses under the standards of the
  Public Company Accounting Oversight Board were: (i) lack of a functioning audit
  committee due to a lack of a majority of independent members and a lack of a
  majority of outside directors on our board of directors, resulting in
  ineffective oversight in the establishment and monitoring of required internal
  controls and procedures; (ii) inadequate segregation of duties consistent with
  control objectives; and (iii) ineffective controls over period end financial
  disclosure and reporting processes. The aforementioned material weaknesses were
  identified by our President and Chief Executive Officer, and
  our Chief Financial Officer, in connection with the review of our financial
  statements as of January 31, 2010.

Management believes that the lack of a functioning audit
  committee and the lack of a majority of outside directors on our board of
  directors results in ineffective oversight in the establishment and monitoring
  of required internal controls and procedures, which could result in a material
  misstatement in our financial statements in future periods.

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
  December  31, 2010 that have materially affected, or that are reasonably likely to
  materially affect, the Companys internal control over financial reporting.

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 December 31, 2010. In this annual report on Form 20-F, the Companys
  independent registered auditor, Dale Matheson Carr-Hilton Labonte LLP, Chartered
  Accountants, has not stated its opinion as to the effectiveness of the Companys
  internal control over financial reporting for the fiscal year ended January 31,
  2010, and has not issued an attestation report on the Companys internal control
  over financial reporting.

44

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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.

ITEM 16A.       Audit
Committee Financial Expert

Audit Committee

Linda Smith and Darcy Krell act as our audit committee;
undertake reviews of our companys financial statements; and determine the
adequacy of internal controls and other financial reporting matters. The members
of our board of directors are Linda Smith, Darcy Krell and Shannon Krell and
they have determined that no member of either the board or the audit committee
is independent as the term is used in Rule 10A-3 of the Securities Exchange
Act of 1934, as amended, and the definition of independent director as defined
in section 4200 of the Marketplace Rules of the NASD.

Audit Committee Financial Expert

Our board of directors has determined that it does not have a
member that qualifies as an audit committee financial expert as defined in
Item 401(e) of Regulation S-B. We believe that our board of directors is capable
of analyzing and evaluating our financial statements and understanding internal
controls and procedures for financial reporting. In addition, we believe that
retaining an independent director who would qualify as an audit committee
financial expert would be overly costly and burdensome and is not warranted in
our circumstances given the early stages of our development and the fact that we
have not generated any revenues to date.

ITEM 16B.       Code of
Ethics

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. As adopted, our Code of Business Conduct
and Ethics sets forth written standards that are designed to deter wrongdoing
and to promote:

(1) honest
and ethical conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional relationships;

(2) full,
fair, accurate, timely, and understandable disclosure in reports and documents
that we file with, or submit to, the Securities and Exchange Commission and in
other public communications made by us;

(3)
compliance with applicable governmental laws, rules and regulations;

(4)
the prompt internal reporting of violations of the Code of Business Conduct and
Ethics to an appropriate person or persons identified in the Code of Business
Conduct and Ethics; and

(5) accountability
for adherence to the Code of Business Conduct and Ethics.

45

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Our Code of Business Conduct and Ethics requires, among other
things, that all of our companys personnel shall be accorded full access to our
president with respect to any matter which may arise relating to the Code of
Business Conduct and Ethics. Further, all of our companys personnel are to be
accorded full access to our companys board of directors if any such matter
involves an alleged breach of the Code of Business Conduct and Ethics by our
company officers.

In addition, our Code of Business Conduct and Ethics emphasizes
that all employees, and particularly managers and/or supervisors, have a
responsibility for maintaining financial integrity within our company,
consistent with generally accepted accounting principles, and federal,
provincial and state securities laws. Any employee who becomes aware of any
incidents involving financial or accounting manipulation or other
irregularities, whether by witnessing the incident or being told of it, must
report it to his or her immediate supervisor or to our companys President. If
the incident involves an alleged breach of the Code of Business Conduct and
Ethics by the President, the incident must be reported to any member of our
board of directors. Any failure to report such inappropriate or irregular
conduct of others is to be treated as a severe disciplinary matter. It is
against our company policy to retaliate against any individual who reports in
good faith the violation or potential violation of our Code of Business Conduct
and Ethics by another.

ITEM 16C.       Principal
Accountant Fees and Services

During the years ended January 31, 2010 and 2009, we incurred
$14,000 per year in fees to its 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, 2010 and 2009, 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

ITEM 16F.       Change in
Registrants Certifying Accountant

Not Applicable

ITEM 16G.       Corporate
Governance

Not applicable.

46

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PART III

ITEM
17. Financial
Statements

Our financial statements for the year ended January 31, 2010
and 2009 were audited by Dale Matheson Carr-Hilton Labonte, Chartered
Accountants, and for the year ended January 31, 2008 were audited by Morgan
& Company, Chartered Accountants, all without reservation, as follows:

| | Audit report dated May 18, 2010                                                  
| | ---------------------------------------------------------------------------------
| | Balance sheets as at January 31,
      2010 and 2009                             
| | Statements for the years ended
      January 31, 2010, 2009 and 2008             
| |                                                                                  
| |                                                                                  
| | Notes to financial statements for
      the years ended January 31, 2010 and 2009

All our financial statements are prepared in accordance with
Canadian GAAP and are reconciled to US GAAP in Note 11 of the audited financial
statements. All figures are expressed in Canadian dollars.

ITEM
18.          Exhibits

The unmarked exhibits below are attached to this report.

| | Exhibit 1:  | Audited
      financial Statements (May 18, 2010)                     
| | ----------- | ----------------------------------------------------------------------
| | Exhibit 2:  | Certificate of Incorporation*                                         
| | 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 6, 2008)**                   

47

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| | Exhibit 4:    | Management agreement
        dated November 1, 2000 between Gemstar Resources Ltd. and Darcy Krell
        doing business as DK Financial Consultants.*                                     
| | ------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Exhibit 4B:   | Amended management agreement
        dated May 1, 2008 between Rouge Resources Ltd. and Darcy Krell doing business
        as DK Financial Consultants. **                                  
| | Exhibit 5.1:  | Consent of Geologist*                                                                                                                                                                       
| | Exhibit 5.2:  | Consent of Morgan and Company, dated February 1, 2011 ****                                                                                                                                  
| | Exhibit 6:    | Mineral
        Property Option Agreement dated April 20, 2010 between 3 optioners (Brian
        Fowler, Patrick Dick and Harold Griggs) and Darcy Krell (in trust for
    the Company) ***
| | 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
*** Previously filed with Form 20-F on June 18, 2010
**** Previously filed with Amendment No.1 to Form 20-F on February 15, 2011

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: March  15, 2011 |                     
|                       | By:                 
|                       |                     
|                       |                     

48

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