UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 20-F

(Mark One)

[  
]

Registration statement pursuant to section 12(b) or 12(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 December 31, 2006

or

[  
]

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 __________________

Commission file number 0-17791

Atlanta Gold Inc. (formerly Twin Mining Corporation)

(Exact name of registrant as specified in its charter)



Incorporated in the Province of British Columbia on March 6, 1985
and continued into the Province of Ontario effective March 15, 2000

(Jurisdiction of incorporation or organization)



Suite 1250, 155 University Avenue, Toronto, Ontario, Canada M5H 3B7

(Address of principal executive offices)



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

|              |  |                      
|------------- |  | ---------------------
|Title of each |  | Name of each exchange
|Class         |  | 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:



(Title of Class)

























---

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.  As of December 31, 2006: 223,360,501 common shares. Effective March 22, 2007, the Corporation amended the Articles of the Corporation to consolidate the common shares of the Corporation on the basis of one consolidated common share for each fifteen pre-consolidation common shares and to change the name of the Corporation from Twin Mining Corporation to Atlanta Gold Inc.



Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes 
[   ]

No 
[X]



If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes 
[   ]

No 
[X]



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes 
[X ]

No 
[   ]

Indicate by check mark whether the registrant 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 financial statement item the Corporation 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 
[   ]

No 
[X]



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In the Annual Report furnished in this Form 20-F, unless otherwise specified, all monetary amounts are expressed in Canadian dollars. The noon rate of exchange reported by the Bank of Canada for the conversion of United States dollars into Canadian dollars on March 28, 2007 was US$1.00 = Cdn$1.1587.   A table disclosing the high, low, year-end, and average exchange rates for the previous five fiscal years is located in ITEM 3  Selected Financial Data.

THIS REPORT AND THE MATERIAL INCORPORATED BY REFERENCE HEREIN CONTAIN CERTAIN FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.

All statements, other than statements of historical fact, are forward-looking statements.  The wordsbelieve, expect, anticipate, contemplate, target, plan, intends, estimate, may, will, could and similar expressions identify forward-looking statements.  These forward-looking statements include estimates, forecasts, and statements which are based on assumptions, estimates, analyses and opinions of management made in light of its expectations and its perceptions of trends, current conditions and expected developments, and are made with respect to, among other things, the size and quality of our mineral reserves and mineral resources, progress in the development of our mineral properties, capital and production costs, costs related to environmental protection, the ability to finance our projects and our financial results.  Forward-looking statements are necessarily based upon a number of estimates and assumptions that are inherently subject to significant business, economic and competitive risks, uncertainties and contingencies which could cause actual results to differ materially from those projected in the forward-looking statements.

Factors that may cause actual results to vary include, but are not limited to, the speculative nature of mineral exploration, development and mining, including inaccurate geological and metallurgical assumptions (including with respect to size, grade and recoverability of mineral reserves and resources), operating and technical difficulties, risks and hazards associated with the business of mineral exploration, development and mining, including environmental hazards, unusual or unexpected formations, industrial accidents, pressures and cave-ins (and the risk of inadequate insurance or inability to obtain insurance to cover these risks), government action or delays in the receipt of governmental approvals, permits and licenses, changes in resource prices and fluctuations in currency exchange rates, the  Corporations limited financial resources and availability of financing alternatives, acquisitions or divestitures of assets and the successful selection and completion of business opportunities made available to us, contests to the title of our property and changes in general economic conditions or conditions in the financial markets.

Statements relating to estimates of reserves and resources are also forward-looking statements as they involve risks and assumptions (including but not limited to assumptions with respect to future commodity prices and production economics) that the reserves and resources described exist in the quantities and grades estimated and are capable of economic extraction.

Readers are cautioned that forward-looking statements are not guarantees of future performance.  All of the forward-looking statements made in this Report or incorporated by reference herein are qualified by these cautionary statements.  Reference should be had under Item 3  Risk Factors for a discussion for some of the factors underlying forward-looking statements.

The Corporation does not assume any obligation to revise or update these forward-looking statements whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.



3.



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Part I

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3.

KEY INFORMATION

Selected Financial Data

Set forth in the tablesbelow are selected financial data with respect to the Corporation's financial condition and results of operations for the five most recent financial years ending on December 31. In Table 1, the selected financial data were derived from our consolidated financial statements which are prepared in accordance with generally accepted accounting principles (GAAP) in Canada, which, for the purposes of these data, conform in all material respects to accounting principles generally accepted in the United States, except as indicated by reference to the U.S. GAAP Reconciliation information, indexed herein as ITEM 17(the Corporation has responded to ITEM 8in lieu of responding to this item) and by reference to "Management's Discussion and Analysis in the annual report furnished pursuant to ITEM 17 hereof (and ITEM 19 (b)). Effective March 22, 2007, the Corporation amended the Articles of the Corporation to consolidate the common shares of the Corporation on the basis of one consolidated common share for each fifteen pre-consolidation common shares.

|                                                                |                                                                                 |          |          |          |          |  | 
|--------------------------------------------------------------- | ------------------------------------------------------------------------------- | -------- | -------- | -------- | -------- |  | 
|                                                                | Table 1  Canadian GAAP
(Canadian Dollars, In Thousands, except per share data)
|FINANCIAL POSITION AS AT                                        |                                                                                
|DECEMBER 31                                                     | 2006                                                                            | 2005     | 2004     | 2003     | 2002    
|                                                                | $                                                                               | $        | $        | $        | $       
|Cash (bank indebtedness)                                        | 1,685                                                                           | 2,953    | 1,896    | 720      | 1,651   
|Other current assets                                            | 484                                                                             | 332      | 595      | 536      | 227     
|Fixed assets                                                    | 94                                                                              | 128      | 51       | 60       | 43      
|Mineral properties                                              | 36,147                                                                          | 38,373   | 34,592   | 30,466   | 25,688  
|Total assets                                                    | 38,410                                                                          | 41,786   | 37,134   | 31,782   | 27,609  
|                                                                |                                                                                 |          |          |          |         
|Current liabilities                                             | 2,049                                                                           | 3,545    | 2,463    | 3,118    | 769     
|Future income taxes                                             | 5,450                                                                           | 6,429    | 6,427    | 2,117    | -       
|Share capital                                                   | 67,742                                                                          | 63,027   | 57,230   | 47,743   | 47,931  
|Deficit                                                         | (36,831)                                                                        | (31,215) | (28,986) | (21,196) | (21,091)
|                                                                | 38,410                                                                          | 41,786   | 37,134   | 31,782   | 27,609  
|STATEMENT OF LOSS FOR THE YEARS ENDED DECEMBER 31               |                                                                                 |          |          |          |         
|Interest income                                                 | (37)                                                                            | (5)      | (2)      | (23)     | (24)    
|General and administrative expenses                             | 1,693                                                                           | 993      | 1,200    | 1,037    | 882     
|(Gain)/loss from foreign exchange                               | (4)                                                                             | (22)     | (79)     | (18)     | (2)     
|Future income tax (recovery)                                    | (932)                                                                           | (237)    | 4,574    | (922)    | -       
|Mineral property costs written off                              | 4,896                                                                           | 1,500    | 1,451    | 31       | -       
|Loss, per Canadian GAAP                                         | 5,616                                                                           | 2,229    | 7,144    | 105      | 856     
|Weighted average number of common shares outstanding (in 000s) | 194,174                                                                         | 137,761  | 100,425  | 83,665   | 74,639  
|Loss per share, per Canadian GAAP                               | $0.029                                                                          | $0.016   | $0.071   | $0.001   | $0.011  
|                                                                |                                                                                 |          |          |          |          |  | 



4.





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|                                                         |         |         |         |        |        |  | 
|-------------------------------------------------------- | ------- | ------- | ------- | ------ | ------ |  | 
|Number of common shares issued and subscribed (in 000s) | 223,361 | 180,984 | 132,364 | 89,921 | 80,079



In Table 2, the selected financial data is derived from note 11 to the consolidated financial statements, which provides a reconciliation to U.S. GAAP. The Corporation is in the exploration stage since it has not commenced commercial operations, and consequently the data disclosed herein may not be indicative of future financial position or results of operations. The statement of losses data in fiscal years 2002 to 2004, inclusive, have been restated (refer to note 11 to the consolidated financial statements).

|                                                  |                                                                             |         |            |            |            |  | 
|------------------------------------------------- | --------------------------------------------------------------------------- | ------- | ---------- | ---------- | ---------- |  | 
|                                                  | Table 2  U.S. GAAP
(Canadian Dollars, In Thousands, except per share data)
|FINANCIAL POSITION AS AT                          |                                                                            
|DECEMBER 31                                       | 2006                                                                        | 2005    | 2004       | 2003       | 2002      
|                                                  |                                                                             |         | (restated) | (restated) | (restated)
|                                                  | $                                                                           | $       | $          | $          | $         
|Cash (bank indebtedness)                          | 1,510                                                                       | 2,446   | 1,472      | (452)      | (1,330)   
|Restricted cash                                   | 175                                                                         | 507     | 424        | 1,172      | 2,981     
|Other current assets                              | 484                                                                         | 332     | 595        | 536        | 227       
|Fixed assets                                      | 94                                                                          | 128     | 51         | 60         | 42        
|Mineral properties                                | 8,680                                                                       | 6,767   | 4,503      | 3,940      | 3,800     
|Total assets                                      | 10,943                                                                      | 10,180  | 7,045      | 5,256      | 5,720     
|                                                  |                                                                             |         |            |            |           
|Current liabilities                               | 2,049                                                                       | 3,545   | 2,462      | 3,118      | 769       
|Shareholders equity                              | 8,894                                                                       | 6,635   | 4,583      | 2,138      | 4,951     
|                                                  | 10,943                                                                      | 10,180  | 7,045      | 5,256      | 5,720     
|STATEMENT OF LOSS FOR THE YEARS ENDED DECEMBER 31 |                                                                             |         |            |            |           
|Loss, per Canadian. GAAP                          | 5,616                                                                       | 2,229   | 7,144      | 105        | 856       
|Development and exploration costs                 | 721                                                                         | 2,260   | 5,012      | 4,669      | 2,656     
|Reversal of mineral property costs written off    | (4,896)                                                                     | (1,500) | (1,451)    | (31)       | -         
|Income tax (provision) recovery                   | 932                                                                         | 157     | (4,574)    | 922        | -         
|Loss, per U.S. GAAP                               | 2,373                                                                       | 3,146   | 6,131      | 5,665      | 3,512     
|Loss per share, per U.S. GAAP                     | $0.012                                                                      | $0.023  | $0.061     | $0.068     | $0.047    



The following table discloses certain high, low and average exchange rates for converting Canadian dollars into U.S. dollars for the five years ended December 31 and six most recent months in the last financial year:

|                               |                   |         |       |      
|------------------------------ | ----------------- | ------- | ----- | -----
|Period                         | End of
    Period | Average | High  | Low  
|Year ended December 31, 2002   | 0.639             | 0.640   | 0.659 | 0.620
|Year ended December 31, 2003   | 0.756             | 0.759   | 0.771 | 0.639
|Year ended December 31, 2004   | 0.828             | 0.769   | 0.849 | 0.744
|Year ended December 31, 2005   | 0.860             | 0.826   | 0.868 | 0.790
|Month ended July 31, 2006      | 0.883             | 0.886   | 0.897 | 0.878
|Month ended August 31, 2006    | 0.905             | 0.895   | 0.905 | 0.889
|Month ended September 30, 2006 | 0.895             | 0.896   | 0.905 | 0.893
|Month ended October 31, 2006   | 0.894             | 0.886   | 0.894 | 0.878
|Month ended November 30, 2006  | 0.873             | 0.876   | 0.885 | 0.872
|Year ended December 31, 2006   | 0.858             | 0.881   | 0.908 | 0.856



5.



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Risk Factors

Nature of Mineral Exploration and Mining

At the present time, the Corporation does not hold any interest in a mining property in production. The Corporation's viability and potential success lie in its ability to develop, exploit, and generate revenue out of mineral deposits.  The exploration and development of mineral deposits involve significant financial risks over a significant period of time, which, even a combination of careful evaluation, experience, and knowledge may not eliminate.  While discovery of a mine may result in substantial rewards, few properties which are explored are ultimately developed into producing mines.  Major expenses may be required to establish reserves by drilling and to construct mining and processing facilities at a site.  It is impossible to ensure that the current or proposed exploration programs on exploration properties in which the Corporation has an interest will result in a profitable commercial mining operation.

The operations of the Corporation are subject to all of the hazards and risks normally incident to exploration and development of mineral properties, any of which could result in damage to life or property, environmental damage and possible legal liability for any or all damage.  The activities of the Corporation may be subject to prolonged disruptions due to weather conditions depending on the location of operations in which the Corporation has interests.  Hazards, such as unusual or unexpected formation, rock bursts, pressures, cave-ins, flooding or other conditions may be encountered in the drilling and removal of material.  While the Corporation may obtain insurance against certain risks in such amounts as it considers adequate, the nature of these risks are such that liabilities could exceed policy limits or could be excluded from coverage.  There are also risks against which the Corporation cannot insure or against which it may elect not to insure.  The potential costs which could be associated with any liabilities not covered by insurance or in excess of insurance coverage or compliance with applicable laws and regulations may cause substantial delays and require significant capital outlays, adversely affecting the future earnings and competitive position of the Corporation and, potentially, its financial position.

Whether a mineral deposit will be commercially viable depends on a number of factors, some of which are the particular attributes of the deposit, such as its size and grade, proximity to infrastructure, financing costs and governmental regulations, including regulations relating to prices, taxes, royalties, infrastructure, land use, importing and exporting and environmental protection. The effect of these factors cannot be accurately predicted, but the combination of these factors may result in the Corporation not receiving an adequate return on invested capital.

Fluctuating Prices

Factors beyond the control of the Corporation may affect the marketability of any diamonds, gold or any other minerals discovered.  Resource prices have fluctuated widely and are affected by numerous factors beyond the Corporation's control.  The effect of these factors cannot accurately be predicted. The following table sets forth in U.S. dollars the high, average and low sales price of gold for the last five years:

Year

High

Low

Average

Close



2002

349

278

310

347

2003

416

320

363

416

2004

454

375

418

437

2005

537

411

445

513

2006

726

521

601

636



Source:  www.kitco.com

(Historical London Fix)



6.



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Permits and Licenses

The operations of the Corporation require licenses and permits from various governmental authorities.  The Corporation believes that it presently holds all necessary licenses and permits required to carry on with activities which it is currently conducting under applicable laws and regulations and the Corporation believes it is presently complying in all material respects with the terms of such licenses and permits.  However, such licenses and permits are subject to changes in regulations and in various operating circumstances.  Also, additional permits and licenses will be required as the development of a property progresses.  There can be no assurance that the Corporation will be able to obtain all necessary licenses and permits required to carry out exploration, development, and mining operations at its projects, including those licences and permits necessary to commence mine construction at its Atlanta Gold property.

Competition

The mineral exploration and mining business is competitive in all of its phases.  The Corporation competes with numerous other companies and individuals, including competitors with greater financial, technical and other resources than the Corporation, in the search for and the acquisition of attractive mineral properties.  The ability of the Corporation to acquire properties in the future will depend not only on its ability to develop its present properties, but also on its ability to select and acquire suitable properties or prospects for mineral exploration.  There is no assurance that the Corporation will continue to be able to compete successfully with its competitors in acquiring such properties or prospects.

Financing Risks

The Corporation has limited financial resources and there is no assurance that additional funding will be available to it for further exploration and development of its projects or to fulfill its obligations under applicable agreements.  The Corporation may attempt to generate additional working capital through the operation, development, sale or possible joint venture development of its properties. Although the Corporation has been successful in the past in obtaining financing through the sale of equity securities, there can be no assurance that the Corporation will be able to obtain adequate financing in the future or that the terms of such financing will be favourable.  The success and the pricing of any such financing will be dependent upon, among other things,  the prevailing market conditions at that time. With regard to the Atlanta Gold property, significant debt and / or equity financing will be required to construct the mine and related facilities and to acquire the necessary equipment. Any debt financing, if available, may involve financial covenants that limit the Corporation`s operations. There can be no assurance that sufficient financings will be obtained on a timely basis and on terms favourable to the Corporation. Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and development of the property interests of the Corporation with the possible dilution or loss of such interests.



No Assurance of Titles

The acquisition of title to mineral projects is a very detailed and time-consuming process. Although the Corporation has taken precautions to ensure that legal title to its property interests is properly recorded in the name of the Corporation, there can be no assurance that such title will ultimately be secured.  Furthermore, there is no assurance that the interests of the Corporation in any of its properties may not be challenged or impugned.

Environmental Regulations

The operations of the Corporation are subject to environmental regulations promulgated by government agencies from time to time. Environmental legislation provides for restrictions and prohibitions on spills, releases 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



7.



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the submission and approval of environmental impact assessments.  Environmental legislation is implementing stricter standards, and enforcement, fines and penalties for non-compliance.  Environmental assessments impose a higher standard of responsibility on companies and their directors, officers and employees.  The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of operations.

Currency Fluctuation

The Corporation's currency fluctuation exposure is primarily to the US dollar as it relates to the Canadian dollar as the Atlanta Gold Property is in the United States of America and substantially all material commitments on the Atlanta Gold Property are in US dollars.  Such fluctuations may materially affect the Corporation's financial position and results of the Corporation.

Conflicts of Interest

The directors and officers of the Corporation may serve as directors or officers of other public resource companies or have significant shareholdings in other public resource companies.  Situations may arise in connection with potential acquisitions and investments where the other interests of these directors and officers may conflict with the interests of the Corporation.  In the event that such a conflict of interest arises at a meeting of the directors of the Corporation, a director is required under the Business Corporations Act (Ontario) to disclose the conflict of interest and to abstain from voting on the matter.

From time to time several companies may participate in the acquisition, exploration and development of natural resource properties thereby allowing for their participation in larger programs, permitting involvement in a greater number of programs and reducing financial exposure in respect of any one program.  It may also occur that a particular company will assign all or a portion of its interest in a particular program to another of these companies due to the financial position of the company making the assignment.  In determining whether or not the Corporation will participate in a particular program and the interest therein to be acquired by it, the directors will primarily consider the degree of risk to which the Corporation may be exposed and its financial position at that time.

Estimates of Reserves, Mineral Deposits and Production Costs

Although the reserve and mineral deposit figures included or incorporated by reference herein have been carefully prepared by the Corporation, or, in some instances have been prepared, reviewed or verified by independent mining experts, these amounts are estimates only and no assurance can be given that any particular level of recovery of gold or other mineral from reserves will in fact be realized or that an identified mineral deposit will ever qualify as a commercially mineable (or viable) ore body which can be economically exploited.  Estimates of reserves, mineral deposits and production costs can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions.  In addition, the grade of ore ultimately mined may differ from that indicated by drilling results.  Short term factors relating to reserves, such as the need for orderly development of ore bodies or the processing of new or different grades, may also have an adverse effect on mining operations and on the results of operations.  Material changes in reserves, grades, stripping ratios or recovery rates may affect the economic viability of projects.  Reserves are reported as general indicators of mine life.  Reserves should not be interpreted as assurances of mine life or of the profitability of current or future operations.  There is a degree of uncertainty attributable to the calculation of reserves and corresponding grades being mined or dedicated to future production.  Until ore is actually mined and processed, reserves and grades must be considered as estimates only.  In addition, the quantity of reserves may vary depending on mineral prices.  Any material change in reserves, or grades or stripping ratios will affect the economic viability of the projects.  In addition, there can be no assurance that gold recoveries or other mineral recoveries in pilot plant tests will be duplicated during production.



8.



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Cautionary Note to U.S. Investors concerning Estimates of Measured and Indicated Resources

This document uses the terms measured resources and indicated resources.  The Corporation advises investors that while those terms are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize them.  Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.

Cautionary Note to U.S. Investors concerning Estimates of Inferred Resources

This document uses the term inferred resources.  The Corporation advises investors that while this term is recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize it. Inferred resources have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility.  It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or prefeasibility-studies, except in rare cases.  Investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally mineable.

U.S. Mining Law

Proposed legislation has been introduced in the United States Congress which would supplant or radically alter the provisions of the Mining Law of 1872 which currently applies to unpatented mining claims held in the United States of America.  The Atlanta Gold Property includes unpatented mining claims.  If enacted, such legislation could substantially increase the cost of holding unpatented mining claims and could materially impair the ability to develop mineral resources on unpatented mining claims.  Under the proposed legislation, the ability of companies to obtain a patent on unpatented mining claims would be nullified or substantially impaired.  Moreover, such proposed legislation contains provisions for the payment of royalties to the federal government in respect of production from unpatented mining claims, which could materially and adversely affect the potential for development of such claims and the economics of operating existing mines on federal unpatented mining claims. In addition, the proposed legislation may prohibit mineral exploration or development, even on existing unpatented mining claims, unless and until a federal agency finds that mining is a suitable use of the land in question, a review process which could take years.

Incorporation

The Corporation exists under the laws of the Province of Ontario, Canada and a majority of the Corporation's directors and officers are residents of Canada. Consequently, it may be difficult for United States investors to effect service of process within the United States upon the Corporation or upon the directors or officers who are not residents of the United States, or to realize in the United States upon judgments of United States courts predicated upon civil liabilities under the United States securities laws. A judgment of a U.S. court predicated solely upon such civil liabilities may be enforceable in Canada by a Canadian court if the U.S. court in which the judgment was obtained had jurisdiction, as determined by the Canadian court, in the matter. There is substantial doubt whether an original action could be brought successfully in Canada against any of such persons or the Corporation predicated solely upon such civil liabilities.

ITEM 4.

INFORMATION ON THE COMPANY

History and development of the Company

Atlanta Gold Inc.  (the "Corporation") was incorporated under the laws of the Province of British Columbia under the name Atlanta Gold Corporation by memorandum of incorporation dated March 6, 1985. On April 3, 1997, Atlanta Gold Corporation acquired Voisey Bay Resources Inc. pursuant to a plan of arrangement effected under the Companies Act (British Columbia) and changed the name of Atlanta Gold Corporation to Twin Gold Corporation.  On March 15, 2000, the Corporation was continued under the Business Corporations Act (Ontario) and the name of the Corporation was changed from Twin Gold Corporation to Twin Mining



9.



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Corporation.  Effective March 22, 2007, the name of the Corporation was changed to Atlanta Gold Inc. and the Corporations outstanding common shares were consolidated on the basis of one consolidated share for each fifteen pre-consolidated shares.

The registered and executive office of the Corporation is located at Suite 1250, 155 University Avenue, Toronto, Ontario M5H 3B7 (telephone: 416-777-0013).  The Corporation has two field offices in Idaho located at Suite D, 1509 Tyrell Lane, Boise, Idaho, 83706 and Suite C, 110 Rattlesnake Avenue, Mountain Home, Idaho, 83647. The Corporation also has a registered head office for the territory of Nunavut, Canada, located at the P.O. Box 1779, Building 1088C, Iqaluit, Nunavut, X0A 0H0.

The Corporation has two subsidiaries, Atlanta Gold Corporation (Atlanta U.S.) (a Nevada company) and Voisey Bay Resources Inc. ("Voisey Bay") (a British Columbia company), both of which are wholly-owned. Voisey Bay is currently inactive.

In March 2005, the Corporation transferred the Layuh gold property from Twin Gold Layuh Mining Corporation to the Corporation and wound down two companies, Twin Gold Cayman Corporation and Twin Gold Layuh Mining (Resources) Corporation ("Twin Gold Layuh") (each of which is a Cayman Islands company).

The Corporation is engaged in the exploration and development of mineral resource properties. The Corporation has various interests in four principal mineral resource properties: a 100% interest in the Atlanta gold property ("Atlanta") located in the State of Idaho, consisting of 35 patented and 120 unpatented mining claims; a 100% interest in the Torngat diamond property ("Torngat") located in the Province of Québec, consisting of one mining exploration permit and thirty four mining claims; a 100% interest in the Brodeur diamond property consisting of 67 mineral claims located on the Brodeur Peninsula of Baffin Island (Brodeur) covering approximately 151,415 acres (613 square kilometers); and the Abitibi Gold Property (Abitibi) located in eastern Québec, consisting of a right to earn a 60% interest in 62 mining claims and 100% interest in an additional 13 mining claims.  The Corporation also holds an 85% interest in the Layuh gold property, an 86,880-hectares property, located in Kalimantan, Indonesia. The Layuh property has been on a care and maintenance basis since 1999 and it was written off by the Corporation in 2004.

The Corporation`s intended objectives for 2007 are as follows:

Atlanta Gold Project:

·

Conduct surface and underground drilling programs to unveil the potential of numerous targets identified by historic mining activities

·

Complete a new NI 43-101 technical report to calculate reserves at prevailing gold and silver prices

·

Continue permitting activities and environmental improvements



Abitibi Gold Project:

·

Continued exploration by the Corporation or by joint venture partners on the Abitibi properties



Brodeur and Torngat Diamond Projects:

·

Pursue alternatives to unlock the value of Brodeur and Torngat



New Financing and New Projects:

·

Complete private placements to finance operations

·

Additions to complement engineering, environmental and financial management team

·

Complete at least one property or corporate acquisition









10.



---

In addition to the interests currently held by the Corporation in mineral resource properties, management of the Corporation reviews opportunities to acquire interests in further mineral resource properties as such opportunities become available to the Corporation. The Corporation performs regular reviews of the carrying values of its mineral resource properties and, to the extent that impairment conditions exist, the carrying values will be written down to their fair value.

Properties

Atlanta Gold Property, Idaho

The Corporation, through its wholly owned subsidiary Atlanta Gold Corporation (AGC), owns and leases a total of 33 patented lode claims, 3 patented mill site claims, 120 unpatented contiguous mining claims, and 1 unpatented mill site claim known as Atlanta Gold covering 1,891 acres near the town of Atlanta in Elmore County, Idaho, approximately 65 miles east-north-east of Boise, Idaho (Atlanta). Of the mining claims comprising Atlanta, three of the patented claims and 75 of the unpatented claims are beneficially owned by AGC and 32 of the patented claims and 43 of the unpatented claims are leased by AGC with terms extending to various dates up to 2015.  Since the acquisition by AGC of an interest in Atlanta in 1985, the Corporation has endeavoured to establish and expand estimated proven and probable reserves at Atlanta and to evaluate the feasibility of constructing and operating a mine at Atlanta.

On July 22, 1997, AGC and Canadian American Mining Company, LLC (CAMC) (formerly Quest International Resources Corporation) (Quest), entered into a joint venture agreement (the Quest Agreement) whereby AGC was appointed the operator of, and held an 80 per cent interest in Atlanta, with Quest holding the remaining 20% participating interest. Pursuant to the Quest Agreement, on December 13, 2002, CAMC transferred its 20% participating interest in the joint venture to AGC.

On February 2, 1999, Atlanta U.S. signed a Lease/Option to Purchase Agreement (the Monarch Agreement) with Monarch Greenback, LLC (Monarch) relating to Monarchs surface and mineral rights to Atlanta. During the term of the ten-year lease, Atlanta U.S. has the option to purchase such surface and mineral rights for US$2 million. If this option is exercised, the existing minimum annual rental payments on such surface and mineral rights will be terminated and replaced by a net smelter return royalty of 0.5% of gold sales if the average realized gold price is US$365 per ounce or less, provided that the cumulative minimum annual rental payments made by Atlanta U.S. pursuant to the Monarch Agreement are credited against the obligation of Atlanta U.S. to make net smelter return royalty payments to Monarch. For each US$1 increase in the average realized gold price over US$365 per ounce, the net smelter return royalty will be increased by 0.01% to a maximum rate of 3.5%. The Corporation amended the minimum annual rental payment to Monarch in 1999, and again, in 2001, such that, commencing in 2001, the Corporation agreed to pay Monarch US$50,000 per year in minimum annual rental payments until 2008 and the option price to purchase such surface and mineral rights increased to US$2,875,000.

A net smelter return royalty is payable on production from Atlanta, subject to annual payments to the lessors as set forth below. These payments are required to keep the agreements in good standing. The advance royalty payments will be terminated if the option to purchase is exercised. During the year, after amending an option to purchase agreement with one of the lessors, the Corporation paid US$102,500 (2005 and 2004 - US$67,500) in minimum annual rental and advance royalty payments to the lessors.

|                        |                                |                        
|----------------------- | ------------------------------ | -----------------------
|Year ending
December 31 | Minimum annual
Rental payments | Advance Royalty Payment
|                        | US$                            | US$                    
|2007                    | 50,000                         | 45,000                 
|2008                    | 50,000                         | 50,000                 
|2009                    |                               | 55,000                 
|2010                    |                               | 49,500                 
|2011                    |                               | 20,000                 
|2012 to 2015            |                               | 10,000                 



11.



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Location Map



Completion of the Feasibility Study  2004

In the fourth quarter of 2004, Behre Dolbear delivered a positive full Feasibility Study on Atlanta. This study concluded that, at then prevailing (+ US$425 per ounce) or lower gold prices, an economically mineable gold deposit was identified and confirmed at Atlanta. At a gold price of US$375, Atlanta has an Internal Rate of Return (IRR) of 24.62 percent and a Net Present Value (NPV) of $15.9 million at a discount rate of 10 percent. Projected Life-of Mine capital expenditures total US$37.977 million. The operation, which is anticipated by the Feasibility Study to have a life of six or more years will employ conventional open pit mining of two ore bodies, the Monarch and Idaho, followed by three-stage crushing, heap leaching and processing through an adsorption-desorption-refining (ADR) carbon plant.















12.



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The projected total cash cost per equivalent ounce of gold is US$187.90 per ounce (see Table 1) and the total production cost, including depreciation, depletion and the mine fleet leasing cost is US$288.00 per ounce.

|                                                                      |          
|--------------------------------------------------------------------- | ---------
|Table 1                         Cost per Equivalent Ounce of Gold ($)
|Item                                                                  | Base Case
|Mining*                                                               | 75.80*   
|Processing                                                            | 78.90    
|G & A                                                                 | 28.90    
|Sub Total                                                             | 183.60   
|By-Product Credits, less refining & transport*                        | (9.40)   
|Cash Operating Costs                                                  | 174.20   
|Royalties                                                             | 9.50     
|Production Taxes, Water Rights Payments                               | 4.20     
|Total Cash Costs                                                      | 187.90   
|Mine Fleet Leasing Cost                                               | 27.80    
|Depreciation                                                          | 36.80    
|Depletion Amortization                                                | 19.70    
|Other Investment                                                      | 15.80    
|Total Production Costs                                                | 288.00   

* In this table the cost of the leased mining equipment has been removed from the mining operating cost and inserted as a separate line item.

Key financial results for the Base Case based on gold and silver prices of US$375 and US$6.00 per ounce respectively (see Table 2) are set forth below The gold cutoff grade is 0.015 OPT as determined by the feasibility study.

Basic parameters for cutoff grade calculation:

Mining (ore & waste)

$1.00 per tonne

Refining & Transport

$3.00 per ounce

Crushing, loading, stacking

$1.22 per tonne

Taxes (excluding income taxes)

$3.75 per ounce

Heap Leach processing

$1.66 per tonne

Gold Price

$350 per ounce

G&A

$1.12 per tonne

Effective gold price

$343.25 per ounce

Total

$5.00 per tonne

Total excluding mining

$4.00 per tonne



Internal recoverable gold equivalent cutoff grade:   0.012 opt

External recoverable gold equivalent cutoff grade:  0.015 opt



|                                                                      |                      
|--------------------------------------------------------------------- | ---------------------
|Table 2                                         Key Financial Results
|Item                                                                  | Base Case @ US$375/oz
|Recoverable Ounces of Gold                                            | 525,229              
|Internal Rate of Return (%)                                           | 24.62                
|Net Income after Taxes ($millions)                                    | 18.6                 
|Net Present Value @ 0% Discount Rate ($millions)                      | 36.2                 
|Net Present Value @ 10% Discount Rate ($millions)                     | 15.9                 
|Net Present Value @ 15% Discount Rate ($millions)                     | 9.2                  
|Net Present Value @ 20% Discount Rate ($millions)                     | 3.9                  
|Payback Period (Years)                                                | 2.6                  









13.



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Key production statistics for the operations, as set forth in the Feasibility Study, include 525,000 ounces of gold and 1,084,000 ounces of silver (see Table 3).

|                                                                              |          
|----------------------------------------------------------------------------- | ---------
|Table 3                                             Key Production Statistics
|Item                                                                          | Quantity 
|Life-of-Mine (years)                                                          | 5.5      
|Total Gold Sold (ounces)                                                      | 525,229  
|Total Silver Sold (ounces)                                                    | 1,083,839
|Average Annual Gold Sold (ounces)                                             | 95,900   
|Average Annual Gold Sold  1st three years (ounces)                           | 106,000  
|Total Tons of Ore Processed (k tons)                                          | 13,669   
|Average Annual Ore Tonnage Processed (k tons)                                 | 2,485    
|Total Tons of Waste moved (k tons)                                            | 46,287   
|Life-of-Mine Stripping Ratio                                                  | 3.39 to 1



Mineable Reserves

Behre Dolbear used the recoverable gold resource model to develop diluted open pit mineable reserves, which are the basis of the Feasibility Study (see Table 4 and 5).

|                                                                                                                                                                                                                     |          
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------
|Table 4                                 Parameters used for pit optimization                                                                                                                                        
|Item                                                                                                                                                                                                                 | Parameter
|Gold Price ($/troy ounce)                                                                                                                                                                                            | 350.00   
|Silver Price ($/troy ounce)                                                                                                                                                                                          | 6.00     
|Refining & Transportation ($/troy ounce)                                                                                                                                                                             | 3.00     
|Royalty (NSR)                                                                                                                                                                                                        | 2.5%     
|Mining (ore & waste $/ton)                                                                                                                                                                                           | 1.00     
|Feeding Crusher with Loader ($/ton)                                                                                                                                                                                  | 0.15     
|Crushing ($/ton)                                                                                                                                                                                                     | 0.92     
|Stacking ($/ton)                                                                                                                                                                                                     | 0.15     
|Heap Leach Processing ($/ton)                                                                                                                                                                                        | 1.66     
|General & Administrative ($/ton)                                                                                                                                                                                     | 1.12     
|Interramp Pit Slope (degrees)                                                                                                                                                                                        | 50       
|Gold Recovery                                                                                                                                                                                                        | Variable*
|Silver Recovery                                                                                                                                                                                                      | 45%      
|Allowance for property, sales and use taxes $ per ounce                                                                                                                                                              | 3.75     
|* Gold recoveries are entered into each block of the model, and range from a low of 44% for the refractory sulfide material to a high of 80% for the clean oxide material. The overall average is approximately 64%.



The mineable proven and probable reserves for Atlanta are calculated at a gold price of US$350 per ounce and a silver price of US$6.00 per ounce. The mineable reserves total 13.669 million tons of ore grading 0.0601 ounces of gold per ton, which, with a weighted recovery of 64.0 percent, yields 525,000 ounces of recoverable (salable) gold.

|                                                                                       |              |                                 |                 |                             |                                        
|-------------------------------------------------------------------------------------- | ------------ | ------------------------------- | --------------- | --------------------------- | ---------------------------------------
|Table 5                                 Proven and Probable Reserves  Atlanta Project
|Ore body                                                                               | Tons (000s) | Diluted         Au grade - oz/t | Ag grade - oz/t | Recoverable Au grade - oz/t | Equivalent Recoverable  Au grade - oz/t
|Monarch Pit                                                                            |              |                                 |                 |                             |                                        
|Proven                                                                                 | 7,023        | 0.0732                          | 0.2306          | 0.0463                      | 0.0481                                 
|Probable                                                                               | 977          | 0.0664                          | 0.2062          | 0.0421                      | 0.0437                                 
|Total                                                                                  | 8,000        | 0.0724                          | 0.2276          | 0.0458                      | 0.0475                                 
|Idaho Pit                                                                              |              |                                 |                 |                             |                                        
|Proven                                                                                 | 5,002        | 0.0421                          | 0.0766          | 0.0280                      | 0.0286                                 



14.



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|              |        |        |        |        |       
|------------- | ------ | ------ | ------ | ------ | ------
|Probable      | 667    | 0.0467 | 0.0654 | 0.0279 | 0.0284
|Total         | 5,669  | 0.0426 | 0.0753 | 0.0280 | 0.0286
|Total Atlanta |        |        |        |        |       
|Proven        | 12,025 | 0.0603 | 0.1665 | 0.0387 | 0.0400
|Probable      | 1,644  | 0.0584 | 0.1491 | 0.0363 | 0.0375
|Total         | 13,669 | 0.0601 | 0.1644 | 0.0384 | 0.0397



Possible Future Additions to the Ore Reserves

The Feasibility Study advises that there are significant possible additions to the mineral reserves/resources, which are likely to extend the mine life:

·

Outside the boundaries of the Monarch and Idaho pits, the orebody is incompletely drilled, particularly below both the Monarch and Idaho pit bottoms and in the area between the two pits. Additional ore may be found in these areas;

·

There are two higher-grade partially drilled inferred resources within one mile or less of the Monarch Pit. These are the Tahoma Zone and the East Extension Zone, which together contain nearly 200,000 in-place ounces, but require confirmatory drilling;

·

There is a partially drilled, inferred underground resource containing some 240,000 ounces, which by itself has upside potential from additional drilling.

Behre Dolbear believes that the ultimate mineable ore reserves could increase substantially.

Mining

The reserves are contained in two open pits, the Monarch and Idaho. The Monarch, larger and higher grade but with a higher stripping ratio, will be mined first, and some of the waste from the Idaho pit will be backfilled into the mined out Monarch pit (Table 6).

The Feasibility Study contemplates that Atlanta will do its own mining with a fleet of reconditioned, conventional, Caterpillar-manufactured mining equipment. The equipment will be leased from and maintained by an independent contractor. Ore will be hauled to a stockpile ahead of the primary crusher for eight months of the year (May through December); waste will be mined all year. The crusher will be fed by a front-end loader.

The major items of mining equipment are rotary blast hole drills, drilling 6-7/8 inch diameter holes into 25-foot high benches, 14 cubic yard front end loaders and 100-ton haulage trucks. Life-of-mine unit mining costs, reflecting the short hauls and the high annual volumes of waste, are approximately $0.90 per ton for both ore and waste, including the contractors leasing and maintenance charges.

The Life-of-Mine schedule used in the Feasibility Study is set forth below and was prepared based on information available and estimates of the time required to achieve production  as of November 2004.

|                                                                                        |             |         |        |         |        |        |        |        
|--------------------------------------------------------------------------------------- | ----------- | ------- | ------ | ------- | ------ | ------ | ------ | -------
|Table 6                                                           Life-of Mine Schedule
|Item                                                                                    | 2007Nov-Dec | 2008    | 2009   | 2010    | 2011   | 2012   | 2013   | Totals 
|Tons of Waste Mined (k tons)                                                            | 1,972       | 12,135  | 12,116 | 10,439  | 7,742  | 2,153  | -      | 46,287 
|Tons of Ore Mined (k tons)                                                              | 672         | 2,596   | 2,464  | 2,464   | 2,464  | 2,464  | 545    | 13,669 
|Stripping Ratio                                                                         | 2.93        | 4.67    | 4.92   | 4.24    | 3.03   | 0.72   | -      |        
|Recovered Gold Grade (opt)                                                              | 0.0467      | 0.0496  | 0.0386 | 0.0483  | 0.0281 | 0.0257 | 0.0340 | 0.0384 
|Recovered Gold         Placed on Heaps (oz)                                             | 31,382      | 128,632 | 95,110 | 119,011 | 69,238 | 63,325 | 18,530 | 525,229



15.



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|                                                         |        |         |         |         |         |        |        |          
|-------------------------------------------------------- | ------ | ------- | ------- | ------- | ------- | ------ | ------ | ---------
|Gold Sold (ozs)                                          | 6,280  | 102,420 | 116,280 | 111,700 | 84,100  | 65,100 | 39,349 | 525,229  
|True Silver                 Grade Mined         (ounces) | 0.2738 | 0.2663  | 0.2241  | 0.1500  | 0.0979  | 0.0736 | 0.1080 | 0.167    
|Silver Recovery (%)                                      | 50     | 50      | 50      | 50      | 50      | 50     | 50     |          
|Recovered Silver Placed on Heaps (ozs)                   | 91,997 | 345,656 | 276,091 | 184,800 | 120,613 | 90,675 | 31,050 | 1,140,883
|Silver Sold (ozs)                                        | 17,480 | 342,000 | 271,700 | 185,250 | 123,500 | 95,950 | 47,959 | 1,083,839



Processing

The Feasibility Study contemplates that Atlanta ore will be crushed through a three-stage crushing circuit and agglomerated with cement and cyanide solution in an agglomeration drum prior to placement on the leach pads. The crushed ore will be crushed to a nominal 80 percent passing 3/8-inch size. The cement is added for agglomerate stability as well as pH control. The agglomerated ore will be placed on the heap leach pads with a conveyor system to maintain good permeability. The initial production will be placed on the Ridge heap leach pad, which will be partially completed and enable gold production to commence at an earlier date while the remainder of the pad is under construction. Leaching operations will continue year around although mining, crushing, and ore emplacement on the pad will be conducted for eight months of the most seasonably amenable portion of the year (May through December). The extra leach time allowed by this placement and leaching schedule will give an increased extraction of gold and silver from the slower leaching components of the ore.

There are two additional advantages of this sequencing of leach pads beyond the initial advantage of earlier gold production. Detoxification and reclamation of one section of the Ridge Pad can take place while leaching of another section commences or continues thus shortening the overall time requirement for this obligation of the project. Secondly, the volume placement on the Ridge Pad allows some additional capacity should additional reserves be proven or some cost reductions should the full potential volume of this pad not be needed.

The pregnant solutions from the heap leach pads will be processed through a carbon adsorption plant to remove the gold and silver, with the barren solution recycled to the heap after adjusting cyanide strength and pH. Provisions have been made in the pregnant and barren pond content to the carbon adsorption plant. The carbon plant will operate year around in conjunction with the leaching operations.

ADR plant general arrangement

Daily, a portion of the carbon will be removed from the adsorption circuit and the gold and silver will be stripped from the carbon. The stripped carbon will be acid washed to remove any scale and adsorbed base metals prior to returning to the adsorption circuit. Periodically, the stripped carbon will be regenerated to restore its adsorption capacity prior to returning to the adsorption circuit.

The gold and silver recovered in a concentrated cyanide solution from the stripped carbon will be recovered in electrolytic cells. The cathodic sludge from the cells will be smelted to produce a gold and silver doré for shipment to a refiner.

Heap Leach Facility

The site is located in steep topography, with no flat ground for simple leach pad siting. AGC plans to construct a leach pad by major earthworks, cutting the ridge south of the Monarch and Idaho Pits, to develop a pad with 14 million tons total capacity. Crushing and placement of ore on the Ridge Pad is contingent on operating permits being issued by the US Forest Service. The Phase 1 Ridge Pad with a capacity of 3.0 million tons is expected to be the first pad ready for loading and leaching. In general, construction is seasonal and weather dependent.  It will take approximately one month after stacking has commenced to produce the first gold bar.



16.



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Land Status

The entire claim block is irregular in plan but lies within Sections 2, 3, 4, 10, 11, 12, 13, 14 and 15 of Township 5 North, Range 11 East, Boise Meridian, Elmore County, Idaho. Patented claim blocks owned mostly by the Monarch Greenback LLC and leased to Atlanta, straddle the approximately 12,000 feet of strike length of the Atlanta Main Zone. It is mainly within those claim blocks that the Monarch and Idaho Pit zones lie.

Approximately 115 acres of patented and unpatented claims are held by others. However, these claims are remote from the main mineralized Atlanta zone. All proposed facilities have been located on mineral claims owned or leased by the Corporation.

The Corporations holdings comprise patented, unpatented, lode, and millsite claims, which are either leased or owned by the Corporation. The total area of the property is 1,994 acres, consisting of 157 contiguous and, in some cases, overlapping claims (Table 7).

|                                                                                |                                     |                   
|------------------------------------------------------------------------------- | ----------------------------------- | ------------------
|Table 7                                                             Claims Held
|Number of Claims                                                                | Classification                      | Total Area (acres)
|33                                                                              | Patented claims with surface rights | 355               
|3                                                                               | Patented millsites                  | 14                
|120                                                                             | Unpatented lode claims              | 1,620             
|1                                                                               | Unpatented millsite                 | 5                 



Water Supply

The Corporation signed a 10-year lease, expiring June 30, 2014, for 20.55 acres of property located in Elmore County and an existing, decreed water right on the Middle Fork of the Boise River from Greene Tree Incorporated for a monthly rental of US$4,887.50. The water right consists of 0.92 cfs (412 gpm) and is a seasonal, irrigation water right that must have the use and point of diversion changed through the Idaho Department of Water Resources prior to its use for mining purposes. Additional water can be acquired through lease or purchase of existing water rights, or from an annual lease of stored water from the Water District #63 rental pool. Rental pool water is priced at US$6.50 per acre-foot for in-basin use.

In June 2005, additional claims were also filed with the Idaho Water Board for the historic water rights sourced in upper Decker Creek valley.

Capital Costs

Behre Dolbear, Lyntek, and Knight Piesold, under the overall direction of Behre Dolbear, have determined that the project capital costs will total US$37.977million, allowing for three months, or US$6 million, of working capital to be on hand at start-up (see Table 8).

|                                                                                 |           
|-------------------------------------------------------------------------------- | ----------
|Table 8                                Total Project Capital and Working Capital
|Item                                                                             | (US$000s)
|Pre-Production Capital                                                           | 28,562    
|Continuing and Sustaining Capital                                                | 9,415     
|Total Project Capital                                                            | 37,977    
|Working Capital                                                                  | 6,000     
|Pre-Production Cash Requirements                                                 | 34,562    









17.



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Operating Costs

Average operating costs for the life of the mine contemplated by the Feasibility Study total US$6.92 per ton of ore, based on the stripping ratio of 3.39 to 1. (Table 9).

|                                                                                   |            
|---------------------------------------------------------------------------------- | -----------
|Table 9                                                  Operating Costs (per ton)
|Item                                                                               | US$ per Ton
|Mining Ore and Waste* (Avg.-Life-of-Mine)                                          | 0.68*      
|Feeding Crusher with Front End Loader*                                             | 0.15*      
|Crushing Ore                                                                       | 0.92       
|Stacking Ore                                                                       | 0.15       
|Heap Leach Processing                                                              | 1.66       
|General and Administrative (Avg.)                                                  | 1.05       
|Total Cost per Ton of Ore at stripping ratio of 3.39:1                             | 6.92       

*Does not include mine fleet leasing costs

Sensitivities

Behre Dolbear ran several sensitivities on the Base Case (US$375 per ounce gold price) to determine the effects on the key financial statistics of the following (see Table 10):

a) Gold prices of $325, $350, $375, $400, $425, $450, and $500 per ounce were run. A silver price of $6.00 per ounce was used in all cases, except for the current price case* (see table), where $7.25 per ounce was used.

b) ±10 percent change in operating cost

c) ±10 percent change in capital cost

d) ± 5 percent change in gold recovery



|                                                                                       |                                                   |       |                       |                                  |                                             |                
|-------------------------------------------------------------------------------------- | ------------------------------------------------- | ----- | --------------------- | -------------------------------- | ------------------------------------------- | ---------------
|Table 10                                                                 Sensitivities
|                                                                                       | % Change over base or actual gold price per ounce | IRR % | NPV @
5 %
($Millions) | Net Income after tax
($Millions) | Net free    Cash flow after tax
($Millions) | Payback
(years)
|Gold price per oz                                                                      | $375                                              | 24.62 | 24.6                  | 18.6                             | 36.2                                        | 2.6            
|Gold price per oz                                                                      | $325                                              | 12.07 | 9.1                   | 8.5                              | 18.3                                        | 3.9            
|Gold price per oz                                                                      | $350                                              | 18.53 | 17.2                  | 13.3                             | 27.5                                        | 2.9            
|Gold price per oz                                                                      | $400                                              | 30.32 | 31.7                  | 24.1                             | 44.4                                        | 2.3            
|Gold price per oz                                                                      | $450                                              | 41.61 | 45.3                  | 35.4                             | 60.4                                        | 2.0            
|Gold price per oz                                                                      | $500                                              | 53.05 | 58.6                  | 47.0                             | 75.9                                        | 1.9            
|Current metal prices*                                                                  | Gold = $425 Silver = $7.25                        | 36.73 | 39.3                  | 30.3                             | 53.3                                        | 2.1            
|Operating costs                                                                        | ±10                                               | 19.23 | 18.2                  | 13.4                             | 28.8                                        | 2.8            
|Operating costs                                                                        | ─10                                               | 29.78 | 30.7                  | 24.3                             | 43.2                                        | 2.3            
|Capital costs                                                                          | ±10                                               | 20.72 | 21.6                  | 17.1                             | 33.4                                        | 2.8            
|Capital costs                                                                          | ─10                                               | 29.24 | 27.6                  | 20.2                             | 39.0                                        | 2.3            
|Gold recovery                                                                          | ±5                                                | 29.03 | 30.1                  | 22.8                             | 42.6                                        | 2.3            
|Gold recovery                                                                          | ─5                                                | 20.02 | 19.0                  | 14.6                             | 29.6                                        | 2.8            









Environmental Impact Statement (EIS)



18.



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An Environmental Impact Statement (EIS) was initiated by the U.S. Forest Service in 2005.  The third-party EIS contractor, TetraTech, Inc., commenced the formal public scoping process at that time.  Subsequent to the EIS startup, a decision was made to place the environmental analysis on hold due to funding limitations faced by the Corporation.  During that period to present, AGC continued to optimize project design and to conduct additional environmental baseline studies.

Mine Construction:

This hiatus gave the Corporation the opportunity to lay the groundwork for future production. With the innovative engineering design and sequencing of Atlantas Monarch and Idaho open pits, it is believed that substantial economic benefits can be achieved. This design allows the extension of construction over several years while production performs at design capacity of 100,000 ounces of gold per year. The current development strategy for the Atlanta project is as follows:

·

Relocation of most buildings to private land at the Yuba/Decker (Y/D) junction. This includes the man camp, freight delivery yard, power plant, process plant, assay laboratory, warehouse, and office. This layout will allow an earlier, phased construction timetable for all these facilities, significantly reducing the on-site manpower requirements.

·

Design of the main power line and fuel and water supply pipe lines on a private land corridor from the Y/D junction east, uphill to the site of the future Idaho Pit. This will allow completion of these lines in advance of heap leach start-up, with reduced on-site construction manpower.  This will also allow delivery of diesel fuel for the mine fleet and power for the crushing plant, at significantly reduced costs.

·

Adoption of the extended Ridge Pad; and elimination of the Valley Pad.  Construction of the extended Ridge Pad will occur in four phases, with only 25 percent of the pad capital needed during the pre-production period, and the final pad construction delayed until Year 4 of operations.

·

Deferring pond storage and leach solution processing facilities to match the pad timeline.  This will defer capital and reduce on-site construction manpower.

EIS Permitting:

Permitting cost increases were significant in early 2005, caused by two factors.  First, certain critical data was not assembled during the primary baseline studies program in 2003, requiring urgent and costly field work by consultants.  Second, the high priority given to achieving an early construction start date was costing significantly, as attempting to eliminate the risk of any delay required engineering and other data in excessive detail. At mid-year, the Corporation presented to U.S. Forest Services (USFS) a number of project design studies and revisions aimed at advancing the EIS and improving project economics, including:

1.

Adoption of the extended Ridge Pad; elimination of the Valley Pad.

2.

Expansion of Quartz Gulch waste rock dump by 7 million tons.

3.

Defense of the necessity for Pettit waste rock dump.

4.

Deferral of phases 2,3,4 pad construction until Year 2,3,4 of operations.

5.

Significant reduction in construction crew requirements.

6.

Claims filed for water rights sourced in upper Decker Creek valley.

7.

Addition of 2 fresh water reservoirs, to ensure water during dry months.

8.

Provision of a fire water supply, to protect against forest fires.

9.

Adoption of active water treatment facilities for arsenic removal.

10.

Proposed design of Land Application Dispersion (LAD) mainly for elimination of excess snowmelt water.

11.

Relocated secure storage yard for freight trailers to patented claim at Y/D junction.

12.

Delivery of a frozen site plan for EIS permitting by July 8th, 2005.





19.



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During the third quarter of 2005, although cash flow constraints reduced the pace of EIS activity by third-party consultants, the Corporation continued additional optimization of the project layout and design and made presentations to USFS resulting in the following revisions being agreed to:

·

Eliminating tanker truck freight deliveries during winter months;

·

Providing a 4-month storage for diesel fuel and for prill and cyanide;

·

Installing two adsorption column circuits below Phase 1&4 of the Ridge Pad;

·

Installing two adsorption column circuits below Phase 2&3 of the Ridge Pad;

·

Modifying the process plant to desorption & refining (DR) only;

·

Relocating the process plant, analytical lab, man camp and power plant to Y/D junction;

·

Eliminating 3 north area LAD sites;

·

Adopting heap leach operating procedures using starvation levels of cyanide;

·

Adopting heap rinsing as primary strategy for heap closure;

·

Designing a new main access route, upslope from Y/D junction;

·

Eliminating the Decker Creek road as a main access route.



Location

AGC, a wholly-owned subsidiary of the Corporation, has a 100% interest in the Atlanta gold property which comprises 1,891 acres and is located 65 miles east of Boise, in Elmore County, Idaho (Atlanta). A long history of mining makes the region very suitable for the development of mining projects. The Atlanta district is an important historic mining district and the Atlanta property has been the site of mining activity for approximately 150 years.  Most of the historic mining used underground cut and fill methods, and focused on high grade narrow veins.  The cut-off grade for most of the old mining was 0.5 ounces gold per ton.  The Corporation has maps and data from much of the historic mining, which will guide the targeting of exploration drilling.

Regional infrastructure is excellent to support a future mining operation with available power, water and year round road access nearby. Historically, Elmore County has been both supportive and dependent upon development of natural resources.  AGC has established an administrative office in Mountain Home, the county seat of Elmore County. As the Atlanta Gold project develops, AGC also plans to site additional support facilities, become a significant employer and taxpayer in Elmore County and provide economic opportunities to the community.   These advantages further reinforce the quality of this asset.

As the Atlanta project continues to develop, it will rehabilitate many years of environmental damage created by historic mining as part of its overall mine reclamation plan.

Environmental Improvements

In early 2005, the Corporation approached the U.S. Environmental Protection Agency (EPA) and proposed a program of environmental improvements in the Atlanta area.  Most of the proposed improvements were focused on clean up and water treatment of historic mine drainage.  Since that initial meeting with EPA, significant progress has been made. The water discharge from the historic 900 Adit now flows through a Water Treatment Facility (WTF) approved by the U.S. Forest Service (USFS), EPA, and the Idaho Department of Environmental Quality (Idaho DEQ).  To December 31, 2006, the Corporation has incurred in excess of US$700,000 in capital and operating costs for the WTF which removes over 90% of the arsenic from the discharge. The treated water meets or exceeds water quality targets set by the agencies.

Several other historic adits have water discharges that are targeted for treatment during 2007.  These adit discharges have much lower concentration of pollutants than the 900 Adit. AGC believes the technology identified for the 900 Adit will be applied successfully to such discharges, at lower cost.

Other targets have been identified for environmental improvements during 2007.  Several years ago, a major forest fire raced across the Atlanta site, and burned the historic Telache mill building to the ground.  A preliminary inspection of the building site by Idaho DEQ and the USFS has identified several hazards that



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require clean up during the 2007 construction season.  Although this mill was not created or ever used by AGC, AGC is willing to provide engineering, manpower and other services to assist in the clean-up efforts.

Finally, during 2007, a significant program has been proposed to the USFS aimed at reclamation of disturbed areas within the AGC proposed project area.  The exploration and development phase of the Atlanta Gold project now extends back over 15 years.  Over that time, access roads have been constructed, for drill sites, monitoring wells, geotechnical boreholes, and other needs.  The reclamation of these areas requires topsoil to support successful re-vegetation.  Because Atlanta Mountain is made of biotite granodiorite rock, there is little if any topsoil naturally present.  In cooperation with Idaho DEQ, the Corporation has proposed to assist with the development of a pilot-scale composting system in 2007, which would provide the topsoil for reclamation of existing areas of disturbance.

The Corporation is committed to minimizing the environmental impact of our exploration and development activities. As evident in the plans for a composting system, conservation and recycling of resources are central to our reclamation plans.

Reserves and Resources

Based on the bankable feasibility study (the Feasibility Study) completed in November 2004 by Behre, Dolbear & Company Inc. (Behre Dolbear), which is compliant with National Instrument 43-101, the Atlanta Gold Mine has 525,229 proven / probableounces of gold and 1,083,889 ounces of silver and it will produce an average of 95,496 ounces of gold and 197,062 ounces of silver per year over its initial 5.5-year mine life. It should be noted that approximately 90% of the mineral reserves are proven (12,399,000 tonnes @ 2.1 grams of gold per tonne and 5.6 grams of silver per tonne). There are already 240,000 ounces of inferred resources at a grade of 10.3 grams of gold per tonne identified in the underground section of the deposit.

Technical Parameters Based on the Original Mine Plan in the Feasibility Study

Based on the Feasibility Study, the Atlanta project is anticipated to have a life span of 5.5 years. The Feasibility Study contemplates an open pit mine with a 27,000 ton per day low cost open-pit / heap-leach operation, expected to produce 100,000 ounces of gold and 200,000 ounces of silver per year. It will employ conventional open pit mining of two ore bodies, the Monarch and Idaho, followed by three-stage crushing, heap leaching and processing through an adsorption-desorption-refining (ADR) carbon plant.

Economic Parameters in the Feasibility Study

The Base Case in the Feasibility Study uses gold and silver prices of US$375 and US$6 per ounce respectively and a projected total cash production cost of approximately US$188 per ounce.

Economic Parameters in the 2006 Financial Model

The new financial model reflects updated capital and operating costs and tax provisions completed in 2006 by the Corporations in-house team together with independent geological, engineering and financial advisors. This model uses gold and silver prices of US$550 and US$12 per ounce respectively and a projected total cash production cost of approximately US$245 per ounce. This new model suggests that a significant improvement in the economic potential of the Atlanta project is indeed possible.

In addition, the economic parameters in the 2006 financial model only include gold contained in a pit designed using a US$375 per ounce gold price and a $6 per ounce silver price, but not through the conversion of low-grade blocks located within the design pit shells which may be upgraded to economic ore reserves due to the higher gold price. No deepening of the Monarch and Idaho pits is involved, because the density of drilling at depth below pit bottom is currently inadequate for the inferred mineralization to be upgraded to reserves.

The Feasibility Study states Behre Dolbear believes that the ultimate mineable ore reserves could grow to 1.5 million ounces contained or approximately 1.0 million ounces of recoverable gold.  The deposit remains open at depth and other surface targets have been identified. The Corporation plans to aggressively explore the



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mineralized zones at Atlanta in 2007 to evaluate the potential for additional reserves.  Higher gold and silver prices are expected to aid these efforts.

2006 Achievements

Despite the delays in securing financing, AGC achieved the following in 2006:

The EPA acknowledged receipt of AGCs Application for the National Pollutant Discharge Elimination System (NPDES) Permit for historic mine discharges at Atlanta. The EPA declared the application as being complete and the Permit Number ID-002828-2 was assigned.

After a difficult winter during which construction was hindered by snow, the WTF at the historic 900 Adit began operations with one pond. Engineering revisions requested by USFS and Idaho DEQ were made for the WTF.  Construction of the second treatment pond was completed by the end of November 2006.

For the fourth time, the Atlanta access road washed out during the spring snowmelt and this highlighted the need for a better access route prior to commencement of mining operations.

In-house staff and consultants prepared a new Supplementary Plan of Operations (SPOO) which incorporated numerous revisions to the plans for Atlanta.  Many of the revisions proposed environmental improvements, which reduced the footprint of the project.  Construction of major project facilities, the open pits and the heap leach, were scheduled to occur in phases, to reduce initial environmental impacts and initial capital costs. AGC proposed phased construction of leach pads with concurrent reclamation during the operating mine life.  After presentation of the new SPOO to USFS in May, a series of public meetings were held to outline the new plans and answer questions. Each agency evaluated its specific data needs related to the new SPOO.

Environmental baseline field studies were completed to develop baseline coverage for areas not previously included in the Atlanta project.  These included the Upper Yuba Decker Creek area where the project water supply is now proposed, and the area above the man-camp where the main on-site road is proposed.

A property-wide, high-definition survey using LiDAR technology was undertaken in June, and the resulting survey data was received in July 2006.  This work enabled detailed engineering of project facilities to proceed, starting with man-camp and process layouts.

In June and July, in-house staff and consultants focused on an update of the projected capital and operating costs and tax provisions in the 2004 Feasibility Study.  Since the projected cost increases from November 2004 to July 2006 were minimal relative to the increase in gold and silver prices during the same period, the update indicated that Atlanta has the potential to generate an attractive rate of return.

In late August, a list of outstanding agency requirements was prepared.  These requirements included geotechnical studies for pit slope stability, water supply, heap rinse-to-closure, long-term water treatment, composting, diesel storage, and man-camp needs.  Plans were advanced to begin studies on pit slope stability before winter. Pit slope stability studies initiated in November identified a critical need for detailed open pit engineering design work.  Legal work resumed on renewing prior mining water rights.

In late 2006, the Corporation focused on preparation of an Alternate Development Plan for Atlanta which considers a combined underground exploration and open-pit mining heap-leach operation.  An underground exploration program is a key component of this Plan which was presented at the Corporations technical review meeting held in December 2006.

Objectives for the Atlanta Gold Project in 2007

In recognition of the much improved gold and silver prices which prevailed throughout 2006 and the potential to expand reserves and resources at Atlanta, the 2007 objectives for this project include the following:



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·

Conduct surface and underground drilling programs to unveil the potential of numerous targets identified by historic mining activities

·

Complete a new NI 43-101 technical report to calculate reserves at prevailing gold and silver prices

·

Continue permitting activities and environmental improvements

·

Additions to complement engineering, environmental and financial management team



Permit Process Overview and Status

The Atlanta project requires that environmental permits and approvals be obtained from a number of federal and state agencies. The environmental issues associated with such permits and approvals include water quality, air quality, endangered species protection, alteration of natural wetlands and stream channels, discharge waters, land use, transportation systems and routes, reclamation, closure and long-term water treatment.

While permitting of Atlanta has been the Corporations primary focus since January 2005, as noted previously in this document, the Corporation has experienced interruptions in funding and unanticipated delays in the permitting process which have changed the project schedule. However, these delays allowed the AGC staff to make several significant enhancements to the design and development of the project.

Based on the proposed new mine plan (the 2006 SPOO) and meetings with the federal and state agencies, the Corporation anticipates that the EIS will be completed in mid 2009.  The environmental permits required to begin construction of the Atlanta project would be issued in late 2009, which would allow initial gold production to commence in early 2010.

Permits and approvals for Atlanta are obtained in a staged process.  Stage 1 is in the National Environmental Policy Act, or NEPA analysis.  For a project with the scope of Atlanta, NEPA requires that an Environmental Impact Statement (EIS) be prepared.  Much of the Atlanta site is on land controlled by the USFS which is therefore the lead agency.

Permitting Achievements

In 2003, an Initial Plan of Operations (IPOO)was submitted to the USFS. After public comment on the IPOO, Atlanta Gold contracted additional feasibility analyses for the project in 2004. In November 2004, Behre Dolbear completed a bankable Feasibility Study, which is compliant with National Instrument 43-101.

In March 2005, a Supplemental Plan of Operations (SPOO)was submitted to, and accepted by, the USFS, allowing the EIS process to move forward.

In February 2006, AGC signed a Memorandum of Understanding (MOU) with the USFS, which allows the completion of the EIS process, which is a prerequisite to obtaining a mine construction permit and ultimately the building of the Atlanta Gold Mine. The MOU outlines the procedures and responsibilities of the USFS and the Corporation for the preparation of the EIS.

In April 2006, AGC completed the Application for the National Pollutant Discharge Elimination System (NPDES) Permitfor historic mine discharges at Atlanta and the EPA assigned permit number ID-002828-2 to the Corporation.

In May 2006, a Revised Supplemental Plan of Operations (SPOO)was submitted to, and accepted by, the USFS.  This revision incorporated many environmental improvements that were suggested during EIS permitting meetings throughout 2005 and the first quarter of 2006.

Future Permitting Activities

Submission of applications and receipt of permits and approvals are subject to, among other things, the availability of financing. Some of these permits will require financial commitments (e.g. reclamation bonds) and representations and warranties from the Corporation and AGC.



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Environmental Baseline Studies.The baseline studies are reports from extensive field studies made during the years 2003  2006.  Certain studies are also planned for 2007. Technical Reports on these baseline studies will be issued in early 2007.

Plans of Study.  When the agencies recommence work on the Atlanta project, they will develop Plans of Study that address all concerns which relate to the potential impacts of the project.  These plans of study will be issued in mid 2007.

Alternatives. Under NEPA, the agencies are required to consider reasonable alternatives to the proposal made by the Corporation for development of the project.  A listing of alternatives will be issued in late 2007.

Technical Analyses.  The Baseline Studies, Plans of Study, and Alternatives will be subjected to Technical Analyses by all agencies involved.

Draft Environmental Impact Statement.  The conclusions of the agencies will be reported in the Draft EIS, which will be published and issued for public review.  This is expected in or about the third quarter of 2008.

Analysis and Response to Public Comments. All of the agencies will consider the public comments to the Draft EIS.  Responses will be prepared by in-house staff, consultants, and the agencies.

Final Mining Plan of Operations.  Based upon the considerations of the public comments and agency responses, the Corporation will prepare a Final Mining Plan of Operations, for the Final EIS.

Final Environmental Impact Statement.  Revisions to the Draft EIS will result from the analysis and response process.  These revisions and the Final Mining Plan of Operations are incorporated into the Final EIS.  The Final EIS is expected to be published in early 2009.

Record of Decision (ROD). It is anticipated that the USFS will issue the ROD concurrent with the FEIS, approving the development of the Atlanta Gold project, as detailed in the Final EIS.  The USFS will also clarify bonding amounts and bonding schedules, to be paid by AGC.

Appeal Period. The FEIS and ROD may be appealed by parties who oppose the project. Such an appeal would be heard by the Forest Supervisor. Legal actions can also be filed against agencies issuing the EIS and permits.

Permits:

The NEPA process is not a permit.  It is a technical process and analysis which is mandatory before the actual permits become effective.  The following permits will be issued after the NEPA and EIS, and various Federal and State evaluations, are completed.

Air Quality Permit. This permit is required for construction before actual mining operations begin.  It will be issued by the Idaho DEQ).  The EIS analysis will demonstrate full compliance with all applicable air quality regulations.

Reclamation Plan. This permit will be issued by Idaho Department of Lands (IDL).  The draft EIS will include the draft reclamation plan for public comment and this is also required by the USFS. When the USFS then issues the Final EIS and Record of Decision, the final reclamation plan that meets the Department of Lands permitting needs will be included.  The USFS and IDL will include bonding for reclamation of disturbed lands.  IDL also hold the bonding for the cyanidation permit.

Cyanidation Permit. This permit will be issued by IDEQ.  The Idaho State Cyanidation Permit is based on new regulations.  These regulations establish rigorous timeframes for permit issuance, once a complete permit application is submitted. AGC is already working with IDEQ staff on the application requirements.



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Land Application Disposal Permit.  It is likely, though not yet confirmed, that a Land Application Disposal (LAD) system will be utilized for water management at the mine site.  This permit will be issued by IDEQ, concurrent with the Cyanidation Permit.

NPDES Permit.  If surface water discharges from the site constitute a new source under the Clean Water Act, a new source National Pollutant Discharge Elimination System (NPDES) permit will be required. EPA is evaluating the 2006 SPOO to determine if there is a new source permit requirement.

Clean Water Act Section 404.  At the federal level, the other significant permit is the Clean Water Act Section 404 permit issued by the U.S. Army Corps of Engineers (Corps) for wetlands disturbance. The Corps has participated throughout the NEPA process to date. The Corps has proposed to issue the public notice for the 404 permit concurrent with the draft EIS to provide the public with the opportunity to comment. Consequently, there is no reason to expect that the final permit will not be issued prior to construction start.

USFS Road Use Permit.  The Road Use Permit is based upon analyses of the proposed Transportation Plan that is a key part of the EIS, managed by the USFS.  The permit will be issued after the ROD.

Building Construction Permits.  There will be a number of construction permits required for individual buildings that are proposed for the mining project.  These will be issued by Elmore County.

Domestic Water and Septic Permits.Some of the facilities will require water and septic permits. These will be issued by Elmore County.

Overall, the approach that AGC has taken for the National Environmental Policy Act (NEPA) analysis will allow for all related permits to follow shortly after the Final EIS and Record of Decision. From the beginning of the project, AGC has coordinated / synchronized the permitting and review responsibilities for the project with each of the federal and state agencies. This is intended to ensure that the Final EIS also meets all of the analysis requirements for the permits.

In summary, the primary driver for the schedule is the NEPA process. The time required to issue the draft and final EIS will be the determining factors in establishing when mine construction can begin.

Abitibi Gold Property, EasternQuébec

In view of the positive market developments for gold, the Corporationdecided early in 2003 to build on the base provided by the Atlanta Gold project and expand its portfolio of gold projects. Considering the lead times from exploration to production, the Corporation decided to acquire strategically located gold properties in historically productive gold districts in North America.





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Location Map





Location and Access

After examining data on numerous individual opportunities, it became apparent that history has demonstrated the Abitibi volcanic belt to be characterized by one of the highest probabilities for discovering new or adding to known gold resources. The Province of Québec is also the top ranked North American jurisdiction for mining investment according to the Fraser Institute, both with respect to policy and mineral potential.

The Abitibi gold belt is the source of approximately 5,000 (150 million ounces) of the 8,000 tonnes of gold which have been extracted from the Superior Province of the Canadian Shield. Québecs portion of the belt continues to yield many new discoveries and annual production exceeds one million ounces, of which a large portion is from the Doyon-Bousquet-LaRonde Mining Camp.

Property Interest

In late August 2003, Breakwater Resources Ltd. (Breakwater) granted the Corporation an option to purchase up to an 80% interest in the 6 properties along Quebecs Cadillac-Malartic portion of the Abitibi gold belt covering 7,040 acres (28.5 square kilometers). Under terms of the option agreement, the Corporation was required to spend $150,000 before September 2004 and make a payment of $25,000 on that date to renew the option. Total payments of $125,000 and aggregate expenditures of $3.5 million are required to maintain the option through September 2008 and to earn an initial 60% interest. The Corporation can include a 10% overhead fee in respect of all exploration expenditures incurred on the Breakwater claims. Expenditures exceeding minimum annual requirements incurred may be carried forward and included in future exploration expenditures. The Corporation can then purchase a further 10% interest for $100,000 and following completion of a feasibility study, the Corporation can purchase an additional 10% interest by paying $500,000. There is a provision to buy Breakwater out of the project for $1,500,000 if it decides not to participate in the development of the properties.

In December 2003 and April 2004, the Corporation staked 63 additional claims in the Bousquet region adjacent to the Normar claims (Bousquet Claims) covering 3,194 acres (12.9 square kilometers).



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In 2004, the Joannes North and Joannes West portions of the property covering 2,540 acres, were returned to Breakwater. In July 2005, the Corporation optioned its interest in the Breakwater and Bousquet Claims to Stellar Pacific Ventures Inc. (Stellar).  Stellar assumed the annual rental fee payable to Breakwater and the commitment to incur $1,900,000 in exploration work by September 2008.  In May 2006, after making cash payments of $40,000 and incurring $108,000 in exploration expenditures on the Normar group of claims, Stellar forfeited its option to earn an interest on Abitibi.

During 2006, after the Corporation initiated a comprehensive review of the 62 Breakwater claims and the 63 Bousquet #1 and #2 claims of Abitibi Gold Property (Abitibi), an exploration program was established focusing on the Normar optioned claim portion, 50 Bousquet claims were allowed to lapse in June without renewal, and $3,500 was written off in respect of these lapsed claims.

As at December 31, 2006, the Corporation had made cash payments totaling $75,000, and incurred exploration expenditures totaling approximately $2,186,000 (including a 10% overhead component and $108,000 incurred by Stellar) sufficient to maintain the Property in good standing until September 1, 2007. The Corporation retains an interest in 62 claims optioned from Breakwater and an additional 13 Bousquet claims covering 20.3 square kilometres (5,018 acres).

In 2007, the Corporation paid $6,812 to renew the 13 Bousquet claims until 2008.

Regional Geology

Normar was selected as having a high potential for discovery of a gold resource because it straddles the prolific Cadillac Break which most recently has yielded Agnico Eagles impressive Lapa gold deposit about 20 kilometres to the east. Past drilling had confirmed the existence of the Decoeur and Paquin gold deposits for which Breakwater reports cited a combined drill-indicated mineral inventory of 60,000 tonnes at 6.6 grams of gold per tonne. This grade is better than the 5.3 grams of gold per tonne reserve grade at Cambiors Doyon mine some 8 kilometres to the northeast.

The Malartic H property is situated on the northern limb of the Malartic Syncline which hosts within 2.5 kilometres of the property boundary the Black Cliff, Marban, Malartic Hygrade, Norlartic and Camflo gold mines. Production from these mines has exceeded 2 million ounces. Up to six gold-bearing zones are associated with the Norbenite/Norlartic shear where it crosses the south portion of the Malartic H claims. The shear zone continues on to the south where it has yielded significant gold production.  Portions of the Malartic H zones, from one of the deeper holes reported in Breakwater files, assayed 5.33 grams of gold per tonne over 1.05 metres, 5.54 grams of gold per tonne over 1.76 metres, 7.93 grams of gold per tonne over 2.25 metres, 42.7 grams of gold per tonne over 0.9 metres and 3.86 grams of gold per tonne over 2.89 metres.

On the Malartic H Annex claims gold has been known to be associated with pyrite where a prominent shear zone cuts basaltic volcanics (Discovery Zone). Over 2 million ounces of gold have been produced from the Siscoe and Sullivan mines, which are located on the same shear zone.  This is the only property for which Breakwater files revealed that additional geophysical coverage might result in definition of new drill targets. Thus, it was decided to conduct induced polarization and magnetometer surveys to focus drilling on unexplored parts of the shear zone with the highest gold potential. Grab samples from a trench on the Discovery Zone were reported in Breakwater files to have returned gold values of more than 1,800 grams of gold per tonne.  A drill hole (M-3, 1936) under this mineralization encountered sections which assayed 94 grams of gold per tonne over 0.35 metres, 31 grams of gold per tonne over 0.34 metres and 21 grams og gold per tonne over 0.65 metres.

The Mouskor property is considered to be located on the same favorable horizon, which to the east contains the Doyon, Bousquet #1, Bousquet #2 and Dumagami Mines. More than 5 million ounces of gold already have been produced from the Doyon and Bousquet #1 mines.

Exploration Program  2004



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A thorough review was performed of the large amount of data obtained from the major drilling program in the last four months of 2003. As a result of the review, the Corporation is focusing future exploration on the Normar property while Mouskor, Malartic H and Malartic H Annex are planned to be explored with joint venture partners. Benefits from the work of others during the Corporations 2004 review were derived from a new gold discovery on the nearby Noranda property about one kilometer NW of the Mouskor boundary. This discovery is along strike with the favorable trend on which the Mouskor and Doyon mines are located and which passes through the Mouskor claims.

Exploration Program  2005

Stellar had undertaken a modest exploration program on the Normar group of claims.

Exploration Program  2006

After Stellar had forfeited its option in May 2006, the Corporation began a four-hole, 1,500-meter drill program on the Normar claims in November 2006. The project was completed in December 2006 and assay results were announced in February 2007. All four holes intersected narrow yet significant gold mineralization ranging from 1.34 g/t gold over .44 meters to 7.27 g/t gold over .31 meters. All these intersections were found in smokey quartz veins, stockworks and flood zones all associated with chalcopyrite, pyrite, and arsenopyrite within larger sericite / chlorite alteration zones.

Hole TMN-06-01 intersected the mineralized structure approximately 100 metres above the zone in Hole TMN-03-19. Holes TMN-06-02 and 03 intersected the mineralized structure approximately at the same elevation, 100 metres east and west of the zone discovered in Hole TMN-03-19. Hole TMN-06-04 evaluated the Tonalite Zone 100 metres west of Hole TMN-03-07. True widths and overall geometry of the mineralized zones are impossible to determine at this early stage in the evaluation of the Normar Property.

Significant assay results from the drilling program at Normar are presented below.

|            |        |          |      |     
|----------- | ------ | -------- | ---- | ----
|Hole
Number | Metres | Gold
g/t
|From        | To     | Length  
|TMN-06-01   | 51.49  | 52.26    | 0.77 | 1.13
|334.60      | 334.91 | 0.31     | 7.27
|368.49      | 370.45 | 1.96     | 2.17
|371.33      | 372.17 | 0.84     | 1.37
|TMN-06-02   | 360.44 | 365.14   | 4.70 | 3.30
|360.44      | 361.70 | 1.26     | 6.48
|370.24      | 370.75 | 0.51     | 1.51
|TMN-06-03   | 442.08 | 442.61   | 0.61 | 1.44
|454.61      | 455.18 | 0.57     | 1.17
|457.27      | 457.75 | 0.48     | 1.03
|517.64      | 518.85 | 1.21     | 4.39
|TMN-06-04   | 35.00  | 35.44    | 0.44 | 1.34
|52.20       | 53.00  | 0.80     | 3.15



This drill program is further evidence that the Normar property contains a geological environment and rocks similar to those found at nearby current and past producing gold mines in the area.

Objectives for the Abitibi Gold Project in 2007

The Corporation intends to continue exploration of the Abitibi project, both by the Corporation and, if possible, by joint venture partners.



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Torngat Property, Québec

The Corporation currently holds one mining exploration permit issued by the Quebec Ministry of Natural Resources (QMNR) in 1999, which was renewed in 2006 and 34 mining claims adjacent to its mining permit staked in 2005, for an area covering a total of 64.9 square kilometres. The permit is valid for up to ten years from its original date of issue, and then must be individually staked by claim. Each claim can be renewed every two years as long as sufficient field work has been submitted and assessed by QMNR. Annual expenditures are required to maintain the permit and claims in good standing. The Corporations efforts to date on the property have mostly focused on a series of five (5) diamondiferous kimberlite dyke systems that stretch over a combined length of 37 kilometres of Torngat.

Location and Access

Torngat is located in northeast Québec on the eastern shore of Ungava Bay.  The nearest habitation is the town of Kangiqsualujjuaq (formerly George River) about 90 kilometres south-southwest of the Torngat Property and the town of Kuujjuaq (formerly Fort Chimo) about 250 kilometres southwest of Torngat.  Montréal is approximately 1,500 kilometres south-southwest of Torngat. Access to Torngat is by marine vessel from the Montréal region, and by fixed-wing aircraft or helicopter from Kuujjuaq (Fort Chimo) or Kangiqsualujjuaq (Fort George), both of which have scheduled air service.

The central part of Torngat is a plateau about 400 metres above sea level and is part of a larger geographical entity, the George Plateau.  The plateau is broken by steep-sided gorges and fjords.  The largest fjord is Alluviaq Fjord that bisects the property and trends in a southeast-northwest direction.  The first of the dikes discovered on Torngat is exposed in the steep-sided walls on the northern side of Alluviaq Fjord.

Torngat is above the tree line.  The climate is arctic with an average annual temperature between -7.5° Celsius and -5° Celsius (18.5° Fahrenheit and 23° Fahrenheit). The property area receives about 400 millimetres to 500 millimetres of precipitation annually, with about 45 per cent of the total falling as snow.  There are normally about 20 to 40 frost free days annually.

Regional and Property Geology

Torngat lies within the Torngat Orogen.  The crust in the Orogen is thickened because Rae Province rocks were thrust below the Nain Province more than a billion years ago and covers three different tectonic regimes.  To the southwest are quartzo-felspathic gneisses of the Rae Province.  Locally, there are infolds of Aphebian age shallow water sedimentary rocks of the Lake Harbour Group, which are progressively deformed to the northeast by the Abloviak Shear Zone.  The predominant rock type on Torngat is the Tasiuyak Gneiss, a northwest trending belt of garnet-quartz-plagioclase gneisses which extend southwards into Labrador.  The gneisses are considered to be altered sedimentary rocks.  The northeastern part of Torngat is underlain by granulitic gneiss of the Burwell Terrane.

The rocks of the Torngat Orogen strike northwest-southeast within Torngat.  Cross-cutting the gneisses, there are a number of kimberlite dikes.  The first dikes discovered are located on the northern shore of Alluviaq Fjord.  These dikes strike northeast and dip subvertically.  They are exposed on the steep side of the fjord, typically in crevices where the kimberlite has been eroded preferentially and the debris from weathering flushed from the crevice by water flowing over the fjord wall.

Three dikes in this area have been sampled by the Corporation numbered, from east to west, Torngat 1 to 3.  The dikes are approximately 2.5 metres, 1 metre and 0.6 metres in thickness, respectively.  Torngat 1, the largest dike, has been traced through discontinuous exposure about 1.5 kilometres across the plateau to an unnamed lake. A number of other dikes have been identified by the Corporation and three narrow dikes have been observed so far at sea level on the south side of Alluviaq Fjord. The Corporation completed a lineament study of the property using air photographs.  This study demonstrated that there are a number of linear features striking northeast across the property on the northern side of Alluviaq Fjord.  South of the fjord, the trend of the linear feature swings to north-south.  Near the Baufremont River, in an area called Torngat South, other



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kimberlite dikes have been identified and one has been sampled.  One sample is from float overlying a dike estimated to be about 3 metres wide.  Based on outcrop patterns, other parallel dikes are recognized in this area. The individual dikes are dark green and generally coarse-grained. Torngat1 has a thin selvage of fine-grained kimberlite on both sides, which is typically about 10 to 15 centimetres thick.  Contacts between the coarse-grained and fine-grained kimberlite and between the kimberlite and the enclosing rocks are sharp.  The dikes outcrop recessively, and the fine-grained kimberlite is more resistant to weathering than the coarse-grained kimberlite.  Torngat 1 appears to bifurcate in the fjord cliff face, so that a horse of wall rock is surrounded by kimberlite.

Previous geochemical work completed by staff and students of the University of Québec in Montreal showed that the rocks contain very low silica and are ultra potassic, and that titania is high and alumina is low.  Based on these results, and the mineralogy, these rocks are classified as Type 1 kimberlites.

Mini-bulk sample analysis  Summer/Fall 2002

In 2002 samples from two anomalously diamondiferous dyke segments were processed. In January 2003, fifteen samples, ranging in weight from 24 kilograms to 100 kilograms were analyzed for diamonds by caustic fusion (100-micron cut-off size), selection and description was completed by SGS Lakefield Research Limited (Lakefield) and reviewed by AMEC E & C Services Limited (AMEC).

Analytical results of the 900-meter and 400-meter segment, respectively, are tabulated below.

Dyke Segment Diamond Summary- (per square mesh sieve analysis provided by Lakefield)

|                                 |                                        |                                     |                      |                               
|-------------------------------- | -------------------------------------- | ----------------------------------- | -------------------- | ------------------------------
|Sampled 
    segment             | 900 metre dyke segment 
    (578.52kg) | 400 metre dyke segment 
    (432kg)
|Sieve size 
    (mm square mesh) | Number of 
 diamonds                   | Weight of diamonds    (carats)      | Number of 
 diamonds | Weight of diamonds    (carats)
|0.85 to 1.18                     | 3                                      | 0.042511                            | 3                    | 0.03471                       
|0.600 to 0.850                   | 10                                     | 0.046633                            | 12                   | 0.05098                       
|0.425 to 0.600                   | 27                                     | 0.038755                            | 14                   | 0.019630                      
|0.300 to 0.425                   | 38                                     | 0.020585                            | 19                   | 0.010965                      
|0.212 to 0.300                   | 69                                     | 0.015260                            | 38                   | 0.007840                      
|0.150 to 0.212                   | 99                                     | 0.007448                            | 50                   | 0.003230                      
|0.100 to 0.150                   | 103                                    | 0.002725                            | 61                   | 0.001585                      
|Total                            | 349                                    | 0.173917                            | 197                  | 0.128940                      





















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Samples listed in this table make up the 900 metre Torngat North dyke segment

|             |                    |                    |                                            
|------------ | ------------------ | ------------------ | -------------------------------------------
|Sample No.   | Sample Weight (Kg) | Diamonds recovered | Total Diamond Weight In Sample
    (Carats)
|GL10         | 101.80             | 99                 | 0.026835                                   
|887573       | 24.00              | 32                 | 0.006175                                   
|DB09         | 100.00             | 60                 | 0.017590                                   
|GL09         | 72.52              | 47                 | 0.030285                                   
|887574       | 24.00              | 14                 | 0.002190                                   
|DB03         | 100.00             | 43                 | 0.015010                                   
|GL08         | 81.25              | 20                 | 0.032385                                   
|887575       | 24.00              | 2                  | 0.000060                                   
|DU character | 50.95              | 32                 | 0.043387                                   
|TOTAL        | 578.52             | 349                | 0.173917                                   

1. 13 diamonds measure greater than 0.5 millemetres in three dimensions and

2. 41 diamonds measure greater than 0.5 millemetres in two dimensions.



Samples listed in this table make up the 400 metre Torngat North dyke segment

|           |                    |                    |                                               
|---------- | ------------------ | ------------------ | ----------------------------------------------
|Sample No. | Sample Weight (Kg) | Diamonds recovered | Total diamond weight   in sample 
    (Carats)
|DB04       | 100.00             | 36                 | 0.021595                                      
|DB01       | 100.00             | 63                 | 0.029975                                      
|887587     | 24.00              | 15                 | 0.021265                                      
|DB06       | 100.00             | 53                 | 0.011465                                      
|GL07       | 84.00              | 29                 | 0.042070                                      
|887588     | 24.00              | 1                  | 0.002570                                      
|TOTAL      | 432.00             | 197                | 0.128940                                      

12 diamonds measure greater than 0.5 millemetres in three dimensions and

28 diamonds measure greater than 0.5 millemetres in two dimensions



Largest diamonds discovered to date from the 900 metre and 400 metre dyke sections are 2.90 x 2.50 x 1.80 millemetres (0.065 ct) and 1.85 x 1.25 x 1.07 millemetres (0.0142 ct), respectively.  The diamonds are very white, mostly transparent and of high preservation, as previously described by Lakefield.

These results and work to date on the project relate to exposed dyke intervals that strike roughly at right angles to stratigraphy.  Cross faults, that are believed to occupy overburden covered valley floors, also intersect dykes at rights angles and potential exists for dyke width enhancement where dykes and cross structures exist.  Additional surveying and ultimately diamond drilling would be required to evaluate overburden covered sections of dyke material.

The Corporation believes that further work should focus primarily on identifying the geometry of the Torngat dyke at depth and along strike. Since the topography is primarily controlled by geology, the deeper valleys could be underlain by shear zones or faults where the dykes could have formed blows. These areas cannot be sampled on surface and further work would involve geophysical surveying followed up by drilling to evaluate those anomalies thought to be representative of dyke material.



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Since 2003, the Corporation has elected to focus its primary attention on its Atlanta, Brodeur and Abitibi properties and as a result, no significant expenditures have been made on Torngat since that time.  Sufficient work has been completed to secure the mining rights: on its exploration permit staked, totaling 50 square kilometers; and its 34 mining claims, totaling 14.9 square kilometres, until July 2009. In 2005, two other exploration permits, covering 277 square kilometres, were not renewed and costs of $700,000 relating to these permits, comprised of $141,270 in acquisition and holding costs, and $558,730 in related field work, were written off during the year.  In 2006, after being inactive for more than three years, the Corporation wrote off the remaining book value of the property of $2,692,190 to comply with Accounting Guideline No. 11 (AcG 11) of the CICA. The Corporation continues to hold a total of 13.4 carats of high quality diamonds which were recovered from Torngat in 2000 from a sample of 343 tonnes of ore.

Brodeur Property, Baffin Island

The Corporation acquired its interest in its Brodeur Property pursuant to an agreement with Helix Resources Inc. (Helix), dated April 27, 2000, as amended by agreement dated May 5, 2005 (as amended, the Helix Agreement) pursuant to which the Corporation acquired three mining claims totaling 28.85 square kilometres (7,128.5 acres) staked on Brodeur. To maintain the Helix Agreement in good standing, the Corporation is required to pay Helix $150,000 annually. One half of these payments and all of certain prior payments made to Helix prior to 2005 are deemed advances against future royalty payments. The 2006 and 2007 payments were made on January 3, 2006 and 2007 respectively. In addition, under the terms of the Helix Agreement, $500,000 is due to Helix upon receipt of all development permits and $1,000,000 plus 500,000 pre-consolidation common shares of the Corporation are due upon production of 500,000 carats. Subsequently, a 5% net profits interest and a 1% gross royalty are due after crediting previous payments. In 2003, the Corporation staked 426 additional mineral claims in the region covering 4,118 square kilometres (1,017,593 acres) and paid an initial filing fee of $101,759. Five of the claims staked in prior years were allowed to lapse. Total cost of $31,219, including direct exploration costs of $29,806, for the five abandoned claims were written off in 2003. By the end of 2003, the Corporation had a 100% interest in 532 mineral claims totaling 5,075 square kilometres (1,254,029 acres) within the region. In 2005, the Corporation elected to reduce its holdings in Brodeur.  It filed assessment reports with Indian and Northern Affairs Canada in connection with field work carried out from 2002 to 2005 and paid filing fees of $29,694 in respect of these reports filed. 218 claims covering 2,093 square kilometres (517,029 acres) were abandoned and costs of $800,000 relating to these claims, comprised of $135,995 in acquisition and holding costs, and $664,005 in related field work, were written off. In 2006, the Corporation decided to focus future exploration on those mining claims in and around the Freightrain-Cargo1 pipe which have the greatest potential for diamond discovery, and recorded a write down of $2,200,000 in respect of those mining claims expected to lapse in 2007. At December 31, 2006, the Corporation decided to retain an interest in 67 claims covering 151,415 acres and continues to hold a total of 51.1 carats of high quality diamonds which were recovered from Brodeur in 2001 and 2002 from a sample of 248.4 tonnes of ore.

Location and Access

The Brodeur cluster of kimberlite pipes is located 12 kilometres east of Tidewater on the Brodeur Peninsula, on the west coast of Baffin Island. It is centered 3.3 kilometres south of Jackson River at 73°14' 48" latitude north and 88°16' 12" longitude west. Approximately 100 kilometres to the east is the community of Arctic Bay (Ikpiarjuk), which is linked by a 21 kilometre all-weather highway to the more easterly Nanisivik zinc mine and townsite.

Arctic Bay and Nanisivik have First Air Boeing 727 jet service twice weekly. Marine shipping companies make the first scheduled delivery in mid-July and the last in mid-September. Navigable waters of Admiralty Inlet, Lancaster Sound and Prince Regent Inlet bound the Brodeur Peninsula.







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Geology

Flat-lying ordovician and silurian carbonates are exposed along the steep coastline of the Brodeur Peninsula and in the deeply incised river gorges. From the air, evidence of the Jackson Inlet cluster of kimberlite pipes is manifested as three dark brown circular patches along a northeast-southwest axis and surrounded by a 500 metres by 600 metres halo of tan colouration. Within the halo are patches of darker tan colour.

The unweathered kimberlite, sampled from three pipes, has a dark brownish green, fine-grained ground mass which comprises 20% to 30% of the rock. The remaining 70% to 80% is primarily light green olivine of random dimensions up to 2 centimetres. Fragments of limestone, shale and gneiss are also present.  Although hand specimens are only slightly magnetic, many contain 5% to 10% very magnetic fragments. These fragments resemble a siliceous iron-manganese shale or iron formation and are prominent in the weathered material in permafrost and "soil" above the pipes.

Thin sections of various kimberlite samples were examined by microscope at Lakefield. The mineral assemblage consists of abundant olivine macrocrysts as well as scarce phlogopite and garnet macrocrysts set in a fine grained serpentine matrix. The presence of pyroclastic texture suggests crater facies material and a relatively shallow level of erosion.

2004 Exploration Program and Results

The Corporation advanced Brodeur after entering into two agreements during the year.  Pursuant to a letter agreement entered into in April 2004 with Kennecott Canada Exploration Inc. (Kennecott) in connection with 270,644 acres of the north claim block (the Jackson East & West) of  Jackson Inlet, Kennecott incurred expenditures in excess of $615,000 in completing a 15,700-line kilometre MIDAS IITM aeromagnetic survey over 200,000 acres of Jackson East & West using 50-metre spacing for one block of claims (Block 1) and 75-metre spacing for a second block of claims (Block 2). The final results of the survey, which were received during the first quarter of 2005, revealed as many as 78 new potential kimberlite drill targets. The agreement with Kennecott was terminated in July 2004 as a result of discussions of the Corporations obligations towards a third party having an interest in Brodeur not producing the necessary results within the anticipated time frame. The Corporation remains committed to honoring the third party agreement and to continue advanced exploration at Brodeur.

In August 2004, the Corporation entered into an agreement (the Option) with Stornoway Diamond Corporation (Stornoway) in respect of the south claim block running along the Vista River (Vista) covering over 980,000 acres of Brodeur pursuant to which Stornoway was granted an option to earn an interest in Vista. In 2006 Stornoway conducted an airborne survey over a portion of Vista. The results of this survey were delivered to the Corporation and the Option was terminated. The Corporation completed a 1,200-sample soil / till sampling program in the third quarter of 2004.  The samples were processed for kimberlite indicator minerals at Vancouver Indicator Processors Inc. in Burnaby, B.C., Canada.  Heavy mineral concentrates at this lab was sent to HDM Laboratories Inc, in Denver, and KIM Dynamics, in Vancouver, B.C., Canada, for sorting, selecting and counting kimberlite indicator minerals.

In July 2004, the Corporation discovered kimberlite fragments on frost boil surfaces at the A-2 magnetic anomaly, located 450 metres northeast of the Freightrain diamondiferous kimberlite. The A-2 anomaly was detected during a ground magnetometer survey carried out in 2003 by JVX.

A sample of frost boil till of approximately 25 kilograms from this site contained 83 pyropes, 2 clinopyroxene and 5 chromite grains as determined by a Lakefield microscopic examination.



On the basis of proven existence of kimberlites, extensive soil sampling on a 2 by 0.5 kilometre grid and promising chemistry of indicator mineral anomalies, the Jackson Inlet East claim block (Block 1) and West



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claim block (Block 2) were chosen for a high resolution aeromagnetic survey. A flight line spacing of 50 metres in Block 1 and 75 metres in Block 2 was chosen, that is, sufficiently close to spot drill holes without the need to conduct follow-up ground magnetic surveys.

Fugro Airborne Surveys carried out the 8,955.2 line kilometre airborne geophysical program during July 2004 utilizing a helicopter mounted multi-sensor MIDAS IITM horizontal gradiometer over both blocks.

Due to the thick flat lying platform sediments over the Archean basement, craton background variations of the magnetic field are mainly due to large-scale deep-seated features. This setting improves the likelihood of identifying smaller, and possibly lower amplitude, anomalies. Magnetic surveys on surrounding properties have shown that the known kimberlites in the area display a monopolar magnetic high signature. Individual anomalies recognized in processed airborne data consist of discrete magnetic features representing either highs or lows relative to background data. Typically, these features are less than one kilometre in diameter.

Careful inspection of the data resulted in the selection of 54 anomalies on the Jackson Inlet East claims (Block 1), 20 on the Jackson Inlet West claims (Block 2) and 4 on the Vista project claims just outside of the Block 1 boundary. The magnetic gradient data assisted in prioritization of subtle anomalies.

On the Jackson Inlet West block, one anomaly is expressed on 4 profiles of the flight lines spaced at 75 m. Two anomalies are expressed on 3 lines, five on 2 lines and 12 on 1 line. The strongest anomalies are 9, 6, 5 and 4 nT .

On Jackson Inlet East and in the case of the four anomalies just outside its boundary (located on the Vista Claim Blocks) one anomaly is expressed on 5 flight lines, each spaced 50 metres apart, one on 4 lines, ten on 3 lines, eighteen on 2 lines and twenty eight on 1 line. The strongest anomalies are adjacent 12.5 nT and 11 nT peaks with dimensions of 200 by 100 metres and 250 by 90 metres, respectively. These and at least 5 other prominent anomalies comprise a cluster of 1.2 kilometre radius centered 7.5 kilometres east of Cargo2. The 12.5 and 11 nT anomalies display approximately twice the magnetic intensity of Cargo2. Fourteen of the 24 soil samples within a 2.5 kilometres radius yielded peridotitic and eclogitic garnets, mantle ilmenites and/or chromites.

Of the 45 East claim block survey anomalies of at least 2 nT, three are in the 10-12-5 nT range, ten are in the 5-9- nT range and 32 are in the 2-4 nT range. These anomalies lie along two broad bands trending northeast-southwest as do the corridors of anomalies on the West claim block. In the case of both blocks, there is a strong coincidence of kimberlite indicator mineral anomalies with these corridors of magnetic anomalies as well as with many individual magnetic anomalies.

The MIDAS IITM survey detected JVX’s magnetic anomaly A-VII (2003 exploration) and the previously identified Cargo2 (JVX’s A-1) which is strongly inferred to reflect a diamondiferous kimberlite because of the presence of indicator minerals as well as a diamond recovered in 2002 during core drilling in deep overburden.

The 980,000 acre Vista project has been confirmed by indicator mineral analyses to have diamond potential and is at the airborne survey stage with the exception of the earlier mentioned MIDAS IITM survey executed on the Jackson Inlet East block that revealed just outside its boundary four anomalies located on Vista. In 2006 the Corporation decided to allow the majority of the Vista claims to lapse.

During the 2004 field season, a total of 1,200 soil samples were collected by the Corporations field personnel, most at 500 metre intervals along north-south lines spaced 2 kilometres apart. Areas covered included the previously untested northeast portion of the Vista project, the anomalous blocks identified by the 2003 stream sediment sampling and several magnetic anomalies selected by a study of the Geological Survey of Canada regional aeromagnetic data.







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2005 Exploration Program and Results

The main objectives of the 2005 exploration program were assessing the kimberlite potential of Brodeur and testing for diamondiferous kimberlites using a portable reverse circulation (RC) drill. Based on heavy mineral anomalies 11 high priority claim groups were selected for the aeromagnetic survey on Vista. Both, chrome diopside and magnesium ilmenites, which are known diamond indicator minerals are present on eight of the Vista heavy mineral clusters. The area covered by this survey was 2,000 square kilometres of carefully selected potential kimberlite targets on the 4,000 square kilometres Vista claim block. The anomaly definition capability of this system allows positioning and drilling of exploration holes directly from the survey results.

Aeromagnetic Survey Results:

The Corporation succeeded with its objectives. Fugros geophysicists selected from the 15,241 kilometres of flight line data approximately 1,400 discrete anomalies in the 2 to 30 nT range. The targets are interpreted to be magnetic sources near surface. Those targets deemed to be most significant by Fugro compare favourably with the 37.25 nT recorded over the Cargo1 kimberlite, for which an approximate diameter of 90 metres is interpreted by Fugro. It should be noted that core holes drilled across the narrow dimension and parallel to the long axis of Cargo1 respectively intersected 83.1 metres and 147.9 metres of solid kimberlite. The most easterly of five holes drilled into Cargo1 confirmed a long dimension of at least 185 metres.

The 39 most significant anomalies picked by Fugro from more than 1,400 on the basis of geophysical response and which are priority kimberlite targets are listed in Table 1. The target diameters range from 60 metres to 225 metres and average 115 metres, while the maximum amplitude varies from 2.79 nT to 29.66 nT with an average of 12.17 nT.

|                |                           |                         |                               |                       |  |  | 
|--------------- | ------------------------- | ----------------------- | ----------------------------- | --------------------- |  |  | 
|Anomaly         | Approx Diameter  (metres) | Maximum Amplitude  (nT) | Mag sensor to source (metres) | Source Depth (metres)
|11-001( Cargo1) | 90                        | 37.25                   | 60                            | 25                   
|9-001           | 125                       | 22.20                   | 78                            | 46                   
|8-001           | 100                       | 29.66                   | 60                            | 21                   
|7-001           | 100                       | 9.52                    | 70                            | 38                   
|7-002           | 100                       | 5.37                    | 63                            | 28                   
|6-001           | 140                       | 6.21                    | 84                            | 52                   
|6-002           | 120                       | 3.15                    | 58                            | 21                   
|6-003           | 80                        | 3.45                    | 52                            | 22                   
|5-001           | 75                        | 2.59                    | NA                            | NA                   
|4-001           | 150                       | 6.60                    | 79                            | 49                   
|4-002           | 200                       | 5.57                    | 93                            | 61                   
|4-003           | 100                       | 8.03                    | 68                            | 36                   
|3-001           | 70                        | 2.79                    | 51                            | 23                   
|3-002           | 60                        | 3.82                    | 53                            | 20                   
|2-001           | 90                        | 11.79                   | 69                            | 44                   
|2-002           | 100                       | 12.53                   | 95                            | 58                   
|2-003           | 120                       | 10.87                   | 81                            | 50                   
|2-004           | 110                       | 21.98                   | 100                           | 67                   
|2-005           | 100                       | 15.36                   | 50                            | 17                   
|2-006           | 125                       | 15.63                   | 73                            | 35                   
|2-007           | 150                       | 20.81                   | 89                            | 46                   



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|      |     |       |     |    |  |  | 
|----- | --- | ----- | --- | -- |  |  | 
|2-008 | 120 | 26.09 | 63  | 30
|2-009 | 80  | 14.30 | 51  | 19
|2-010 | 100 | 13.08 | 75  | 38
|2-011 | 180 | 8.24  | 100 | 67
|2-012 | 100 | 13.59 | 61  | 26
|1-002 | 110 | 10.94 | 58  | 30
|1-003 | 75  | 11.97 | 48  | 19
|1-004 | 100 | 12.83 | 49  | 19
|1-005 | 140 | 10.54 | 59  | 29
|1-006 | 180 | 19.16 | 67  | 35
|1-007 | 100 | 8.01  | 46  | 14
|1-009 | 100 | 9.39  | 57  | 24
|1-010 | 100 | 16.56 | 67  | 36
|1-011 | 110 | 10.12 | 68  | 36
|1-012 | 140 | 14.43 | 103 | 71
|1-013 | 140 | 12.63 | 84  | 51
|1-014 | 225 | 12.67 | 82  | 47
|1-015 | 125 | 16.65 | 78  | 40
|1-016 | 100 | 15.45 | 69  | 32



In 2006, a technical review of the Fugro aeromagnetic data was undertaken by Scott Hogg & Associates Limited. The objective was to identify high priority drill targets. Of the 38 magnetic anomalies with characteristics most reflective of shallow intrusive bodies such as kimberlite pipes, 12 were recommended as priority sites for investigation by drilling. A ground or detailed helicopter-borne magnetic survey of each site is required to determine the location of each anomaly source with sufficient accuracy for drill positioning.

Testing for diamondiferous kimberlites:

The 2005 drilling program was designed to investigate the presence and quality of kimberlites in addition to the known Freightrain pipe, the Cargo1 pipe, the 1.7 kilometre kimberlite corridor and the 3 pipes discovered by Rio Tinto on their property near Brodeur. The focus was on Jackson Inlet East and West drill targets and to establish the diamond potential of the 78 new targets produced by the 2004 airborne survey.

The Corporation is encouraged by the results of this drilling program which is believed to be a good indicator of more diamondiferous kimberlite pipes present.  A series of holes investigated the 1.7 kilometre corridor of kimberlite fragments up to 50 metres wide. One angled hole (-60°) drilled under a line of kimberlite fragments intersected, 330 metres northeast of the Cargo1 pipe, 1.83 metres of kimberlite after passing through 2.13 metres of till and 15.24 metres of limestone. This confirmed the existence of a significant dyke extending beyond Cargo1 to the northeast and southwest towards the Freightrain pipe. Earlier grab samples, weighing approximately 50 kilograms, of kimberlite fragments on the corridor yielded 13 diamonds. Other Reverse Circulation (RC) holes, testing 11 targets which had favorable aeromagnetic responses, yielded diamond indicator minerals in their cuttings possibly indicating nearby kimberlite. Further analysis of the minerals found in the drill cuttings might identify kimberlite bodies. It is inferred that a number of holes may have stopped prematurely in boulders of limestone or sandstone rather than in true bedrock.

2006 Analytical Results



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During 2006, SGS Mineral Services provided electron microprobe analyses on indicator mineral grains from a 2-kg sample of rock cuttings (number 92032) recovered from a 1.83m interval of kimberlite intersected in 2005 by RC drill hole CG1-12 within the 1.7-km corridor. Because the SGS Mineral Services microprobe unit was being serviced, these analyses were conducted on its behalf at the University of New Brunswick. Furthermore, analyses were reported for indicator minerals recovered from surface float (sample number 92026) in a kimberlite fragment train in the vicinity of Magnetic Anomaly A-2. The following discussion of results from a report by Dr. Bruce Craig Jago entitled Interpretation of Kimberlite Indicator Mineral Electron Microprobe Analyses: Samples No. 92026 and 92032. Dr. Jago is a qualified person as defined by National Instrument 43-101 of the Canadian Securities Administrators.

Analytical results from both samples 92026 and 92032 are similar to those obtained from indicator minerals recovered from the Freightrain pipe, located 450m to the southwest of Magnetic Anomaly A-2. Thus, and kimberlite sources of these samples probably are related to the Freightrain system (possible extension). The samples are characterized by a mantle-derived peridotitic suite of Cr-pyrope, chromite/spinel, olivine, clinopyroxene and picroilmenite.  The Cr-pyrope suite includes garnets of harzburgitic (G10 and G10D), lherzolitic (G9), websteritic (G4) and wehrlitic (G12) paragenesis.



Nearly 10% of the pyrope population garnets are subcalcic G10s, many of which are G10Ds.  High-pressure megacrystic garnets are present but rare.  Noteworthy is a small (2.3%) but highly significant population of sodium-enriched, diamond-facies websteritic/pyroxenitic garnets (G4 and G4D), compositionally similar to such garnets that have been linked to the principle diamond source at the Victor kimberlite near Attiwapiskat, Ontario, currently under development by De Beers. The De Beers fact sheet on Victor indicates a grade of 0.23 carats per tonne and a value of C$117 per tonne.

(see http://www.debeerscanada.com/files_2/victor_project/factsheet.html)

A significant portion (up to 66%) of the chromite population plots within the Diamond Inclusion Field and general chromite distribution patterns are similar to those at Freightrain.



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Cr-bearing clinopyroxenes were recovered only from the kimberlite float sample (number 92026) and all were derived from garnet lherzolite.  These were plotted on a temperature-pressure diagram and are interpreted as being roughly coincident with a 45mW/m2conductive geotherm that is rooted in the diamond stability field (see accompanying Fig. 8 from the Jago report).  Although temperatures are clearly higher than reported for diamondiferous kimberlites from the Slave Province in Canada where geothermal array plots indicate a relatively cool 35 to 40 mW/m2 conductive geotherm, the presence of significant diamond populations at the Freightrain and Tuwawi (Kennecott) kimberlites clearly indicate that temperatures are not too high for



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diamond preservation.  The presence of relatively abundant Mg-Cr-enriched picroilmenite indicates reduced conditions (oxygen-poor) in kimberlite source areas, which also favours diamond preservation.



The very positive chemistry of drill cuttings sample number 92032 re-enforces the potential significance of magnetically undetectable kimberlite along the 1.7-km Cargo 1 dyke-fragment trend, and provides strong justification for focusing additional exploration in the immediate vicinity.  The dyke underlying the fragment train and a large portion of the Cargo 1 pipe were not apparent from results of either ground or airborne magnetic surveys.  At the Cargo 1 pipe, magnetic susceptibility (MS) of kimberlite core from hole CG1-05 tested by MPH Consulting Limited averaged only 0.05 MS whereas that encountered by two other Cargo 1 holes west of CG1-05 had susceptibility averages of 2.49 and 2.26.  These values are not unlike those from many known kimberlites in other districts (e.g., Victoria Island).

Objectives for Brodeur and Torngat Diamond Properties in 2007

Management believes that realization of the potential of the Brodeur and Torngat diamond properties can best be achieved if these assets are held by an entity that specializes in diamond exploration, possessing levels of funding and infrastructure to sustain exploration. The Corporation plans to continue to pursue alternatives to unlock the value of the Brodeur and Torngat diamond properties during 2007.









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Indonesian Property

In  1997, the Corporation, and its wholly-owned subsidiaries, Twin Gold Cayman Corporation (Twin Gold Cayman) and Twin Gold Layuh Mining Corporation (Twin Gold Layuh) entered into agreements (collectively the "Layuh Agreements") with two wholly-owned subsidiaries of PT Harita Jayaraya ("PT Harita"), an Indonesian company, to form a joint venture between Twin Gold Layuh and such subsidiaries to explore for gold and related minerals and, if successful, to mine in an area covering 86,880 hectares (the "Layuh Property") in the Layuh area of South Kalimantan, Indonesia.  The Layuh Agreements provided that a joint venture would be formed provided that an application is granted for a Seventh Generation Draft C.O.W. (Contract of Work).

Since 1999, the Corporations Layuh Property had been on care and maintenance.At the end of fiscal 2004, the Corporation wrote-off Layuhs carrying value of $1,450,626 because it decided to focus its time and effort on its North American mineral properties. In 2005, the Layuh Property was transferred to the Corporation from Twin Gold Layuh, before Twin Gold Layuh and Twin Gold Cayman were dissolved.

Method of Operation

The Corporation has been an exploration stage mineral resource company since inception and has undertaken gold exploration and mine development activities since 1994. Between July 1999 and December 2001, the Corporation focused on diamond exploration in Canada. In 2002, the Corporation reactivated development activities on Atlanta and continued to direct its efforts towards diamond exploration on Brodeur. In 2004, a positive feasibility study on Atlanta was completed and the Corporation has commenced discussions in respect of financing the mine at Atlanta.  Concurrently with this, the EIS and permitting process at Atlanta is progressing.  On February 9, 2005, the Corporation submitted a Supplement to the Plan of Operation to the U.S. Department of Agriculture  Forest Service (USFS), the lead agency in the permitting process, and on March 2, 2005, the USFS accepted the Supplement as adequate to proceed with the NEPA analysis through the completion of an Environmental Impact Statement (EIS). In 2006, at Brodeur, the Corporation engaged MPH Consulting Limited (MPH), an international exploration and mining consulting company, to manage bulk sampling programs designed to further evaluate the economic potential of the Freightrain kimberlite and to provide an initial evaluation of the commercial diamond content of Cargo1 group of claims.

During the past three years, all financings undertaken by the Corporation have been by way of private equity offerings.  In fiscal 2004, the Corporation raised aggregate gross proceeds of $9,261,275 by means of equity financings. The financings consisted of the private placement of units, with each unit consisting of one common share and one common share purchase warrant, with each warrant being exercisable for two years with exercise prices ranging from $0.24 to $0.50 per share.  Pursuant to these financings, the Corporation issued warrants in payment of commissions and advisory fees, consisting of 1,642,500 warrants exercisable at $0.205 per share and 1,589,136 warrants exercisable at $0.23 per share.  The Corporation has also agreed to pay cash fees totaling $248,700. Of the aggregate amount raised, $4,896,100 was raised during the fourth quarter of 2004. Pursuant to the various financings, three directors of the Corporation subscribed for, in aggregate, 4,934,221 units for aggregate proceeds to the Corporation of $1,250,075.  The warrants included in the units subscribed for by the directors are exercisable at prices ranging from $0.24 to $0.50 per share.

In fiscal 2005, the Corporation raised aggregate gross proceeds of $6,278,800 by means of equity financings consisting of 6,955,832 flow-through shares issued at prices of $0.12 and $0.18 per flow-through share, 36 million common shares issued at $0.12 per share and 5,664,846 common share units issued at prices ranging from $0.12 to $0.22, of which 318,181 units consisted of one common share and one common share purchase warrant and 5,346,665 units consisted of one common share and one half of one common share purchase warrant, with the warrants exercisable for two years from the date of issue at exercise prices ranging from $0.18 to $0.24 per share. Pursuant to one of the flow-through financings, the Corporation issued 400,000 warrants as payment of commissions and advisory fees, exercisable at $0.12 per share.  The Corporation also paid fees of $59,840 in connection with the financings. Of the aggregate amount raised, $4,980,000 was raised



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during the fourth quarter of 2005.  Pursuant to the various financings, four directors of the Corporation subscribed for 387,777 flow-through shares and 3,616,665 common share units for aggregate proceeds to the Corporation of $720,800. 1,808,331 warrants included in the units subscribed for by the directors are exercisable at $0.24 per share.

The 36 million shares issued in December 2005 were issued to Jipangu Canada Inc. (Jipangu) and resulted in Jipangu then owning approximately 19.9% of the Corporations outstanding shares.  In addition, Jipangu and the Corporation signed a letter of intent which would have allowed Jipangu to subscribe for and purchase by April 4, 2006, 63,854,545 common share units at $0.1375 per unit for gross proceeds to the Corporation of $8,780,000. In March 2006, Jipangu decided that it would not proceed with the additional financing.

In 2006, the Corporation completed stock offerings for total gross proceeds of $5,011,000 by means of equity financings consisting of 1,666,666 flow-through shares units issued at $0.15 per unit, 1,222,222 million common shares issued at $0.18 per share and 38,617,393 common share units issued at $0.115. The Flow through share units were issued on May 9 and consisted of one flow through common share and one half of one common share purchase warrant of the Corporation. In addition, 133,333 broker warrants were issued in respect of the May 9 closing. Each whole warrant is exercisable at $0.23 per warrant for two years. 1,544,694 broker warrants were issued in respect of the September and October closings. Each warrant is exercisable at $0.13 per warrant for one year. Total share issue costs incurred in 2006 were $557,610, including cash finders fees of $242,050 paid in respect of the private placements.

4,347,826 of the common shares issued at $0.115 were placed with directors of the Corporation or with a company related to a director of the Corporation. 1,222,222 shares were issued in satisfaction of demand notes of $220,000 bearing interest of 5% per year due to two directors of the Corporation and 870,000 of the shares were issued in satisfaction of $100,000 due to a supplier.

The Corporation is currently in discussions to secure additional financing. A delay in arranging such financing on terms satisfactory to the Corporation could result in construction at Atlanta and ultimately production from Atlanta, being delayed.

Segmented Information

Information regarding geographical segments in which the Corporation has operated is disclosed in note 9 to the annual consolidated financial statements in the 2006 annual report of the Corporation, which consolidated financial statements and notes thereto are incorporated herein by reference.

Mining Agreements

Certain of the interests of the Corporation in the mineral properties of the Corporation are held through various agreements which are described in note 4 to the consolidated financial statements of the Corporation as set out in the 2006 annual report of the Corporation, which consolidated financial statements and notes thereto are incorporated herein by reference.

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Disclosure regarding management's discussion and analysis of financial condition and results of operations is set out in the 2006 annual report of the Corporation, which disclosure is incorporated herein by reference.

Off-Balance Sheet Arrangements

The Corporation does not have any off-balance sheet arrangements.



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Tabular Disclosure of Contractual Obligations

All amounts in this section are expressed in thousands of Canadian dollars, except in respect of Atlanta, which are expressed in thousands of U.S. dollars).

The Corporation has made commitments in respect of its head office leases and mineral properties as follows:

|               |           |           |             
|-------------- | --------- | --------- | ------------
|               | Years 1-2 | Years 3-4 | After Year 4
|Head office    | 149       | 79        | -           
|Atlanta (1)(2) | 195       | 105       | 60          
|Abitibi        | 25        | -         | -           
|Brodeur (3)    | 150       | 150       | 150         



(1) Pursuant to an amendment to one of the Atlanta lease-purchase option agreements a final option payment of $120,000 which was due in December 2006, will be repaid in equal installments to December 2010, and include accrued simple interest of @ 5% per year.

(2) Pursuant to the Lease / Option to Purchase agreement with Monarch Greenback, LLC (Monarch), the Corporation has an option to purchase Monarchs surface and mineral rights on February 2, 2009 for $2,875,000.

(3)

Paid to Helix Resources Inc. on January 3, 2007.  Payments are to be made annually until the production of 500,000 carats of diamonds or the termination of the existing claims purchase agreement with Helix.

Contingencies and commitments are described in Note 10 to the Corporations audited consolidated financial statements for the year ended December 31, 2006.

Exploration work, particularly at Brodeur and Torngat, is significantly affected by the weather and light conditions that prevail in the Canadian Arctic in the fall and winter seasons.  The level of the Corporations activities at Atlanta and Abitibi are also somewhat impacted by winter weather conditions.  These factors may result in lower overall levels of activity on the Corporations properties during these seasons.  However, as a property advances toward the production stage and permanent facilities are constructed, the impact of adverse weather conditions on operations diminishes.



























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ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Directors and officers of the Corporation (as at March 23, 2007)

Name and Position

Term of Office

James K. Gray, O.C. *

Chairman

Director since March 15, 2000, Chairman since August 2006

Eric J. Berentsen

Director

Since June 30, 2006

Allan J. Folk

Director

Since November 6, 2006

Bill Baird

Director and Interim CEO

Director since February 7, 2007, Interim CEO since August 4, 2006

Domenico Bertucci, C.A. (1)

Chief Financial Officer

Since February 18, 2000

R. Bruce Thorndycraft, Met. Eng

Vice President, Operations and

General Manager, Atlanta Gold Corporation

Since November 6, 2006



F. Paul Collins,

Secretary

Since March 15, 2001

*  Members of the Audit Committee of the Board of Directors of the Corporation
 during 2006. Mr. Folk was appointed to the Audit Committee on February 7, 2007 and Mr. Berentsen was appointed to the Audit Committee on March 22, 2007, to replace two directors who had retired from the Board.



(1) Mr. Bertucci has submitted his resignation as Chief Financial Officer of the Corporation to be effective March 31, 2007.

James K. Gray, O.C., has been a director of the Corporation since March 15, 2000 and its Chairman since August 4, 2006. For the past 50 years, Mr. Gray has been engaged in the oil and natural gas exploration business in Western Canada.  In 1973, Mr. Gray co-founded Canadian Hunter Exploration Ltd., one of Canada's larger natural gas producers, serving in the positions of Executive Vice President, President and CEO, and Chairman until the company was purchased by Burlington Resources in December 2001. Mr. Gray also serves as a director of Brookfield Asset Management Inc. (formerly Brascan Corporation), Canadian National Railways and Phoenix Technology Income Fund.  He is also non-executive Chairman of Temple Energy Inc., a private oil and gas exploration company, and a member of the Advisory Board of Lazard Canada, a subsidiary of Lazard Brothers & Co. Limited.

Eric J. Berentsen, who became a director of the Corporation on June 29, 2006, is the President of Jipangu Exploration Inc.  He has over twenty-nine years of varied geological experience, including as Chief Exploration Geologist for Getchell Gold Corp. from 1990 to 1999 and for Apollo Gold Inc. from 2002 to 2005. Mr. Berentsen also served as Senior Mine Geologist from 1999 to 2002 for Placer Dome Inc. and has worked for Jipangu since their acquisition of the Exploration division of Apollo Gold.

Allan J. Folk, a director of the Corporation since November 6, 2006, is Vice President of Institutional Equity Sales for Fort House Inc., an investment dealer and has more than 20 years experience in the investment industry.

Bill Baird, was appointed as Interim Chief Executive Officer of the Corporation on August 4, 2006 and as director of the Corporation on February 12, 2007. Mr. Baird has over 20 years of senior experience with a number of mining and exploration companies including 10 years with Teck Cominco Limited. Prior to his



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appointment as Interim CEO, Mr. Baird was a consultant to the Corporation and to other companies in the mining, land management and high technology / data utility industries.

Domenico Bertucci, the Chief Financial Officer of the Corporation, formerly worked as an independent financial consultant and, prior thereto, was the Controller and Secretary Treasurer of Oxbridge Securities Inc. and articled with Laventhol & Horwath, Chartered Accountants. Mr. Bertucci received his chartered accountant designation in 1991 and joined the Corporation in July 1997 as accounting manager.

Bruce Thorndycraft has been the Vice President, Operations and General Manager of the Corporations U.S. subsidiary, Atlanta Gold Corporation, since November 2006. Mr. Thorndycraft is an experienced chemical and metallurgical engineer and mine operator, and is internationally recognized for his expertise in designing, developing and running gold heap-leach operations for over 20 years, including gold projects in North, Central and South America. Prior to joining Atlanta Gold Corporation, Mr. Thorndycraft was with Lyntek Incorporated, where his last assignment was the pit and plant design for the Atlantas Full Feasibility Study.

F. Paul Collins, the Secretary of the Corporation, has been a partner with the law firm of Lang Michener LLP since 1991, practicing in the areas of corporate finance, mergers and acquisitions and securities law.

Directors of the Corporation are elected at each annual meeting of shareholders of the Corporation and hold office until the close of the first annual meeting of shareholders of the Corporation, occurring following their election unless their office is earlier vacated in accordance with the by-laws of the Corporation. Officers of the Corporation are appointed by the directors of the Corporation and serve as officers at the pleasure of the directors of the Corporation.

Family relationships among directors and executive officers

There are no family relationships between any director or executive officer of the Corporation and any other director or executive officer of the Corporation.

Employees

As of December 31, 2006, the Corporation had ten employees. Two employees reside in Canada and eight employees reside in the United States. In November 2005, a senior employee became a full-time consultant at the Corporations Boise, Idaho office. In November 2006, he became an employee of the Corporation, again.

Compensation

Disclosure regarding the compensation paid by the Corporation and its subsidiaries to the directors and officers of the Corporation is set out in the management information circular dated February 7, 2007 of the Corporation, which disclosure is incorporated herein by reference.  In 2006, the aggregate compensation paid by the Corporation and its subsidiaries to the directors and officers of the Corporation as a group for services in all capacities was US$322,675 (2005 - US$293,132).

Options and Warrants

Certain of the directors, officers, employees and consultants of the Corporation have been granted options to purchase common shares of the Corporation at various prices under the share option plan of the Corporation. Effective March 22, 2007, the Corporation amended the Articles of the Corporation to consolidate the common shares of the Corporation on the basis of one consolidated common share for each fifteen pre-consolidated common shares. As a result of this consolidation outstanding options to purchase common shares and the exercise prices thereof were also adjusted to reflect the consolidation. As at the date hereof, the following share options (to purchase consolidated common shares) were outstanding:





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|                                                       |                   |                |                   
|------------------------------------------------------ | ----------------- | -------------- | ------------------
|Held by                                                | Number
of Options | Exercise
Price | Expiration Date   
|Directors and Officers                                 | 13,333            | $4.275         | November 24, 2009 
|                                                       | 6,667             | 2.85           | February 13, 2011 
|                                                       | 10,000            | 1.80           | June 28, 2011     
|                                                       | 50,000            | 1.65           | September 28, 2011
|                                                       | 13,333            | 1.50           | November 6, 2011  
|                                                       | 10,000            | 1.35           | December 11, 2011 
|Sub total                                              | 103,333           |                |                   
|Employees and others who are not directors or officers | 13,333            | $7.65          | May 17, 2007      
|                                                       | 6,667             | 6.75           | January 17, 2008  
|                                                       | 3,333             | 4.00           | January 29, 2008  
|                                                       | 10,000            | 4.275          | November 24, 2009 
|                                                       | 30,000            | 3.30           | February 11, 2010 
|                                                       | 6,667             | 2.70           | June 30, 2010     
|                                                       | 80,000            | 2.85           | February 13, 2011 
|Sub total                                              | 156,667           |                |                   
|Total                                                  | 260,000           |                |                   



Share Ownership of Directors and Officers

As of March 29, 2007, and after giving effect to the share consolidation described above, the Corporation had 14,890,700 consolidated common shares outstanding (pre-consolidation: 223,360,501 shares) and to the knowledge of the Corporation, the total amount of any class of the Corporation's voting securities owned by the officers and directors of the Corporation as a group is as follows:

Identity of Person

Title of Class

or Group

Amount Owned

Percent of Class



Common shares

Officers and Directors

774,123(1)

5.1%



(1) Includes 143,518 common shares which the officers and directors as a group have the right to acquire beneficial ownership pursuant to the exercise of stock options and common share purchase warrants. Excludes 2,486,956 common shares and 129,646 common share purchase warrants held by companies associated with two of the directors.

The following table discloses on an individual basis the number of consolidated common shares owned and options to purchase consolidated shares granted to directors and senior management of the Corporation.

|                   |                        |                 |                 |                                      
|------------------ | ---------------------- | --------------- | --------------- | -------------------------------------
|Name               | Number of shares owned | Options granted | Exercise price  | Expiry dates                         
|James K. Gray      | 613,937                | 6,666 (1)       | $2.85           | February 13, 2011                    
|Eric J. Berentsen  | - (2)                  | 10,000          | 1.80            | September 28, 2011                   
|Allan J. Folk      | 16,666                 | 10,000 (3)      | 1.35            | December 11, 2011                    
|Bill Baird         | -                      | 50,000          | 1.65            | September 28, 2011                   
|Bruce Thorndycraft | -                      | 26,666          | $1.50
to $4.275 | November 24, 2009 to November 6, 2011
|F. Paul Collins    | -                      | -               | -               | -                                    



(1) Excludes warrants held by James K. Gray to purchase, in aggregate, 40,185 common shares. Of these warrants, 30,925 are exercisable at $3.60 per share until July 28, 2007, and 9,259 are exercisable at $3.60 per share until September 15, 2007.

(2) Excludes 2,486,956 common shares owned by a company associated with Mr. Berentsen.





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(3) Excludes warrants held by a company associated with Mr. Folk to purchase, in aggregate, 129,646 common shares. Of these warrants, 99,501 are exercisable at $1.95 per share until September 11, 2007, 3,478 are exercisable at $1.95 per share until October 6, 2007, and 26,666 are exercisable at $1.80 per share until November 17, 2007.



To the knowledge of the Corporation, there are no arrangements, the operation of which may at a subsequent date result in a change in control of the Corporation.

ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

To the knowledge of the Corporation, the Corporation is not directly or indirectly owned or controlled by a corporation or foreign government and no person is the owner of more than five per cent of any class of voting securities of the Corporation, except Jipangu Canada Inc., which owns 2,486,956 consolidated common shares of the Corporation (being approximately 16.7% of the number of consolidated common shares currently outstanding).

In October 2005, Mr. Thorndycraft entered into a consulting agreement with the Corporation to provide technical engineering expertise in respect of the Atlanta gold project until rejoining the Corporation on a fulltime basis in November 2006. Total amount invoiced to the Corporation in 2006 was US$68,187. In addition, during 2006, 4,347,826 (pre-consolidated) common shares were issued at $0.115 were placed directly with directors of the Corporation or with a company related to a director of the Corporation. In February 2006, the Corporation settled $220,000 of principal amount of the demand promissory notes held by two directors of the Corporation by issuing 1,222,222 pre-consolidated common shares in full satisfaction thereof. As at December 31, 2006, the Corporation had accrued for $488,012 in respect of demand loans made by two former directors of the Corporation and evidenced by promissory notes (Notes) bearing interest at 5% per annum and due on demand.  Interest of $25,707 was paid in 2006 to the directors in respect of the Notes. Additional disclosure regarding the interest of management in certain transactions is set out in the management information circular dated February 7, 2007 of the Corporation, which disclosure is incorporated herein by reference.

ITEM 8.

FINANCIAL INFORMATION (also see ITEMS 3 and 19(a))

Legal Proceedings

(i)

On May 25, 2005, the Idaho Conservation League (ICL) filed a complaint in federal district court alleging that Atlanta Gold was in violation of the United States Clean Water Act by allowing drainage from a historic underground mine adit (the 900 Adit) to discharge into a local creek. On December 8, 2005, the court approved an out-of court settlement on the complaint that confirmed Atlanta Golds requirement to complete construction of a water treatment facility for the 900 Adit discharge water by December 1, 2005, or as soon thereafter as weather conditions permitted, and required Atlanta Gold to create a fund of US$25,000 to be used for additional environmental projects benefiting water quality in the area and to pay $6,000 towards ICLs legal fees. In January 2006, the Corporation paid US$31,000 in respect of the environmental projects fund and the legal fees. After a difficult winter during which most work had to be halted, installation of two new treatment ponds was completed in June 2006. In July 2006, ICL raised questions about the adequacy of some of the work in the 900 Adit water treatment project.  During the last half of 2006, the Corporation completed modifications in response to these questions, including reinstalling a new liner and heavier underlayment in one of the two ponds, as well as additional piping, a leak detection system, and a fence around the project. Total expenditures incurred in respect of the ICL complaint was $426,376 in 2006 (2005  $206,790).

(ii)In September 2006, an equipment supplier brought an action against the Corporation seeking damages of approximately $970,000. The Corporation filed a statement of defense in October 2006 and intends to vigorously defend the action.

(iii)In March 2007, a former director and officer of the Corporation filed a Statement of Claim against the Corporation seeking $428,012 in respect of amounts alleged to have been advanced to the Corporation in 2005 and 2006. The Corporation intends to vigorously defend the action.



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ITEM 9.

THE OFFER AND LISTING

The table below summarizes the high and low trading prices of the pre-consolidated common shares of the Corporation on the Toronto Stock Exchange for (a) each of the previous five financial years; (b) each of the eight quarterly periods within the past two financial years of the Corporation; and (c) each of the most recent six months:

Period





(In Canadian Dollars)

High

Low

Financial year ended December 31, 2002

$0.820

$0.300

Financial year ended December 31, 2003

$0.490

$0.220

Financial year ended December 31, 2004

$0.395

$0.150

Quarter ended March 31, 2005

$0.215

$0.155

Quarter ended June 30, 2005

$0.185

$0.130

Quarter ended September 30, 2005

$0.155

$0.110

Quarter ended December 31, 2005

$0.135

$0.095

Quarter ended March 31, 2006

$0.225

$0.115

Quarter ended June 30, 2006

$0.175

$0.110

Quarter ended September 30, 2006

$0.150

$0.100

Quarter ended December 31, 2006

$0.110

$0.085

Month ended September 30, 2006

$0.145

$0.110

Month ended October 31, 2006

$0.110

$0.095

Month ended November 30, 2006

$0.105

$0.090

Month ended December 31, 2006

$0.100

$0.085

Month ended January 31, 2007

$0.120

$0.080

Month ended February 28, 2007

$0.105

$0.075



As at March 22, 2007 there were 883,094 consolidatedcommon shares (5.9% of the outstanding common shares) of the Corporation held of record by 141 persons residing in the United States.   There is no United States market in which any securities of the Corporation are traded. Until March 28, 2007 the common shares of the Corporation traded on the Toronto Stock Exchange under the trading symbol "TWG". Commencing on March 28, 2007, the common shares of the Corporation traded on the Toronto Stock Exchange under the trading symbol "ATG". The shares also trade on the Berlin / Frankfurt Over-the­-Counter Exchange under the symbol "#878 341, EDV Kürzel ATG".

ITEM 10.

ADDITIONAL INFORMATION

A.

Share Capital (See Consolidated Statement of Shareholders Equity in ITEM 19(a))

B.

Articles of Continuance and By-laws

The Corporation was incorporated under the laws of the Province of British Columbia on March 6, 1995 as Atlanta Gold Corporation.  On April 3, 1997, Atlanta Gold Corporation acquired Voisey Bay Resources Inc. by means of a plan of arrangement and changed its name to Twin Gold Corporation.  By Certificate and Articles of Continuance dated March 15, 2000, the Corporation was continued under the laws of the Province of Ontario as Twin Mining Corporation. Effective March 22, 2007, the Corporation amended the Articles of the Corporation to change its name to Atlanta Gold Inc. and to consolidate the common shares of the Corporation on the basis of one consolidated share for each fifteen pre-consolidated shares. The Corporations Articles do not contain any limitations on the objects or purposes of the Corporation.

Matters in Which a Director or Officer is Interested

The Corporations by-laws and the Business Corporations Act (Ontario) (the Act) provide that each director or officer of the Corporation who is a party to or who is a director or officer of or who otherwise has a material interest in any entity which is a party to, any existing or proposed material contract or transaction with the Corporation, must disclose in writing or request to have entered in the minutes of a directors meeting, the



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nature and extent of such interest.  The declaration of interest must be made at the meeting of the Corporations Board of Directors at which the question of entering into the proposed contract or transaction is first taken into consideration, or if the interested director did not then have an interest in the contract or transaction, at the first meeting of the Board of Directors occurring after the director acquired an interest.  An officer who is not a director must declare his or her interest forthwith after the officer becomes aware that the contract or transaction is to be considered or has been considered by the Board of Directors.  The Corporations by-laws provide that a director interested in a contract or transaction shall not vote on any motion to approve any such contract or transaction, except as otherwise permitted by the Act.  The Act permits a director to vote on resolutions in respect of arrangements by way of security for money lent to or obligations undertaken for the benefit of the Corporation, in respect of matters relating primarily to his or her remuneration as a director, officer, employee or agent of the Corporation and in respect of matters relating to indemnity and insurance.

Borrowing Powers

Pursuant to the Corporations by-laws, the Board of Directors may from time to time, without the authorization of the shareholders of the Corporation:

(i)

borrow money upon the credit of the Corporation;

(ii)

issue, reissue, sell or pledge debt obligations of the Corporation;

(iii)

subject to the Act, give a guarantee on behalf of the Corporation to secure performance of an obligation of any person; and

(iv)

mortgage, hypothecate, pledge or otherwise create a security interest in all or any present or future property of the Corporation to secure an obligation of the Corporation.

The Board of Directors may by resolution delegate any or all of the above-noted powers to a director, a committee of directors or to an officer of the Corporation.

Directors Retirement and Share Ownership

The Corporations articles and by-laws do not require directors to retire at a fixed age and do not require a director to hold qualifying shares of the Corporation.  Unless otherwise stated, the term of office for each director expires at the close of the next annual meeting of shareholders following such directors election or when such directors successor is elected unless prior to such annual meeting, such director retires or is removed from office or otherwise ceases to be qualified to be a director, in each case in accordance with the Act.

Rights and Preferences of Shares

The authorized share capital of the Corporation consists of an unlimited number of common shares, an unlimited number of first preference shares (First Preference Shares) issuable in series and an unlimited number of second preference shares (Second Preference Shares) issuable in series.  Effective March 22, 2007, the currently issued and outstanding common shares of the Corporation were consolidated on the basis of one new common share for each fifteen existing and outstanding common shares. As of March 29, 2007, the Corporation had 14,890,700 consolidated common shares, no First Preference Shares and no Second Preference Shares issued and outstanding. Each common share of the Corporation entitles the holder to one vote at all meetings of shareholders of the Corporation, other than meetings at which only holders of another class or series of shares are entitled to vote.  Subject to the prior rights and privileges attaching to the First Preference Shares and the Second Preference Shares and the shares of any other class ranking senior to the common shares, holders of common shares are entitled to receive dividends in such amounts as and when declared by the Board of Directors. In the event of the liquidation, dissolution or winding-up of the Corporation or other distribution of the property and assets of the Corporation for the purpose of winding-up the affairs of the Corporation and subject to the prior rights of holders of First Preference Shares, Second



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Preference Shares and shares of any class ranking senior to the common shares, holders of common shares are entitled to receive the remaining property and assets of the Corporation.

The First Preference Shares and the Second Preference Shares are each issuable in one or more series.  The Board of Directors is entitled to fix the number of shares in, and determine the designation, rights, privileges, restrictions and conditions attaching to the First Preference Shares and the Second Preference Shares of each series, including voting and dividend rights.  With regard to payment of dividends and the distribution of property and assets in the event of the liquidation, dissolution or winding-up of the Corporation, the First Preference Shares rank in priority to the Second Preference Shares and the First Preference Shares and Second Preference Shares rank in priority to the common shares and any other shares of the Corporation ranking junior to the First Preference Shares or Second Preference Shares.  The First Preference Shares and Second Preference Shares of each series may also be given such other preferences over any other shares ranking junior to them as may be determined.  Each series of First Preference Shares will rank on a parity with every other series of First Preference Shares and each series of Second Preference Shares will rank on a parity with every other series of Second Preference Shares, in each case with respect to payment of dividends and priority in the return of capital in the event of the liquidation, dissolution or winding-up of the Corporation.

The First Preference Shares and Second Preference Shares are non-voting, except as otherwise required by the Act and except as may be designated by the Board of Directors with respect to any series of such shares.

Amendment of Share Capital

Pursuant to the Act, the creation of a new class of shares, the addition, change or removal of any rights, privileges or restrictions in respect of all or any of the Corporations shares and the change of the Corporations shares into a different number of shares, among other things, require the approval of a majority of not less than two-thirds of the votes cast by shareholders who vote in respect of the matter, and in certain circumstances, with each class or series of shares entitled to vote separately.  The Board of Directors is authorized (without shareholder approval) to designate one or more series of First Preference Shares and Second Preference Shares and to fix the rights, privileges, conditions and restrictions attaching to each such series.

Shareholders Meetings

The Act requires that an annual meeting of the Corporations shareholders be held not later than 15 months after the preceding annual meeting, at a time and place determined by the Board of Directors of the Corporation.  The Board of Directors may at any time call a special meeting of the shareholders.  At least 21 days notice and not more than 50 days notice of every shareholders meeting, specifying the time, place and purpose for holding such meeting and, when special business is to be considered, specifying the nature of the special business to be transacted, must be given to the Corporations shareholders entitled to vote at the meeting, to each director and to the auditor of the Corporation.  Those persons entitled to notice of the shareholders meeting, those entitled to vote at the meeting and such other persons as may be required by the Act, are entitled to be present at the meeting.  Any other person may be admitted to the shareholders meeting only on the invitation of the chairman of the meeting or with the consent of the meeting.

Shareholder Ownership Disclosure

The Corporations articles and by-laws do not contain a provision governing the ownership threshold at which a shareholders ownership must be disclosed.  Under the securities laws of the Province of Ontario, a person or company who acquires beneficial ownership of, or the power to exercise control or direction over, 10% or more of the outstanding common shares of the Corporation, is required to forthwith issue and file a news release and within 2 business days after such acquisition, file a report, in each case containing prescribed information.  Thereafter, such person or company must issue a further news release and file a further report for each additional 2% increase in its shareholdings.



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Investment Canada Act

Except as provided in the Investment Canada Act (the "Investment Act"), there are no limitations under the laws of Canada, the Province of Ontario or in the articles or bylaws of the Corporation, on the right of non- Canadians to hold or vote the Corporation's common shares.

The Investment Act generally prohibits implementation of a reviewable investment by an individual, government (or agency thereof), corporation, partnership, trust or joint venture that is not a "Canadian" as defined in the Investment Act (a "non-Canadian"), unless after review the minister responsible for the Investment Act is satisfied that the investment is likely to be of net benefit to Canada. An investment in the Corporation's common shares by a non-Canadian (other than a "WTO Investor" or a NAFTA Investor as defined in the Investment Act) would be reviewable under the Investment Act if it was an investment to acquire control of the Corporation and the value of the assets of the Corporation was $5 million or more. A non-Canadian (other than a WTO Investor or NAFTA Investor) would be deemed to acquire control of the Corporation for the purposes of the Investment Act if he acquired a majority of the common shares outstanding (or less than a majority but controlled the Corporation in fact through the ownership of one-third or more of the common shares outstanding) unless it could be established that, on the acquisition, the Corporation was not controlled in fact by the acquisition through the ownership of such shares. Certain transactions in relation to the Corporation's common shares would be exempt from review under the Investment Act, including, among others, the following:

(a)

acquisition of shares by a person in the ordinary course of that person's business as a trader or dealer in securities;

(b)

acquisition of control of the Corporation in connection with the realization of security granted for a loan or other financial assistance and not for any purpose related to the provision of the Investment Act; and

(c)

acquisition of control of the Corporation by reason of any amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control of the Corporation, through the ownership of voting interests, remains unchanged.

The Investment Act provides for special review thresholds for WTO Investors and NAFTA Investors, who are essentially a natural or permanent resident of a World Trade Organization (WTO) or North American Free Trade Agreement (NAFTA) member, or an entity controlled by such persons. The United States is a member of the WTO and NAFTA. Under the Investment Act, as amended, an investment in the Corporation's common shares by a WTO Investor or a NAFTA Investor would be reviewable only if it was an investment to acquire control of the Corporation and the value of the assets of the Corporation was equal to or greater than a specified amount (the "Review Threshold"), which increases in stages. The Review Threshold is currently $281 million, and is adjusted annually (calculated as prescribed in the Investment Act).

The provisions of the Investment Act may have an anti-takeover effect as they may operate to prevent non-Canadian persons from directly or indirectly acquiring control of the Corporation.

Shareholders Rights Plan

In November 2000, the Board of Directors of the Corporation adopted a Shareholder Rights Plan (the Plan), the terms of which are set forth in the Shareholder Rights Plan Agreement dated as of November 17, 2000 between the Corporation and Equity Transfer Services Inc., as amended by agreement dated January 26, 2001. The Plan was ratified by shareholders at a meeting held on March 15, 2001 and the Plan will be in effect until the 2011 annual meeting of shareholders.

Under the Plan, a right to purchase one of the Corporations common shares (a Right) was issued for each outstanding common share as of November 17, 2000. In addition, a Right will be issued for each share issued subsequent to November 17, 2000 and prior to the separation date of the Rights. The rights are initially not separate from the Corporations common shares nor are they represented by separate certificates. However,



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upon a person acquiring ownership of 20% or more of the Corporations common shares (other than by means of complying with the Plans Permitted Bid provisions or with approval of the Board of Directors of the Corporation), a holder of a Right (other than the acquiror of 20% or more of the Corporations common shares) becomes entitled to exercise the Right and to purchase the number of common shares as determined under the Plan at a 50% discount to the then prevailing market price per share.

Under the Plan, a Permitted Bid is, among other things, a bid made to all shareholders for all common shares that is open for at least 60 days and which must be accepted by holders of at least 50% of the Corporations outstanding common shares, excluding shares held by the offeror and certain related parties. If at the end of 60 days, at least 50% of the outstanding shares, other than those owned by the offeror and certain related parties, have been tendered, the offeror may take up and pay for the shares, but must extend the bid for a further 10 days to allow other shareholders to tender. The Rights may, in certain circumstances, be redeemed by the Corporation at a price of $0.00001 per Right.

C.

Material Contracts

On July 22, 1997, the Corporation and Canadian American Mining Company, LLC (CAMC) (formerly Quest International Resources Corporation) (Quest), entered into a joint venture agreement (the Quest Agreement) whereby the Corporation was initially appointed as the operator of Atlanta with an 80% interest, with Quest holding the remaining 20% participating interest. Quest subsequently advised the Corporation that it had elected under the Quest Agreement not to participate in its contractual share of further property costs incurred after 1997. In December 2002, CAMC transferred its 20% participating interest in the joint venture to the Corporation. CAMC retains the 2% Net Smelter Return royalty on Atlanta, as per the Quest Agreement.

By agreement dated August 29, 2003 between the Corporation and Breakwater Resources Ltd. (Breakwater), the Corporation has the exclusive right and option to earn up to a 100% interest in the Abitibi property (the Property), subject to certain net smelter and net profits royalty interests. The Corporation can earn a minimum 60% interest in the Property by paying annual taxes and otherwise maintaining the Property in good standing and by making cash payments and incurring exploration expenditures as follows:

|                  |               |                          |              
|----------------- | ------------- | ------------------------ | -------------
|                  | Cash
Payments | Exploration
Expenditures | Total        
|September 1, 2004 | $   25,000    | $      150,000           | $     175,000
|September 1, 2005 | 25,000        | 350,000                  | 375,000      
|September 1, 2006 | 25,000        | 600,000                  | 625,000      
|September 1, 2007 | 25,000        | 1,000,000                | 1,025,000    
|September 1, 2008 | 25,000        | 1,400,000                | 1,425,000    
|Total             | $125,000      | $3,500,000               | $3,625,000   





The Corporation can acquire an additional 10% interest by making a $100,000 cash payment to Breakwater. Within six months after the preparation of an independent positive feasibility study, the Corporation may acquire a further 10% interest in the property by making a $500,000 cash payment to Breakwater. Upon formation of a joint venture, expenditures will be shared between the Corporation and Breakwater in accordance with their respective ownership interest. If Breakwaters interest in the joint venture is reduced to, or below, a 10% interest, then Breakwaters interest in the joint venture will be deemed to be converted to a 1.5% net smelter return (NSR) royalty. The Corporation may purchase the 1.5% NSR royalty at any time for a cash payment of $1,500,000 to Breakwater.

Since September 1, 2004, the Corporation paid $25,000 per year to Breakwater for the annual option fee. In July 2005, the Corporation signed an option agreement with Stellar Pacific Venture Inc (Stellar) whereby Stellar paid to the Corporation $15,000 upon execution of the agreement and $25,000 in respect of the 2005 annual rental payment to Breakwater.



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The Corporation has the right to include a 10% overhead fee in exploration expenditures. Expenditures exceeding minimum annual requirements incurred may be carried forward included in future exploration expenditures. As at December 31, 2006, the Corporation has made cash payments totaling $75,000 and incurred exploration expenditures totaling approximately $2,186,000. This includes a 10% overhead component on all exploration expenditures including approximately $108,000 incurred by Stellar Pacific Ventures Inc. on behalf of the Corporation. On May 1, 2006, Stellar notified the Corporation that it would not be exercising the option. As at December 31, 2006, the Corporation has incurred sufficient exploration expenditures to maintain the Property in good standing until September 1, 2007.

D.

Exchange Controls

There are currentlyno restrictions on the export or import of capital out of or into Canada, nor are there foreign exchange controls or other laws, decrees or regulations of Canada or the Province of Ontario restricting remittance of dividends or other payments to non-resident holders of the Corporation's common shares, other than any applicable withholding taxes. However, no assurance can be given that legislation enacted in the future will not have an adverse impact on non-Canadian shareholders.

E.

Taxation

The following paragraphs set forth certain United States and Canadian income tax considerations in connection with the ownership of common shares of the Corporation. These tax considerations are stated in general terms. There may be relevant state, provincial or local income tax considerations which are not discussed.

Certain United States Federal Income Tax Consequences

The following is a general discussion of certain possible United States Federal income tax consequences, under current law, generally applicableto a U.S. Holder (as defined below) of common shares of the Corporation. This discussion does not address all potentially relevant Federal income tax matters and it does not address consequences peculiar to persons subject to special provisions of Federal income tax law, such as those described below as excluded from the definition of a U.S. Holder. In addition, this discussion does not cover any state, provincial, local or foreign tax consequences. (See certain Canadian tax consequences below under the heading "Certain Canadian Federal Income Tax Consequences"). The following discussion is based upon the sections of the Internal Revenues Code of 1986, as amended (the "Code"), Treasury Regulations, published Internal Revenue Service (the "IRS") rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time. In addition, this discussion does not consider the potential effects, both adverse and beneficial, of recently proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time. The following discussion is for general information only and it is not intended to be, nor should it be construed to be, legal or tax advice to any holder or prospective holder of common shares of the Corporation, and no opinion or representation with respect to the United States Federal income tax consequences to any such holder or prospective holder is made. Accordingly, holders and prospective holders of common shares should consult their own tax advisors about the Federal,state, provincial, local, and foreign tax consequences of purchasing, owning and disposing of common shares.

U.S. Holders

As used herein, a "U.S. Holder" includes a holder of common shares who is a citizen or resident of the United States, a corporation created or organized in or under the laws of the United States or of any political subdivision thereof and any other person or entity whose ownership of common shares is effectively connected with the conduct of a trade or business in the United States. A U.S. Holder does not include persons subject to special provisions of Federal income tax law, such as tax-exempt organizations, qualified retirement plans, financial institutions, insurance companies,  real estate investment trusts, regulated investment companies, broker-dealers, partnerships, estates, trusts, nonresident alien individuals or foreign corporations whose ownership of common shares is not effectively connected with the conduct of a trade or business in the United



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States and shareholders who are not residents or citizens of the United States who acquired their stock through the exercise of employee stock options or otherwise as compensation.

Distributions on Common Shares

U.S. Holders receiving dividend distributions (including constructive dividends) with respect to common shares are required to include in gross income for United States Federal income tax purposes the gross amount of such distributions in the year received to the extent that the Corporation has current or accumulated earnings and profits, without reduction for any Canadian income tax withheld from such distributions. Such Canadian tax withheld may be credited, subject to certain limitations, against the U.S. Holder's Federal income tax liability, or alternatively, may be deducted in computing the U.S. Holder's United States Federal taxable income by corporations or individuals who itemize deductions. (See more detailed discussion in "Foreign Tax Credit" below). To the extent that distributions exceed current or accumulated earnings and profits of the Corporation, they will be treated first as a return of capital up to the U.S. Holder's adjusted basis in the common shares and thereafter as gain from the sale or exchange of the common shares. Dividend income will be taxed at marginal tax rates applicable to ordinary income while net long term capital gains of a shareholder other than a corporation are subject to a maximum tax rate of 15%. Corporate United States shareholders are taxed on the net capital gains at the regular tax rates. Gain from the sale or exchange of the common shares will be capital gain if the Common shares are held as a capital asset, and will be long term capital gain if the common shares with respect to which the gain is realized have been held for more than twelve months.

Dividends paid on the common shares will not generally be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations. A U.S. Holder which is a corporation may, under certain circumstances, be entitled to a 70% deduction of the United States source portion of dividends received from the Corporation (unless the Corporation is a "foreign personal holding company" or a "passive foreign investment company", as defined below) if such U.S. Holder owns shares representing at least 10% of the voting power and value of the Corporation and such U.S. Holder has held the shares of the Corporation for at least 46 days. The availability of this deduction is subject to several complex limitations which are beyond the scope of this discussion.

Foreign Tax Credit

A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to dividends paid with respect to common shares may be entitled, at the option of the U.S. Holder, to either a deduction or a tax credit for such foreign tax paid or withheld. Generally, it will be more advantageous to claim a credit because a credit reduces United States Federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayer's income subject to tax. The foreign tax credit is elective, and if the U.S. Holder elects to take the credit, no deduction for foreign taxes paid is available. Generally, the U.S. Holder accounts for the foreign tax credit in a manner consistent with the U.S. Holders method of accounting. However, the U.S. Holder may be able to claim a foreign tax credit in the year that the foreign taxes accrue even if the U.S. Holder uses the cash method of accounting. This election is made on a year-by-year basis and applies to all foreign taxes paid by (or withheld from) the U.S. Holder during that year. There are significant and complex limitations which apply to the credit, among which is the general limitation that the credit cannot exceed the proportionate share of the U.S. Holder's United States income tax liability that the U.S. Holder's foreign source income bears to his or its worldwide taxable income. In the determination of the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources. Complex rules govern this classification process. There are further limitations on the foreign tax credit for certain types of income such as "passive income," "high withholding tax interest," "financial services income," "shipping income," and certain other classifications of income. The availability of the foreign tax credit and the application on the limitations on the credit are fact specific and holders and prospective holders of common shares should consult their own tax advisors regarding their individual circumstances.



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Other Considerations

In the following circumstances, the above sections of this discussion may not describe the United States Federal income tax consequences resulting from the holding and disposition of common shares of the Corporation:

i) Foreign Personal Holding Corporation

If at any time during a taxable year more than 50% of the total combined voting power or the total value of the Corporation's outstanding shares is owned, actually or constructively, by five or fewer individuals who are citizens or residents of the United States and 60% or more of the Corporation's gross income for such year was derived from certain passive sources (e.g. possibly dividends received from its non Canadian subsidiaries), the Corporation would be treated as a "foreign personal holding company". In that event, U.S. Holders that hold common shares would be required to include in gross income for such year their allowable portions of such passive income to the extent the Corporation does not actually distribute such income. A person acquiring stock of a Foreign Personal Holding Corporation from a decedent will not be entitled to a step-up in the basis of the Foreign Personal Holding Corporation at the decedent's death

ii) Foreign Investment Corporation

If 50% or more of the combined voting power or total value of the Corporation's outstanding shares are held, actually or constructively, by citizens or residents of the United States, United States domestic partnerships or corporations, or estates or trusts other than foreign estates or trusts (as defined by Code Section 7701 (a)(31)), and the Corporation is found to be engaged primarily in the business of investing, reinvesting or trading in securities, commodities or any interest therein,it is possible that the Corporation may be treated as a "foreign investment company" as defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S. Holder selling or exchanging common shares to be treated as ordinary income rather than capital gains. A U.S. Shareholder acquiring stock of a Foreign Investment Corporation from a decedent may not be entitled to a step-up in the basis of the Foreign Investment Corporation  at the decedent's death.

iii) Passive Foreign Investment Corporation

Under the Code, certain tax consequences may result from classification of a corporation as a passive foreign investment company (a "PFIC"). A corporation not formed in the United States is a PFIC if 75% or more of its gross income for the taxableyear is from passive sources such as interest, dividends and certain rents and royalties or if the average percentage of assets by value (in the case of a publicly-traded corporation) held by such corporation during the taxable year which produce passive income is at least 50%. Where the Corporation is both a controlled foreign corporation and a PFIC, the PFIC rules will not apply. Furthermore, a PFIC will not include any Foreign Investment Corporation which has made an election to distribute its income currently under Code section 1247.  Classification of the Corporation as a PFIC may affect shareholders who are United States citizens, resident aliens or United States corporations, estates or trusts other than foreign estates or trusts (a "U.S. shareholder").  A U.S. shareholder who holds stock indirectly (i.e., is a partner in a partnership or a beneficiary in an estate or trust) is also subject to these rules. The Corporation believes that there is a significant possibility that it would be deemed to fit within the PFIC definition.

U.S. shareholders of a company that is a PFIC who held stock after December 31, 1986 are subject to certain adverse tax consequences. For example, a gain recognized on disposition of PFIC stock or on receipt of an excess distribution from a PFIC is considered earned pro rata over the U.S. shareholder's holding period and is treated as ordinary income and is generally taxed at the highest marginal rates in effect during that period (an excess distribution is the amount of any distribution received by the U.S. shareholder during the taxable year over 125% of the average amount received in respect of the PFIC stock by the U.S. shareholder during the three preceding taxable years, subject to certain adjustments). U.S. shareholders must also pay an interest charge based on the value of tax deferral when the U.S. shareholder disposes of its stock or receives an excess distribution. Additionally, a U.S. shareholder who uses PFIC stock as security for a loan is treated as having disposed of the stock.  A transfer of the PFIC stock where there is not full recognition of gain,  will be treated



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as a taxable disposition in some circumstances, and a U.S. shareholder acquiring PFIC stock from a decedent who was a U.S. shareholder during his or her holding period of the PFIC stock, will not be entitled to a step-up in the basis of the PFIC stock at death.

Shareholder Election and Corporation Record-keeping Requirements

Adverse tax consequences, other than the loss of the step-up in basis at death, and the deemed disposition where PFIC stock is used as security of a loan, can be avoided, if (i) the U.S. shareholder has elected to treat the PFIC as a qualified electing fund (a "QEF'") with respect to that U.S. shareholder effective for each of the PFIC's taxable years beginning on or after January 1, 1987, which include any portion of the U.S. shareholder's holding period, and (ii) the Corporation complies with reporting requirements to be prescribed by the Secretary of the Treasury.

THE QEF ELECTION FOR A TAXABLE YEAR MUST BE FILED BY THE DUE DATE (PLUS EXTENSION) FOR FILING THE U.S. SHAREHOLDER'S INCOME TAX RETURN FOR THAT YEAR. A U.S. shareholder makes a QEF election by filing a Form 8621 with his or her tax return. Once the election is made with respect to the Corporation, it cannot be revoked without permission from the Secretary of the Treasury.

When a PFIC becomes a QEF with respect to a U.S. shareholder and an election by the U.S. shareholder to treat the PFIC as a QEF has not been in effect for each of the PFIC's taxable years beginning on or after January 1, 1987, which include any portion of the U.S. shareholder's holding period, the U.S. shareholder may elect to recognize gain as if it had sold the QEF stock on the first day of the taxable year in which the QEF election is made, if (i) the U.S. shareholder holds stock in the PFICon that day, and (ii) the U.S. shareholder can establish the fair market value of the PFIC stock on that day.The U.S. shareholder will treat that deemed sale transaction as a disposition of PFIC stock and will thereafter be subject to the rules described below applicable to U.S. shareholders of a QEF.

The Corporation intends to comply with the reporting requirements that are prescribed in Treasury regulations.  In particular, the Corporation will maintain information so that the ordinary earnings and net capital gain of the Corporation may be determined. If, after review of the requirements, the Corporation decides not to comply with the PFIC record-keeping requirements, the Corporation will so notify its shareholders.

Qualified Electing Funds

In general, U.S. shareholders of a QEF are taxable currently on their pro rata share of the QEF's ordinary income and net capital gain, unless they elect to defer payments of tax on amounts included in income for which no distribution has been received (subject to an interest charge). Because the Corporation technically fits within the PFIC definition,each U.S. shareholder of the Corporation should consult its tax advisor to determine whether it wishes to make the QEF election and with respect to how the PFIC rules affect its tax situation generally.

Controlled Foreign Corporation

If more than 50% of the voting power of all classes of stock or the total value of the stock of the Corporation is owned, directly or indirectly, by citizens or residents of the United States, United States domestic partnerships and corporations or estates or trusts other than foreign estates or trusts, each of whom own 10% or more of the total combined voting power of all classes of stock of the Corporation ("United States shareholders"), the Corporation could be treated as a "controlled foreign corporation" under Subpart F of the Code. This classification would effect many complex results including the required inclusion by such United States shareholders in income of their pro rata shares of "Subpart F income" (as specially defined by the Code) of the Corporation. In addition, under Section 1248 of the Code, a gain from the sale or exchange of stock by a holder of common shares who is or was a United States shareholder at any time during the five year period ending with the sale or exchange is treated as ordinary dividend income to the extent of earnings and profits of



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the Corporation attributable to the stock sold or exchanged. Because of the complexity of Subpart F a more detailed review of these rules is outside of the scope of this discussion.

THE FOREGOING SUMMARY IS A GENERAL DISCUSSION OF THE UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS GENERALLY APPLICABLE TO U.S. HOLDERS OF COMMON SHARES UNDER CURRENT LAW. IT DOES NOT DISCUSS ALL OF THE TAX CONSEQUENCES THAT MAY BE RELEVANT TO PARTICULAR HOLDERS IN LIGHT OF THEIR CIRCUMSTANCES OR TO HOLDERS SUBJECT TO SPECIAL RULES, SUCH AS TAX-EXEMPT ORGANIZATIONS, QUALIFIED RETIREMENT PLANS, FINANCIAL INSTITUTIONS, INSURANCE COMPANIES, REAL ESTATE INVESTMENT TRUSTS, REGULATED INVESTMENT COMPANIES, BROKER-DEALERS, NONRESIDENT ALIEN INDIVIDUALS OR FOREIGN CORPORATIONS WHOSE OWNERSHIP OF COMMON SHARES IS NOT EFFECTIVELY CONNECTED WITH THE CONDUCT OF A TRADE OR BUSINESS IN THE UNITED STATES, SHAREHOLDERS WHO ACQUIRED THEIR STOCK THROUGH THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS COMPENSATION, AND ANY OTHER NON-U.S. HOLDERS. IN ADDITION, U.S. HOLDERS MAY BE SUBJECT TO STATE, LOCAL OR FOREIGN TAX CONSEQUENCES. THIS DISCUSSION IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY HOLDER OF COMMON SHARES OF THE REGISTRANT AND NO OPINION OR REPRESENTATION WITH RESPECT TO THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO ANY SUCH HOLDER OR PROSPECTIVE HOLDER IS MADE. HOLDERS AND PROSPECTIVE HOLDERS SHOULD THEREFORE CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THEIR PARTICULAR CIRCUMSTANCES.

Certain Canadian Federal Income Tax Considerations

The following summary of certain Canadian federal income tax considerations is generally applicable to a holder (a "Holder") of common shares who for the purposes of theIncome Tax Act(Canada) (the "Act") is not a resident of Canada, holds the common shares as capital property, dealsat arm's length and is not affiliated with the Corporation, does not use or hold the common shares in carrying on a business in Canada and is not a non-resident insurer for the purposes of the Act.

Dividends

A Holder will be subject to Canadian withholding tax ("Part XIII Tax") equal to 25%, or such lower rate as may be available under an applicable tax treaty, of the gross amount of any dividend paid or deemed to be paid on his common shares. Under the Canada-U.S. Income Tax Convention (1980) (the "Treaty") the rate of Part XIII Tax applicable to a dividend on common shares paid to a Holder who is a resident of the United States is, if the Holder is a company that beneficially owns at least 10% of the voting stock of the Corporation, 5% and, in any other case, 15% of the gross amount of the dividend. The Corporation will be required to withhold the applicable amount of Part XIII Tax from each dividend so paid and remit the withheld amount to the Canada Revenue Agency.

Disposition of Common Shares

A Holder who disposes of a common share, including by deemed disposition on death, will not be subject to tax under the Act on any capital gain thereby realized unless the common share constituted "taxable Canadian property" at the time of disposition as defined in the Act.  Generally, a common share of a corporation listed on a prescribed stock exchange (the Toronto Stock Exchange is a prescribed stock exchange) will not constitute taxable Canadian property of a Holder unless, at any time within the 60 months preceding the disposition, the Holder or persons with whom the Holder did not deal at arm's length or the Holder together with such persons owned or had an interest in or an option to acquire 25% or more of the shares of any class of the capital stock of the Corporation.

A Holder who is a resident of the United States and realizes a capital gain on disposition of a common share that is taxable Canadian property will nevertheless, by virtue of the Treaty, generally be exempt from Canadian tax thereon unless (a) more than 50% of the value of the common share is derived from, or from an



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interest in, Canadian real property, including Canadian mineral resource properties, or (b) the Holder is an individual who (i) was a resident of Canada at any time within the ten years immediately preceding the disposition and was a resident of Canada for a total of 120 months during the 20 consecutive years preceding the disposition, and (ii) owned the common share or certain substituted properties when he ceased to be resident in Canada.

A Holder who is subject to Canadian tax in respect of a capital gain realized on disposition of a common share must include one-half of the capital gain realized (taxable capital gain) in computing his taxable income earned in Canada.  The Holder may, subject to the detailed rules in the Act, deduct one-half of any capital loss arising on disposition of taxable Canadian property from taxable capital gains realized in the year of disposition upon the disposition of other taxable Canadian property and, to the extent not so deductible, from such taxable capital gains of any of the three preceding years or any subsequent year.

F.

Dividends

Not applicable.

G.

Documents on Display

All material contracts listed herein may be inspected between the hours of 9:00 a.m. and 5:00 p.m. at the head office of the Corporation located at 1250 - 155 University Avenue, Toronto, Ontario, L4W 3T6. The Financial Statements of the Corporation are also available on the SEDAR website at www.sedar.com.

ITEM 11.

QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

See Risk Factors section of Item 3. KEY INFORMATION

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

Part II

ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

See Item 10. B.

Articles of Continuance and By-laws

ITEM 15.

CONTROLS AND PROCEDURES

The directors of the Corporation are elected annually and hold office until the next annual meeting of the shareholders of the Corporation or until their successors in office are duly elected or appointed. The Corporation does not have an executive committee. All directors are elected for a one-year term. All officers serve at the pleasure of the Board.

The Corporation's Board of Directors has only one committee, the Audit Committee, which during 2006 was composed entirely of independent directors, being Cedric E. Richie, Alfred Powis, and James K. Gray. Following Mr. Powis retirement as a director in the fourth quarter of 2006, Mr. Allan Folk was appointed to the Audit Committee in February 2007. Mr. Folk is also an independent director. The Audit Committee has the responsibility of reviewing with the Corporation's external auditor all financial statements to be submitted to an annual meeting of the shareholders of the Corporation, prior to their consideration by the Board of Directors. The members of the Audit Committee do not receive any separate remuneration for acting as



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members of the committee. (Please see Statement of Corporate Governance Practices in the Management Information Circular dated February 7, 2007 indexed herein as ITEM 19(b)).

During 2006 management implemented remedial measures to correct  certain material weaknesses in the disclosure controls and procedures that existed as of December 31, 2005. As of the end of the period covered by this report, the Corporations management (with the participation of its Chief Executive Officer and Chief Financial Officer) conducted an evaluation pursuant to Rule 13a-15 promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act), of the effectiveness of the design and operation of the Corporations disclosure controls and procedures. Based on this evaluation, the Corporations Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report such disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by the Corporation in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. During the period covered by this report there were no changes in the system of internal controls over financial reporting of the Corporation..

ITEM 16.

A.

AUDIT COMMITTEE

During 2003, the Corporation adopted a formal charter for its Audit Committee, the text of which is set forth below. One of the Committees role is to recommend to the board of directors the choice of auditor to be nominated for appointment by the Corporations shareholders. The Committee has the authority to approve all audit engagement terms and fees. The Committee must pre-approve all non-audit and assurance services to be provided by the auditor. The auditor is required to report directly to the Audit Committee. On February 7, 2007, there was a meeting of the Audit Committee with the auditors present to discuss and, ultimately, recommend to the full Board of Directors to approve the 2006 audited consolidated financial statements.

Audit Committee Financial Expert

In 2006, the Board of Directors, after having reviewed the composition of its Audit Committee, has determined that Cedric E. Ritchie qualified as the committees financial expert in accordance with the audit committee financial expert requirements pursuant to the rules of the Securities Exchange Act of 1934, as amended (the Securities Act), as set by the Securities and Exchange Commission (SEC). In 2007, the Board of Directors, has determined that Allan J Folk qualifies as the committees financial expert.

Composition of the Audit Committee and Relevant Education and Experience

During 2006, the Audit Committee consisted of Messrs. Powis, Gray, Holmes (until he resigned as a director on April 12, 2006), and Ritchie. All members appointed to the 2007 Audit Committee are independent (pursuant to Rule 10A-3 of the Securities Act), and financially literate as evidenced by their background as follows:

James K. Gray, O.C., a member of the Audit Committee, has over 50 years of experience in the oil and gas industry, including being a co-founder and former Chairman of Canadian Hunter Exploration Ltd., one of the larger natural gas producers in Canada. Mr. Gray is also a director of Canadian National Railways, EdperBrascan Corporation and Nova Scotia Power.

Eric J. Berentsen, a member of the Audit Committee, is the President for Jipangu Exploration Inc. and has over twenty-nine years of varied geological experience, including as Chief Exploration Geologist for Getchell Gold Corp. from 1990 to 1999 and for Apollo Gold Inc. from 2002 to 2005. Mr. Berentsen also served as Senior Mine Geologist from 1999 to 2002 for Placer Dome Inc. and has worked for Jipangu since their acquisition of the Exploration division of Apollo Gold.



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Allan J. Folk, a member of the Audit Committee since becoming a director of the Corporation in November 2006, is Vice President of Institutional Equity Sales for Fort House Inc. and has more than 20 years of experience in the investment industry.

Charter of the Audit Committee of the Board of Directors

Purpose

The Audit Committee (the Committee) is appointed by the Board of Directors (the Board) for the purpose of assisting the Board in fulfilling its oversight responsibilities and, to this end, will assist the Board with its review of:

·

the integrity, adequacy and timeliness of the Corporations auditing, accounting, and financial reporting processes;

·

the financial statements and related reports provided by the Corporation to its shareholders, securities regulators, other government or regulatory bodies, or the public; and

·

the Corporations system of internal controls regarding finance, accounting, legal compliance and ethics, that Management and the Board have established from time to time.

The Committee will encourage continuous improvement of, and foster adherence to, the Corporations policies, procedures, and practices at all levels.  The Committee shall also perform any other activities consistent with this Charter, the Corporations by-laws and applicable laws as the Committee or the Board deems necessary or appropriate.

Composition

The Committee will consist of not less than three directors as appointed annually by the Board, each of whom shall be independent and free from any relationship that, in the opinion of the Board, would interfere with the exercise of his or her independent judgment as a member of the Committee.  In evaluating a members independence, applicable laws and regulations shall be followed.  The Chair of the Committee shall be appointed by the full Board.

All members of the Committee will be financially literate.  Financial literacy is the ability to read and understand basic financial statements.  At least one member of the Committee will have accounting or related financial management expertise, that is, the ability to analyze and interpret a full set of financial statements, including the notes thereto, in accordance with generally accepted accounting principles (GAAP), applicable laws and regulations.  This member must have past employment experience in finance or accounting, professional certification in accounting, or any other comparable experience or background that results in the individuals financial sophistication, including being or having been a chief executive officer, chief financial officer, or other senior officer with financial oversight responsibilities.

Each Committee member serves until the earlier of the date on which he or she is replaced by the Board, resigns from the Committee, or resigns from the Board.

Responsibilities

The Committees role is one of oversight.  Management is responsible for preparing the Corporations financial statements and other financial information and for the fair presentation of the information set forth in the financial statements in accordance with GAAP.  Management is also responsible for establishing internal controls and procedures and for maintaining the appropriate accounting and financial reporting principles and policies designed to assure compliance with accounting standards and all applicable laws and regulations.  The external auditor is responsible for auditing the Corporations financial statements and for providing its opinion, based on its audit conducted in accordance with generally accepted auditing standards, that the financial statements present fairly, in all material respects, the financial position, results of operations and cash flows of



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the Corporation in accordance with GAAP.  In carrying out its oversight responsibilities, the Committee is not providing any expert or special assurance as to the Corporations financial statements or any professional certification as to the external auditors work.

The Committee will be responsible for:

1.

Recommending to the Board and shareholders the external auditor to be selected.  The Committee has the authority, pursuant to the authority granted by the Corporations shareholders, to approve all audit engagement terms and fees.  The Committee shall pre-approve non-audit and assurance services to be provided to the Corporation by the auditor, but the Chairman of the Committee may be delegated the responsibility to approve these services where the fee is not significant.  The external auditor shall report directly to the Committee, as the auditor is accountable to the Committee and the Board as representatives of the Corporations shareholders.

2.

Reviewing and assessing the adequacy of this Charter and recommend any proposed changes to the Board for approval on an ongoing basis.

3.

Reviewing the appointments of the Corporations Chief Financial Officer and any other key financial executives involved in the financial reporting process.

4.

Reviewing with Management and the auditor the adequacy and effectiveness of the Corporations accounting and financial controls and the adequacy and timeliness of its financial reporting processes.

5.

Reviewing with Management and the auditor the annual audited financial statements and unaudited quarterly financial statements and related documents, prior to filing or distribution, including matters required to be reviewed under applicable legal or regulatory requirements.

6.

Reviewing with Management, where appropriate and prior to release, any news releases that contain significant financial information that has not previously been released to the public.

7.

Reviewing the Corporations financial reporting and accounting standards and principles and significant changes in such standards or principles or in their application, including key accounting decisions affecting the financial statements, alternatives thereto and the rationale for decisions made.

8.

Reviewing the quality and appropriateness, not just the acceptability, of the accounting policies and the clarity of financial information and disclosure practices adopted by the Corporation, including consideration of the auditors judgments about the quality and appropriateness of the Corporations accounting policies.  This review shall include discussions with the auditor without the presence of management.

9.

Reviewing with Management and the auditor, the annual audit plan and results of, and any problems or difficulties encountered during, any external audits and Managements responses thereto.

10.

Monitoring the independence of the auditor by reviewing all relationships between the auditor and the Corporation and all non-audit and assurance work performed for the Corporation by the auditor on at least an annual basis.



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Meetings

The Committee will meet not less than four times per year or more frequently if circumstances dictate.  The Committee Chair shall prepare and/or approve an agenda in advance of each meeting.  A quorum shall consist of a majority of the members of the Committee.  The Committee will keep minutes or other records of its meetings and activities.

The Corporations external auditor shall attend each of the Committees meetings held to consider the audited annual financial statements of the Corporation.  The Corporations external auditor shall also be asked to attend each of the Committees meetings held to consider the unaudited quarterly financial statements of the Corporation and the auditor will be asked to provide its comments thereon.  The Committee may invite such other persons to its meetings as it deems appropriate.The external auditor is accountable to the Committee and to the Board as representatives of the shareholders and shall report directly to the Committee, which is expected to maintain free and open communication with the external auditor and the Corporations Management.  The Committee should meet privately in executive session at least annually with each of Management and the external auditor, and as a committee to discuss any matters that the Committee or each of these groups believe should be discussed.  The Committee Chair shall report on Audit Committee activities to the full Board at each Board meeting.  Employees may submit anonymous complaints or concerns respecting accounting or audit matters to any member of the Committee.

Education

The Corporation is responsible for providing the Committee with educational resources related to accounting principles and procedures, current accounting topics pertinent to the Corporation, and other material as requested by the Committee.  Committee members are encouraged to enhance their familiarity with finance and accounting by participating, at the Corporations expense, in seminars, conferences, roundtables, and other educational programs conducted by the Corporation or outside organizations.  The Corporation will assist the Committee in maintaining appropriate financial literacy.

Authority

The Committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities, and therefore has direct access to the external auditor, as well as Corporation personnel.  The Committee has the ability to retain, at the Corporations expense, independent legal, accounting, or other advisors it deems necessary to carry out its duties.

B.

CODE OF ETHICS

In 2003, the Corporation adopted a Code of Conduct, including an Insider Trading Policy, applicable to all directors, officers, senior management and employees of the Corporation. The text of the Code of Conduct is available on our website,www.twinmining.com and at www.SEDAR.com.

This code promotes:

·

compliance with applicable laws and regulations;

·

the prevention of conflicts of interests;

·

the fact that proper attention be given to people and the environment;

·

the protection of the groups assets;

·

fairness in financial reporting; and

·

internal controls.



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C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Pre-approved policies and procedures

The charter of the Board and its committees provides that the scope of audit services is to be pre-approved for each year. Any amendment to the list of audit services or any fees in excess of those that have been pre-approved (other than by reason of exchange rate variations) shall be pre-approved by the Audit Committee and the Board.

Auditors shall confirm every year to the Audit Committee that the services pre-approved are in compliance with applicable rules and regulations relating to auditors independence.

The Corporations external auditors, PricewaterhouseCoopers LLP, billed the Corporation C$55,000 for professional services rendered in connection with the 2006 financial year-end audit, an additional C$31,100 for professional services rendered in connection with the 2006 interim financial reporting, C$83,040 for tax planning services in respect of a proposed corporate restructuring, and C$42,469 for advisory services in respect of replies to SEC comments to the Corporation as a U.S. issuer (C$37,500 in connection with the 2005 financial year-end audit, and an additional C$31,000 for professional services rendered in connection with the 2005 interim financial reporting.

|                    |           |           |          
|------------------- | --------- | --------- | ---------
|Description of fees | 2006
(C$) | 2005
(C$) | 2004
(C$)
|Audit fees          | 55,000    | 37,500    | 35,000   
|Audit-related fees  | 31,100    | 31,000    | 2,000    
|Tax fees            | 83,040    | -         | -        
|All other fees      | 42,469    | -         | -        



D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable

E.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Neither the Corporation nor any affiliated purchaser, as defined in Rule 10b-18 (a) underthe Act, made any purchase of the equity securities of the Corporation during the period covered by this report.

Part III

ITEM 17.

FINANCIAL STATEMENTS

Indexed herein at ITEM 19.

ITEM 18.

FINANCIAL STATEMENTS

The Corporation has responded to item 17 in lieu of responding to this Item.





ITEM 19.

FINANCIAL STATEMENTS AND EXHIBITS

|   |                               | 
|-- | ----------------------------- | 
|a) | Index to Financial Statements | 



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|                                    |                                                                                                                                                      | 
|----------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------- | 
|                                    | The Management Discussion and Analysis of the Corporation is included in the 2006 Annual Report of the Corporation incorporated herein by reference. | 
|                                    | Management's report on the consolidated financial statements.                                                                                        | 
|                                    | Independent auditors report to the shareholders.                                                                                                    | 
|                                    | Consolidated balance sheets as at December 31, 2006 and December 31, 2005.                                                                           | 
|                                    | Consolidated statements of loss for the years ended December 31, 2006, December 31, 2005 and December 31, 2004.                                      | 
|                                    | Consolidated statements of cash flow for the years ended December 31, 2006, December 31, 2005 and December 31, 2004.                                 | 
|                                    | Consolidated statements of mineral properties for the years ended December 31, 2006, December 31, 2005 and December 31, 2004.                        | 
|                                    | Consolidated statement of shareholders' equity for the years ended December 31, 2006, December 31, 2005 and December 31, 2004.                       | 
|                                    | Notes to the consolidated financial statements.                                                                                                      | 
|b)                                  | Index to Exhibits                                                                                                                                    | 
|Documents Incorporated
by Reference |                                                                                                                                                      | 
|15(b).1                             | The 2006 Annual Report of the Corporation.                                                                                                           | 
|                                    | Item 4, Segmented Information, Note. 9 to the consolidated financial statements of the 2006 Annual Report of the Corporation                         | 
|                                    | Item 5, Management's Discussion and Analysis of Financial Condition and Results of Operations, included in the 2006 Annual Report of the Corporation | 
|                                    | Item 19(a), Index to Financial Statements, included in the 2006 Annual Report of the Corporation                                                     | 
|15(b).2                             | Management information circular dated February 7, 2007 of the Corporation                                                                            | 
|                                    | Item 6, Directors, Senior Management and Employees, "Executive Compensation" is set in the management information circular.                          | 
|                                    | Item 7, Related Party Transactions, "Interest of Management and Others in Material Transactions" set out in the management information circular.     | 



|               |             |           
|-------------- | ----------- | ----------
|Exhibit
Number | Description | # of Pages



|     |                                                                                                                                                                                                                                                                                                      |            
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------
|1.1* | Articles of continuance effective March 15, 2000 effecting the continuance of the Corporation under the Business Corporations Act (Ontario), the change of name of the Corporation from Twin Gold Corporation to Twin Mining Corporation and the alteration of the share capital of the Corporation. |            
|1.2  | Certificate and Articles of Amendment effective March 22, 2007 effecting the consolidation of the common shares of the Corporation on a one for fifteen pre-consolidated basis and effecting the change of name of the
    Twin Mining Corporation to Atlanta Gold Inc.                              | 3
    pages



63.





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|4.1 #  | Agreement to abandon the 20% Participating Interest by Canadian American Mining Company, LLC (CAMC) (formerly Quest USA Resources Inc. (Quest)) under Venture Agreement dated July 22, 1997 between Quest and Atlanta U.S.                                                                                                                                                     |            
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------
|4.2 ## | Option to acquire a 60% Participating Interest on 6 non-contiguous claim blocks totaling ninety one claims or 2,849 hectares from Breakwater Resources Ltd. (Breakwater) under an Option to Purchase Agreement dated August 13, 2003 between Breakwater and the Corporation.                                                                                                     |            
|4.3 ** | Claim Purchase, Gross Royalty and Net Profit Interest (NPI) Agreements with Helix Resources Inc., signed on December 15, 2000, to exercised its option to acquire 100% of three mineral claims from Helix (Freightrain, tag # F65593; Slot, tag # F45691; and 38S, tag # F45683) totaling 7,128.5 acres (28.85 square kilometres). Claim 38S (2,480 acres) was allowed to lapse. |            
|4.4    | Amending Agreement to the Claim Purchase Agreement with Helix Resources Inc. dated May 5, 2005.                                                                                                                                                                                                                                                                                    | 4
    pages
|4.5    | Consulting agreement between Bill Baird and the Corporation dated August 4, 2006.                                                                                                                                                                                                                                                                                                  | 5
    pages
|12.1   | Chief Executive Officer certification pursuant to Rule 13(a)14 of the Securities Exchange Act of 1934.                                                                                                                                                                                                                                                                            | 1
    page 
|12.2   | Chief Financial Officer certification pursuant to Rule 13(a)14 of the Securities Exchange Act of 1934.                                                                                                                                                                                                                                                                            | 1
    page 
|13     | Certification pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                             | 1
    page 



*

Previously filed with 1999 Report on FORM 20-F.

**

Previously filed with 2000 Report on FORM 20-F.

#

Previously filed with 2002 Report on FORM 20-F.

##

Previously filed with 2003 Report on FORM 20-F.

###

Previously filed with 2004 Report on FORM 20-F.



SIGNATURE

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

ATLANTA GOLD INC.

DATE: March 30, 2007

/s/ Bill Baird



BILL BAIRD

DIRECTOR AND INTERIM CEO





64.