---

AMARC RESOURCES LTD.

CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED

MARCH 31, 2006, 2005, and 2004

(Expressed in Canadian Dollars)

---

D E     V I S S E
R    G R A YCHARTERED ACCOUNTANTS

401 - 905 West Pender StreetVancouver, BC Canada
  V6C 1L6

Tel: (604) 687-5447
  Fax: (604) 687-6737

AUDITORS REPORT

To the Shareholders of Amarc Resources Ltd.

We have audited the consolidated balance sheets of Amarc
Resources Ltd. as at March 31, 2006 and 2005, and the consolidated statements of
operations and deficit and cash flows for each of the years in the three year
period ended March 31, 2006. These financial statements are the responsibility
of the Companys management. Our responsibility is to express an opinion on
these financial statements based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards in Canada and the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and
perform an audit to obtain reasonable assurance whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.

In our opinion, these consolidated financial statements present
fairly, in all material respects, the financial position of the Company as at
March 31, 2006 and 2005 and the results of its operations and cash flows for
each of the years in the three year period ended March 31, 2006 in accordance
with generally accepted accounting principles in Canada.

De Visser Gray

CHARTERED ACCOUNTANTS

Vancouver, British Columbia
  July 7, 2006

---

|AMARC RESOURCES LTD.                              |   |             |   |   |             |  
|------------------------------------------------- | - | ----------- | - | - | ----------- | -
|Consolidated Balance Sheets                       |   |             |   |   |             |  
|(Expressed in Canadian Dollars)                   |   |             |   |   |             |  
|                                                  |   |             |   |   |             |  
|                                                  |   | March 31    |   |   | March 31    |  
|                                                  |   | 2006        |   |   | 2005        |  
|                                                  |   |             |   |   |             |  
|ASSETS                                            |   |             |   |   |             |  
|                                                  |   |             |   |   |             |  
|Current assets                                    |   |             |   |   |             |  
|Cash and equivalents                              | $ | 4,537,933   |   | $ | 7,335,379   |  
|Marketable securities (note 4)                    |   |            |   |   | 290,297     |  
|Amounts receivable and
      prepaids             |   | 100,917     |   |   | 262,673     |  
|Balances receivable from related parties (note 8) |   | 233,308     |   |   |            |  
|                                                  |   | 4,872,158   |   |   | 7,888,349   |  
|                                                  |   |             |   |   |             |  
|Equipment (note 5)                                |   | 36,951      |   |   | 47,105      |  
|Mineral property
      interests (note 6)         |   | 98,429      |   |   | 155,929     |  
|                                                  |   |             |   |   |             |  
|                                                  | $ | 5,007,538   |   | $ | 8,091,383   |  
|                                                  |   |             |   |   |             |  
|                                                  |   |             |   |   |             |  
|LIABILITIES AND SHAREHOLDERS' EQUITY              |   |             |   |   |             |  
|                                                  |   |             |   |   |             |  
|Current liabilities                               |   |             |   |   |             |  
|Accounts payable and accrued liabilities          | $ | 38,431      |   | $ | 777,971     |  
|Balances payable to related parties (note 8)      |   |            |   |   | 93,272      |  
|                                                  |   | 38,431      |   |   | 871,243     |  
|                                                  |   |             |   |   |             |  
|Shareholders' equity                              |   |             |   |   |             |  
|Share capital (note 7(b))                         |   | 23,997,068  |   |   | 22,387,954  |  
|Contributed surplus (note 7(e))                   |   | 487,821     |   |   | 507,065     |  
|Deficit                                           |   | (19,515,782 | ) |   | (15,674,879 | )
|                                                  |   | 4,969,107   |   |   | 7,220,140   |  
|Nature of operations (note 1)                     |   |             |   |   |             |  
|Commitments (notes
      6(a) and 10)             |   |             |   |   |             |  
|                                                  |   |             |   |   |             |  
|                                                  |   |             |   |   |             |  
|                                                  | $ | 5,007,538   |   | $ | 8,091,383   |  

The accompanying notes are an integral part of these consolidated financial
statements.

|Approved by the Board of Directors |                     
|---------------------------------- | --------------------
|                                   |                     
|/s/ Ronald W. Thiessen             | /s/ Jeffrey R. Mason
|                                   |                     
|Ronald W. Thiessen                 | Jeffrey R. Mason    
|Director                           | Director            

---

|AMARC RESOURCES LTD.                                           |   |                      |   |   |             |   |   |            |  
|-------------------------------------------------------------- | - | -------------------- | - | - | ----------- | - | - | ---------- | -
|Consolidated Statements of Operations and Deficit              |   |                      |   |   |             |   |   |            |  
|(Expressed in
      Canadian Dollars)                          |   |                      |   |   |             |   |   |            |  
|                                                               |   |                      |   |   |             |   |   |            |  
|                                                               |   | Years ended March 31 |   |   |             |  
|                                                               |   | 2006                 |   |   | 2005        |   |   | 2004       |  
|                                                               |   |                      |   |   |             |   |   |            |  
|Expenses                                                       |   |                      |   |   |             |   |   |            |  
|Amortization                                                   | $ | 10,154               |   | $ | 13,083      |   | $ | 17,037     |  
|Conference and travel                                          |   | 37,471               |   |   | 5,591       |   |   | 33,404     |  
|Exploration (schedule)                                         |   | 3,012,825            |   |   | 7,553,950   |   |   | 460,252    |  
|Legal, accounting, and audit                                   |   | 64,160               |   |   | 63,521      |   |   | 53,913     |  
|Management and consulting                                      |   | 92,987               |   |   | 45,658      |   |   | 79,964     |  
|Office and administration                                      |   | 137,155              |   |   | 106,349     |   |   | 28,468     |  
|Property investigation                                         |   | 4,316                |   |   |            |   |   |           |  
|Salaries and benefits                                          |   | 382,254              |   |   | 356,841     |   |   | 140,619    |  
|Shareholder communication                                      |   | 72,531               |   |   | 104,308     |   |   | 21,495     |  
|Stock-based compensation - administration
      (note 7(c))    |   | (6,407               | ) |   | 282,800     |   |   | 220,428    |  
|Stock-based compensation -
      exploration (note 7(c))       |   | (9,875               | ) |   | 213,231     |   |   | 186,935    |  
|Trust
      and filing                                         |   | 17,946               |   |   | 23,350      |   |   | 43,915     |  
|                                                               |   | 3,815,517            |   |   | 8,768,682   |   |   | 1,286,430  |  
|                                                               |   |                      |   |   |             |   |   |            |  
|Other items                                                    |   |                      |   |   |             |   |   |            |  
|Foreign exchange loss                                          |   | (2,645               | ) |   | (8,204      | ) |   | (9,621     | )
|Gain on sale of marketable
      securities (notes 4 and 6(a)) |   | 92,887               |   |   | 81,554      |   |   | 2,052,596  |  
|Write down of accounts receivable                              |   | (45,088              | ) |   |            |   |   |           |  
|Write down of mineral property
      interest (note 6(a))      |   | (10,000              | ) |   | (76,000     | ) |   |           |  
|Write down of marketable securities (notes 4
      and 6(a))   |   | (190,392             | ) |   | (6,667      | ) |   |           |  
|Interest on flow-through
      shares                          |   |                     |   |   | (92,502     | ) |   |           |  
|Interest and other                                             |   | 129,852              |   |   | 242,862     |   |   | 74,590     |  
|                                                               |   | (25,386              | ) |   | 141,043     |   |   | 2,117,565  |  
|                                                               |   |                      |   |   |             |   |   |            |  
|Net income (loss) for the year                                 | $ | (3,840,903           | ) | $ | (8,627,639  | ) | $ | 831,135    |  
|                                                               |   |                      |   |   |             |   |   |            |  
|Deficit, beginning of year                                     | $ | (15,674,879          | ) | $ | (7,047,240  | ) | $ | (7,878,375 | )
|                                                               |   |                      |   |   |             |   |   |            |  
|Deficit, end of year                                           | $ | (19,515,782          | ) | $ | (15,674,879 | ) | $ | (7,047,240 | )
|                                                               |   |                      |   |   |             |   |   |            |  
|Basic and diluted net income (loss) per share                  | $ | (0.08                | ) | $ | (0.19       | ) | $ | 0.04       |  
|                                                               |   |                      |   |   |             |   |   |            |  
|Weighted average number                                        |   |                      |   |   |             |   |   |            |  
|of common shares outstanding                                   |   | 49,880,651           |   |   | 45,168,411  |   |   | 21,421,096 |  

The accompanying notes are an integral part of these consolidated
  financial statements.

---



|AMARC RESOURCES LTD.                                                                          |                      |            |   |   |            |   |   |            |  
|--------------------------------------------------------------------------------------------- | -------------------- | ---------- | - | - | ---------- | - | - | ---------- | -
|Consolidated Statements of Cash Flows                                                         |                      |            |   |   |            |   |   |            |  
|(Expressed in Canadian Dollars)                                                               |                      |            |   |   |            |   |   |            |  
|                                                                                              |                      |            |   |   |            |   |   |            |  
|                                                                                              | Years ended March 31
|Cash provided by
      (used in)                                                              |                      | 2006       |   |   | 2005       |   |   | 2004       |  
|                                                                                              |                      |            |   |   |            |   |   |            |  
|Operating activities                                                                          |                      |            |   |   |            |   |   |            |  
|Income (loss) for the year                                                                    | $                    | (3,840,903 | ) | $ | (8,627,639 | ) | $ | 831,135    |  
|Items not involving cash                                                                      |                      |            |   |   |            |   |   |            |  
|Amortization                                                                                  |                      | 10,154     |   |   | 13,083     |   |   | 17,037     |  
|Common shares issued for property
      fees                                                  |                      | 18,750     |   |   | 174,900    |   |   |           |  
|Gain on sale of
      marketable securities                                                   |                      | (92,887    | ) |   | (81,554    | ) |   | (2,052,596 | )
|Stock-based compensation (note 7(c))                                                          |                      | (16,282    | ) |   | 496,031    |   |   | 407,363    |  
|Warrants received
      for option earn-in rights (note 6(b))                                 |                      |           |   |   | (102,000   | ) |   |           |  
|Write down of accounts receivable                                                             |                      | 45,088     |   |   |           |   |   |           |  
|Write down of mineral
      property interest                                                 |                      | 10,000     |   |   | 76,000     |   |   |           |  
|Write down of marketable securities                                                           |                      | 190,392    |   |   | 6,667      |   |   |           |  
|Changes in non-cash working capital
      items                                               |                      |            |   |   |            |   |   |            |  
|Amounts receivable and prepaids                                                               |                      | 116,668    |   |   | (140,786   | ) |   | 135,094    |  
|Balances receivable
      from and payable to related parties                                 |                      | (326,580   | ) |   | 175,111    |   |   | (247,389   | )
|Accounts payable and accrued liabilities                                                      |                      | (739,540   | ) |   | 595,213    |   |   | 92,308     |  
|                                                                                              |                      | (4,625,140 | ) |   | (7,414,974 | ) |   | (817,048   | )
|                                                                                              |                      |            |   |   |            |   |   |            |  
|Investing activities                                                                          |                      |            |   |   |            |   |   |            |  
|Proceeds from sale of marketable securities                                                   |                      | 240,292    |   |   | 146,590    |   |   | 2,657,646  |  
|Acquisition of mineral property
      interests                                               |                      |           |   |   | (168,000   | ) |   | (73,929    | )
|Purchase of marketable securities                                                             |                      |           |   |   | (125,000   | ) |   | (125,000   | )
|Reclamation deposit                                                                           |                      |           |   |   |           |   |   | 70,000     |  
|                                                                                              |                      | 240,292    |   |   | (146,410   | ) |   | 2,528,717  |  
|                                                                                              |                      |            |   |   |            |   |   |            |  
|Financing activities                                                                          |                      |            |   |   |            |   |   |            |  
|Issuance of share capital, net of costs                                                       |                      | 1,587,402  |   |   | 1,172,090  |   |   | 12,003,155 |  
|                                                                                              |                      | 1,587,402  |   |   | 1,172,090  |   |   | 12,003,155 |  
|                                                                                              |                      |            |   |   |            |   |   |            |  
|Increase (decrease) in cash and equivalents                                                   |                      | (2,797,446 | ) |   | (6,389,294 | ) |   | 13,714,824 |  
|                                                                                              |                      |            |   |   |            |   |   |            |  
|Cash and equivalents,
      beginning of year                                                 |                      | 7,335,379  |   |   | 13,724,673 |   |   | 9,849      |  
|                                                                                              |                      |            |   |   |            |   |   |            |  
|Cash and equivalents,
      end of year                                                       | $                    | 4,537,933  |   | $ | 7,335,379  |   | $ | 13,724,673 |  
|                                                                                              |                      |            |   |   |            |   |   |            |  
|The accompanying notes are an integral part of these
      consolidated financial statements. |                      |            |   |   |            |   |  
|                                                                                              |                      |            |   |   |            |   |   |            |  
|                                                                                              |                      |            |   |   |            |   |   |            |  
|Supplementary cash flow information:                                                          |                      |            |   |   |            |   |   |            |  
|                                                                                              |                      |            |   |   |            |   |   |            |  
|Interest paid                                                                                 | $                    |           |   | $ | 92,502     |   | $ |           |  
|Taxes paid                                                                                    | $                    |           |   | $ |           |   | $ |           |  
|                                                                                              |                      |            |   |   |            |   |   |            |  
|Non cash financing and investing activities:                                                  |                      |            |   |   |            |   |   |            |  
|Issuance of common shares for property
      option fees                                      |                      | 18,750     |   |   | 174,900    |   |   |           |  
|Common shares received from Endurance Gold Corporation
      (note 6(a)(iv))                  |                      | 47,500     |   |   |           |   |   |           |  
|                                                                                              |                      |            |   |   |            |   |   |            |  

---



|AMARC RESOURCES LTD.                                                                          |   |           |   |   |            |  |   |           |  |   |            |  
|--------------------------------------------------------------------------------------------- | - | --------- | - | - | ---------- |  | - | --------- |  | - | ---------- | -
|Consolidated Schedules of Exploration Expenses                                                |   |           |   |   |            |  |   |           |  |   |            |  
|Years ended March 31, 2006, 2005, and 2004                                                    |   |           |   |   |            |  |   |           |  |   |            |  
|(Expressed in Canadian Dollars)                                                               |   |           |   |   |            |  |   |           |  |   |            |  
|                                                                                              |   |           |   |   |            |  |   |           |  |   |            |  
|                                                                                              |   | Mexico    |   |   | British    |  |   | Manitoba  |  |   | All        |  
|                                                                                              |   | Inde      |   |   | Columbia   |  |   | Fox River |  |   | Properties |  
|                                                                                              |   | Property  |   |   | Properties |  |   | Property  |  |   | Total      |  
|                                                                                              |   |           |   |   |            |  |   |           |  |   |            |  
|Exploration expenses for the year ended March 31, 2006                                        |   |           |   |   |            |  |   |           |  |   |            |  
|Assays and analysis                                                                           | $ |          |   | $ | 205,889    |  | $ |          |  | $ | 205,889    |  
|Drilling                                                                                      |   |          |   |   | 260,900    |  |   |          |  |   | 260,900    |  
|Equipment rental                                                                              |   |          |   |   | 186,127    |  |   |          |  |   | 186,127    |  
|Freight                                                                                       |   |          |   |   | 40,214     |  |   |          |  |   | 40,214     |  
|Geological                                                                                    |   |          |   |   | 1,117,544  |  |   |          |  |   | 1,117,544  |  
|Graphics                                                                                      |   |          |   |   | 19,094     |  |   |          |  |   | 19,094     |  
|Helicopter                                                                                    |   |          |   |   | 260,720    |  |   |          |  |   | 260,720    |  
|Property fees and assessments                                                                 |   |          |   |   | 23,310     |  |   |          |  |   | 23,310     |  
|Property option payments                                                                      |   |          |   |   | 78,750     |  |   |          |  |   | 78,750     |  
|Site activities                                                                               |   |          |   |   | 727,397    |  |   |          |  |   | 727,397    |  
|Travel and accommodation                                                                      |   |          |   |   | 92,880     |  |   |          |  |   | 92,880     |  
|Incurred during fiscal 2006                                                                   |   |          |   |   | 3,012,825  |  |   |          |  |   | 3,012,825  |  
|Cumulative expenditures, March 31, 2005                                                       |   | 2,246,761 |   |   | 8,089,989  |  |   | 1,811,188 |  |   | 12,147,938 |  
|Cumulative expenditures,
      March 31, 2006                                                 | $ | 2,246,761 |   | $ | 11,102,814 |  | $ | 1,811,188 |  | $ | 15,160,763 |  
|                                                                                              |   |           |   |   |            |  |   |           |  |   |            |  
|                                                                                              |   |           |   |   |            |  |   |           |  |   |            |  
|Exploration expenses for the year ended
      March 31, 2005                                  |   |           |   |   |            |  |   |           |  |   |            |  
|Assays and analysis                                                                           | $ |          |   | $ | 455,737    |  | $ |          |  | $ | 455,737    |  
|Drilling                                                                                      |   |          |   |   | 708,953    |  |   |          |  |   | 708,953    |  
|Engineering                                                                                   |   |          |   |   | 36,809     |  |   |          |  |   | 36,809     |  
|Environmental                                                                                 |   |          |   |   | 7,246      |  |   |          |  |   | 7,246      |  
|Equipment rental                                                                              |   | 603       |   |   | 149,258    |  |   |          |  |   | 149,861    |  
|Freight                                                                                       |   |          |   |   | 46,775     |  |   |          |  |   | 46,775     |  
|Geological                                                                                    |   |          |   |   | 3,082,953  |  |   |          |  |   | 3,082,953  |  
|Graphics                                                                                      |   |          |   |   | 73,072     |  |   |          |  |   | 73,072     |  
|Helicopter                                                                                    |   |          |   |   | 674,075    |  |   |          |  |   | 674,075    |  
|Option earn-in rights (note 6(b))                                                             |   | (102,000  | ) |   |           |  |   |          |  |   | (102,000   | )
|Property fees and assessments                                                                 |   |          |   |   | 47,486     |  |   |          |  |   | 47,486     |  
|Property option payments                                                                      |   |          |   |   | 99,400     |  |   |          |  |   | 99,400     |  
|Site activities                                                                               |   | 742       |   |   | 2,105,905  |  |   |          |  |   | 2,106,647  |  
|Socioeconomic                                                                                 |   |          |   |   | 2,210      |  |   |          |  |   | 2,210      |  
|Travel and accommodation                                                                      |   |          |   |   | 164,726    |  |   |          |  |   | 164,726    |  
|Incurred during fiscal 2005                                                                   |   | (100,655  | ) |   | 7,654,605  |  |   |          |  |   | 7,553,950  |  
|Cumulative expenditures,
      March 31, 2004                                                 |   | 2,347,416 |   |   | 435,384    |  |   | 1,811,188 |  |   | 4,593,988  |  
|Cumulative expenditures, March 31, 2005                                                       | $ | 2,246,761 |   | $ | 8,089,989  |  | $ | 1,811,188 |  | $ | 12,147,938 |  
|                                                                                              |   |           |   |   |            |  |   |           |  |   |            |  
|                                                                                              |   |           |   |   |            |  |   |           |  |   |            |  
|Exploration expenses for the year ended March 31, 2004                                        |   |           |   |   |            |  |   |           |  |   |            |  
|Assays and analysis                                                                           | $ | 575       |   | $ | 115,087    |  | $ |          |  | $ | 115,662    |  
|Engineering                                                                                   |   |          |   |   | 6,431      |  |   |          |  |   | 6,431      |  
|Equipment rental                                                                              |   | 1,119     |   |   | 1,446      |  |   |          |  |   | 2,565      |  
|Geological                                                                                    |   | 3,964     |   |   | 287,284    |  |   |          |  |   | 291,248    |  
|Graphics                                                                                      |   |          |   |   | 7,197      |  |   |          |  |   | 7,197      |  
|Helicopter                                                                                    |   |          |   |   | 2,302      |  |   |          |  |   | 2,302      |  
|Property fees and assessments                                                                 |   | (6,051    | ) |   | 500        |  |   |          |  |   | (5,551     | )
|Site activities                                                                               |   | 24,361    |   |   | 15,055     |  |   | 662       |  |   | 40,078     |  
|Travel and accommodation                                                                      |   | 238       |   |   | 82         |  |   |          |  |   | 320        |  
|Incurred during fiscal 2004                                                                   |   | 24,206    |   |   | 435,384    |  |   | 662       |  |   | 460,252    |  
|Cumulative expenditures, March 31, 2003                                                       |   | 2,323,210 |   |   |           |  |   | 1,810,526 |  |   | 4,133,736  |  
|Cumulative expenditures,
      March 31, 2004                                                 | $ | 2,347,416 |   | $ | 435,384    |  | $ | 1,811,188 |  | $ | 4,593,988  |  
|The accompanying notes are an integral
      part of these consolidated financial statements. |   |           |   |   |            |  |  

---

|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              

|1. | NATURE OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Amarc Resources Ltd. (the Company) is incorporated
        under the laws of the Province of British Columbia, and its principal
        business activity is the acquisition and exploration of mineral properties.
        Its principal mineral property interests are located in British Columbia.                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | These consolidated financial statements have been prepared
        using Canadian generally accepted accounting principles assuming a going
        concern. The Company has incurred losses since inception and its ability
        to continue as a going concern depends upon its capacity to develop profitable
        operations and to continue to raise adequate financing. These consolidated
        financial statements do not reflect adjustments, which could be material,
        to the carrying values of assets and liabilities which may be required
        should the Company be unable to continue as a going concern.                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|2. | BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | These consolidated financial statements have been prepared
        in accordance with Canadian generally accepted accounting principles,
        and have been reconciled to the generally accepted accounting principles
        of United States of America in note 10. These consolidated financial statements
        include the accounts of the Company and its wholly owned subsidiaries,
        Compania Minera Amarc SA de CV and Amarc Exploraciones Mineras SA de CV,
        both of which are incorporated in Mexico. Also included are the accounts
        of the Precious Exploration Limited Partnership, which is subject to the
        Companys control and primary beneficial ownership.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|3. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

|(a) | Cash and equivalents                                                                                                                                                                                                
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                     
|    | Cash and equivalents consist of cash and highly liquid
        investments, having maturity dates of three months or less from the date
        of purchase, which are readily convertible to known amounts of cash.
|    |                                                                                                                                                                                                                     
|(b) | Marketable securities                                                                                                                                                                                               
|    |                                                                                                                                                                                                                     
|    | Marketable securities are recorded at the lower of cost
        and estimated fair value.                                                                                                                           
|    |                                                                                                                                                                                                                     
|(c) | Equipment                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                     
|    | Equipment is recorded at cost and is amortized over
        its estimated useful life using the declining balance method at various
        rates ranging from 20% to 30% per annum.                                

---

|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              

|(d) | Reclamation deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Reclamation deposits are recorded at cost and are included
        in amounts receivable and prepaids.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(e) | Mineral property interests and related retirement
        obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The acquisition costs of mineral properties are deferred
        until the properties are placed into production, sold or abandoned. These
        costs are amortized on a unit-of-production basis over the estimated useful
        life of the related properties following the commencement of production
        or written off if the properties are sold, allowed to lapse or abandoned,
        or when impairment has been determined to have occurred. If the deferred
        mineral property costs are determined not to be recoverable over the estimated
        useful life or are greater than the estimated fair market value, the unrecoverable
        portion is charged to operations in that period.                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Mineral property acquisition costs include the cash
        consideration and the fair market value of common shares, based on the
        trading price of the shares, on the date of issue or as otherwise provided
        under the agreement terms for the mineral property interest. Costs for
        properties for which the Company does not possess unrestricted ownership
        and exploration rights, such as option agreements, are expensed in the
        period incurred or until a feasibility study has determined that the property
        is capable of commercial production.                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Exploration costs and option payments are expensed in
        the period incurred. Option payments which are solely at the Companys
        discretion are recorded as they are made.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Administrative expenditures are expensed in the period
        incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The Company records the fair value of an asset retirement
        obligation as a liability in the period in which it incurs a legal obligation
        associated with the retirement of tangible long-lived assets that result
        from the acquisition, construction, development and/or normal use of the
        assets. The Company also records a corresponding asset value which is
        amortized over the remaining service life of the asset being retired.
        Subsequent to the initial measurement of the asset retirement obligation,
        the obligation will be adjusted at the end of each period to reflect the
        passage of time (accretion expense) and changes in the estimated future
        cash flows underlying the obligation (asset retirement cost).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The Company also reviews its long-lived assets for impairment
        whenever events or changes in circumstances indicate that the carrying
        value of an asset may not be recoverable. Recoverability of assets to
        be held and used is measured by a comparison of the carrying amount of
        an asset to future net cash flows expected to be generated by the asset.
        If the carrying amount of an asset exceeds its estimated future cash flows,
        an impairment charge is recognized in the amount by which the carrying
        amount of the asset exceeds the fair value of the asset.                                                                                                                                                                        

---



|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              



The Company has no material asset obligations
  as the disturbance at the exploration sites to date has been minimal

|(f) | Government grants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Due to the uncertainty of approval associated with government
        grants for which the Company applies, government grants are recorded when
        the proceeds of these grants are actually received.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(g) | Share capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Common shares issued for mineral property interests
        are recorded at their fair market value based upon the trading price of
        the shares on the TSX Venture Exchange on the date of issue or as otherwise
        provided under the agreement terms to issue the shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The proceeds from common shares issued pursuant to flow-through
        share financing agreements are credited to share capital and the tax benefits
        of the exploration expenditures incurred pursuant to these agreements
        are transferred to the purchaser of the flow-through shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Share issue costs are deducted from share capital.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(h) | Stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Company accounts for all non-cash stock-based payments
        to non-employees, and employee awards that are direct awards of shares
        that call for settlement in cash or other assets, or that are share appreciation
        rights which call for settlement by the issuance of equity instruments,
        using the fair value method.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Under the fair value method, stock-based payments are
        measured at the fair value of the consideration received, or the fair
        value of the equity instruments issued, or liabilities incurred, whichever
        is more reliably measurable. The fair value of non-cash stock-based payments
        is periodically re-measured until counterparty performance is complete,
        and any change therein is recognized in the same manner as if the Company
        had paid cash instead of paying with or using equity instruments. The
        cost of non-cash stock-based payments to service providers that are fully
        vested and non-forfeitable at the grant date is measured and recognized
        at that date. For awards that vest at the end of a vesting period, compensation
        cost is recognized on a straight-line basis; for awards that vest on a
        graded basis, compensation cost is recognized on a pro-rata basis over
        the vesting period.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Consideration received by the Company upon the exercise
        of share purchase options, and the stock- based compensation previously
        credited to contributed surplus related to such options, is credited to
        share capital.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

---

|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              

|(i) | Use of estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The preparation of financial statements in conformity
        with Canadian generally accepted accounting principles requires management
        to make estimates and assumptions that affect the reported amounts of
        assets and liabilities and the disclosure of contingent assets and liabilities
        as at the balance sheet date, and the reported amounts of revenues and
        expenses during the reporting period. Significant areas requiring the
        use of management estimates include the determination of potential impairments
        of asset values, and rates for amortization of equipment, as well as the
        assumptions used in determining the fair value of non-cash stock-based
        compensation. Actual results could differ from those estimates.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(j) | Foreign currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | All of the Companys foreign subsidiaries are considered
        integrated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Monetary assets and liabilities of the Company and its
        integrated foreign operations are translated into Canadian dollars at
        exchange rates in effect at the balance sheet date. Non-monetary assets
        and liabilities are translated at historical exchange rates unless such
        items are carried at market, in which case they are translated at the
        exchange rates in effect on the balance sheet date. Revenues and expenses,
        except amortization, are translated at average exchange rates for the
        period. Amortization is translated at the same exchange rates as the assets
        to which it relates. Foreign exchange gains or losses are recognized in
        the statement of operations.                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(k) | Segment disclosures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The Company is currently operating in a single segment
         the acquisition, exploration and development of mineral properties
        in British Columbia, Canada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(l) | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The Company uses the asset and liability method of accounting
        for income taxes. Under this method, future income tax assets and liabilities
        are computed based on differences between the carrying amount of assets
        and liabilities on the balance sheet and their corresponding tax values,
        generally using the enacted or substantively enacted income tax rates
        expected to apply to taxable income in the years in which those temporary
        differences are expected to be recovered or settled.                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Future income tax assets also result from unused loss
        carry-forwards and other deductions. Future tax assets are recognized
        to the extent that they are considered more likely than not to be realized.
        The valuation of future income tax assets is adjusted, if necessary, by
        the use of a valuation allowance to reflect the estimated realizable amount.                                                                                                                                                                                                                                                                                                                                                                                                             

---



|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              



The Companys accounting policy
  for future income taxes currently has no effect on the consolidated financial
  statements of any of the periods presented.

|(m) | Loss per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Basic loss per share is calculated by dividing the loss
        for the period by the weighted average number of common shares outstanding
        during the period.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Diluted loss per share is calculated using the treasury
        stock method. Under the treasury stock method, the weighted average number
        of common shares outstanding used for the calculation of diluted loss
        per share assumes that the proceeds to be received on the exercise of
        dilutive stock options and warrants are used to repurchase common shares
        at the average market price during the period.                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(n) | Fair value of financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The carrying values of cash and equivalents, accounts
        receivable, and accounts payable and accrued liabilities approximate their
        fair value due to their short term nature. The fair value of balances
        receivable from related parties is not readily determinable due to the
        related party nature of these amounts and the absence of a secondary market
        for such instruments. Management believes that the Company is not exposed
        to significant credit risk or interest rate risk.                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Warrants received by the Company pursuant to certain
        private placement and option agreements described in note 4 and note 6
        are classified as derivative financial instruments and are recorded on
        the consolidated balance sheet as marketable securities at estimated fair
        value. Changes in the fair value of these warrants are charged to operations.                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(o) | Impairment of long-lived assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The Company reviews and evaluates its long-lived assets,
        including mineral properties, plant and equipment, for impairment when
        events or changes in circumstances indicate that the related carrying
        amounts may not be recoverable. Recoverability of assets to be held and
        used is measured by a comparison of the carrying amount of an asset to
        its estimated undiscounted future cash flows expected to be generated
        by the asset. Measurement of an impairment loss is based on the excess
        of the estimated fair value of the asset over its carrying value.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | At each reporting period and whenever events or circumstances
        indicate that an assets fair value may not be at least equal to
        its carrying value, management of the Company reviews the net carrying
        value. These reviews involve consideration of the fair value of each property
        to determine whether a permanent impairment in value has occurred and
        whether any asset write down is necessary.                                                                                                                                                                               

---

|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              

|(p) | Variable interest entities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Effective April 1, 2005, the Company adopted the Canadian
        Institute of Chartered Accountants Handbook Accounting Guideline 15, "Consolidation
        of Variable Interest Entities" ("AcG15"). AcG15 prescribes the application
        of consolidation principles for entities that meet the definition of a
        variable interest entity (VIE). An enterprise holding other
        than a voting interest in a VIE could, subject to certain conditions,
        be required to consolidate the VIE if it is considered its primary beneficiary
        whereby it would absorb the majority of the VIEs expected losses,
        receive the majority of its expected residual returns, or both. The adoption
        of this new standard had no effect on the consolidated financial statements
        as the Company does not have any VIEs.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(q) | Flow-through financing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Under the Canadian Income Tax Act, a company may issue
        securities referred to as flow-through shares whereby the investor may
        claim the tax deductions arising from the qualifying expenditure of the
        proceeds by the company. When resource expenditures are renounced to the
        investors and the Company has reasonable assurance that the expenditures
        will be completed, future income tax liabilities are recognized (renounced
        expenditures multiplied by the effective corporate tax rate), thereby
        reducing share capital. Previously unrecognized tax assets may then offset
        or eliminate the liability recorded.                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(r) | Comparative figures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Certain of the prior years comparative figures
        have been reclassified to conform to the financial statement presentation
        adopted for the current year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

---

|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              

|4. | MARKETABLE SECURITIES
|-- | ---------------------

| |                                                        |  | Number  |  |   | Book value |  |   | value   | 
| | ------------------------------------------------------ |  | ------- |  | - | ---------- |  | - | ------- | 
| | March 31, 2006                                         |  |         |  |   |            |  |   |         | 
| | ComWest Enterprise Corp. warrants (2)                  |  | 12,426  |  |   |           |  |   |        | 
| | Total                                                  |  |         |  | $ |           |  | $ |        | 
| |                                                        |  |         |  |   |            |  |   |         | 
| | March 31, 2005                                         |  |         |  |   |            |  |   |         | 
| | Yukon Zinc Corporation (formerly
      Expatriate      |  |         |  |   |            |  |   |         | 
| | Resources Ltd.) common shares (1)                      |  | 537,000 |  | $ | 163,964    |  | $ | 171,840 | 
| | Chatworth Resources Inc. (formerly
      GMD           |  |         |  |   |            |  |   |         | 
| | Resources Corp.) common shares (note
      6(a)(i))    |  | 16,667  |  |   | 3,333      |  |   | 3,583   | 
| | Chatworth Resources Inc. warrants
      (note 6(a)(i)) |  | 16,667  |  |   | 22,000     |  |   | 22,000  | 
| | Yukon Zinc Corporation warrants (1)                    |  | 250,000 |  |   | 12,000     |  |   | 12,000  | 
| | Sydney Resource Corporation warrants (3)(note 6(b))    |  | 300,000 |  |   | 89,000     |  |   | 89,000  | 
| | Total                                                  |  |         |  | $ | 290,297    |  | $ | 298,423 | 

| | (1) | On July 21, 2004, the Company subscribed to a private
        placement in Yukon Zinc Corporation (formerly Expatriate Resources Ltd.)
        (Yukon Zinc) consisting of 500,000 units for a total cost
        of $125,000. Each unit consisted of one common share and one-half of one
        warrant. Each whole warrant is convertible into one common share of Yukon
        Zinc. The costs totaling $125,000 were allocated between the common shares
        and warrants of Yukon Zinc based on their relative fair values at the
        date of issuance. The Company did not exercise the warrants, and consequently
        $12,000 originally allocated to the warrants on acquisition was written
        off when they expired unexercised on July 21, 2005. In January 2006, the
        Company disposed all the common shares of Yukon Zinc with proceeds of
        $202,009, and a gain of $94,609 was recorded after a write down to current
        market value of $56,564 in the first quarter of fiscal 2006.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (2) | In November 2005, Chatworth Resources Inc. (Chatworth)
        (formerly, GMD Resources Corp.) amalgamated with ComWest Capital Corp.
        to form ComWest Enterprise Corp. (ComWest). Under the amalgamation
        agreement, the Companys 16,667 post-consolidated Chatworth warrants
        (100,000 pre-consolidation) were exchanged for 12,426 ComWest warrants.
        Each ComWest warrant entitles the Company to acquire one additional ComWest
        Class B voting common share at $1.207 per share until July
        16, 2006, which subsequently expired unexercised. During the current fiscal
        year, the Company wrote off the $22,000 carrying costs originally associated
        with these warrants.                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | (3) | The Company did not exercise the warrants of Sydney
        Resources Corporation and the related carrying cost of $89,000 was written
        off during fiscal 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

---

|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              

|5. | EQUIPMENT
|-- | ---------

| |                |   |         |  |   | Accumulated  |  |   | Net Book | 
| | -------------- | - | ------- |  | - | ------------ |  | - | -------- | 
| |                |   | Cost    |  |   | Amortization |  |   | Value    | 
| | March 31, 2006 |   |         |  |   |              |  |   |          | 
| | Automotive     | $ | 24,514  |  | $ | 19,391       |  | $ | 5,123    | 
| | Site equipment |   | 77,551  |  |   | 45,723       |  |   | 31,828   | 
| | Total          | $ | 102,065 |  | $ | 65,114       |  | $ | 36,951   | 
| |                |   |         |  |   |              |  |   |          | 
| | March 31, 2005 |   |         |  |   |              |  |   |          | 
| | Automotive     | $ | 24,514  |  | $ | 17,195       |  | $ | 7,319    | 
| | Site equipment |   | 77,551  |  |   | 37,765       |  |   | 39,786   | 
| | Total          | $ | 102,065 |  | $ | 54,960       |  | $ | 47,105   | 

|6. | MINERAL PROPERTY INTERESTS
|-- | --------------------------

| |                      |   | Balance at |  |   | Acquired   |  |   | Credited   |   |   | Written           |   |   | Balance at | 
| | -------------------- | - | ---------- |  | - | ---------- |  | - | ---------- | - | - | ----------------- | - | - | ---------- | 
| | Property Acquisition |   | March 31,  |  |   | during the |  |   | during the |   |   | down              |   |   | March 31,  | 
| | Costs                |   | 2005       |  |   | year       |  |   | year       |   |   | during
      year |   |   | 2006       | 
| | British Columbia,    |   |            |  |   |            |  |   |            |   |   |                   |   |   |            | 
| | Canada               |   |            |  |   |            |  |   |            |   |   |                   |   |   |            | 
| | Buck                 | $ | 55,929     |  | $ |           |  | $ |           |   | $ |                  |   | $ | 55,929     | 
| | Nechako              |   | 90,000     |  |   |           |  |   | (47,500    | ) |   |                  |   |   | 42,500     | 
| | Witch                |   | 10,000     |  |   |           |  |   |           |   |   | (10,000           | ) |   |           | 
| | Total                | $ | 155,929    |  | $ |           |  | $ | (47,500    | ) | $ | (10,000           | ) | $ | 98,429     | 

---

|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              

| |                      |   |            |  |   |            |  |   |            |   |   | Written-   |   |   |            | 
| | -------------------- | - | ---------- |  | - | ---------- |  | - | ---------- | - | - | ---------- | - | - | ---------- | 
| |                      |   | Balance at |  |   | Acquired   |  |   | Credited   |   |   | down       |   |   | Balance at | 
| | Property Acquisition |   | March 31,  |  |   | during the |  |   | during the |   |   | during the |   |   | March 31,  | 
| | Costs                |   | 2004       |  |   | year       |  |   | year       |   |   | year       |   |   | 2005       | 
| | British Columbia,    |   |            |  |   |            |  |   |            |   |   |            |   |   |            | 
| | Canada               |   |            |  |   |            |  |   |            |   |   |            |   |   |            | 
| | Buck                 | $ | 65,929     |  | $ |           |  | $ | (10,000    | ) | $ |           |   | $ | 55,929     | 
| | RAD                  |   | 8,000      |  |   |           |  |   |           |   |   | (8,000     | ) |   |           | 
| | Nechako              |   |           |  |   | 90,000     |  |   |           |   |   |           |   |   | 90,000     | 
| | Witch                |   |           |  |   | 10,000     |  |   |           |   |   |           |   |   | 10,000     | 
| | Sitka                |   |           |  |   | 68,000     |  |   |           |   |   | (68,000    | ) |   |           | 
| | Total                | $ | 73,929     |  | $ | 168,000    |  | $ | (10,000    | ) | $ | (76,000    | ) | $ | 155,929    | 

|(a) | British Columbia, Canada                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | In 2004, the Company acquired a 100% interest
        in the 4,750 hectare Buckproperty, located 20 kilometers south
        of Houston, from United Mineral Services Ltd., a private company owned
        by a director of the Company. The option was exercised by the Company
        by reimbursing the $65,929 cost of staking the property and then carrying
        out line cutting to establish a survey grid over it and performing an
        induced polarization geophysical survey on the property.                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | On July 9, 2004, the Company reached an option
        agreement with Chatworth pursuant to which Chatworth could earn a 50%
        interest in the Buck project by (i) issuing 100,000 units comprised of
        100,000 common shares of Chatworth at a deemed price of $0.05 per share,
        (ii) issuing 100,000 two-year share purchase warrants exercisable at $0.10
        per share in the first year and $0.15 per share in the second year, and
        (iii) incurring exploration expenditures totaling $500,000 over five years,
        with a minimum annual expenditure of $100,000.                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | Upon acceptance of the option agreement by
        the TSX Venture Exchange on July 16, 2004, 100,000 common shares and 100,000
        warrants of Chatworth were received by the Company. The 100,000 pre-consolidation
        Chatworth shares with an estimated value of $5,000 were credited against
        the acquisition cost of the property. Chatworth subsequently completed
        a 6-for-1 share consolidation. The fair value of the Chatworth warrants
        was estimated at $5,000 using a Black-Sholes option pricing model, and
        has been credited against the acquisition cost of the property. Chatworth
        did not perform its obligations under the July 2004 option agreement,
        causing the agreement to lapse.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    | The Company continues to maintain the property
        in good standing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

---

|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              

| | (ii) | RAD Property
| | ---- | ------------

In 2004, the Company acquired a 100%
  interest in the 2000 hectare RAD property, located 250 kilometers west
  of Williams Lake, from United Mineral Services Ltd., a private company owned
  by a director of the Company, by reimbursing the staking cost of $8,000. The
  acquisition costs totaling $8,000 were written-off in the year ended March 31,
  2005 as no further exploration work was conducted on this property. The Company
  plans to allow the property to lapse.

| | (iii) | Sitka Property
| | ----- | --------------

In 2004, the Company acquired a 100%
  interest in the 1,275 hectare Sitkaproperty, located 30 kilometers northeast
  of Port Hardy, by paying $20,000 in cash and by the issuance of 80,000 shares
  of the Company to an arm's length party. A review of the existing exploration
  information on the property was performed and it was determined that the property
  did not warrant further exploration work by the Company. Consequently, acquisition
  costs totalling $68,000 were expensed in the year ended March 31, 2005 and the
  property was allowed to lapse.

| | (iv) | Nechako Gold Property (formerly Bob and
        JMD Properties)
| | ---- | -------------------------------------------------------------------

In 2004, the Company acquired a 100%
  interest in the Nechako mineral property, located 80 kilometers west
  of Quesnel, by issuing a total of 200,000 shares of the Company to two arm's
  length parties. Of these 200,000 shares, 50,000 were not due to be issued until
  the Company reached a third party joint venture agreement or completed a total
  of $250,000 in exploration expenditures on the property.

In November 2004, the Company signed
  an option agreement with Endurance Gold Corporation (Endurance Gold),
  an arm's length private company, whereby Endurance Gold can acquire a 60% interest
  in the properties by issuing to the Company 250,000 common shares in stages
  (issued), and by incurring $250,000 in exploration work on the property over
  a three year period (completed). The agreement was conditional upon Endurance
  Gold becoming a publicly-listed company, a condition that Endurance fulfilled
  in July 2005 by becoming a publicly-listed company on the TSX Venture Exchange.
  The Company received its payments of 250,000 common shares of Endurance Gold
  during fiscal 2006 and $47,500 was credited to the acquisition cost of the property.
  Consequently, Endurance Gold earned its 60% interest in the property. The two
  arm's length parties from whom the property was acquired waived their right
  to the 50,000 common shares of the Company referred to above. After a write
  down of $10,000 to the common shares of Endurance Gold held by the Company,
  the Company disposed of all shares it held for proceeds of $36,165 and a loss
  of $1,203 was recorded.

At the end of the option period, the
  Company and Endurance Gold entered into a joint venture to develop the property
  with the Company owning 40% and Endurance Gold owning 60%.

---



|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              



Since January 2005, Endurance Gold registered
  an additional 3,275 hectares of mineral claims within the area of common interest
  surrounding the property. These will form part of the property and are subject
  to the terms of the agreement with Endurance Gold.

Amarc reviewed the Endurance Gold exploration
  results and elected not to participate in the additional expenditures required
  to complete the drilling in December 2005. As a result, Amarcs interest
  in the property has been reduced to 32.61% .

| | (v) | GBR
| | --- | ---

In April 2004, the Company entered into
  an agreement to acquire the 1,000 hectare GBR Property located approximately
  70 kilometers northwest of Dease Lake. The Company had the option to acquire
  a 100% interest in the claims, subject to a 2% net smelter royalty (NSR),
  by making cash payments totaling $225,000 and by issuing 450,000 common shares
  of the Company, of which $15,000 was paid and 30,000 common shares were issued
  during the fiscal year ended March 31, 2005. The Company subsequently staked
  an additional 28 claims on 5,825 hectares to add to the property within an area
  of common interest that became subject to the terms of the agreement.

In May 2005, the Company terminated the
  GBR agreement.

| | (vi) | Spius Property
| | ---- | --------------

In June 2004, the Company entered into
  an option agreement with two arm's length parties to acquire a 100% interest
  in the 1,000 hectare Spius gold-copper porphyry property, located near
  Merritt. The Company could have acquired its interest in the Spius property
  by making staged cash payments totaling $35,000 and issuing 80,000 common shares
  over three years (of which 10,000 shares were issued during the fiscal year
  ended March 31, 2005). The property was subject to a 2% NSR which the Company
  could have, at its option, purchased for $2 million. In July 2005, the Company
  terminated the Spius agreement.

| | (vii) | Witch Properties
| | ----- | ----------------

In September 2004, the Company acquired
  a 100% interest in the Witch porphyry gold-copper property for a cash
  payment of $10,000. The property comprises approximately 4,600 hectares and
  is located in the Witch Lake/Chuchi Lake region, approximately 80 kilometers
  north-northwest of Fort St. James. Amarc added to the property by staking an
  additional 1,750 hectares in four claims. The Company conducted exploration
  work during the fiscal year and the results did not warrant further work by
  the Company. Consequently, acquisition costs of $10,000 were written off during
  the year ended March 31, 2006.

During the quarter ended December 31,
  2004, Amarc staked an additional 36,350 hectares in the Witch Lake region, comprising
  the Chona, Kal, M2, M3, M4, M5, Tsil and additional Witch claims. In
  November 2004, the Kal, M2, M3, M4, M5 and Tsil properties became subject to
  a farm

---



|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              



out agreement with Rockwell Ventures
  Inc., as described below under Rockwell Agreement. An evaluation
  of these results has been completed and the results do not warrant further exploration
  by the Company. As of March 31, 2006, the M2, M4, M5, Kal and Tsil claims had
  lapsed.

During the quarter ended March 31, 2005,
  the Company registered an additional 31,611 hectares in the same region (the
  Chica, additional Chona, Tchent, Wolf and Xander
  claims). The Company completed exploration work on these claims during the year
  ended March 31, 2006 and no significant results were obtained from this exploration
  work.

The Company has filed assessment work
  on 21,025 hectares of the Chona claims and is holding an additional 4,714 hectares
  of the Witch and Chona claims that are in good standing.

| | (viii) | Natlan Property
| | ------ | ---------------

In October 2004, Amarc signed a Letter
  of Intent to enter into an option agreement to acquire the Natlan gold
  property located 25 kilometers northeast of Hazelton. In March 2005, a definitive
  option agreement was signed, whereby the Company could purchase 100% of the
  Natlan gold property by making staged cash payments totaling $500,000 over five
  years, of which $10,000 was paid. The property was subject to a 2% NSR, which
  could be purchased by the Company for $2 million. The Company conducted exploration
  work in fiscal 2006 and the results of this exploration did not warrant additional
  work. Consequently, the option agreement was terminated by the Company during
  the year ended March 31, 2006.

| | (ix) | Cariboo Properties
| | ---- | ------------------

In February and March 2004, the Company
  staked the 2,000 hectare Crystal Property, the 2,000 hectare Orr
  Property, the 1,125 hectare Hook Property, the 2,125 Sky Property
  and the 2,175 hectare Jim Property. The Crystal and Orr claims are located
  approximately 45 kilometers southeast and 35 kilometers southeast, respectively,
  of the town of 100 Mile House. The Hook, Sky and Jim Properties are located
  12 kilometers northeast, 15 kilometers northwest and 6 kilometers northeast,
  respectively, of the town of Horsefly. Subsequently, Amarc added, by staking,
  100 hectares in four claims to the Jim property and 2,500 hectares in five claims
  to the Crystal property. In November 2004, the Crystal and Hook properties became
  the subject to a farm out agreement with Rockwell Ventures Inc., as described
  below under Rockwell Agreement.

Exploration work conducted on the Crystal,
  Hook and Orr properties determined that no further work was warranted. Consequently,
  the Company allowed the Crystal, Orr and Sky claims to lapse during the year
  ended March 31, 2006.

In March 2005, the Company entered into
  an agreement with Wildrose Resources Ltd., whereby the Hook and Jim
  properties were sold to Wildrose for the sum of $10 and the right, in favor
  of the Company and Rockwell, to enter into an option agreement to purchase Wildroses
  Cowtrail and

---

AMARC RESOURCES LTD.Notes to the Consolidated Financial StatementsYear ended March 31, 2006, 2005, and 2004(Expressed in Canadian Dollars)



Patclaims, also located in the
  Cariboo region near Horsefly. The Company and Rockwell did not exercise the
  right to enter into the option agreement.

In November 2004, the Company staked
  the Giff, NaudandTin properties comprising 5,196 hectares located
  in the Cariboo region approximately 85 kilometers east of Williams Lake, to
  cover regional geophysical targets prospective for porphyry gold-copper-molybdenum
  deposits. In February 2005 the Company registered the Magoro, RS, Tisdall
  and TKLproperties, comprising a total of 7,462 hectares, in the same
  area.

These properties were explored during
  fiscal 2006 and the results of the exploration did not warrant further work
  by the Company. The Giff, Naud, Tin, Magoro, RS, Tisdall and TKL properties
  have subsequently been allowed to lapse.

In May 2005, the Company entered into
  an option agreement with Taseko Mines Limited, a public company with certain
  directors in common with the Company, to earn a 50% interest in the Waspand Anvil properties. The Company will be the operator and can acquire
  its interest by incurring $150,000 of exploration expenditures over a two year
  period. The Wasp and Anvil properties are located approximately 15 kilometers
  southeast of Tasekos Prosperity project, situated 130 southwest of Williams
  Lake.

| | (x) | Max Property
| | --- | ------------

In January 2005, the Company entered
  into an agreement whereby it obtained an option to acquire a 100% interest in
  the 121 hectare Homestake/Kamad crown-granted mineral claims located
  65 kilometers northeast of Kamloops, by making staged cash payments totaling
  $135,000 and issuing 200,000 common shares of the Company over a period of 2
  years, of which $60,000 has been paid and 50,000 common shares have been issued
  to March 31, 2006. The agreement included a 2% net smelter royalty payable from
  production on the property, which royalty was purchasable by the Company for
  $1 million.

In December 2004, the Company entered
  into a letter agreement with Eagle Plains Resources Ltd. (Eagle Plains)
  for an option to acquire a 60% joint venture position with Eagle Plains to develop
  the 5,075 hectare Acacia property that is contiguous with and surrounds
  the Homestake/Kamad claims. The Company could have acquired its interest by
  making staged payments totaling $125,000 and 350,000 common shares of the Company
  and by expending $2,500,000 in exploration and development work over the next
  four years. The Company could have increased its interest to 75% by carrying
  the project to feasibility. A definitive agreement was signed in April 2005.
  Initial cash payments of $25,000 and the issuance of 25,000 common shares of
  the Company were made.

The Company has given notice of termination
  of the option agreements on the Homestake/Kamad property and the Acacia property.

---

|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              

| | (xi) | Tulox Property
| | ---- | --------------

The Tulox property, located in the Cariboo
  region, was registered for acquisition during the current year.

| | (xii) | Meziadin Properties
| | ----- | -------------------

The Company registered for acquisition
  five properties in the Meziadin Lake area of northwestern B.C. during the current
  year.

| | (xiii) | Rockwell Agreement
| | ------ | ------------------

On November 1, 2004, the Company signed
  an agreement with Rockwell Ventures Inc. (Rockwell), a public company
  with certain directors in common with the Company, whereby Rockwell was granted
  the right to earn a 50% interest in each of the Crystal, Hook, Kal, M2, M3,
  M5 and Tsil properties (as described above under Cariboo properties)
  by incurring $600,000 in exploration expenditures on the named properties by
  December 31, 2004 (completed). The Company had the option to buy back Rockwells
  interest at any time up to June 30, 2005, by paying a mutually-agreed upon price
  of $660,000 in cash or the equivalent in Amarc shares. The Company allowed this
  option to lapse unexercised.

|(b) | Durango State, Mexico Inde Property                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The Inde Property ("the Property") comprises approximately
        270 hectares located in Durango State, Mexico, and consists of five mineral
        concessions, of which three were owned outright by the Company and two
        were held under option.                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | In December 2003, and concurrent with an amendment to
        the underlying option agreement, the Company optioned the Property to
        Minera Bugambilias, S.A. de C.V. ("Bugambilias"). Bugambilias could have
        earned up to a 70% interest in the Inde Property by exercising two options
        and was also required to make all necessary option payments to the underlying
        property vendor.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | In January 2004, the Company reached an option agreement
        with Sydney Resource Corporation (Sydney) pursuant to which
        Sydney could earn a 51% interest in the Inde project by (i) incurring
        $2.2 million in exploration expenses within 3 years and (ii) issuing 300,000
        warrants at exercisable at $0.52 per share until February 4, 2006.                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | In October 2004, Bugambilias terminated its option.
        The Company then terminated its option agreement with the underlying vendor,
        and pursuant to that agreement also relinquished, to the underlying vendor,
        the three concessions which it owned. Consequently, the Company has no
        further interest in the Inde Property.                                                            

---



|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              



Upon acceptance of the option agreement
  by the TSX Venture Exchange on April 27, 2004, 300,000 warrants of Sydney were
  received by the Company. The Sydney warrants were recorded as a reduction in
  exploration expenses with an estimated fair value of $102,000 using the Black-Scholes
  option pricing model. The warrants expired unexercised on February 4, 2006.

|(c) | Other Properties                                                                                                                                                                                                                                                                                                                                                                     
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                      
|    | Yukon Territory and Saskatchewan                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                      
|    | The Company has a 5% net profits interest ("NPI") in
        the 46 mineral claims comprising the Ana Property in the Yukon, and a
        2.5% NPI in a mineral lease comprising the Mann Lake Property in Saskatchewan.
        The Company has neither active exploration programs nor does it plan to
        undertake any new programs on these properties at the present time.

|7. | SHARE CAPITAL
|-- | -------------

|(a) | Authorized share capital                                                                                          
|--- | ------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                   
|    | The Company's authorized share capital consists of an
        unlimited number of common shares without par value.
|    |                                                                                                                   
|(b) | Issued and outstanding common shares                                                                              

| |                                                                            |  | Number of  |  |   |            | 
| | -------------------------------------------------------------------------- |  | ---------- |  | - | ---------- | 
| |                                                                            |  | Shares     |  |   | Amount     | 
| | Balance at March 31, 2004                                                  |  | 44,173,641 |  | $ | 20,638,830 | 
| | Issued during fiscal 2005                                                  |  |            |  |   |            | 
| | Options exercised                                                          |  | 2,123,500  |  |   | 654,090    | 
| | Nechako property option payment, June 2004 (note
      6(a)(iv))           |  | 150,000    |  |   | 90,000     | 
| | GBR property option payment, June
      2004 (note 6(a)(v))                |  | 30,000     |  |   | 18,000     | 
| | Sitka property option payment, June 2004 (note
      6(a)(iii))            |  | 80,000     |  |   | 48,000     | 
| | Spius Creek property option payment,
      July 2004 (note 6(a)(vi))       |  | 10,000     |  |   | 5,900      | 
| | Homestake/Kamad property option payment, January
      2005 (note 6(a)(x)) |  | 25,000     |  |   | 13,000     | 
| | Warrants exercised                                                         |  | 1,145,001  |  |   | 518,000    | 
| | Contributed
      surplus transferred on options exercised                 |  |           |  |   | 402,134    | 
| | Balance at March 31, 2005                                                  |  | 47,737,142 |  |   | 22,387,954 | 
| | Issued during fiscal 2006                                                  |  |            |  |   |            | 
| | Options exercised                                                          |  | 7,000      |  |   | 1,190      | 
| | Warrants exercised                                                         |  | 4,665,331  |  |   | 1,586,212  | 
| | Acacia property option payment,
      May 2005 (note 6(a)(x))              |  | 25,000     |  |   | 9,250      | 
| | Homestake/Kamad property option payment, June
      2005 (note 6(a)(x))    |  | 25,000     |  |   | 9,500      | 
| | Contributed surplus transferred on options
      exercised                 |  |           |  |   | 2,962      | 
| | Balance at March
      31, 2006                                            |  | 52,459,473 |  | $ | 23,997,068 | 

|(c) | Share purchase option compensation plan                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                             
|    | The Company has a share purchase option compensation
        plan approved by the shareholders that allows the Company to grant up
        to 10% of the issued and outstanding shares of the Company at any

---



|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              



one time, typically vesting over up to two years, subject to
  regulatory terms and approval, to its directors, employees, officers, and consultants.
  The exercise price of each option may be set equal to or greater than the closing
  market price of the common shares on the TSX Venture Exchange on the day prior
  to the date of the grant of the option, less any allowable discounts. Options
  had a maximum term of five years and terminate 30 days following the termination
  of the optionees employment, except in the case of retirement or death.
  As at March 31, 2006, no options were outstanding.

The continuity of share purchase options for the period ended
  March 31, 2006 was:

|                                | Exercise | March 31  |         |           | Expired/    | March 31
|------------------------------- | -------- | --------- | ------- | --------- | ----------- | --------
|Expiry date                     | price    | 2005      | Granted | Exercised | Cancelled   | 2006    
|May 9, 2005                     | $0.17    | 7,000     |        | (7,000)   |            |        
|March 21, 2006                  | $0.60    | 2,021,000 |        |          | (2,021,000) |        
|Total                           |          | 2,028,000 |        | (7,000)   | (2,021,000) |        
|                                |          |           |         |           |             |         
|Weighted average exercise price | $ 0.60   | $        | $ 0.17  | $ 0.60    | $         

The continuity of share purchase options for the year ended March
  31, 2005 was:

|                                | Exercise | March 31  |           |             | Expired/  | March 31 
|------------------------------- | -------- | --------- | --------- | ----------- | --------- | ---------
|Expiry date                     | price    | 2004      | Granted   | Exercised   | Cancelled | 2005     
|December 20, 2004               | $0.18    | 67,000    |          | (67,000)    |          |         
|March 21, 2005                  | $0.31    | 2,033,000 |          | (2,013,000) | (20,000)  |         
|March 21, 2005                  | $0.36    | 25,500    |          | (25,500)    |          |         
|March 21, 2005                  | $0.49    | 73,000    |          | (18,000)    | (55,000)  |         
|May 9, 2005                     | $0.17    | 7,000     |          |            |          | 7,000    
|March 21, 2006                  | $0.60    |          | 2,046,000 |            | (25,000)  | 2,021,000
|Total                           |          | 2,205,500 | 2,046,000 | (2,123,500) | (100,000) | 2,028,000
|                                |          |           |           |             |           |          
|Weighted average exercise price | $ 0.31   | $ 0.60    | $ 0.31    | $ 0.48      | $ 0.60   

---



|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              



The exercise prices of all share purchase
  options granted during the period were equal to the market price at the grant
  date. Using an option pricing model, Black-Sholes Model, with the assumptions
  noted below, the estimated adjustment to fair value of all options outstanding
  during the year have been reflected in the statement of operations as follows:

| |                                                   | Year ended March 31
| | ------------------------------------------------- | -------------------
| |                                                   |                    
| | Exploration                                       |                    
| | Engineering                                       | $                  
| | Environmental, socioeconomic and land             |                    
| | Geological                                        |                    
| | Exploration                                       |                    
| | Office and administration                         |                    
| | Total compensation cost recognized in operations, |                    
| | credited (charged) to contributed surplus         | $                  

The assumptions used to estimate the
  fair value of options granted during the year are as follows:

| |                                      | Year ended March 31
| | ------------------------------------ | -------------------
| |                                      |                    
| | Risk free interest rate              |                    
| | Weighted average expected life       |                    
| | Vesting period                       |                    
| | Weighted average expected volatility |                    
| | Expected dividends                   |                    

|(d) | Share purchase warrants                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                             
|    | There were no warrants outstanding as of March 31, 2006
        and the continuity of share purchase warrants for the year ended March
        31, 2006 was:

---

| |                                 | Exercise | March 31   |        |             | Expired/    | March 31
| | ------------------------------- | -------- | ---------- | ------ | ----------- | ----------- | --------
| | Expiry date                     | Price    | 2005       | Issued | Exercised   | Cancelled   | 2006    
| | December 31, 2005               | $ 0.34   | 12,349,999 |       | (4,665,331) | (7,684,668) |        
| | Weighted average exercise price | $ 0.34   | $         | $ 0.34 | $          | $         

The continuity of share purchase warrants
  (each warrant redeemable for one common share) for the year ended March 31,
  2005 was:

| |                                 | Exercise | March 31   |        |             | Expired/    | March 31  
| | ------------------------------- | -------- | ---------- | ------ | ----------- | ----------- | ----------
| | Expiry date                     | Price    | 2004       | Issued | Exercised   | Cancelled   | 2005      
| | December 31, 2004               | $ 0.60   | 8,002,084  |       | (495,000)   | (7,507,084) |          
| | March 9, 2005                   | $ 0.85   | 2,000,000  |       |            | (2,000,000) |          
| | December 31, 2005               | $ 0.34   | 13,000,000 |       | (650,001)   |            | 12,349,999
| | Total                           |          | 23,002,084 |       | (1,145,001) | (9,507,084) | 12,349,999
| |                                 |          |            |        |             |             |           
| | Weighted average exercise price | $ 0.47   | $         | $ 0.45 | $ 0.65      | $ 0.34     

|(e) | Contributed surplus
|--- | -------------------

| | Balance at March 31, 2004                                                               | $ | 413,168  |  
| | --------------------------------------------------------------------------------------- | - | -------- | -
| | Changes during fiscal 2005                                                              |   |          |  
| | Non-cash stock-based compensation
      (note 7(c))                                     |   | 496,031  |  
| | Contributed
      surplus transferred to share capital on options exercised (note 7(a)) |   | (402,134 | )
| | Balance at March 31, 2005                                                               |   | 507,065  |  
| | Changes during fiscal 2006                                                              |   |          |  
| | Non-cash stock-based compensation
      (note 7(c))                                     |   | (16,282  | )
| | Contributed
      surplus transferred to share capital on options exercised (note 7(a)) |   | (2,962   | )
| | Balance at March 31, 2006                                                               | $ | 487,821  |  
| |                                                                                         |   |          |  
| | The components of contributed surplus at March
      31, 2006 were:                     |   |          |  
| | Cumulative stock-based compensation                                                     | $ | 892,917  |  
| | Contributed surplus transferred to share capital relating
      to options exercised    |   | (405,096 | )
| | Balance
      at March 31, 2006                                                         | $ | 487,821  |  

---

|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              

|8. | RELATED PARTY BALANCES AND TRANSACTIONS
|-- | ---------------------------------------

| |                                       | As at March 31
| | ------------------------------------- | --------------
| |                                       |               
| | Balances receivable
      (payable)   |               
| | Hunter Dickinson Inc. (a)             | $             
| | Hunter Dickinson Group
      Inc. (b) |               
| | Total                                 | $             

| |                                            | Year ended March 31
| | ------------------------------------------ | -------------------
| | Transactions                               |                    
| | Services rendered and expenses reimbursed: |                    
| | Hunter Dickinson Inc. (a)                  | $                  
| | Hunter Dickinson Group Inc. (b)            |                    
| | Property acquisitions:                     |                    
| | United Mineral
      Services Ltd. (d)     |                    

| | (a) | Hunter Dickinson Inc. ("HDI") and its wholly-owned subsidiaries
        are private companies owned equally by nine public companies, one of which
        is the Company, and have certain directors in common with the Company.
        HDI provides geological, technical, corporate development, administrative
        and management services to, and incurs third party costs on behalf of,
        the Company on a full cost recovery basis pursuant to an agreement dated
        December 31, 1996. Balances receivable from (payable to) HDI have arisen
        in the normal course of exploration work on the Companys mineral
        properties and from the provision of ongoing administrative and technical
        services.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (b) | Hunter Dickinson Group Inc. (HDGI) is a
        private company with certain directors in common with the Company that
        provides consulting services to the Company at market rates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (d) | United Mineral Services Ltd. (UMS) is a
        private company owned by a director of the Company. During the year ended
        March 31, 2004, the Company acquired the 2,000 hectare RAD claims for
        $8,000, which was the staking cost paid by UMS, and the Buck claims for
        $65,929, being the cost of staking the property and line cutting (note
        6(a)).                                                                                                                                                                                                                                                                                                                                                           

|9. | INCOME TAXES                                                                                                                                                                                                                                                                                                                                                          
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                       
|   | Substantially all of the differences between the actual
        income tax expense (recovery) of $nil (2005  $nil; 2004  $nil)
        and the expected income tax recovery based on statutory rates relate to
        the benefit of losses not previously recognized and items not deductible
        for tax purposes, such as stock- based compensation expense.

---

|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              

| |                                        |   | March 31   |   |   | March 31   |  
| | -------------------------------------- | - | ---------- | - | - | ---------- | -
| |                                        |   | 2006       |   |   | 2005       |  
| | Future income tax assets (liabilities) |   |            |   |   |            |  
| | Resource pools                         | $ | 3,000,000  |   | $ | 2,055,000  |  
| | Loss carry forwards                    |   | 1,040,000  |   |   | 855,000    |  
| | Share issued cost                      |   | 50,000     |   |   | 75,000     |  
| | Other                                  |   |           |   |   | (55,000    | )
| | Subtotal                               |   | 4,090,000  |   |   | 2,930,000  |  
| | Valuation
      allowance              |   | (4,090,000 | ) |   | (2,930,000 | )
| | Net future income tax asset            | $ |           |   | $ |           |  

Income tax expense differs from the amount
  that would result from applying the Canadian federal and provincial tax rates
  to earnings before income taxes. These differences result from the following
  items:

| |                                                               |   | March 31   |   |   | March 31   |  
| | ------------------------------------------------------------- | - | ---------- | - | - | ---------- | -
| |                                                               |   | 2006       |   |   | 2005       |  
| | Combined Canadian federal and provincial statutory
      rate |   | 34.12%     |   |   | 35.62%     |  
| |                                                               |   |            |   |   |            |  
| | Income tax at statutory rates                                 | $ | (1,300,000 | ) | $ | (3,060,000 | )
| | Non-deductible items                                          |   | 40,000     |   |   | 220,000    |  
| | Reduction in statutory tax rates                              |   | 125,000    |   |   |           |  
| | Benefit of share issuance costs                               |   | (25,000    | ) |   | (40,000    | )
| | Change in valuation allowance                                 |   | 1,160,000  |   |   | 2,915,000  |  
| | Other                                                         |   |           |   |   | (35,000    | )
| |                                                               | $ |           |   | $ |           |  

At March 31, 2006, the Company had non-capital
  losses available for Canadian income tax purposes totaling approximately $3.2
  million (2005  $2.4 million) expiring in various periods to 2015.

|10. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES
|--- | -----------------------------------------------------------------------------------------------

The consolidated financial statements
  have been prepared in accordance with Canadian generally accepted accounting
  principles (Canadian GAAP), which differ in certain material respects
  from those principles that the Company would have followed had its consolidated
  financial statements been prepared in accordance with the generally accepted
  accounting principles in United States of America (US GAAP).

Had the Company followed US GAAP, certain
  items on the consolidated statements of operations and deficit, and balance
  sheets would have been reported as follows:

---

|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              

| |                                             | Year ended March 31,
| | ------------------------------------------- | --------------------
| | Consolidated statements of operations       |                     
| |                                             |                     
| | Income (loss) for the year under Canadian   |                     
| | GAAP and US GAAP                            | $                   
| | Other comprehensive income                  |                     
| | Mark-to-market adjustment (note 11(c))      |                     
| | Comprehensive
      income (loss)           | $                   
| |                                             |                     
| | Comprehensive
      income (loss) per share | $                   

| |                                                |   | March 31, |  |   | March 31, | 
| | ---------------------------------------------- | - | --------- |  | - | --------- | 
| | Consolidated Balance
      Sheets              |   | 2006      |  |   | 2005      | 
| | Total assets under Canadian GAAP               | $ | 5,007,538 |  | $ | 8,091,383 | 
| | Adjustments under US GAAP                      |   |           |  |   |           | 
| | Mark-to-market adjustment (note 11(c))         |   |          |  |   | 8,126     | 
| | Total assets under
      US GAAP               | $ | 5,007,538 |  | $ | 8,099,509 | 
| |                                                |   |           |  |   |           | 
| | Total liabilities under Canadian GAAP          | $ | 38,431    |  | $ | 871,243   | 
| | Adjustments under US GAAP                      |   |          |  |   |          | 
| | Total liabilities
      under US GAAP          | $ | 38,431    |  | $ | 871,243   | 
| |                                                |   |           |  |   |           | 
| | Total shareholders' equity under Canadian GAAP | $ | 4,969,107 |  | $ | 7,220,140 | 
| | Adjustments under US GAAP                      |   |           |  |   |           | 
| | Accumulated
      Deficit (note 11(c))         |   |          |  |   | 8,126     | 
| | Total shareholders' equity under US GAAP       | $ | 4,969,107 |  | $ | 7,228,266 | 

|    | There are no material differences between Canadian GAAP
        and US GAAP in the consolidated statement of cash flows for the years
        ended March 31, 2006, 2005 and 2004.                                                                                                                                                                                                                                                                
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(a) | Mineral property costs                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The Companys policy of expensing all property
        costs except where an outright property interest has been acquired results
        in an accounting treatment for these costs which the Company considers
        to be materially congruent with US GAAP. Accordingly, the Company considers
        that no US/Canadian GAAP difference exists with respect to mineral property
        costs in these consolidated financial statements.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(b) | Stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | United States Statement of Financial Accounting Standards
        148 ("SFAS 148"), "Accounting for Stock-Based Compensation - Transition
        and Disclosure - an amendment of FASB Statement No.                                                                                                                                                                                                                                             

---



|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              



123", permits the Company to adopt a
  fair value methodology on a prospective basis. Effective April 1, 2002, for
  US GAAP purposes the Company prospectively adopted the fair value method of
  accounting for stock-based compensation, a treatment consistent with the accounting
  treatment used for Canadian GAAP. Accordingly the Company considers there were
  no material differences in the treatment by the Company with respect to stock
  based compensation under US and Canadian GAAP for the years ended March 31,
  2006, 2005 and 2004.

|(c) | Available for sale securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | US GAAP requires investments in available-for-sale securities
        to be recorded at fair value in accordance with SFAS 115, Accounting
        for Certain Investments in Debt and Equity Securities. Unrealized
        gains and losses are recorded as other comprehensive income which is a
        separate component of shareholders equity, except for declines in
        fair value that are determined to be other than temporary. These declines
        in value are charged to the statement of operations, which is consistent
        with the treatment prescribed under Canadian GAAP for that occurrence.                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | US GAAP requires the Company to present comprehensive
        income (loss) in accordance with SFAS 130, Reporting Comprehensive
        Income, which establishes standards for the reporting and display
        of comprehensive income (loss), its components and accumulated balances.
        Comprehensive income (loss) comprises net income (loss) and all changes
        to shareholders equity except those resulting from investments by
        owners and distributions to owners. Canadian GAAP does not require the
        presentation of comprehensive income (loss).                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | For the year ended March 31, 2005, the common shares
        of Yukon Zinc and Chatworth held by the Company were considered available-for-sale
        securities and the Company had recorded an upward mark-to-market adjustment
        of $8,126 related to its investment in common shares of Yukon Zinc and
        Chatworth in 2005. For the year ended March 31, 2006, the Company disposed
        all common shares of Yukon Zinc and Chatworth. Consequently, the gain
        on the sale of these shares recorded under Canadian GAAP in fiscal 2006
        would be reduced by the mark-to-market adjustment made in fiscal 2005.                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | The warrants held as marketable securities by the Company
        would be considered derivative financial instruments and would be accounted
        for under SFAS 133, Accounting for Derivative Instruments and
        Hedging Activities, until they are exercised. Once exercised,
        the common shares received would be considered available-for-sale securities
        and would be accounted for under SFAS 115. SFAS 133 requires that all
        derivative financial instruments be recognized in the financial statements
        and measured at fair value. Changes in the fair value of a derivative
        financial instrument are charged to operations if the instrument does
        not qualify as a hedge, or to operations or other comprehensive income,
        a separate component of shareholders equity, if it does qualify
        as a hedge.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | For the year ended March 31, 2004, for US GAAP purposes,
        the common shares of StrataGold Corporation ("StrataGold") and of Expatriate
        Resources Ltd. ("Expatriate") held by the Company would be considered
        available-for-sale securities and the Company would have recorded an upward                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

---



|AMARC RESOURCES LTD.                          
|----------------------------------------------
|Notes to the Consolidated Financial Statements
|Year ended March 31, 2006, 2005, and 2004     
|(Expressed in Canadian Dollars)               
|                                              



mark-to-market adjustment of $84,498 related to its investment
  in common shares of StrataGold, and the same amount was added to cost when the
  shares were disposed in fiscal 2005.

|(d) | Impact of recent United States accounting
        pronouncements:
|--- | -----------------------------------------------------------------
|    |                                                                  
|    | (i)                                                              
|    |                                                                  
|    | (ii)                                                             

---