EXHIBIT 14









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FREEGOLD
VENTURES LIMITED



(An Exploration Stage
Company)



CONSOLIDATED
FINANCIAL STATEMENTS



31 DECEMBER 2005 and
2004

















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-
2 -



|[ex1002.gif] | [ex1004.gif]
|------------ | ------------





Report
of Independent Registered Public Accounting Firm





To
the Shareholders of Freegold Ventures Limited:



We
have audited the accompanying consolidated balance sheets of Freegold Ventures
Limited (an Exploration Stage Company) (the "Company") as at 31 December
2005 and 2004 and the related consolidated statements of shareholders' equity,
loss and cash flows for each of the years ended 31 December 2005, 2004 and 2003.
 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 the Canadian generally accepted auditing
standards and with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements are
free of material misstatement.  The Company is not required to have, nor
were we engaged to perform an audit of its internal control over financial
reporting.  Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting.  Accordingly, we express no such opinion.  An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

In
our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company as at 31
December 2005 and 2004, and the results of its operations and its cash flows for
each of the years ended 31 December 2005, 2004 and 2003 in accordance with
Canadian generally accepted accounting principles.



|                            | "Staley,
      Okada & Partners"
|--------------------------- | --------------------------------
|Vancouver,
      BC, Canada | STALEY, OKADA &
      PARTNERS  
|6 February 2006             | CHARTERED
      ACCOUNTANTS     





[ex1006.gif]





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3 -



|                                                                     |            
|-------------------------------------------------------------------- | -----------
|Freegold Ventures Limited
      (An
      Exploration Stage Company) | Statement 1
|Consolidated
      Balance Sheets                                    |            
|As at 31
      December                                              |            
|Canadian
      Funds                                                 |            





|                                                                |   |              |   |             
|--------------------------------------------------------------- | - | ------------ | - | ------------
|ASSETS                                                          |   | 2005         |   | 2004        
|Current                                                         |   |              |   |             
|Cash and
      cash equivalents                                 | $ | 544,275      | $ | 167,573     
|Term
      deposits                                             |   | -            |   | 1,405,949   
|Accounts and
      advances receivable                          |   | 49,624       |   | 176,273     
|Portfolio
      investments (Note 3)                            |   | 197,153      |   | 216,711     
|Prepaid
      expenses and deposits                             |   | 22,380       |   | 34,563      
|                                                                |   | 813,432      |   | 2,001,069   
|Restricted Cash -
      Flow-through                            |   | -            |   | 894,321     
|Mineral
      Property Costs- Schedule (Note 4)                 |   | 8,584,178    |   | 7,509,371   
|Property
      and Equipment(Note 5)                            |   | 34,094       |   | 37,896      
|                                                                | $ | 9,431,704    | $ | 10,442,657  
|                                                                |   |              |   |             
|                                                                |   |              |   |             
|                                                                |   |              |   |             
|LIABILITIES                                                     |   |              |   |             
|Current                                                         |   |              |   |             
|Accounts
      payable                                          | $ | 66,943       | $ | 200,841     
|Accrued
      liabilities                                       |   | 56,695       |   | 42,985      
|Due
      to related parties (Note 6a)                          |   | -            |   | 20,960      
|Option
      payment settlement (Note 4a(ii))                   |   | -            |   | 12,982      
|                                                                |   | 123,638      |   | 277,768     
|                                                                |   |              |   |             
|                                                                |   |              |   |             
|Contingent
      Liabilities(Note 4g)                           |   |              |   |             
|Commitments(Note 4a(i) and 4d)                                  |   |              |   |             
|                                                                |   |              |   |             
|                                                                |   |              |   |             
|SHAREHOLDERS' EQUITY                                            |   |              |   |             
|Share
      Capital- Statement 2(Note 7)                        |   |              |   |             
|Authorized:                                                     |   |              |   |             
|Unlimited
      common shares without par value                 |   |              |   |             
|Issued,
      allotted and fully paid:                          |   |              |   |             
|31,562,590
      (2004 - 29,992,205) shares                     |   | 30,714,606   |   | 30,411,391  
|Contributed Surplus                                             |   | 1,072,794    |   | 857,995     
|Deficit
      Accumulated During Exploration Stage- Statement 2 |   | (22,479,334) |   | (21,104,497)
|                                                                |   | 9,308,066    |   | 10,164,889  
|                                                                | $ | 9,431,704    | $ | 10,442,657  



ON BEHALF OF THE BOARD:



"Harry
Barr",
Director     "Bernard
Barlin",
Director



- See Accompanying Notes
-

---

- 4 -

|                                                                     |             | 
|-------------------------------------------------------------------- | ----------- | 
|Freegold Ventures Limited
      (An
      Exploration Stage Company) | Statement 2
|Consolidated
      Statements of Changes in Shareholders' Equity     |            
|Canadian
      Funds                                                 |            





|                                                 |                     |   |            |   |                           |   |                           |   |             | 
|------------------------------------------------ | ------------------- | - | ---------- | - | ------------------------- | - | ------------------------- | - | ----------- | 
|                                                 | Common
      Shares |   | Amount     |   | Contributed
      Surplus |   | Accumulated
      Deficit |   | Total      
|Balance
      - 31 December 2002                 | 14,367,079          | $ | 23,905,521 | $ | 238,495                   | $ | (17,946,772)              | $ | 6,197,244  
|Issuance
      of shares for:                    |                     |   |            |   |                           |   |                           |   |            
|-
      Cash                                     | 10,924,936          |   | 5,092,738  |   | -                         |   | -                         |   | 5,092,738  
|-
      Property                                 | 800,000             |   | 336,000    |   | -                         |   | -                         |   | 336,000    
|-
      Finder's fees                            | 174,690             |   | -          |   | -                         |   | -                         |   | -          
|Share
      issuance costs                       | -                   |   | -          |   | -                         |   | (272,171)                 |   | (272,171)  
|Stock
      compensation costs                   | -                   |   | -          |   | 261,350                   |   | -                         |   | 261,350    
|Loss
      for the year                          | -                   |   | -          |   | -                         |   | (1,177,923)               |   | (1,177,923)
|Balance
      - 31 December 2003                 | 26,266,705          |   | 29,334,259 |   | 499,845                   |   | (19,396,866)              |   | 10,437,238 
|Issuance
      and allotment of shares for:      |                     |   |            |   |                           |   |                           |   |            
|-
      Cash                                     | 2,738,000           |   | 1,140,100  |   | -                         |   | -                         |   | 1,140,100  
|-
      Property                                 | 900,000             |   | 303,000    |   | -                         |   | -                         |   | 303,000    
|-
      Finder's fees                            | 87,500              |   | -          |   | -                         |   | -                         |   | -          
|Share
      issuance costs                       | -                   |   | -          |   | -                         |   | (54,910)                  |   | (54,910)   
|Stock
      compensation costs                   | -                   |   | -          |   | 358,150                   |   | -                         |   | 358,150    
|Future
      income tax on flow-through (Note 8) | -                   |   | (365,968)  |   | -                         |   | -                         |   | (365,968)  
|Loss
      for the year                          | -                   |   | -          |   | -                         |   | (1,652,721)               |   | (1,652,721)
|Balance
      - 31 December 2004                 | 29,992,205          |   | 30,411,391 |   | 857,995                   |   | (21,104,497)              |   | 10,164,889 
|Issuance
      and allotment of shares for:      |                     |   |            |   |                           |   |                           |   |            
|-
      Cash                                     | 1,445,385           |   | 245,715    |   | -                         |   | -                         |   | 245,715    
|-
      Property                                 | 75,000              |   | 50,000     |   | -                         |   | -                         |   | 50,000     
|-
      Performance shares                       | 50,000              |   | 7,500      |   | -                         |   | -                         |   | 7,500      
|Share
      issuance costs                       | -                   |   | -          |   | -                         |   | (6,467)                   |   | (6,467)    
|Stock
      compensation costs                   | -                   |   | -          |   | 214,799                   |   | -                         |   | 214,799    
|Loss
      for the year                          | -                   |   | -          |   | -                         |   | (1,368,370)               |   | (1,368,370)
|Balance
      - 31 December 2005                 | 31,562,590          | $ | 30,714,606 | $ | 1,072,794                 | $ | (22,479,334)              | $ | 9,308,066  









- See Accompanying Notes
-

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- 5 -



|                                                                     |            
|-------------------------------------------------------------------- | -----------
|Freegold Ventures Limited
      (An
      Exploration Stage Company) | Statement 3
|Consolidated
      Statements of Loss                                |            
|Canadian
      Funds                                                 |            





|                                                    |  |  |   |                              |   |             |   |            
|--------------------------------------------------- |  |  | - | ---------------------------- | - | ----------- | - | -----------
|                                                    |  |  |   |                              |   |             |   |            
|                                                    |  |  |   | Year
      Ended 31 December
|                                                    |  |  |   | 2005                         |   | 2004        |   | 2003       
|General
      and Administrative Expenses           |  |  |   |                              |   |             |   |            
|Stock-based
      compensation                      |  |  | $ | 214,799                      | $ | 358,150     | $ | 261,350    
|Consulting
      fees                               |  |  |   | 304,998                      |   | 173,124     |   | 297,581    
|Travel                                              |  |  |   | 142,099                      |   | 156,151     |   | 97,152     
|Promotion                                           |  |  |   | 92,633                       |   | 143,237     |   | 71,675     
|Management
      fees                               |  |  |   | 106,818                      |   | 124,640     |   | 124,280    
|Director
      fees                                 |  |  |   | 24,000                       |   | -           |   | -          
|Audit
      and accounting                          |  |  |   | 81,528                       |   | 76,110      |   | 58,405     
|Wages,
      salaries and benefits                  |  |  |   | 95,733                       |   | 73,823      |   | 39,432     
|Shareholder
      relations                         |  |  |   | 83,609                       |   | 61,067      |   | 89,199     
|Transfer
      and filing fees                      |  |  |   | 46,115                       |   | 52,456      |   | 56,327     
|Rent
      and utilities                            |  |  |   | 40,015                       |   | 40,015      |   | 40,015     
|Office
      and miscellaneous                      |  |  |   | 20,277                       |   | 30,175      |   | 41,569     
|Insurance                                           |  |  |   | 39,135                       |   | 26,842      |   | 4,397      
|Legal                                               |  |  |   | 17,050                       |   | 26,776      |   | 31,120     
|Telephone                                           |  |  |   | 10,172                       |   | 18,330      |   | 16,414     
|Equipment
      rental                              |  |  |   | 1,028                        |   | 12,341      |   | 17,098     
|Amortization                                        |  |  |   | 7,999                        |   | 8,480       |   | 7,577      
|Loss
      Before the Undernoted                    |  |  |   | (1,328,008)                  |   | (1,381,717) |   | (1,253,591)
|                                                    |  |  |   |                              |   |             |   |            
|Other
      Income (Expenses)                       |  |  |   |                              |   |             |   |            
|Gain
      on sale of portfolio investments         |  |  |   | -                            |   | 30,570      |   | 66,591     
|Interest
      income                               |  |  |   | 39,476                       |   | 65,250      |   | 19,654     
|Foreign
      exchange gain (loss), net             |  |  |   | (2,492)                      |   | 9,688       |   | 11,760     
|Miscellaneous
      income                          |  |  |   | 958                          |   | 73,003      |   | -          
|Interest
      and bank charges                     |  |  |   | (29,373)                     |   | (27,107)    |   | (3,620)    
|Write-off
      of mineral property costs           |  |  |   | (40,020)                     |   | (788,376)   |   | (18,717)   
|Write-down
      of investments                     |  |  |   | (19,559)                     |   | -           |   | -          
|Gain
      on sale of property and equipment        |  |  |   | 10,648                       |   | -           |   | -          
|                                                    |  |  |   | (40,362)                     |   | (636,972)   |   | 75,668     
|                                                    |  |  |   |                              |   |             |   |            
|Loss
      Before Income Taxes                      |  |  |   | (1,368,370)                  |   | (2,018,689) |   | (1,177,923)
|Future
      income tax recovery (Note 8)           |  |  |   | -                            |   | 365,968     |   | -          
|Loss
      for the Year                             |  |  | $ | (1,368,370)                  | $ | (1,652,721) | $ | (1,177,923)
|                                                    |  |  |   |                              |   |             |   |            
|                                                    |  |  |   |                              |   |             |   |            
|Loss
      per Share - Basic and diluted            |  |  | $ | (0.04)                       | $ | (0.06)      | $ | (0.06)     
|                                                    |  |  |   |                              |   |             |   |            
|                                                    |  |  |   |                              |   |             |   |            
|Weighted
      Average Number of Shares Outstanding |  |  |   | 30,506,308                   |   | 26,847,155  |   | 18,664,625 









- See Accompanying Notes
-

---

-6 -

|                                                                     |            
|-------------------------------------------------------------------- | -----------
|Freegold Ventures Limited
      (An
      Exploration Stage Company) | Statement 4
|Consolidated
      Statements of Cash Flows                          |            
|Canadian
      Funds                                                 |            





|                                                                 |  |  |   |                              |   |             |   |            
|---------------------------------------------------------------- |  |  | - | ---------------------------- | - | ----------- | - | -----------
|                                                                 |  |  |   |                              |   |             |   |            
|                                                                 |  |  |   | Year
      Ended 31 December
|Cash
      Resources Provided By (Used In)                       |  |  |   | 2005                         |   | 2004        |   | 2003       
|Operating
      Activities                                       |  |  |   |                              |   |             |   |            
|Loss
      for the period                                        |  |  | $ | (1,368,370)                  | $ | (1,652,721) | $ | (1,177,923)
|Items
      not affecting cash:                                  |  |  |   |                              |   |             |   |            
|Amortization                                                     |  |  |   | 7,999                        |   | 8,480       |   | 7,577      
|Gain
      on sale of portfolio investments                      |  |  |   | -                            |   | (30,570)    |   | (66,591)   
|Gain
      on sale of equipment                                  |  |  |   | (10,648)                     |   | -           |   | -          
|Write-down
      of investments                                  |  |  |   | 19,559                       |   | -           |   | -          
|Write-off
      of mineral property costs                        |  |  |   | 40,020                       |   | 788,376     |   | 18,717     
|Stock
      compensation expense included in consulting fees     |  |  |   | 214,799                      |   | 358,150     |   | 261,350    
|Consulting
      fees - performance shares issued                |  |  |   | 7,000                        |   | -           |   | -          
|Future
      income tax recovery on flow-through shares (Note 8) |  |  |   | -                            |   | (365,968)   |   | -          
|Net
      changes in non-cash working capital components:        |  |  |   |                              |   |             |   |            
|Accounts
      and advances receivable                           |  |  |   | 126,649                      |   | (154,113)   |   | (12,595)   
|Term
      deposits                                              |  |  |   | 1,405,949                    |   | 100,996     |   | (1,506,945)
|Prepaid
      expenses and deposits                              |  |  |   | 12,183                       |   | (33,463)    |   | (1,100)    
|Accounts
      payable                                           |  |  |   | (21,966)                     |   | (4,851)     |   | 15,194     
|Accrued
      liabilities                                        |  |  |   | 13,710                       |   | 27,985      |   | -          
|Due
      to related parties                                     |  |  |   | (20,960)                     |   | 20,960      |   | (9,245)    
|                                                                 |  |  |   | 425,924                      |   | (936,739)   |   | (2,471,561)
|                                                                 |  |  |   |                              |   |             |   |            
|Investing
      Activities                                       |  |  |   |                              |   |             |   |            
|Purchase
      of portfolio investments                          |  |  |   | -                            |   | (40,823)    |   | (27,191)   
|Proceeds
      on sale of portfolio investments                  |  |  |   | -                            |   | 48,260      |   | 93,735     
|Mineral
      property acquisition costs                         |  |  |   | (173,514)                    |   | (280,365)   |   | (241,980)  
|Mineral
      property deferred exploration costs                |  |  |   | (1,186,119)                  |   | (1,770,925) |   | (299,968)  
|Mineral
      tax credit                                         |  |  |   | 152,873                      |   | -           |   | -          
|Option
      payments received                                   |  |  |   | 30,000                       |   | 104,585     |   | 40,000     
|Advances
      received from Meridian                            |  |  |   | -                            |   | 986,228     |   | -          
|Purchase
      of property and equipment                         |  |  |   | (4,197)                      |   | (12,549)    |   | (7,861)    
|Proceeds
      on sale of equipment                              |  |  |   | 10,648                       |   | -           |   | -          
|Option
      payment liability settlement                        |  |  |   | (12,982)                     |   | (29,677)    |   | (28,811)   
|                                                                 |  |  |   | (1,183,291)                  |   | (995,266)   |   | (472,076)  
|                                                                 |  |  |   |                              |   |             |   |            
|Financing
      Activities                                       |  |  |   |                              |   |             |   |            
|Share
      capital issued                                       |  |  |   | 245,715                      |   | 1,140,100   |   | 5,092,738  
|Share
      issuance costs                                       |  |  |   | (6,467)                      |   | (54,910)    |   | (272,171)  
|Performance
      shares                                         |  |  |   | 500                          |   | -           |   | -          
|                                                                 |  |  |   | 239,748                      |   | 1,085,190   |   | 4,820,567  
|                                                                 |  |  |   |                              |   |             |   |            
|Net
      Increase (Decrease) in Cash and Cash Equivalents       |  |  |   | (517,619)                    |   | (846,815)   |   | 1,876,930  
|Cash
      and cash equivalents  - Beginning of year             |  |  |   | 1,061,894                    |   | 1,908,709   |   | 31,779     
|Cash
      and Cash Equivalents - End of Year                    |  |  | $ | 544,275                      | $ | 1,061,894   | $ | 1,908,709  
|                                                                 |  |  |   |                              |   |             |   |            





- See Accompanying Notes
-

---

- 7 -



|                                                                     |            
|-------------------------------------------------------------------- | -----------
|Freegold Ventures Limited
      (An
      Exploration Stage Company) | Statement 4
|Consolidated
      Statements of Cash Flows- Continued               |            
|Canadian
      Funds                                                 |            







|                                                                             |  |  |   |                              |   |           |   |          
|---------------------------------------------------------------------------- |  |  | - | ---------------------------- | - | --------- | - | ---------
|                                                                             |  |  |   |                              |   |           |   |          
|                                                                             |  |  |   | Year
      Ended 31 December
|Cash
      Resources Provided By (Used In)                                   |  |  |   | 2005                         |   | 2004      |   | 2003     
|                                                                             |  |  |   |                              |   |           |   |          
|Cash
      Position Consists of:                                             |  |  |   |                              |   |           |   |          
|Cash
      and cash equivalents                                              |  |  | $ | 544,275                      | $ | 167,573   | $ | 1,158,709
|Restricted
      cash                                                        |  |  |   | -                            |   | 894,321   |   | 750,000  
|                                                                             |  |  | $ | 544,275                      | $ | 1,061,894 | $ | 1,908,709
|                                                                             |  |  |   |                              |   |           |   |          
|                                                                             |  |  |   |                              |   |           |   |          
|                                                                             |  |  |   |                              |   |           |   |          
|Supplemental
      Disclosure of Non-Cash Investing and Financing Activities |  |  |   |                              |   |           |   |          
|Exploration
      expenditures included in accounts payable                  |  |  | $ | 66,943                       | $ | 178,875   | $ | 37,522   
|Shares
      issued or allotted for mineral property                         |  |  | $ | (50,000)                     | $ | (303,000) | $ | (436,500)
|Option
      payments received in shares                                     |  |  | $ | -                            | $ | 17,100    | $ | 32,600   
|Stock-based
      compensation expense                                       |  |  | $ | (214,799)                    | $ | (358,150) | $ | (261,350)
|Performance
      shares issued for consulting fees                          |  |  | $ | (7,000)                      | $ | -         | $ | -        
|Future
      income tax recovery on flow-through shares (Note 8)             |  |  | $ | -                            | $ | 365,968   | $ | -        







- See Accompanying Notes
-

---

- 8 -



|                                                                     |         
|-------------------------------------------------------------------- | --------
|Freegold Ventures Limited
      (An
      Exploration Stage Company) | Schedule
|Consolidated
      Schedules of Mineral Property Costs              
|For the Years
      Ended 31 December                                |         
|Canadian
      Funds                                                 |         







|                                            |   |          |   |          
|------------------------------------------- | - | -------- | - | ---------
|                                            |   | 2005     |   | 2004     
|Direct                                      |   |          |   |          
|Golden Summit Property,
      Alaska, USA   |   |          |   |          
|Acquisition
      costs                     |   |          |   |          
|Treasury
      shares - option payments     | $ | -        | $ | 148,000  
|Cash -
      option payments                |   | 82,583   |   | 70,266   
|Option
      payment received from Meridian |   | -        |   | (84,585) 
|                                            |   | 82,583   |   | 133,681  
|Deferred
      exploration expenditures     |   |          |   |          
|Geological
      and field expenses         |   | 8,164    |   | 62,591   
|Mineral
      property fees                 |   | 28,378   |   | 60,535   
|Drilling                                    |   | -        |   | 368,840  
|Assaying                                    |   | 9,635    |   | -        
|Engineering
      and consulting            |   | 25,967   |   | -        
|Administration                              |   | -        |   | 22,766   
|Equipment
      and supplies                |   | -        |   | 32,245   
|Services                                    |   | -        |   | 30,912   
|Personnel                                   |   | -        |   | 263,763  
|Management
      fees                       |   | 18,819   |   | 73,003   
|Amounts
      received from Meridian        |   | -        |   | (986,228)
|Amounts
      recovered                     |   | -        |   | (9,946)  
|                                            |   | 90,963   |   | (81,519) 
|Total                                       |   | 173,546  |   | 52,162   
|                                            |   |          |   |          
|Union Bay
      Property, Alaska, USA       |   |          |   |          
|Shares -
      option payments received     |   | -        |   | (17,100) 
|Cash -
      option payments received       |   | (30,000) |   | (20,000) 
|Total                                       |   | (30,000) |   | (37,100) 
|Rob
      Property, Alaska, USA             |   |          |   |          
|Acquisition
      costs                     |   |          |   |          
|Cash -
      option payments                |   | 21,175   |   | 16,750   
|                                            |   | 21,175   |   | 16,750   
|Deferred
      exploration expenditures     |   |          |   |          
|Mineral
      property fees                 |   | 16,674   |   | 18,261   
|Engineering
      and consulting            |   | 5,496    |   | 10,338   
|Geological
      and field expenses         |   | 2,304    |   | 2,709    
|Wages                                       |   | 159      |   | 3,571    
|                                            |   | 24,633   |   | 34,879   
|Total                                       |   | 45,808   |   | 51,629   
|                                            |   |          |   |          
|Balance Forward                             | $ | 189,354  | $ | 66,691   









- See Accompanying Notes
-

---

- 9 -



|                                                                        |         
|----------------------------------------------------------------------- | --------
|Freegold Ventures Limited
      (An
      Exploration Stage Company)    | Schedule
|Consolidated
      Schedules of Mineral Property Costs-
      Continued
|For the Years
      Ended 31 December                                   |         
|Canadian
      Funds                                                    |         
|                                                                        |         









|                                         |   |         |   |        
|---------------------------------------- | - | ------- | - | -------
|                                         |   | 2005    |   | 2004   
|Balance Carried Forward                  | $ | 189,354 | $ | 66,691 
|Yeager
      Property, Alaska, USA       |   |         |   |        
|Acquisition
      costs                  |   |         |   |        
|Treasury
      shares - option payments  |   | -       |   | 126,000
|Cash -
      option payments             |   | -       |   | 13,400 
|Total                                    |   | -       |   | 139,400
|                                         |   |         |   |        
|Rainbow
      Hill, Alaska, USA          |   |         |   |        
|Acquisition
      costs                  |   |         |   |        
|Treasury
      shares - option payments  |   | -       |   | 14,000 
|Cash -
      option payments             |   | -       |   | 40,482 
|                                         |   | -       |   | 54,482 
|Deferred
      exploration expenditures  |   |         |   |        
|Geological
      and field expenses      |   | -       |   | 376    
|Mineral
      property fees              |   | -       |   | 11,877 
|Wages                                    |   | -       |   | 1,968  
|Engineering
      and consulting         |   | -       |   | 4,810  
|                                         |   | -       |   | 19,031 
|Total                                    |   | -       |   | 73,513 
|                                         |   |         |   |        
|Liberty
      Bell Property, Alaska, USA |   |         |   |        
|Deferred
      exploration expenditures  |   |         |   |        
|Mineral
      property fees              |   | -       |   | 3,904  
|Engineering
      and consulting         |   | 1,258   |   | 553    
|                                         |   | 1,258   |   | 4,457  
|Total                                    |   | 1,258   |   | 4,457  
|Almaden
      Property, Idaho, USA       |   |         |   |        
|Acquisition
      costs                  |   |         |   |        
|Cash -
      option payments             |   | 24,755  |   | 21,094 
|                                         |   | 24,755  |   | 21,094 
|Deferred
      exploration expenditures  |   |         |   |        
|Mineral
      property fees              |   | 20,379  |   | 22,909 
|Geological
      and field expenses      |   | 3,010   |   | 3,230  
|Engineering
      and consulting         |   | 49,948  |   | -      
|                                         |   | 73,337  |   | 26,139 
|Total                                    |   | 98,092  |   | 47,233 
|                                         |   |         |   |        
|Balance Forward                          | $ | 288,704 | $ | 331,294





- See Accompanying Notes
-

---

- 10 -



|                                                                        |         
|----------------------------------------------------------------------- | --------
|Freegold Ventures Limited
      (An
      Exploration Stage Company)    | Schedule
|Consolidated
      Schedules of Mineral Property Costs-
      Continued
|For the Years
      Ended 31 December                                   |         
|Canadian
      Funds                                                    |         



|                                                    |   |           |   |          
|--------------------------------------------------- | - | --------- | - | ---------
|                                                    |   | 2005      |   | 2004     
|Balance Carried Forward                             | $ | 288,704   | $ | 331,294  
|                                                    |   |           |   |          
|Eskay
      Rift Property, British Columbia, Canada |   |           |   |          
|Acquisition
      costs                             |   |           |   |          
|Staking
      costs                                 |   | -         |   | 47,903   
|                                                    |   | -         |   | 47,903   
|Deferred
      exploration expenditures             |   |           |   |          
|Geological
      and field expenses                 |   | 3,150     |   | 74,583   
|Mineral
      Property fees                         |   | 1,140     |   | -        
|Assaying                                            |   | -         |   | 24,556   
|Engineering
      and consulting                    |   | -         |   | 75,928   
|                                                    |   | 4,290     |   | 175,067  
|Total                                               |   | 4,290     |   | 222,970  
|                                                    |   |           |   |          
|Duke
      Property, British Columbia, Canada       |   |           |   |          
|Acquisition
      costs                             |   |           |   |          
|Cash -
      option payments                        |   | -         |   | 10,000   
|Shares -
      option payments                      |   | 35,000    |   | -        
|                                                    |   | 35,000    |   | 10,000   
|Deferred
      exploration expenditures             |   |           |   |          
|Geological
      and field expenses                 |   | 911       |   | 11,574   
|Geophysics                                          |   | 45,027    |   | -        
|Assaying                                            |   | 1,117     |   | -        
|Engineering
      and consulting                    |   | 31,799    |   | -        
|Drilling                                            |   | 131,628   |   | 64,858   
|                                                    |   | 210,482   |   | 76,432   
|Total                                               |   | 245,482   |   | 86,432   
|                                                    |   |           |   |          
|Grew
      Creek Property, Yukon, Canada            |   |           |   |          
|Acquisition
      costs                             |   |           |   |          
|Cash -
      option payments                        |   | 45,000    |   | 40,000   
|Shares -
      option payments                      |   | 15,000    |   | 15,000   
|Staking
      costs                                 |   | -         |   | 20,470   
|                                                    |   | 60,000    |   | 75,470   
|Deferred
      exploration expenditures             |   |           |   |          
|Geological
      and field expenses                 |   | 55,467    |   | 136,519  
|Geophysics                                          |   | 196,384   |   | -        
|Drilling                                            |   | 280,647   |   | 389,780  
|Assaying                                            |   | 40,495    |   | 19,887   
|Engineering
      and consulting                    |   | 96,231    |   | 64,385   
|Mineral tax
      credit                            |   | (152,873) |   | -        
|                                                    |   | 516,351   |   | 610,571  
|Total                                               |   | 576,351   |   | 686,041  
|                                                    |   |           |   |          
|Balance Forward                                     | $ | 1,114,827 | $ | 1,326,737





- See Accompanying Notes
-

---

- 11 -



|                                                                        |         
|----------------------------------------------------------------------- | --------
|Freegold Ventures Limited
      (An
      Exploration Stage Company)    | Schedule
|Consolidated
      Schedules of Mineral Property Costs-
      Continued
|For the Years
      Ended 31 December                                   |         
|Canadian
      Funds                                                    |         
|                                                                        |         









|                                                    |   |           |   |          
|--------------------------------------------------- | - | --------- | - | ---------
|                                                    |   | 2005      |   | 2004     
|Balance Carried Forward                             | $ | 1,114,827 | $ | 1,326,737
|                                                    |   |           |   |          
|General Exploration and
      Property Examinations |   |           |   |          
|Engineering
      and consulting                    |   | -         |   | 51,251   
|Geological
      and field expenses                 |   | -         |   | 9,742    
|Assaying                                            |   | -         |   | -        
|Total                                               |   | -         |   | 60,993   
|                                                    |   |           |   |          
|Costs for the Year                                  |   | 1,114,827 |   | 1,387,730
|Balance -
      Beginning of year                   |   | 7,509,371 |   | 6,910,017
|Write-off of
      mineral property costs           |   | (40,020)  |   | (788,376)
|Balance - End of Year                               | $ | 8,584,178 | $ | 7,509,371







- See Accompanying Notes
-

---

- 12 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---



1.

Significant
Accounting Policies



a)

Consolidation



These
consolidated financial statements include the accounts of the Company's wholly
owned subsidiaries, Freegold Recovery, Inc. USA, Ican Minerals, Inc. ("Ican")
and Canu Resources, Inc. ("Canu").  All subsidiaries are U.S.
corporations which are involved in mineral property exploration.  They have
been accounted for under the purchase method.



b)

Cash
and Cash Equivalents



For
purposes of reporting cash flows, the Company considers cash and cash
equivalents to include amounts held in banks and highly liquid investments with
remaining maturities at point of purchase of 90 days or less.  The Company
places its cash and cash equivalents with institutions of high-credit
worthiness.



c)

Portfolio
Investments



Portfolio
investments are recorded at the lower of cost or market value.  Portfolio
investments are written down to market value when the decline in market value is
deemed to be other than temporary.



d)

Mineral
Properties and Deferred Exploration Expenditures



The
Company is in the process of exploring its mineral properties and has not yet
determined whether these properties contain ore reserves that are economically
recoverable.



Mineral
exploration and development costs are capitalized on an individual prospect
basis until such time as an economic ore body is defined or the prospect is
abandoned.  Costs for a producing prospect are amortized on a
unit-of-production method based on the estimated life of the ore reserves, while
those costs for the prospects abandoned are written off.



The
recoverability of the amounts capitalized for the undeveloped mineral properties
is dependent upon the determination of economically recoverable ore reserves,
confirmation of the Company's interest in the underlying mineral claims, the
ability to obtain the necessary financing to complete their development, and
future profitable production or proceeds from the disposition thereof.



All
mineral properties are assessed on a regular basis to determine whether
permanent impairment of value has occurred.  A property will be written off
at the time that exploration results indicate no further work is warranted.
 A property will be written down to net realizable value of proven and
probable reserves, as reserve values are determined.



Title
to mineral properties involves inherent risks due to the difficulties of
determining the validity of certain claims as well as the potential for problems
arising from the frequently unreliable conveyancing history characteristic of
many mineral properties.  The Company has investigated title to all of its
mineral properties and, to the best of its knowledge, all of its properties are
in good standing.



---

- 13 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

1.

Significant
Accounting Policies - Continued



e)

Asset Retirement
Obligation



Effective
1 January 2004, the Company adopted the recommendations of CICA Handbook Section
3110, Asset Retirement Obligations.  This new section requires
recognition of a legal liability for obligations relating to retirement of
property, plant, and equipment, and arising from the acquisition, construction,
development, or normal operation of those assets.  Such asset retirement
cost must be recognized at fair value when a reasonable estimate of fair value
can be estimated, in the period in which it is incurred, added to the carrying
value of the asset, and amortized into income on a systematic basis over its
useful life.



There
is no material impact on the financial statements resulting from the adoption of
Section 3110 either in the current or prior years presented.



f)

Amortization



The
Company provides for amortization on its property, plant and equipment at 20% -
45% on a declining balance method.  One half of the rate is applied in the
year of acquisition.



g)

Share
Capital



i)

The
proceeds from the exercise of stock options and warrants are recorded as share
capital in the amount for which the option or warrant enabled the holder to
purchase a share in the Company.



ii)

Share
capital issued for non-monetary consideration is recorded at an amount based on
fair market value.



h)

Stock-Based
Compensation



All
stock-based awards made to employees and non-employees are measured and
recognized using a fair value based method.  For employees, the fair value
of the options at the date of the grant is accrued and charged to operations,
with the offsetting credit to contributed surplus, on a straight-line basis over
the vesting period.  If and when the stock options are ultimately
exercised, the applicable amounts of contributed surplus are transferred to
share capital. For non-employees, the fair value of the options is measured on
the earlier of the date at which the counterparty performance is complete or the
date the performance commitment is reached or the date at which the equity
instruments are granted if they are fully vested and non-forfeitable.



i)

Loss
per Share



Basic
earnings per share is computed by dividing income available to common
shareholders by the weighted average number of common shares outstanding during
the year.  The computation of diluted earnings per share assumes the
conversion, exercise or contingent issuance of securities only when such
conversion, exercise or issuance would have a dilutive effect on earnings per
share.  The dilutive effect of convertible securities is reflected in
diluted earnings per share by application of the "if converted"
method.  The dilutive effect of outstanding options and warrants and their
equivalents is reflected in diluted earnings per share by application of the
treasury stock method.





---

- 14 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

1.

Significant
Accounting Policies - Continued



j)

Income
Taxes



The
asset and liability method is used for determining future income taxes.  Under
the asset and liability method, the change in the net future income tax asset or
liability is included in income.  The income tax effects of differences in
the periods when revenue and expenses are recognized, in accordance with Company
accounting practices, and the periods they are recognized for income tax
purposes are reflected as future income tax assets or liabilities.  Future
income tax assets and liabilities are measured using the statutory income tax
rates which are expected to apply to taxable income in the years in which
temporary differences are expected to be recovered or settled.



k)

Foreign Currency
Translation



The
accounts of the Company's foreign operations have been translated into Canadian
dollars as follows:



·

Monetary
assets and liabilities at year-end rates;

·

All
other assets and liabilities at historical rates; and

·

Revenue,
expense, exploration and development items at the average rate of exchange
prevailing during the year.



Exchange
gains and losses arising from these transactions are reflected in income or
expense in the year that they occur.



l)

Management's
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
disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenues and expenses during the reported
periods.  Actual results could differ from those estimates.



m)

Flow-Through
Shares



During
the prior year, the Company adopted the new recommendations of the Emerging
Issues Committee relating to flow-through shares effective for all flow-through
agreements dated after
19 March 2004.  Canadian Income Tax Legislation permits an enterprise to
issue securities referred to as flow-through shares, whereby the investor can
claim the tax deductions arising from the renunciation of the related resource
expenditures.  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 tax rate) thereby reducing share capital.



If a
company has sufficient unused tax losses and deductions ("losses") to offset
all or part of the future income tax liabilities and no future income tax assets
have been previously recognized on such losses, a portion of such unrecognized
losses (losses multiplied by the effective corporate tax rate) is recorded as
income up to the amount of the future income tax liability that was previously
recognized on the renounced expenditures.







---

- 12 -

|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---



n)

Variable Interest
Entities - Change in Accounting Policy



The
Accounting Standards Board (AcSB) issued Accounting Guideline AcG 15 "Consolidation
of Variable Interest Entities," to harmonize the Guideline with the
equivalent FASB Interpretation No. 46R, "Consolidation of Variable Interest
Entities" ("VIE").  The Guideline provides criteria for identifying
VIEs and further criteria for determining what entity, if any, should
consolidate them.  The Guideline is effective for annual and interim
periods beginning on or after November 1, 2005, and upon adoption, will not
materially impact the Company's results of operations and financial position.



o)

Mineral
Exploration Tax Credits ("METC")



The
Company recognizes METC amounts and applies those amounts against deferred
exploration costs when the Company's application for tax credits is approved
by Canada Revenue Agency.  Assessments, if any for taxes, penalties and
interest under Part XII.6 under section 2.11.91 of the Income Tax Act are
deducted from the tax credits when assessed.





2.

Fair Value of
Financial Instruments



The
Company's financial instruments consist of cash and cash equivalents, term
deposits, accounts and advances receivable, portfolio investments, restricted
cash flow-through, accounts payable, accrued liabilities and amounts due to
related parties.  Unless otherwise noted, it is management's opinion that
the Company is not exposed to significant interest, currency or credit risks
arising from the financial instruments.  The fair value of these financial
instruments approximates their carrying value due to their short-term maturity
or capacity of prompt liquidation.



The
Company is exposed to currency risk on its acquisition and exploration
expenditures on its US properties since it has to convert Canadian dollars
raised through equity financing in Canada to US dollars.  The Company's
expenditures will be negatively impacted if the US dollar increase versus the
Canadian dollar.



---

- 16 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

3.

Portfolio
Investments



Details
are as follows:

|                                               |  |                              |               |      |                  |   |                    |   |                  | 
|---------------------------------------------- |  | ---------------------------- | ------------- | ---- | ---------------- | - | ------------------ | - | ---------------- | 
|                                               |  | 2005                         |               | 2004
|                                               |  | Number
      of
      Shares | %
      Owned |      | Book
      Value |   | Market
      Value |   | Book
      Value
|Pacific
      North West Capital Corp. ("PFN") |  | 400,400                      | 1.14%         | $    | 120,120          | $ | 120,120            | $ | 139,679         
|CanAlaska
      Ventures Ltd. ("CVV")          |  | 332,400                      | 0.54%         |      | 77,033           |   | 142,932            |   | 77,032          
|                                               |  |                              |               | $    | 197,153          | $ | 263,052            | $ | 216,711         



The
above investments have been accounted for using the cost method.  PFN, CVV
and the Company are companies with certain directors in common.  During the
year, the Company had a net gain on sale of investments of $Nil (2004 - $30,570)
of which a gain of $Nil (2004 - $15,420) was due to the sale of CVV shares and a
gain of $Nil (2004 - $15,150) was due to the sale of other shares.  During
the year, the Company had a write down in investments of $19,559 related to PFN
shares. The maximum percentage owned of PFN or CVV by the Company at any time
during the year was less than 2% (2004 - less than 2%).





4.

Mineral Property
Costs



Details are as
follows:



|                             |   |             |                            |                                           |   |                  |   |                  |   |          
|---------------------------- | - | ----------- | -------------------------- | ----------------------------------------- | - | ---------------- | - | ---------------- | - | ---------
|                             |   | Acquisition | Deferred
      Exploration | Write-off
      of Mineral Property Costs |   | Total
      2005 |   | Total
      2004
|Golden
      Summit Property | $ | 384,867     | $                          | 4,724,811                                 | $ | -                | $ | 5,109,678        | $ | 4,936,132
|Union
      Bay Property     |   | 110,658     |                            | 57,305                                    |   | -                |   | 167,963          |   | 197,963  
|Rob
      Property           |   | 496,250     |                            | 152,909                                   |   | -                |   | 649,159          |   | 603,351  
|Liberty
      Bell Property  |   | 30,015      |                            | 5,715                                     |   | (35,730)         |   | -                |   | 34,472   
|Almaden
      Property       |   | 670,905     |                            | 144,968                                   |   | -                |   | 815,873          |   | 717,781  
|PGM
      Properties         |   | 98,650      |                            | 148,549                                   |   | -                |   | 247,199          |   | 247,199  
|Eskay
      Rift Property    |   | -           |                            | 4,290                                     |   | (4,290)          |   | -                |   | -        
|Grew
      Creek Property    |   | 135,470     |                            | 1,126,922                                 |   | -                |   | 1,262,392        |   | 686,041  
|Duke
      Property          |   | 45,000      |                            | 286,914                                   |   | -                |   | 331,914          |   | 86,432   
|                             |   |             |                            |                                           |   |                  |   |                  |   |          
|                             | $ | 1,971,815   | $                          | 6,652,383                                 | $ | (40,020)         | $ | 8,584,178        | $ | 7,509,371







---

- 17 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

4.

Mineral
Property Costs - Continued



a)

Golden
Summit Property, Alaska, USA



By
various agreements dated from 1 December 1992 to 9 May 1997, the Company
acquired from Fairbanks Exploration Inc. ("FEI") certain mineral claims in
the Fairbanks Mining District of Alaska known as the Golden Summit Property
subject to a 7% working interest held in trust for FEI by the Company.  The
property is controlled by the Company through long-term lease agreements or
outright claim ownership.  As consideration for the property, the Company
agreed to:



·

Issue
25,000 shares of the Company (issued in 1997);

·

Issue
25,000 shares of the Company for each US$1,000,000 in expenditures spent on the
property including all underlying lease obligations since 9 May 1997 to an
aggregate of 125,000 shares.  As at 31 December 2005, the Company had spent
approximately US$4,324,000 on the property since 9 May 1997.  Since the
Company has expended the next US$1,000,000, the Company issued 25,000 shares of
the Company's common stock on 30 March  2005 (25,000 shares issued in 1998,
25,000 shares issued in 1999, 25,000 shares issued in 2001);

·

Expend
a minimum of US$1,767,000 of exploration expenditures on the property before
2000 (completed); and

·

Make
all required lease payments to underlying lessors(Note 4a(i-iii)).



The
Company will fund 100% of the project until commercial production is achieved at
which point FEI will be required to contribute 7% of any approved budget.  The
property is subject to a 2% Net Smelter Royalty ("NSR").  The Company
has a 30 day right of first refusal in the event that the 7% working interest of
FEI or the NSR is to be sold.  The Company can also purchase the NSR at any
time following commercial production, based on its net present value as
determined by mineable reserves.



Underlying
Leases



(i)

Keystone
Claims



By
agreement dated 17 May 1992 and amended 15 May 2000 and 30 November 2001, the
Company agreed to make advance royalty payments as follows:



|                                        |   |                |  |                                                                            
|--------------------------------------- | - | -------------- |  | ---------------------------------------------------------------------------
|                                        |   | US
      Funds |  |                                                                            
|1992 - 1998 (US$15,000 per
      year)  | $ | 105,000        |  | (paid)                                                                     
|2000                                    | $ | 50,000         |  | ($25,000 paid in cash and $25,000
      with 58,898 treasury shares issued)
|2001                                    | $ | *50,000        |  | (treasury shares issued)                                                   
|2002                                    | $ | 50,000         |  | (paid)                                                                     
|2003                                    | $ | 50,000         |  | (paid)                                                                     
|2004                                    | $ | 50,000         |  | (paid)                                                                     
|2005                                    | $ | 50,000         |  | (paid)                                                                     
|2006                                    | $ | 50,000         |  |                                                                            
|2007 - 2019 (US$150,000 per
      year) | $ | 1,950,000      |  |                                                                            



*
 This advance royalty payment was settled by issuing 250,000 shares.  These
shares were issued during the year ended 31 December 2002.





---

- 18 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

4.

Mineral
Property Costs - Continued



a)

Golden
Summit Property, Alaska, USA - Continued



Underlying
Leases - Continued



(i)

Keystone
Claims- Continued



An
amendment signing bonus of US$50,000 was paid 1 October 2000.  Until 2006,
if the Company terminates the agreement prior to 1 April of any year, the
Company's obligation will be the completion of any reclamation work.  If
the Company terminates the agreement after 1 April of any year, all
obligations must be fulfilled for the calendar year in which the option is
terminated.  Advance royalty payments may be made in cash, shares or a
combination thereof.



During
the exploration stage and before commencement of production, the Company is
required to incur minimum exploration expenditures of US$50,000 per year from
2000 to 2006 if the average price of gold exceeds US$300 per ounce in the last
quarter of each proceeding year, therefore a minimum expenditure of US$50,000
was required for 2005, as the average price of gold during the last three months
of 2004 was above US$300 an ounce.  The work commitment for 2005 was
completed. If the work commitment is not met, in whole or part, in any calendar
year, the Company must pay the lessor the difference between the value of the
work incurred and US$50,000.



The leased property
is subject to a 3% NSR.



(ii)

Vetter
/ McKibben Claims



By
lease agreement dated 1 July 1986 and amended 23 July 1991 and 22 September
1997, the Company agreed to make annual advance royalty payments from 1986 to
2003.



During
the 1999 fiscal year, the Company terminated the lease agreement and accordingly
all direct acquisition costs were written off.  The lessors made a claim
against the Company for US$250,000 plus costs and punitive damages, being the
payment due under the lease for 1999.  During the 2001 fiscal year, the
dispute was settled.  The Company agreed to pay US$160,000 of which
US$100,000 was paid during 2001.  The remaining US$60,000 was paid over the
next four years commencing in fiscal 2002.  As at 31 December 2005, this
amount had been paid in full.



(iii)

Newsboy
Claims



By
lease agreement dated 28 February 1986 and amended 26 March 1996, the Company
assumed the obligation to make advance royalty payments of US$2,500 per year
until 1996 (paid) and US$5,000 per year until 2006 (paid to date).  The
claims are subject to a 4% NSR which the Company has an option to purchase for
the greater of the current value or US$1,000,000 less all advance royalty
payments made.





---

- 19 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

4.

Mineral
Property Costs - Continued



a)

Golden
Summit Property, Alaska, USA - Continued



Underlying
Leases - Continued



(iv)

Tolovana
Claims



In
May 2004, the Company entered into an agreement with a third party (the
"Seller") whereby the seller transferred 100% of the rights via Quit Claim
Deed to a 20-year lease on the Tolovana Gold Property in Alaska.



Under
the terms of the agreement, the Company assumed all of the Seller's
obligations under the lease, which include making annual payments of $1,000 per
month for the first 23 months increasing to $1,250 per month for the 24th to the
48th months and increasing to $1,500 after the 49th month and for the duration
of the lease.



The
property is subject to a sliding scale NSR as follows: 1.5% NSR if gold is below
US$300, in the event the price of gold is between US$300 to US$400, a 2.0% NSR
is in effect.  In the event that the price of gold is above US$400, the
property is subject to a 3.0% NSR.  In addition, the Company has made a
cash payment of US$7,500 on signing and issued 400,000 shares on regulatory
approval. An additional 200,000 shares are to be issued within 30 days of a
minimum 200,000 ounce mineral resource being calculated on the property if the
resource is established in five years or less from the date of the agreement.



(v)

Meridian
Gold Option and Joint Venture



During
the prior year, the Company entered into an option and joint venture agreement
with Meridian Gold Company ("Meridian") with regard to the Gold Summit
Project.



During
the year, Meridian terminated the agreement.  The 200,000 shares and
$75,000 to be subscribed/received on or before 31 December 2004 was never
subscribed/received.



b)

Yeager
Property, Alaska, USA



Pursuant
to an agreement dated 9 July 2002 and amended 31 March 2004 and 15 December
2004, the Company had the option to earn a 100% interest in certain mineral
claims, in the Fairbanks Mining District, Alaska, known as the Yeager Property.



During
the prior year, management decided not to pursue further exploration on the
property.  Accordingly, the associated acquisition and deferred exploration
expenditures were written-off during the prior year.



---

- 20 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

4.

Mineral
Property Costs- Continued



c)

Union
Bay Property, Alaska, USA



The
Company acquired certain mineral claims known as the Union Bay Property, in
Alaska, USA, by way of staking.



(i)

By
agreement dated 1 October 2002 and amended 2 April 2003, the Company granted to
Pacific North West Capital Corp. ("PFN"), a company with certain directors
and officers in common, an option to earn a 70% interest in the property.



To
earn a 50% interest, PFN, at its option, must subscribe to purchase a private
placement of $165,000 (completed in the 2002 fiscal year) and must at its option
make cash payments, issue shares and incur exploration expenditures as follows:



|                                                        |   |          |        |   |                               
|------------------------------------------------------- | - | -------- | ------ | - | ------------------------------
|                                                        |   | Payments | Shares |   | Exploration
      Expenditures
|-
      Within 5 days from approval date (received)     | $ | -        | 30,000 | $ | -                             
|-
      On or before 1 July 2003 (received / completed) |   | 20,000   | -      |   | 30,000                        
|-
      On or before 30 January 2004 (received)         |   | -        | 30,000 |   | -                             
|-
      On or before 1 July 2004 (received / completed) |   | 20,000   | -      |   | 30,000                        
|-
      On or before 1 July 2005 (received / completed) |   | 30,000   | -      |   | 340,000                       
|-
      On or before 1 July 2006                        |   | 30,000   | -      |   | 600,000                       
|                                                        | $ | 100,000  | 60,000 | $ | 1,000,000                     



Upon
vesting with a 50% interest, PFN may elect within 45 days to increase its
interest to 60% by completing a feasibility study within 12 months of having
vested.  Upon vesting with a 60% interest, PFN may elect within 90 days to
earn a 70% interest in the property by placing the property into commercial
production within two years of the date of election.  In the event the
bankable feasibility study indicates an internal rate of return in excess of
15%, PFN agrees to make cash payments in the amount of $50,000 per year for each
year the project is delayed from being placed into commercial production.



PFN
is responsible for the annual rents due on the property.  These rental
payments shall be made on or before 1 August of each year the agreement is in
effect.







---

- 21 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

4.

Mineral
Property Costs- Continued



c)

Union
Bay Property, Alaska, USA- Continued



(i)

-
Continued



Under
an amendment dated 2 April 2003, in the event a major mining company elects to
participate in the project before PFN vests with a 50% interest, and
subsequently vests with an interest in the property, the Company and PFN shall
each, at the time of vesting, be deemed to hold a 50% interest in the property
and PFN shall relinquish its right to earn a 60% or 70% interest.  PFN will
then issue shares to the value of $100,000 to the Company within 15 days of PFN
becoming vested. The shares will be issued at a price equivalent to the volume
weighted five-day average price preceding the vesting date.  In addition,
PFN will receive 100% of the first US$60,000 received in cash payments from any
third party agreement with subsequent payments divided equally between the
Company and PFN.



(ii)

Joint
Venture Agreement



By
agreement dated 21 May 2003 with Lonmin PLC ("Lonmin") (a major mining
company), the Company and PFN granted Lonmin an option to earn up to a 70%
interest in the Union Bay platinum project.  Under the agreement, Lonmin
was required to incur, at its option, exploration expenditures of US$815,000 (completed)
in 2003 and a minimum of US$1,000,000 per year in 2004 (completed), 2005(completed), and 2006.  US$750,000 for each year thereafter. PFN is the
operator of the project during the exploration phase.



On
26 August 2005, Lonmin advised that it will not fund further exploration on the
project. PFN has notified the Company that it intends to retain the project by
reducing the property size to encompass the remaining prospective target areas
identified to date.



d)

Rob
Property, Alaska, USA



By
agreement dated 9 July 2002 the Company has the option to earn a 100% interest
in a 20-year lease on certain mineral claims located in the Good Paster Mining
district, Alaska, known as the Rob Property.



As
consideration, the Company shall, at its option, make the following payments and
issue shares as follows:



|                                                                    |   |                |          
|------------------------------------------------------------------- | - | -------------- | ---------
|                                                                    |   | US
      Funds | Shares   
|-
      Upon execution of the agreement (paid)                      | $ | 7,000          | -        
|-
      Earlier of 1 September 2002 and approval date (paid/issued) |   | 7,000          | 500,000  
|-
      On or before 1 July 2003 (paid/issued)                      |   | 2,500          | 500,000  
|-
      On or before 1 July 2004 (paid)                             |   | 2,500          | -        
|-
      On or before 1 July 2005 (paid)                             |   | 2,500          | -        
|-
      On or before 1 July 2006                                    |   | 2,500          | -        
|-
      On or before 1 July 2007                                    |   | 2,500          | -        
|-
      On or before 1 July 2008                                    |   | 2,500          | -        
|                                                                    | $ | 29,000         | 1,000,000



---

- 22 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

4.

Mineral
Property Costs- Continued



d)

Rob
Property, Alaska, USA- Continued



The
Company is also responsible to make payments for an underlying agreement with
the vendor as follows:



|                                            |   |               
|------------------------------------------- | - | --------------
|                                            |   | US
      Funds
|-
      On or before 1 July 2003 (paid)     | $ | 10,000        
|-
      On or before 1 July 2004 (paid)     |   | 10,000        
|-
      On or before 1 December 2005 (paid) |   | 15,000        
|-
      On or before 1 December 2006        |   | 20,000        
|-
      On or before 1 December 2007        |   | 25,000        
|                                            | $ | 80,000        



In
addition, the Company is also required to expend a total of US$1,000,000 in
exploration expenditures on the property prior to 31 December 2008 ($96,737
spent to date).  Minimum work in any given year shall not be less than
US$10,600 per year.  If the Company fulfills this US$1,000,000 exploration
expenditure requirement, an additional 500,000 shares of the Company must be
issued.



Commencing
1 December 2008 annual advance royalty payments must be made depending on the
average gold price for the proceeding year as follows:



|                           |                             
|-------------------------- | ----------------------------
|Gold Price Per
      Ounce | Annual Royalty
      Payment
|Less than US$350           | US$30,000                   
|US$350 to US$400           | US$40,000                   
|More than US$400           | US$50,000                   



The
vendor shall retain a NSR, which shall vary according to the London gold price
for the preceding six-month period as follows:  1% for gold prices less
than US$300, 1.5% for gold prices between US$301 and US$350, and 2% for gold
prices greater than US$350.  The NSR may be purchased for US$500,000 for
each percentage point.  An undivided 100% interest in the property may be
purchased for US$1,500,000.



In
addition, an intermediary vendor retains a 1% NSR which the Company may purchase
for US$1,000,000.



---

- 23 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

4.

Mineral
Property Costs- Continued



e)

Rainbow
Hill Property, Alaska, USA



By
agreement dated 28 August 2003 the Company could acquire, from CVV, a company
with certain directors and officers in common, up to a 65% interest in certain
mineral claims known as the Rainbow Hill Property located in Valdez Mining
District central Alaska.



During
the prior year, the Company terminated this agreement.  The $30,000 cash
payment due on 31 December 2004 was not paid.  Accordingly, all costs
associated with the property have been written off.



f)

Liberty
Bell Property, Alaska, USA



The
Company acquired by staking 48 one hundred sixty-acre state mining claims plus
46 forty-acre state mining claims in the Bonnifield Mining District, Nenana
Recording District, Alaska.



During
the year, management has decided not to pursue further exploration on the
property.  Accordingly, the associated acquisition and deferred exploration
expenditures have been written-off.



g)

Almaden
Property, Washington County, Idaho, USA



By
agreement dated 13 December 1995 and various amendments, the Company purchased a
60% interest in certain mineral claims located in Washington County, Idaho,
known as the Almaden Property.  As consideration, the Company paid
US$250,000 to underlying optionors, issued 4,621,714 common shares and completed
a feasibility study.



Pursuant
to the Company submitting a feasibility report, the Company entered into a joint
venture agreement whereby 60% of all further costs spent on the property are the
responsibility of the Company.  The joint venture assumed the requirements
to pay US$250,000 to underlying optionors (paid), US$4 per month for each acre
acquired (approximately US$10,000 per year [paid to date]) and US$24,000 per
year (US$6,000 annually [paid to date] and the remaining US$18,000 is deferred
for payment upon commencement of commercial production).  The US$18,000
annual contingent liability has not been recorded in these financial statements
due to the uncertainty of going into commercial production.  This
accumulated contingent liability for lease payments due on commencement of
commercial production is US$432,000.



By
agreement dated 17 April 2001, the Company acquired the remaining 40% portion of
the joint venture interest and 100% of the shares of Ican Minerals, Inc. ("Ican")
and Canu Resources, Inc. ("Canu") for 500,000 shares of the Company
(issued). The Company now owns a 100% interest in the Almaden Property, subject
to underlying lease agreements.  Using the recent purchase price as the
imputed value, management, for conservative purposes, wrote down the Almaden
Property to $576,648 in 2001.



The
property is subject to a production royalty of 4% of net returns and a 1% NSR if
the average price of gold is less than US$425 per ounce and 2% if the average
price of gold is equal to or greater than US$425 per ounce.



---

- 24 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

4.

Mineral
Property Costs- Continued



h)

PGM
A Property, Sudbury Region, Ontario, Canada



By
various agreements dated between 6 March and 19 December 2000, the Company
acquired a property in the Sudbury region, Ontario known as the PGM A Property.
 During a prior year, the Company earned a 100% interest in the property by
making cash payments of $100,000, issuing 300,000 shares and incurring
exploration expenditures of $50,000.  The Company is also required to issue
a further 100,000 shares to the optionor upon the completion of a bankable
feasibility study.



The
property is subject to a 3% NSR.   The Company has the right to
purchase up to 2% of the NSR for $3,000,000.  (The first 1% for $1,000,000
and the second 1% for $2,000,000.)



By
Letter Agreement dated 16 November 2001, the Company granted to PFN, a company
with certain directors in common, an option to earn a 70% interest in PGM A for
cash payments of $55,000, issuance of 20,000 PFN shares and exploration
expenditures on the property of $55,000 (completed).



PFN
has the right to purchase an additional 30% interest in the property by paying
to the Company $750,000.  The Company and PFN will share the NSR buyout
privileges in proportion to their respective interests.



i)

Grew
Creek Property, Yukon Territory, Canada



By
Letter Agreement dated 27 May 2004 the Company can acquire, from a third party
("Optionor"), up to a 100% interest in certain mineral claims known as the
Grew Creek Property located in Whitehorse Mining District, Yukon Territory.
 To acquire a 100% interest in the property, the Company must, at its
option, complete the following:



|                                                         |                    |                     |                                      |   |          
|-------------------------------------------------------- | ------------------ | ------------------- | ------------------------------------ | - | ---------
|                                                         | Issue
      Shares | Cash
      Payments | Incur
      Exploration Expenditures
|Upon
      signing the letter agreement (paid)           | -                  | $                   | 5,000                                | $ | -        
|Within
      5 days of regulatory approval (issued/paid) | 50,000             |                     | 35,000                               |   | -        
|On
      or before 27 May 2005 (issued/paid/incurred)    | 50,000             |                     | 45,000                               |   | 75,000   
|On
      or before 27 May 2006                           | 50,000             |                     | 65,000                               |   | 150,000  
|On
      or before 27 May 2007                           | 50,000             |                     | 75,000                               |   | 325,000  
|On
      or before 27 May 2008                           | -                  |                     | 80,000                               |   | 450,000  
|On
      or before 27 May 2009                           | -                  |                     | -                                    |   | 500,000  
|                                                         | 200,000            | $                   | 305,000                              | $ | 1,500,000



The
project is subject to a 3% NSR.  In the event that commercial production
has not commenced on the property by the 6th anniversary of the
Letter Agreement, the Company shall make an advance royalty payment in the
amount of $50,000.  On the 7th Anniversary, the advance royalty
payments shall increase to $100,000 and remain at that level until such time
that commercial production commences, or until the Company notifies the Optionor
that it does not intend to proceed to commercial production.  These advance
royalty payments made shall be deducted from the NSR payments due.  Once
commercial production has commenced the minimum annual royalty payable shall be
$50,000.



---

- 25 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

4.

Mineral
Property Costs- Continued



j)

Eskay
Rift Property, British Columbia, Canada



During
a prior year, the Company acquired, by staking, a 100% interest in 440 claim
units in the Kiniskan area of northern British Columbia.



During
the prior year, management decided not to pursue further exploration on the
property.  Accordingly, the associated acquisition and deferred exploration
expenditures were written-off during the prior year.



k)

Duke
Property, British Columbia, Canada



By
agreement dated 21 October 2004 and amended 24 December 2004 the Company can
acquire, from a third party (the "Optionor"), up to a 70% interest in
certain mineral claims known as the Duke Property located in Merritt, British
Columbia.  To acquire a 51% interest in the property, the Company must, at
its option, complete the following:



|                                                   |              |                     |                                           |   |        
|-------------------------------------------------- | ------------ | ------------------- | ----------------------------------------- | - | -------
|                                                   | Issue Shares | Cash
      Payments | Cumulative
      Exploration Expenditures
|Upon receipt of
      drill permits (paid)         | -            | $                   | 10,000                                    | $ | -      
|Upon receipt of
      regulatory approval (issued) | 25,000       |                     | -                                         | $ | -      
|On or before 31
      May 2005 (issued)            | 25,000       |                     | -                                         | $ | -      
|On or before 1
      October 2005 (incurred)       | -            |                     | -                                         | $ | 100,000
|On or before 21
      October 2005 (issued)        | 50,000       |                     | -                                         | $ | -      
|On or before 1
      October 2006                  | -            |                     | -                                         | $ | 350,000
|On or before 1
      October 2007                  | -            |                     | -                                         | $ | 750,000
|                                                   | 100,000      | $                   | 10,000                                    |   |        



Upon
written notification of completion of the exploration expenditures, cash
payments and share issuances set out above, the Company shall vest with a 51%
interest in the project.  The Company may further elect, within 120 days of
the notification date of vesting with a 51% interest, to increase its interest
to 70% by paying an additional $150,000 and the Company at its sole election may
pay up to 50% of the $150,000 in shares and incurring an additional $1,000,000
in exploration expenditures within three years of the election date.



The
Company will act as operator of the property; the Company may terminate this
agreement at any time within 30 days written notice upon completing the $100,000
exploration expenditure and the $10,000 payment.



---

- 26 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---



5.

Property
and Equipment



Details
are as follows:



|                     |      |                                |                           |           |   |       
|-------------------- | ---- | ------------------------------ | ------------------------- | --------- | - | ------
|                     | Cost | Accumulated
      Amortization | 2005
      Net Book Value
|Automotive equipment | $    | 32,744                         | $                         | (32,744)  | $ | -     
|Office equipment     |      | 185,933                        |                           | (151,839) |   | 34,094
|                     | $    | 218,677                        | $                         | (184,583) | $ | 34,094



|                     |      |                                |                           |           |   |       
|-------------------- | ---- | ------------------------------ | ------------------------- | --------- | - | ------
|                     | Cost | Accumulated
      Amortization | 2004
      Net Book Value
|Automotive equipment | $    | 32,744                         | $                         | (32,744)  | $ | -     
|Office equipment     |      | 181,736                        |                           | (143,840) |   | 37,896
|                     | $    | 214,480                        | $                         | (176,584) | $ | 37,896





6.

Related Party
Balances and Transactions



Except
as noted elsewhere in these consolidated financial statements, related party
transactions are as follows:



a)

As
at 31 December 2005, amounts due to related parties consists of $Nil (2004 -
$20,960) owing to a company controlled by the Chairman.  These amounts were
incurred in the ordinary course of business, are non-interest bearing, unsecured
and due on demand.



b)

During
the year, management fees of $106,818 (2004 - $124,640; 2003 - $124,800) were
paid to a company controlled by the Chairman.



c)

During
the year, consulting fees of $33,428 (2004 - $40,900; 2003 - $26,876) were paid
to a company controlled by the Corporate Secretary.



d)

During
the year, accounting fees of $28,556 (2004 - $41,713; 2003 - $35,315) were paid
to a company controlled by the Chief Financial Officer.



e)

During
the year, rent of $40,015 (2004 - $40,015; 2003 - $40,015) was paid to a company
controlled by the Chairman.



f)

During
the year, consulting fees of $61,658 were paid, 50,000 performance shares
(vested as described in Note 7g) were issued  and 350,000 performance
shares were allotted to the Vice-President of Business Development.



g)

During
the year, consulting fees of $30,000 (2004 - $Nil; 2003 - $34,900) were paid to
a director and former President of the Company.



---

- 27 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

6.

Related
Party Balances and Transactions - Continued



h)

During
the year, wages of $25,000 were paid and 1,000,000 performance shares (vested as
described in Note 7g) were allotted to the President and CEO.



i)

Effective
1 January 2005, each outside director is entitled to receive $500 per month,
$500 per directors meeting and $500 per committee meeting.  During the
year, $24,000 was paid to directors.



The
above transactions, occurring in the normal course of operations, are measured
at the exchange amount, which is the amount of consideration established and
agreed to by the related parties.





7.

Share
Capital



a)

Private
Placements



During
the year, the Company issued 1,445,385, shares at $0.17 per share (325,294
shares issued to related parties) through private placements for gross proceeds
of $245,715.



Subsequent
to year end, the Company issued 1,500,000 shares through private placements for
gross proceeds of $300,000.



During
the prior year, the Company issued 2,713,000, units through private placements
for gross proceeds of $1,128,100 as follows:



i)

143,000
units at $0.70 per unit consisting of one common share and one non-transferable
share purchase warrant for gross proceeds of $100,100.  Each whole warrant
entitled the holder to purchase one additional common share of the Company at a
purchase price of $1.00 expiring 15 April 2005.



ii)

2,570,000
flow-through units at $0.40 per unit for gross proceeds of $1,028,000.  Each
unit consisted of one flow-through common share and one-half of one
non-transferable, non-flow-through share purchase warrant, each whole warrant
entitled the holder to purchase one additional common share of the Company for a
period of 12 months from the closing date at a price of $0.50 per warrant share.
A finder's fee of 7% was paid of which $35,000 was cash and 87,500 were
shares.  Agents whose participation exceeded $125,000 received additional
agent's warrant entitling the agent to purchase one additional common share of
the Company at a purchase price of $0.50 for a period of 12 months.  Therefore,
250,000 agent's warrants were issued expiring December 23, 2005.



---

- 28 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

Share
Capital- Continued



b)

Flow-Through
Shares



Flow-through
shares are shares issued by a Company that incurs certain resource expenditures
and then renounces them for Canadian tax purposes.  This allows the
expenditures to flow through to the subscriber for tax purposes.  The
subscribers may in turn claim the expenditure as a deduction on their personal
or corporate tax returns.



The
total amount of funds raised through the issuance of flow-through shares must be
spent on qualifying mineral exploration.  The use of proceeds from
flow-through shares is restricted to certain Canadian Exploration Expenditures
under Canadian Income Tax Legislation.  Restricted Cash - Flow-Through
represents funds that have not been spent as at the balance sheet date.



c)

Exercise
of Warrant and Options



i)

During
the year, no warrants were exercised.



ii)

During
the year, Nil (2004 - 25,000) options were exercised for gross proceeds of $Nil
(2004 -$12,000).



d)

Share
Purchase Warrants



As
at 31 December 2005, no share purchase warrants were outstanding.  All
share purchase warrants outstanding as of 31 December 2004 expired during the
year.



e)

Share
Purchase Options



The
Company has established a share purchase option plan whereby the Board of
Directors ("Board"), may from time to time, grant options to directors,
officers, employees or consultants to a maximum of 8,250,061 options.  Options
granted must be exercised no later than five years from date of grant or such
lesser period as determined by the Board.  The exercise price of an option
is not less than the closing price on the Toronto Stock Exchange on the last
trading day preceding the grant date.  Options vest upon the discretion of
the Board.



---

- 29 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

7.

Share
Capital- Continued



f)

Share
Purchase Options- Continued



A
summary of the Company's options at 31 December 2005 and the changes for the
year are as follows:



|                                                            |         |           |           |           |                                                             |                                            |                        
|----------------------------------------------------------- | ------- | --------- | --------- | --------- | ----------------------------------------------------------- | ------------------------------------------ | -----------------------
|Number
      Outstanding
      31
      December
      2004 | Granted | Exercised | Cancelled | Expired   | Number
      Outstanding
      31
      December
      2005 | Exercise
      Price
      Per
      Share | Expiry
      Date      
|140,000                                                     | -       | -         | -         | (140,000) | -                                                           | $0.50                                      | 11
      February 2005 
|314,500                                                     | -       | -         | -         | (314,500) | -                                                           | $0.50                                      | 28
      February 2005 
|7,500                                                       | -       | -         | (5,000)   | (2,500)   | -                                                           | $0.50                                      | 5
      May 2005       
|975,000                                                     | -       | -         | (115,000) | -         | 860,000                                                     | $0.50                                      | 31
      December 2007 
|1,160,000                                                   | -       | -         | (10,000)  | -         | 1,150,000                                                   | $0.48                                      | 10
      September 2008
|100,000                                                     | -       | -         | -         | -         | 100,000                                                     | $0.25                                      | 1
      July 2007      
|90,000                                                      | -       | -         | (10,000)  | -         | 80,000                                                      | $0.55                                      | 10
      February 2007 
|50,000                                                      | -       | -         | -         | -         | 50,000                                                      | $0.31                                      | 1
      July 2007      
|100,000                                                     | -       | -         | (100,000) | -         | -                                                           | $0.25                                      | 1
      July 2007      
|2,000,000                                                   | -       | -         | (620,000) | -         | 1,380,000                                                   | $0.40/
      $0.50                         | 5
      November 2009  
|-                                                           | 100,000 | -         | -         | -         | 100,000                                                     | $0.30                                      | 13
      July 2010     
|-                                                           | 500,000 | -         | -         | -         | 500,000                                                     | $0.20                                      | 30
      September 2010
|4,937,000                                                   | 600,000 | -         | (860,000) | (457,000) | 4,220,000                                                   |                                            |                        



Effective
1 January 2003, the Company adopted the recommendations of CICA Handbook Section
3870, Stock-based compensation (Note 1h).  The new standard requires
that stock-based awards made to employees and non-employees are to be measured
and recognized using a fair value based method.





During
the year, the Company granted options to purchase up to 100,000 shares of the
Company's stock at an exercise price of $0.30 per share for five years.  The
total estimated fair value of the 100,000 options is $9,930.  Since the
options were granted under a graded vesting schedule, $4,667 of the total fair
value has been recorded in the Company accounts as stock-based compensation
expenses during the year.  The offsetting entry is to contributed surplus.



During
the year, the Company granted options to purchase up to 500,000 shares of the
Company's stock to the President of the Company at an exercise price of $0.20
per share for five years.  The total estimated fair value of the 500,000
options is $46,167.  Since the options were granted under a graded vesting
schedule, $8,656 of the total fair value has been recorded in the Company
accounts as stock-based compensation expenses during the year.  The
offsetting entry is to contributed surplus.





---

- 30 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

7.

Share
Capital- Continued



f)

Share
Purchase Options- Continued



During
the prior year, the Company extended the expiry dates for the 100,000 stock
options exercisable at $0.25 previously granted to a consultant of the Company
for an additional three years to 1 July 2007.  For the options that had
alteration in their conditions, compensation expense is based on the fair value
of the options on the alteration date less the fair value of the original
options based on the shorter of the remaining expanded life of the old option or
the expected life of the modified option. The total additional fair value of the
options extended was calculated to be $6,000.  This amount was recorded in
the Company accounts during the prior year as stock-based compensation expense.
 The offsetting entry is to contributed surplus.



During
the prior year, the Company granted options to purchase up to 120,000 shares of
the Company's stock at an exercise price of $0.55 per share.  Of these
options, 30,000 were cancelled approximately two months after the grant date.
The estimated total fair value of the 90,000 options is $21,700 on the grant
date.  This amount was recorded in the Company accounts during the prior
year as stock-based compensation expense.  The offsetting entry is to
contributed surplus.



During
the prior year, the Company granted options to purchase up to 50,000 shares of
the Company's stock at an exercise price of $0.31 per share.  The
estimated total fair value of the 50,000 options is $6,600 on the grant date.
 This amount was recorded in the Company accounts during the prior year as
stock-based compensation expense.  The offsetting entry is to contributed
surplus.



During
the prior year, the Company granted options to purchase up to 2,000,000 shares
of the Company's stock at an exercise price of $0.40 in years 1, 2 and 3 and
 $0.50 in years 4 and 5 per share. The total estimated fair value of the
2,000,000 options is $427,000.  Since the options were granted under a
graded vesting schedule, $127,000 of the total fair value has been recorded in
the Company accounts as stock-based compensation
expenses during the prior year. During the current year, 620,000 of these
options were cancelled thereby reducing the estimated fair value by $72,709 of
which $16,824 was recorded during the current year. The offsetting entry is to
contributed surplus.



The
fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted average
assumptions:



|                                |                 |                 |                
|------------------------------- | --------------- | --------------- | ---------------
|                                | 2005            | 2004            | 2003           
|Expected dividend yield         | 0.00%           | 0.00%           | 0.00%          
|Expected stock price volatility | 62.76%          | 73.52%          | 89.59%         
|Risk-free interest rate         | 3.52%           | 3.75%           | 3.70%          
|Expected life of options        | 5.0
      years | 4.8
      years | 4.5
      years



Option pricing
models require the input of highly subjective assumptions including the expected
price volatility.  Changes in the subjective input assumptions can
materially affect the fair value estimate, and therefore the existing models do
not necessarily provide a reliable single measure of the fair value of the
Company's stock options.



---

- 31 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

7.

Share
Capital- Continued



g)

Performance
Shares



A
total of 2,187,482 performance shares are reserved for issue.  At the
discretion of the Board, these shares may be issued to such arm's length
parties as the Board considers desirable to attract consultants and/or employees
to the Company.



During
the year, the Board authorized the issuance of up to 400,000 performance shares
at an exercise price of $0.01 per share to attract a Vice-President of Business
Development to the Company.  These shares are to be granted as follows:



|        |                  |          
|------- | ---------------- | ---------
|Shares  | Date             |          
|50,000  | 5 September 2005 | (issued*)
|50,000  | 5 March 2006     |          
|50,000  | 5 September 2006 |          
|50,000  | 5 March 2007     |          
|50,000  | 5 September 2007 |          
|50,000  | 5 March 2008     |          
|50,000  | 5 September 2008 |          
|50,000  | 5 March 2009     |          
|400,000 |                  |          



*
50,000 performance shares were issued at $0.01 per share for total proceeds of
$500.  The fair market value of the performance shares at the date of the
issuance was $7,500.  The difference between the issue price and the fair
market value ($7,000) was recorded in the accounts as consulting fees.  The
offsetting entry is to share capital.



During
the year, the Board authorized the issuance of up to 1,000,000 performance
shares at an exercise price of $0.01 per share to attract a new President to the
Company.  These shares are to be granted as follows:



|          |                | 
|--------- | -------------- | 
|Shares    | Date           | 
|100,000   | 1 January 2006 | 
|81,818    | 1 April 2006   | 
|81,818    | 1 July 2006    | 
|81,818    | 1 October 2006 | 
|81,818    | 1 January 2007 | 
|81,818    | 1 April 2007   | 
|81,818    | 1 July 2007    | 
|81,818    | 1 October 2007 | 
|81,818    | 1 January 2008 | 
|81,818    | 1 April 2008   | 
|81,818    | 1 July 2008    | 
|81,820    | 1 August 2008  | 
|1,000,000 |                | 





---

- 32 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

8.

Income
Taxes



The
Company has incurred certain mineral property related expenditures of
approximately $2,625,123 in Canada, which may be carried forward indefinitely
and are available to offset future taxable income.



The
Company has non-capital losses for Canadian tax purposes of approximately
$4,027,000 which are available to offset future taxable income.  These
losses may be carried forward and expire as follows:



|     |   |          
|---- | - | ---------
|     |   | Amount   
|2006 | $ | 550,000  
|2009 |   | 480,000  
|2010 |   | 999,000  
|2014 |   | 1,099,000
|2015 |   | 899,000  
|     | $ | 4,027,000



Significant
components of the Company's future tax assets and liabilities, after applying
enacted corporate income tax rates, are as follows:



|                                                                        |   |             |   |            
|----------------------------------------------------------------------- | - | ----------- | - | -----------
|Future Income Tax Assets                                                |   | 2005        |   | 2004       
|Statutory tax rate                                                      |   | 34.1%       |   | 35.6%      
|Non-capital losses                                                      | $ | 1,373,207   | $ | 1,409,048  
|Undepreciated
      capital cost in excess of accounting net book value |   | 125,416     |   | 130,079    
|Exploration and development
      expenditures                          |   | 1,002,718   |   | 649,947    
|                                                                        |   | 2,501,341   |   | 2,189,074  
|Less:  Valuation allowances                                             |   | (2,501,341) |   | (2,189,074)
|                                                                        | $ | -           | $ | -          





---

- 33 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

8.

Income
Taxes - Continued



The
Company has net operating loss carryovers for US tax purposes of approximately
US$16,149,100 which are available to offset future taxable income.  These
losses may be carried forward and expire as follows:



|     |   |                        
|---- | - | -----------------------
|     |   | Amount
      (US Funds)
|2009 | $ | 89,000                 
|2010 |   | 29,000                 
|2011 |   | 4,000                  
|2013 |   | 1,770,000              
|2014 |   | 8,334,000              
|2020 |   | 3,061,000              
|2021 |   | 2,807,000              
|2022 |   | 1,100                  
|2023 |   | 20,400                 
|2024 |   | 33,600                 
|     | $ | 16,149,100             



The
potential future tax benefits of these expenditures and tax losses have not been
recognized in these consolidated financial statements.



Future
Income Tax Recovery



During
the prior year, flow-through shares totalling $1,028,000 were issued, which
funds are required to be spent on certain Canadian Exploration Expenditures.
 Because the Company no longer has the ability to use the expenditures for
tax purposes, the Company is required to record a future tax liability which is
equal to the renunciation, times the corporation tax rate when expenditures are
renounced.  However, because the Company has unused tax losses and resource
pools in excess of the renunciation, the future tax liability becomes a future
income tax recovery.



---

- 34 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

Segmented
Information



Details
on a geographic basis as at 31 December 2005 are as follows:



|                             |   |           |   |             |   |            
|---------------------------- | - | --------- | - | ----------- | - | -----------
|                             |   | USA       |   | Canada      |   | Total      
|Assets                       | $ | 6,753,761 | $ | 2,677,943   | $ | 9,431,704  
|Mineral
      property costs | $ | 6,742,673 | $ | 1,841,505   | $ | 8,584,178  
|Loss
      for the year      | $ | (43,019)  | $ | (1,325,351) | $ | (1,368,370)



Details
on a geographic basis as at 31 December 2004 are as follows:



|                             |   |           |   |             |   |            
|---------------------------- | - | --------- | - | ----------- | - | -----------
|                             |   | USA       |   | Canada      |   | Total      
|Assets                       | $ | 6,601,475 | $ | 3,841,182   | $ | 10,442,657 
|Mineral
      property costs | $ | 6,489,699 | $ | 1,019,672   | $ | 7,509,371  
|Loss
      for the year      | $ | (447,510) | $ | (1,205,211) | $ | (1,652,721)



Details
on a geographic basis as at 31 December 2003 are as follows:



|                             |   |           |   |             |   |            
|---------------------------- | - | --------- | - | ----------- | - | -----------
|                             |   | USA       |   | Canada      |   | Total      
|Assets                       | $ | 5,996,781 | $ | 4,562,455   | $ | 10,559,236 
|Mineral
      property costs | $ | 6,634,818 | $ | 275,199     | $ | 6,910,017  
|Loss
      for the year      | $ | (6,200)   | $ | (1,171,723) | $ | (1,177,923)





10.

Differences
Between United States and Canadian Generally Accepted Accounting Principles
("GAAP")



These
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles in Canada.  Except as set out
below, these financial statements also comply, in all material aspects, with
accounting principles generally accepted in the United States and the rules and
regulations of the Securities and Exchange Commission.



a)

Under
Canadian GAAP, the mineral properties are carried at cost and written off or
written down if the properties are abandoned, sold or if management decides not
to pursue the properties.  Under United States GAAP, the Company would
periodically review and obtain independent reports in determining adjustments to
the mineral properties and record properties at net realizable value.  The
Company has not yet obtained an independent report for United States GAAP
purposes, therefore, the Company's mineral property costs have been written
off.



b)

Under
United States GAAP, investments available for sale are recorded at market value.
 The difference between the market value and the cost of the investment is
recorded as a separate shareholder equity category named comprehensive income.
 Once the investment is sold, the comprehensive income for that investment
is cleared out to income.  Under Canadian GAAP, investments held for
re-sale are recorded at the lower of cost or market.  There is no
comprehensive income category in Canada.





---

- 35 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

10.

Differences
Between United States and Canadian Generally Accepted Accounting Principles
("GAAP") - Continued



c)

Under
United States GAAP, adjustments arising from foreign currency translations are
deferred until realization and are included as a separate component of
shareholders' equity as a component of comprehensive income or loss.  Therefore,
translation adjustments are not included in determining net income but reported
as other comprehensive income.  Under Canadian GAAP, translation
adjustments are included in net income.  There is no comprehensive income
category in Canada.



d)

Under
Canadian income tax legislation, corporations are permitted to issue shares
whereby the corporation agrees to incur qualifying expenditures as defined under
the Canadian Income Tax Act, and renounce the related income tax deductions to
the investors.



In
March, 2004, the Canadian Institute of Chartered Accountants ("CICA")
released EIC - 146 "Flow-Through Shares," which requires the future income
tax liability resulting from the timing differences on exploration expenditures
renounced to investors and the resulting draw down of such future income tax
liability be recorded as a credit to income upon renunciation of the exploration
expenditures by the Company.  EIC - 146 is effective for all flow-through
share transactions initiated after 19 March 2004.



United
States GAAP requires the premium or discount from the market trading price at
the time an irrevocable agreement to issue the flow-through shares exists, to be
accounted for separately on the balance sheet.  At the time the
expenditures are renounced, the previously recorded premium or discount is
reversed and offset against the tax provision on the income statement, and the
deferred income tax liability on the balance sheet recorded.  During the
years presented, there were no GAAP differences.



e)

The
impact of the above differences between Canadian and United States GAAP on loss
for the period is as follows:



|                                                                                       |  |                                               |                                               |                                               |   |             |   |            
|-------------------------------------------------------------------------------------- |  | --------------------------------------------- | --------------------------------------------- | --------------------------------------------- | - | ----------- | - | -----------
|                                                                                       |  | Year
      Ended
      31 December
      2005 | Year
      Ended
      31 December
      2004 | Year
      Ended
      31 December
      2003
|Loss
      for the period as reported                                                  |  |                                               | $                                             | (1,368,370)                                   | $ | (1,652,721) | $ | (1,177,923)
|Write-off
      of mineral property costs                                              |  |                                               |                                               | (1,074,807)                                   |   | (599,354)   |   | (822,840)  
|Foreign
      exchange adjustment                                                      |  |                                               |                                               | (2,072)                                       |   | (13,520)    |   | (22,377)   
|Loss
      for the period in accordance with   United States GAAP                      |  |                                               | $                                             | (2,445,249)                                   | $ | (2,265,595) | $ | (2,023,140)
|Pr
      imary
      loss per share for the year in accordance with United States GAAP |  |                                               | $                                             | (0.08)                                        | $ | (0.08)      | $ | (0.11)     



---

- 36 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

10.

Differences
Between United States and Canadian Generally Accepted Accounting Principles
("GAAP") -Continued



f)

The
impact of the above differences between Canadian and United States GAAP on the
deficit, as reported, is as follows:



|                                                    |  |                                               |                                               |                                               |   |              |   |             
|--------------------------------------------------- |  | --------------------------------------------- | --------------------------------------------- | --------------------------------------------- | - | ------------ | - | ------------
|                                                    |  | Year
      Ended
      31 December
      2005 | Year
      Ended
      31 December
      2004 | Year
      Ended
      31 December
      2003
|Deficit
      - As reported                         |  |                                               | $                                             | (22,479,334)                                  | $ | (21,104,497) | $ | (19,396,866)
|Stock
      compensation expense                    |  |                                               |                                               | (244,404)                                     |   | (244,404)    |   | (244,404)   
|Write-off
      of mineral property costs           |  |                                               |                                               | (8,584,178)                                   |   | (7,509,371)  |   | (6,910,017) 
|Share
      issuance costs                          |  |                                               |                                               | 972,026                                       |   | 965,559      |   | 910,649     
|Foreign
      exchange adjustment                   |  |                                               |                                               | (37,969)                                      |   | (35,897)     |   | (22,377)    
|Deficit
      in accordance with United States GAAP |  |                                               | $                                             | (30,373,859)                                  | $ | (27,928,610) | $ | (25,663,015)



g)

The
impact of the above differences between Canadian and United States GAAP on the
statement of changes in shareholders' equity, as reported, is as follows:



| |                                                                                      |            |   |            |   |              |   |                           |   |                            |   |             |  |  |  |  |  |  |  |  |  | 
| | ------------------------------------------------------------------------------------ | ---------- | - | ---------- | - | ------------ | - | ------------------------- | - | -------------------------- | - | ----------- |  |  |  |  |  |  |  |  |  | 
| | Common
      Shares                                                                  |            |   |            |   |              |   |                           |  
| |                                                                                      | Number     |   | Amount     |   | Deficit      |   | Contributed
      Surplus |   | Comprehensive
      Income |   | Total      
| | Shareholders'
      equity balance as reported at 31 December 2003                   | 26,266,705 | $ | 29,334,259 | $ | (19,396,866) | $ | 499,845                   | $ | -                          | $ | 10,437,238 
| | Stock
      compensation expense                                                     | -          |   | 244,404    |   | (244,404)    |   | -                         |   | -                          |   | -          
| | Write-off
      of mineral property costs                                            | -          |   | -          |   | (6,910,017)  |   | -                         |   | -                          |   | (6,910,017)
| | Share
      issuance costs                                                           | -          |   | (910,649)  |   | 910,649      |   | -                         |   | -                          |   | -          
| | Investments
      held for re-sale                                                   | -          |   | -          |   | -            |   | -                         |   | 288,129                    |   | 288,129    
| | Foreign
      exchange adjustment                                                    | -          |   | -          |   | (22,377)     |   | -                         |   | 22,377                     |   | -          
| | Shareholders'
      equity in accordance with United States GAAP at 31 December 2003 | 26,266,705 | $ | 28,668,014 | $ | (25,663,015) | $ | 499,845                   | $ | 310,506                    | $ | 3,815,350  
| | Shareholders'
      equity balance as reported at 31 December 2004                   | 29,992,205 | $ | 30,411,391 | $ | (21,104,497) | $ | 857,995                   | $ | -                          | $ | 10,164,889 
| | Stock
      compensation expense                                                     | -          |   | 244,404    |   | (244,404)    |   | -                         |   | -                          |   | -          
| | Write-off
      of mineral property costs                                            | -          |   | -          |   | (7,509,371)  |   | -                         |   | -                          |   | (7,509,371)
| | Share
      issuance costs                                                           | -          |   | (965,559)  |   | 965,559      |   | -                         |   | -                          |   | -          
| | Investments
      held for re-sale                                                   | -          |   | -          |   | -            |   | -                         |   | 127,403                    |   | 127,403    
| | Foreign
      exchange adjustment                                                    | -          |   | -          |   | (35,897)     |   | -                         |   | 35,897                     |   | -          
| | Shareholders'
      equity in accordance with United States GAAP at 31 December 2004 | 29,992,205 | $ | 29,690,236 | $ | (27,928,610) | $ | 857,995                   | $ | 163,300                    | $ | 2,782,921  
| | Shareholders'
      equity balance as reported at 31 December 2005                   | 31,562,590 | $ | 30,714,606 | $ | (22,479,334) | $ | 1,072,794                 | $ | -                          | $ | 9,308,066  
| | Stock
      compensation expense                                                     | -          |   | 244,404    |   | (244,404)    |   | -                         |   | -                          |   | -          
| | Write-off
      of mineral property costs                                            | -          |   | -          |   | (8,584,178)  |   | -                         |   | -                          |   | (8,584,178)
| | Share
      issuance costs                                                           | -          |   | (972,026)  |   | 972,026      |   | -                         |   | -                          |   | -          
| | Foreign
      exchange adjustment                                                    | -          |   | -          |   | (37,969)     |   | -                         |   | 37,969                     |   | -          
| | Shareholders'
      equity in accordance with United States GAAP at 31 December 2005 | 31,562,590 | $ | 29,986,984 | $ | (30,373,859) | $ | 1,072,794                 | $ | 37,969                     | $ | 723,888    





---

- 37 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



---

10.

Differences
Between United States and Canadian Generally Accepted Accounting Principles
("GAAP")- Continued



h)

New
Accounting Pronouncements



In
December 2004, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standard (SFAS) No. 123R, "Share Based Payment".
SFAS 123R is a revision of SFAS No. 123 "Accounting for Stock-Based
Compensation", and supersedes APB Opinion No. 25, "Accounting for
Stock Issued to Employees" and its related implementation guidance. SFAS
123R establishes standards for the accounting for transactions in which an
entity exchanges its equity instruments for goods or services. It also addresses
transactions in which an entity incurs liabilities in exchange for goods or
services that are based on the fair value of the entity's equity instruments
or that may be settled by the issuance of those equity instruments. SFAS 123R
focuses primarily on accounting for transactions in which an entity obtains
employee services in share-based payment transactions. SFAS 123R does not change
the accounting guidance for share-based payment transactions with parties other
than employees provided in SFAS 123 as originally issued and Emerging Issues
Task Force Issue No. 96-18, "Accounting for Equity Instruments That Are
Issued to Other Than Employees for Acquiring, or in Conjunction with Selling,
Goods or Services".  SFAS 123R does not address the accounting for
employee share ownership plans, which are subject to AICPA Statement of Position
93-6, "Employers' Accounting for Employee Stock Ownership Plans".
 SFAS 123R requires a public entity to measure the cost of employee
services received in exchange for an award of equity instruments based on the
grant-date fair value of the award (with limited exceptions). That cost will be
recognized over the period during which an employee is required to provide
service in exchange for the award - the requisite service period (usually the
vesting period). SFAS 123R requires that the compensation cost relating to
share-based payment transactions be recognized in financial statements. That
cost will be measured based on the fair value of the equity or liability
instruments issued. The scope of SFAS 123R includes a wide range of share-based
compensation arrangements including share options, restricted share plans,
performance-based awards, share appreciation rights, and employee share purchase
plans. Public entities (other than those filing as small business issuers) will
be required to apply SFAS 123R as of the first interim or annual reporting
period that begins after 15 June 2005. Public entities that file as small
business issuers will be required to apply SFAS 123R in the first interim or
annual reporting period that begins after 15 December 2005. For non-public
entities, SFAS 123R must be applied as of the beginning of the first annual
reporting period beginning after 15 December 2005. The adoption of this standard
is not expected to have a material effect on the Company's results of
operations or financial position.

In
December 2004, FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets -
An Amendment of APB Opinion No. 29". The guidance in APB Opinion No. 29,
"Accounting for Nonmonetary Transactions", is based on the principle
that exchanges of nonmonetary assets should be measured based on the fair value
of the assets exchanged. The guidance in that Opinion, however, included certain
exceptions to that principle.  SFAS No. 153 amends Opinion No. 29 to
eliminate the exception for nonmonetary exchanges of similar productive assets
and replaces it with a general exception for exchanges of nonmonetary assets
that do not have commercial substance. A nonmonetary exchange has commercial
substance if the future cash flows of the entity are expected to change
significantly as a result of the exchange.  The provisions of SFAS No. 153
are effective for nonmonetary asset exchanges occurring in fiscal periods
beginning after 15 June 2005. Early application is permitted and companies must
apply the standard prospectively. The adoption of this standard is not expected
to have a material effect on the Company's results of operations or financial
position.



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- 38 -



|                                                                           | 
|-------------------------------------------------------------------------- | 
|Freegold
      Ventures Limited
      (An
      Exploration Stage Company) | 
|Notes
      to Consolidated Financial Statements                           | 
|31 December
      2005 and 2004                                            | 
|Canadian
      Funds                                                       | 
|                                                                           | 



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10.

Differences
Between United States and Canadian Generally Accepted Accounting Principles
("GAAP")- Continued



h)

New
Accounting Pronouncements- Continued



In
May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections," which replaces APB Opinion No. 20, "Accounting
Changes," and supersedes FASB Statement No. 3, "Reporting
Accounting Changes in Interim Financial Statements - an amendment of APB
Opinion No. 28." SFAS 154 requires retrospective application to prior
periods' financial statements of changes in accounting principle, unless it is
impracticable to determine either the period-specific effects or the cumulative
effect of the change.  When it is impracticable to determine the
period-specific effects of an accounting change on one or more individual prior
periods presented, SFAS 154 requires that the new accounting principle be
applied to the balances of assets and liabilities as of the beginning of the
earliest period for which retrospective application is practicable and that a
corresponding adjustment be made to the opening balance of retained earnings for
that period rather than being reported in an income statement.  When it is
impracticable to determine the cumulative effect of applying a change in
accounting principle to all prior periods, SFAS 154 requires that the new
accounting principle be applied as if it were adopted prospectively from the
earliest date practicable.  SFAS 154 shall be effective for accounting
changes and corrections of errors made in fiscal years beginning after 15
December 2005.  The company does not expect the provisions of SFAS 154 will
have a significant impact on its results of operations.



In
February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Instruments, an amendment of FASB Statements No. 133 and 140."
 This statement permits fair value re-measurement for any hybrid financial
instrument that contains an embedded derivative that otherwise would require
bifurcation.  It establishes a requirement to evaluate interests in
securitized financial assets to identify interests that are freestanding
derivatives or that are hybrid financial instruments that contain an embedded
derivative requiring bifurcation.  In addition, SFAS 155 clarifies which
interest-only strips and principal-only strips are not subject to the
requirements of Statement 133.  It also clarifies that concentrations of
credit risk in the form of subordination are not embedded derivatives.  SFAS
155 amends Statement 140 to eliminate the prohibition on a qualifying
special-purpose entity from holding a derivative financial instrument that
pertains to a beneficial interest other than another derivative financial
instrument.  This Statement is effective for all financial instruments
acquired or issued after the beginning of an entity's first fiscal year that
begins after 15 September 2006.  The adoption of this standard is not
expected to have a material effect on the Company's results of operations or
financial position.





11.

Comparative
Figures



Certain
of the comparative figures have been reclassified to conform with the current
year's presentation.







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