**UNITED
        STATES**
  **SECURITIES
        AND EXCHANGE COMMISSION**
 **WASHINGTON,
        D.C. 20549**
  **FORM
        20-F**
 (Mark
        One)
 [
                  ]
              REGISTRATION
                  STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE
                  ACT
                  OF 1934
  OR
  [X]
              ANNUAL
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934
  For
        the fiscal year ended June 30, 2006
 OR
  [
                  ]
              TRANSITION
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934
  OR
  [
                  ]
              SHELL
                  COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                  EXCHANGE
                  ACT OF 1934
  Commission
        file number 0-28296
 **GOLDBELT
        RESOURCES LTD.**
 (Exact
        name of registrant as specified in its charter)
  British
        Columbia, Canada
 (Jurisdiction
        of incorporation or organization)
  **Sterling
        Tower, 372 Bay Street, Suite 1201**
 **Toronto,
        Ontario, Canada, M5H 2W9**
 (Address
        of principal executive offices)
  Securities
        registered or to be registered pursuant to Section 12(b) of the
        Act:
  Title
                  of each class
              
              Name
                  of each exchange on which registeredNone
              
              None
  Securities
        registered or to be registered pursuant to
        Section 12(g) of the Act:
 Common
                  Shares without par Value(Title
                  of class)
  Securities
        for which there is a reporting obligation pursuant to Section 15(d) of the
        Act.
  None(Title
                  of class)
  Indicate
        the number of outstanding shares of each of the issuer’s classes of capital or
        common stock as of the close of the period covered by the annual
        report.
  51,287,747
  
 Indicate
        by check mark if the registrant is a well-known seasoned issuer, as defined
        in
        Rule 405 of the Securities Act.
  Yes  ̈   No þ
  If
        this report is an annual or transaction report, indicate by check mark if
        the
        registrant is not required to file reports pursuant to Section 13 or 15(d)
        of
        the Securities Exchange Act of 1934.
 Yes  ̈   No þ
  Indicate
        by check mark whether the registrant: (1) has filed all reports required
        to be
        filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
        the
        preceding 12 months (or for such shorter period that the registrant was required
        to file such reports), and (2) has been subject to such filing requirements
        for
        the past 90 days.
  Yes þ   No  ̈
  Indicate
        by check mark whether the registrant is a large accelerated filer, an
        accelerated filer, or a non-accelerated filer. See definition of “accelerated
        filer and large accelerated filer” in Rule 12b-2 of the Exchange
        Act.
 Large
        Accelerated Filer  ̈  Accelerated
        Filer  ̈  Non-Accelerated
        Filer þ
  Indicate
        by a check mark which financial statement item the registrant has elected
        to
        follow.
  Item
        17 þ  Item
        18  ̈
  If
        this report is an annual report, indicate by check mark whether the registrant
        is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
 Yes  ̈   No þ
 
 Indicate
        by check mark whether the registrant has filed all documents and reports
        required to be filed by Section 12, 13 or 15(d) of the Securities Exchange
        Act
        of 1934 subsequent to the distribution of securities under a plan confirmed
        by a
        court.
 Not
        Applicable
  **Table
          of Contents**
 FORWARD-LOOKING
                    STATEMENTS
                5GLOSSARY
                    OF TERMS AND DEFINITIONS
                6PART
                    1
                
                9Item
                    1.
                    Identity of Directors, Senior Management and Advisers
                9Item
                    2.
                    Offer Statistics and Expected Timetable
                9Item
                    3.
                    Key Information
                9A.
                Selected
                    financial data
                9B.
                Capitalization
                    and Indebtedness
                11C.
                Reasons
                    for the offer and use of proceeds
                11D.
                Risk
                    factors
                11Item
                    4.
                    Information on the Company
                16A.
                History
                    and Development of Goldbelt Resources
                16B.
                Business
                    Overview
                18C.
                Organizational
                    Structure
                23D.
                Property,
                    Plants and Equipment
                23Item
                    4A. Unresolved Staff Comments.
                31Item
                    5.
                    Operating and Financial Review and Prospects
                32A.
                Operating
                    results
                32B.
                Liquidity
                    and capital resources
                33C.
                Research
                    and development, patents and licences, etc
                34D.
                Trend
                    information
                35E.
                Off-balance
                    sheet arrangements
                35F.
                Tabular
                    disclosure of contractual obligations
                35Item
                    6.
                    Directors, Senior Management and Employees
                35A.
                Directors
                    and senior management
                35B.
                Compensation
                36C.
                Board
                    practices
                38D.
                Employees
                44E.
                Share
                    Ownership
                45Item
                    7.
                    Major Shareholders and Related Party Transactions
                46A.
                Major
                    shareholders
                46B.
                Related
                    Party Transactions
                47C.
                Interests
                    of experts and counsel
                47Item
                    8.
                    Financial Information
                47A.
                Consolidated
                    Statements and Other Financial Information
                47B.
                Significant
                    Changes
                48Item
                    9.
                    The Offer and Listing
                48A.
                Offer
                    and listing details
                48B.
                Plan
                    of distribution
                49C.
                Markets
                49D.
                Selling
                    shareholders
                50E.
                Dilution
                50F.
                Expenses
                    of the issue
                50
   3
  Item
                    10. Additional Information
                50A.
                Share
                    capital
                50B.
                Memorandum
                    and articles of association
                50C.
                Material
                    Contracts
                52D.
                Exchange
                    controls
                53E.
                Taxation
                53F.
                Dividends
                    and paying agents
                54G.
                Statement
                    by experts
                54H.
                Documents
                    on display
                54I.
                Subsidiary
                    Information
                54Item
                    11. Quantitative and Qualitative Disclosures About Market
                    Risk.
                54
 Item
                    12. Description of Securities Other than Equity Securities
                55PART
                    2
                
                55Item
                    13. Defaults, Dividend Arrearages and Delinquencies
                55Item
                    14. Material Modifications to the Rights of Security Holders
                    and Use of
                    Proceeds
                55Item
                    15. Controls and Procedures
                55Item
                    16A.
                Audit
                    Committee Financial Expert.
                55Item
                    16B.
                Code
                    of Ethics
                55Item
                    16C.
                Principal
                    Accountant Fees and Services.
                56Item
                    16D.
                Exemptions
                    from the Listing Standards for Audit Committees.
                56Item
                    16E.
                Purchases
                    of Equity Securities by the Issuer and Affiliated
                    Purchasers.
                56PART
                    3
                
                57Item
                    17.
                Financial
                    Statements
                57Item
                    18.
                Financial
                    Statements
                57Item
                    19.
                Exhibits
                57
 
  4
   **FORWARD-LOOKING
        STATEMENTS**
  Certain
        statements in this annual report under Item 4: Information on the Company
        and
        Item 5: Operating and Financial Review and Prospects and elsewhere in this
        annual report are “forward-looking statements” within the meaning of the United
        States Private Securities Litigation Reform Act of 1995. These forward-looking
        statements are not based on historical facts but, rather, on our current
        expectations and our projections about future events, including our current
        expectations regarding:
  •
              estimates
                  of the mineral resources with respect to lands in which we have
                  an
                  interest;
  •
              our
                  exploration and development plans with respect to lands in which
                  we have
                  an interest;
  •
              our
                  future stability and growth
                  prospects;
  •
              our
                  business strategies, the measures to implement those strategies
                  and the
                  benefits to be derived therefrom;
  •
              our
                  future profitability and capital needs, including capital
                  expenditures;
  •
              the
                  outlook for and other future developments in our affairs or in
                  the
                  industries in which we participate;
                  and
  •
              the
                  effect on us of new accounting
                  releases.
  These
        forward-looking statements generally can be identified by the use of statements
        that include words such as “believe”, “expect”, “anticipate”, “intend”, “plan”,
“likely”, “will”, “predicts”, “estimates”, “forecasts” or other similar words or
        phrases. Similarly, statements that describe our objectives, plans or goals
        are
        or may be forward-looking statements. These forward-looking statements are
        subject to risks, uncertainties and other factors that could cause our actual
        results to differ materially from the future results expressed or implied
        by the
        forward-looking statements. These risks and uncertainties are described under
        “Risk Factors”.
  Any
        written or oral forward-looking statements made by us or on our behalf are
        subject to these factors. In light of these risks, uncertainties and
        assumptions, the forward-looking events discussed in this annual report on
        Form
        20-F may not occur. Actual results could differ materially from those expressed
        in any of our forward-looking statements. Other unknown or unpredictable
        factors
        also could harm our future results. Given these uncertainties, prospective
        investors are cautioned not to place undue reliance on such forward-looking
        statements. The forward-looking statements included in this annual report
        on
        Form 20-F are made only as at the date of this annual report on Form 20-F.
        We do
        not intend, and do not assume any obligation, to update these forward- looking
        statements, except as required by law.
  5
 **GLOSSARY
        OF TERMS AND DEFINITIONS**
  The
        following is a glossary of technical terms which are used in this registration
        statement to describe Goldbelt Resources’ business.
  “ Au ”
        means gold.
  “ diamond
        drill ”
        means a type of rotary drill, the bit of which is set with diamonds that
        cut by
        abrasion rather than percussion. The hollow-centered cutting bit is attached
        to
        the end of long hollow drill rods that are rotated and through which water
        is
        pumped to the cutting face of the bit. The drill cuts a circle, the rock
        core of
        which is recovered in long cylindrical sections, an inch or more in
        diameter.
  “ dilution ”
        means the incorporation of waste or low grade rock with ore during the mining
        process resulting in lower grade.
  “ disseminated
        ore ”
        means a scattered distribution of generally fine-grained metal bearing minerals
        throughout a rock body, in sufficient quantity to make the deposit an
        ore.
  “ dollars ”
        or “ $ ”
        means Canadian currency unless otherwise indicated.
  “ exploration ”
        means prospecting, diamond drilling and other work involved in searching
        for ore
        bodies.
  “ grade ”
        the weight of valuable minerals in each tonne of ore.
  “ g/t ”
        means grams per tonne.
  “ Indicated
        Mineral Resource ”
        is a term defined by the Canadian Institute of Mining, Metallurgy and Petroleum
        (“CIM”) and adopted in Canadian National Instrument 43-101 Standards for
        Disclosure of Mineral Projects (“NI 43-101”) as meaning that part of a mineral
        resource for which quantity, grade or quality, densities, shape and physical
        characteristics, can be estimated with a level of confidence sufficient to
        allow
        the appropriate application of technical and economic parameters, to support
        mine planning and evaluation of the economic viability of the deposit. The
        estimate is based on detailed and reliable exploration and testing information
        gathered through appropriate techniques from locations such as outcrops,
        trenches, pits, workings and drill holes that are spaced closely enough for
        geological and grade continuity to be reasonably assumed.
  “ Inferred
        Mineral Resource ”
        is a term defined by the CIM and adopted in NI 43-101 as meaning that part
        of a
        mineral resource for which quantity and grade or quality can be estimated
        on the
        basis of geological evidence and limited sampling and reasonably assumed,
        but
        not verified, geological and grade continuity. The estimate is based on limited
        information and sampling gathered through appropriate techniques from locations
        such as outcrops, trenches, pits, workings and drill holes.
  6
 “ Measured
        Mineral Resource ”
        is a term defined by the CIM and adopted in NI 43-101 as meaning that part
        of a
        mineral resource for which quantity, grade or quality, densities, shape and
        physical characteristics, are so well established that they can be estimated
        with sufficient confidence to allow the appropriate application of technical
        and
        economic parameters, to support production planning and evaluation of economic
        viability of the deposit. The estimate is based on detailed and reliable
        exploration sampling and testing information gathered through appropriate
        techniques from locations such as outcrops, trenches, pits, workings and
        drill
        holes that are spaced closely enough for geological and grade
        continuity.
  “ mineralization ”
        means rock containing an undetermined amount of minerals or metals.
  “ Mineral
        Reserve ”
        is a term defined by the CIM and adopted in NI 43-101 as meaning the
        economically mineable part of a Measured or Indicated Mineral Resource
        demonstrated by at least a Preliminary Feasibility Study. This Study must
        include adequate information on mining, processing, metallurgical, economic
        and
        relevant factors that demonstrate, at the time of reporting, that economic
        extraction can be justified. A Mineral Reserve includes diluting materials
        and
        allowances for losses that may occur when the material is mined. (Note below
        the
        definition of “Reserve” found in the U.S. Securities and Exchange Commission
        Industry Guide 7)
  “ Mineral
        Resource ”
        is a term defined by the CIM and adopted in NI 43-101 as meaning a concentration
        or occurrence of natural, solid, inorganic or fossilized organic material
        in or
        on the earth’s crust in such form and quantity and of such a grade or quality
        that it has reasonable prospects for economic extraction. The location,
        quantity, grade, geological characteristics and continuity of a Mineral Resource
        are known, estimated or interpreted from specific geological evidence and
        knowledge.
  “ mineral
        zone ”
        means a mineral-bearing belt or area.
  “ Ore ”
        is a natural aggregate of one or more minerals which, at a specified time
        and
        place, may be mined, processed and sold at a profit, or from which some part
        may
        profitably be separated.
  “ oz/t ”
        means Troy ounces per short ton.
  “ percussion
        drill ”
        means a drill that operates by having the drill bit fall with force onto
        the
        rock.
  “ preliminary
        assessment ”
        means an assessment that may be disclosed under NI 43-101 if made by a qualified
        person, notwithstanding that it includes an economic evaluation which uses
        inferred mineral resources, provided that such disclosure includes a proximate
        statement that the assessment is preliminary in nature, that it includes
        inferred mineral resources that are too speculative geologically to have
        the
        economic considerations applied to them that would enable them to be categorized
        as mineral reserves and there is no certainty that the preliminary assessment
        will be realized; a preliminary assessment is sometimes referred to as a
        “scoping study”.
  7
 “ Reserve ”
        is a term defined by Industry Guide 7 of the U.S. Securities and Exchange
        Commission (SEC) as meaning that part of a mineral deposit which could be
        economically and legally extracted or produced at the time of the reserve
        determination. Industry Guide 7 classifies reserves as either “Proven
        (Measured)” or “Probable (Indicated)”. Proven (measured) reserves are those for
        which (a) quantity is computed from dimensions revealed in outcrops, trenches,
        workings or drill holes; grade and/or quality are computed from the results
        of
        detailed sampling and (b) the sites for inspection, sampling and measurement
        are
        spaced so closely and geologic character is so well defined that size, shape,
        depth and mineral content of reserves are well-established. Probable (indicated)
        reserves are those for which quantity and grade and/or quality are computed
        from
        information similar to that used for proven (measured) reserves, but the
        sites
        for inspection, sampling, and measurement are farther apart or are otherwise
        less adequately spaced. The degree of assurance, although lower than that
        for
        proven (measured) reserves, is high enough to assume continuity between points
        of observation. Note: SEC staff has traditionally required a “bankable” or
“final” feasibility study before reserves may be designed for purposes of
        meeting the requirements of Industry Guide 7.
  “ resource ”
        or “Mineral Resource” is a term defined by the CIM and adopted in NI 43-101 as
        meaning a concentration or occurrence of natural, solid, inorganic or fossilized
        organic material in or on the Earth’s crust in such form and quantity and of
        such a grade or quality that it has reasonable prospects for economic
        extraction. The location, quantity, grade, geological characteristics and
        continuity of a Mineral Resource are known, estimated or interpreted from
        specific geological evidence and knowledge.
  “ tonne ”
        means metric tonne (2,204 pounds).
  Measurements
        stated in metric units covert to imperial equivalents as
        follows:
  Metric
                  Units
              Multiplied
                  by
              =Imperial
                  Unitshectares
              2.471
              =acresmetres
              3.281
              =feetkilometres
              0.621
              =miles
                  (5,280 feet)grams
              0.032
              =ounces
                  (troy; 12 troy ozs/lb)tonnes
              1.102
              =tons
                  (short or 2,000 lbs)grams/tonne
              0.029
              =ounces
                  (troy)/ton
 
  
 8
  **PART
        1**
  **Item
                  1.**
              **Identity
                  of Directors, Senior Management and
                  Advisers**
  Not
        Applicable.
  **Item
                  2.**
              **Offer
                  Statistics and Expected
                  Timetable**
  Not
        Applicable.
  **Item
                  3.**
              **Key
                  Information**
  **A.** **Selected
        Financial Data**
  The
        selected financial data appearing below for the fiscal years ended June 30,
        2006, 2005, 2004, 2003 and 2002 are set forth in Canadian dollars and extracted
        from the audited Consolidated Financial Statements of Goldbelt Resources
        that
        appear elsewhere herein.
  Goldbelt
        Resources’ financial statements are prepared in accordance with generally
        accepted accounting principles (GAAP) that apply in Canada. The selected
        financial data appearing in the table below is presented in accordance with
        Canadian GAAP. For the years ended June 30, 2006, 2005 and 2004, the
        reconciliation of the Net Loss and Net Loss Per Share to a U.S. GAAP basis
        is
        presented in Note 12 of the June 30, 2006 financial statements. The principal
        differences between Canadian GAAP and US GAAP that affect Goldbelt Resources’
income and shareholders’ equity relate to those items described in Note 12 of
        Goldbelt Resources’ June 30, 2006 financial statements appearing elsewhere
        herein.
  The
        following selected financial data should be read in conjunction with, and
        is
        qualified in its entirety by reference to, Goldbelt Resources’ audited
        Consolidated Financial Statements appearing elsewhere in this annual report.
        The
        differences between US GAAP and Canadian GAAP are described in Note 12 to
        the
        accompanying June 30, 2006 audited financial statements. Significant accounting
        policies applied in preparing Goldbelt Resources’ financial statements are set
        out in Note 2 to the accompanying audited financial statements.
  9
  **SELECTED
        FINANCIAL DATA UNDER CANADIAN GAAP**
  **Year
                  Ended**
                **June
                  30, 2006**
              **Year
                  Ended**
                **June
                  30, 2005**
              **Year
                  Ended**
                **June
                  30, 2004**
              **Year
                  Ended**
                **June
                  30, 2003**
              **Year
                  Ended**
                **June
                  30, 2002**Operating
                  Revenues
              Nil
              Nil
              Nil
              Nil
              NilExpenses
              (3,515,323)
              (1,767,641)
              (444,039)
              (164,986)
              (113,494)Other
                  income
              202,708
              31,122
              979,960
              6,928
              6,949Income
                  (loss) from operations
              (3,312,615)
              (1,736,519)
              535,921
              (158,058)
              (106,545)Income
                  (loss) from continuing operations
              (3,312,615)
              (1,736,519)
              535,921
              (158,058)
              (106,545)Net
                  income (loss)
              (3,312,615)
              (1,736,519)
              535,921
              (158,058)
              (106,545)Earnings
                  (loss) per Share
              (0.09)
              (0.10)
              0.08
              (0.03)
              (0.02)Earnings
                  (loss) from operations per share
              (0.09)
              (0.10)
              0.08
              (0.03)
              (0.02)Earnings
                  (loss) from continuing operations per share
              (0.09)
              (0.10)
              0.08
              (0.03)
              (0.02)Diluted
                  earnings (loss) per share
              (0.09)
              (0.10)
              0.07
              (0.03)
              (0.02)Total
                  Assets
              20,681,494
              14,862,378
              1,074,334
              361,565
              479,301Net
                  Assets
              20,311,485
              11,031,761
              1,057,933
              24,366
              182,424Dividends
                  per share
              -
              -
              -
              -
              -Retained
                  Earnings (Deficit)
              (4,671,271)
              (1,358,656)
              377,863
              (158,058)
              (48,194,465)Capital
                  Stock
              23,242,232
              11,737,625
              662,424
              182,424
              48,124,162Weighted
                  Average Number of Shares
              38,475,471
              17,274,397
              6,834,589
              4,655,137
              4,655,137
  All
        dollar amounts set forth in this report are in Canadian dollars, except where
        otherwise indicated. On November 30, 2006 a Canadian dollar (C$1.00) was
        exchangeable for US$0.8819 on the basis applied in the following table, which
        sets forth (i) the rates of exchange for the Canadian dollar, expressed in
        U.S.
        dollars, in effect at the end of each of the periods indicated; (ii) the
        average
        exchange rates in effect on the last day of each month during such periods;
        (iii) the high and low exchange rate during such periods, in each case based
        on
        the noon buying rate in New York City for cable transfers in Canadian dollars
        as
        certified for customs purposes by the Federal Reserve Bank of New
        York.
  10
  **Period**
              **At
                  Period End**
              **Average
                  Rate**
              **High**
              **Low**(all
                  figures in US$ per C$)Month
                  ended November 30, 2006
              0.8819
              0.8810
              0.8928
              0.8699Month
                  ended October 31, 2006
              0.8923
              0.8873
              0.8969
              0.8760Month
                  ended September 30, 2006
              0.8979
              0.8969
              0.9064
              0.8851Month
                  ended August 31, 2006
              0.9025
              0.8926
              0.9047
              0.8790Month
                  ended July 31, 2006
              0.8840
              0.8879
              0.9056
              0.8726Month
                  ended June 30, 2006
              0.8930
              0.8987
              0.9106
              0.8904Year
                  ended June 30, 2006
              0.8930
              0.8600
              0.9106
              0.8039Year
                  ended June 30, 2005
              0.8159
              0.8000
              0.8493
              0.7489Year
                  ended June 30, 2004
              0.7459
              0.7441
              0.7880
              0.7085Year
                  ended June 30, 2003
              0.7376
              0.6620
              0.7492
              0.6264Year
                  ended June 30, 2002
              0.6583
              0.6375
              0.6622
              0.6200
  **B.** **Capitalization
        and Indebtedness**
  Not
        applicable.
  **C.** **Reasons
        for the offer and use of proceeds**
  Not
        applicable.
  **D.** **Risk
        factors**
  This
        section describes some of the risks and uncertainties faced by Goldbelt
        Resources. The factors below should be considered in connection with any
        forward-looking statements in this registration statement. The risks described
        below are considered to be the significant or material ones, but they are
        not
        the only risks faced by Goldbelt Resources. Some risks may not be known to
        Goldbelt Resources and others that are not considered significant or material
        may turn out to be material. Investment in the common shares of Goldbelt
        Resources must be considered speculative and risky, since any one or more
        of the
        risks could materially impact Goldbelt Resources’ business, its revenues,
        income, ability to raise required capital and the market price of its common
        shares.
  **Risks
        and Uncertainties**
  The
        Company’s business is subject to a number of risks related to its exploration
        and development projects as well as risks related to the mining industry
        generally.
  11
 ***Political
        and Economic Risks of Doing Business in Burkina Faso***
  All
        of Goldbelt’s mineral properties are currently located in Burkina Faso, which is
        a politically stable country with newly developed mining and environmental
        legislation in place.  The fiscal laws and practices are well established
        and generally consistent with Western rules and regulations.  However,
        there is no assurance that future political and economic conditions in this
        country will not result in its government adopting different policies respecting
        foreign development and ownership of mineral properties. Any changes in laws,
        regulations or shifts in political attitudes regarding foreign direct investment
        in the Burkina Faso mining industry are beyond Goldbelt’s control and may
        adversely affect its business. Goldbelt’s exploration and development activities
        may be affected in varying degrees by a variety of economic and political
        risks,
        including cancellation or renegotiation of contracts, changes in Burkina
        Faso’s
        domestic laws or regulations, changes in tax laws, royalty and tax increases,
        restrictions on production, price controls, expropriation of property,
        fluctuations in foreign currency, foreign exchange controls, import and export
        regulations, restrictions on the export of gold, restrictions on the ability
        to
        repatriate earnings and pay dividends offshore, restrictions on the ability
        to
        hold foreign currencies in offshore bank accounts, environmental legislation,
        employment practices and mine safety. In the event of a dispute regarding
        any of
        these matters, Goldbelt may be subject to the jurisdiction of courts outside
        of
        Canada, which could have adverse implications on the outcome.
  ***Funding
        Requirements***
  Goldbelt
        has limited financial resources, no source of operating cash flow and no
        assurance that additional funding will be available for further exploration
        and
        development of its projects. Goldbelt will require additional financing from
        external sources to meet its operating and capital requirements. Although
        Goldbelt has been successful in the past in obtaining financing through the
        sale
        of equity securities, there can be no assurance that it will obtain adequate
        financing in the future or that the terms of such financing will be favorable.
        Failure to obtain such additional financing could result in delay or indefinite
        postponement of further exploration and development of Goldbelt’s projects with
        the possible forfeiture of all or parts of its properties.
  ***Risk
        Associated with Title***
  Title
        to mineral properties involves certain inherent risks due to the difficulties
        of
        determining the validity of certain claims, as well as the potential for
        problems arising from the frequently ambiguous conveyance history characteristic
        of many mineral properties. The Company has investigated title to all of
        its
        mineral properties and, to the best of its knowledge, title to all of its
        properties are in good standing. However, the foregoing should not be construed
        as a guarantee of title to those properties. Title to those properties may
        be
        affected by undisclosed and undetected defects.
  12
 ***Competition***
  Goldbelt
        competes with other mining companies that have substantially greater financial
        and technical resources in the search for and the acquisition of mineral
        concessions, as well as for the recruitment and retention of qualified employees
        with technical skills and experience in the mining industry. There can be
        no
        assurance that Goldbelt will be able to compete successfully with others
        in
        acquiring mineral concessions and continue to attract and retain skilled
        and
        experienced employees.
  ***Management
        and Dependence on Key Personnel***
  Goldbelt
        currently has a small executive management group, which is sufficient for
        the
        Company’s present stage of development. Goldbelt has relied, and will continue
        to rely, upon a number of consultants and others for operating expertise.
        Goldbelt may need to recruit additional personnel to supplement existing
        management. Goldbelt’s development to date has largely depended and in the
        future will continue to depend on the efforts of the current executive
        management group and the loss of a significant number of the members of this
        group could have a material adverse effect on Goldbelt, its business and
        its
        ability to develop its mineral properties.
  ***Enforcement
        of Civil Liabilities***
  As
        substantially all of the assets of Goldbelt and its subsidiaries are located
        outside of Canada, and certain of its directors and officers are resident
        outside of Canada, it may not be possible for investors to enforce judgments
        granted by a court in Canada against the assets of Goldbelt or its subsidiaries
        or its directors and officers residing outside of Canada.
  ***Dividends***
  All
        of Goldbelt’s available funds will be invested to finance the growth of its
        business and, therefore, investors cannot expect to receive a dividend on
        its
        common shares in the foreseeable future.
  **Risks
        Related to the Gold Mining Industry Generally**
  The
        following risks apply to the gold mining industry generally:
  ***Exploration
        and Mining Risks***
  The
        business of exploring for minerals and mining involves a high degree of risk.
        Few properties that are explored are ultimately developed into producing
        mines.
        At present, none of Goldbelt’s properties have proven and probable reserves.
        Fires, power outages, labour disruptions, flooding, explosions, cave-ins,
        land
        slides and the inability to obtain suitable or adequate machinery, equipment
        or
        labour are other risks involved in the operation of mines and the conduct
        of
        exploration programs. Substantial expenditures are required to establish
        reserves through drilling, to develop metallurgical processes, to develop
        the
        mining and processing facilities and infrastructure at any site chosen for
        mining. Although substantial benefits may be derived from the discovery of
        a
        major mineralized deposit, no assurance can be given that minerals will be
        discovered in sufficient quantities to justify commercial operations or that
        the
        funds required for development can be obtained on a timely basis. The economics
        of developing gold and other mineral properties is affected by many factors
        including the cost of operations, variations of the grade of ore mined,
        fluctuations in the price of gold or other minerals produced, fluctuations
        in
        exchange rates, costs of development, infrastructure and processing equipment
        and such other factors as government regulations, including regulations relating
        to royalties, allowable production, importing and exporting of minerals and
        environmental protection. In addition, the grade of mineralization ultimately
        mined may differ from that indicated by drilling results and such differences
        could be material. Depending on the price of gold or other minerals produced,
        Goldbelt may determine that it is impractical to commence or continue commercial
        production.
  13
 ***Estimates
        of Mineral Reserves and Resources and Production
        Risks***
  The
        mineral resource estimates are estimates only and no assurance can be given
        that
        any particular level of recovery of minerals will in fact be realized or
        that an
        identified resource will ever qualify as a commercially mineable (or viable)
        deposit, which can be legally and economically exploited. In addition, the
        grade
        of mineralization ultimately mined may differ from that indicated by drilling
        results and such differences could be material. Production can be affected
        by
        such factors as permitting regulations and requirements, weather, environmental
        factors, unforeseen technical difficulties, unusual or unexpected geological
        formations, inaccurate or incorrect geologic, metallurgical or engineering
        work,
        and work interruptions, among other things. Short term factors, such as the
        need
        for orderly development of deposits or the processing of new or different
        grades, may have an adverse effect on mining operations and on the results
        of
        operations. There can be no assurance that minerals recovered in small scale
        laboratory tests will be duplicated in large scale tests under on-site
        conditions or in production scale operations. Material changes in reserves
        or
        resources, grades, stripping ratios or recovery rates may affect the economic
        viability of projects. The estimated resources described herein should not
        be
        interpreted as assurances of mine life or of the profitability of future
        operations.
  Goldbelt
        has engaged expert independent technical consultants to advise it with respect
        to mineral resources, among other things. Goldbelt believes that those experts
        are competent and that they have carried out their work in accordance with
        all
        internationally recognized industry standards.
  ***Gold
        Prices***
  Over
        the years, the price of gold has fluctuated widely. The marketability of
        gold is
        affected by numerous factors beyond Goldbelt’s control, including government
        regulations relating to price, royalties, allowable production and importing
        and
        exporting of gold, the effect of which cannot accurately be predicted. Depending
        on the price of gold or other minerals produced, Goldbelt may determine that
        it
        is impractical to commence or continue commercial production.
  14
 ***Environmental
        and other Regulatory Requirements***
  Goldbelt’s
        activities are subject to environmental regulations, which are enacted by
        government agencies from time to time. Environmental legislation generally
        provides for restrictions and prohibitions on spills, releases or emissions
        of
        various substances produced in association with certain mining industry
        operations, such as seepage from tailings disposal areas, which would result
        in
        environmental pollution. A breach of such legislation may result in the
        imposition of fines and penalties. In addition, certain types of operations
        require the submission and approval of environmental impact assessments.
        Environmental legislation is evolving in such a manner that standards for
        enforcement, fines and penalties for non-compliance are more stringent.
        Environmental assessments of proposed projects carry a heightened degree
        of
        responsibility for companies and directors, officers and employees. The cost
        of
        compliance with changes in governmental regulations has the potential to
        reduce
        the profitability of operations.
  Goldbelt’s
        current exploration activities, including any development activities and
        commencement of production on its properties, require permits from various
        governmental authorities and such operations are and will be governed by
        laws
        and regulations governing prospecting, development, mining, production, exports,
        taxes, labour standards, occupational health, waste disposal, toxic substances,
        land use, environmental protection, mine safety and other matters. Companies
        engaged in exploration activities and in the development and operation of
        mines
        and related facilities generally experience increased costs, and delays in
        production and other schedules as a result of the need to comply with applicable
        laws, regulations and permits. There can be no assurance that all permits
        which
        may be required for exploration, construction of mining facilities and conduct
        of mining operations will be obtainable on reasonable terms or on a timely
        basis, or that such laws and regulations would not have an adverse effect
        on any
        mining project that Goldbelt may undertake. Management of Goldbelt believes
        that
        the Company is in substantial compliance with all material laws and regulations,
        which currently apply to its activities.
  Failure
        to comply with applicable laws, regulations, and permitting requirements
        may
        result in enforcement actions thereunder, including orders issued by regulatory
        or judicial authorities causing operations to cease or be curtailed, and
        may
        include corrective measures requiring capital expenditures, installation
        of
        additional equipment, or remedial actions. Parties engaged in mining operations
        may be required to compensate those suffering loss or damage by reason of
        the
        mining activities and may have civil or criminal fines or penalties imposed
        for
        violations of applicable laws or regulations and, in particular, environmental
        laws.
  Amendments
        to current laws, regulations and permits governing operations and activities
        of
        mining companies, or more stringent implementation thereof, could have a
        material adverse impact on Goldbelt and cause increases in capital expenditures
        or production costs or reduction in levels of production at producing properties
        or require abandonment or delays in development of new mining
        properties.
  15
 
  **Item
                  4.**
              **Information
                  on the Company**
  **A.** **History
        and Development of Goldbelt Resources**
  ***1.*** ***Name
        of the Company***
  The
        Company’s legal and commercial name is: GOLDBELT RESOURCES LTD.
  ***2.*** ***Incorporation***
  Goldbelt
        Resources Ltd. (“Goldbelt”, “Goldbelt Resources” or the “Company”) was
        incorporated under the Company Act (British Columbia) on July 23, 1976 as
        a
        specially limited company with the name of Goldbelt Mines Inc. (Non-Personal
        Liability) and converted to a limited company pursuant to the Company Act
        (British Columbia) with the name Goldbelt Mines Inc. on October 5, 1984.
        The
        Company amalgamated with North American Metal Corporation on October 22,
        1984 as
        one company with the name Goldbelt Mines Inc., changed its name to Goldbelt
        Resources Ltd. on July 15, 1991 and amalgamated with Comptoir International
        du
        Commerce Ltee on July 9, 1997 as one company with the name Goldbelt Resources
        Ltd. In August 2001, the Company continued its corporate jurisdiction into
        Yukon
        Territory, Canada. On February 16, 2006, the Company continued its corporate jurisdiction into
        the
        Province of British Columbia, Canada.
  ***3.*** ***Domicile
        and Legal Form of Company***
  Goldbelt
        Resources exists as a limited liability corporation as indicated
        above.
  Goldbelt
        Resources’ registered office in Canada is located at 10 th Floor, 595 Howe Street, Vancouver, British Columbia, Canada, V6C 2T5 (telephone:
        (604) 687-1224). Its executive office is located at Sterling Tower, 372 Bay
        Street, Suite 1201, Toronto, Ontario, Canada, M5H 2W9; telephone - (416)
        364-0557. Website: www.goldbeltresources.com
  Goldbelt
        Resources is a reporting issuer in British Columbia, Alberta, Ontario and
        the
        United States, and is a multiple jurisdiction filer with SEDAR and an EDGAR
        filer. The Company’s common shares are listed on the TSX Venture Exchange (the
        TSXV) under the symbol “GLD.V”.
  ***4.*** ***Important
        Events in Development of Company’s Business***
  The
        Company was involved in exploration and development of precious and base
        mineral
        deposits in the Republic of Kazakhstan from 1992 to 1998. The Company did
        not
        undertake any activity in Kazakhstan from March 1998 until the final disposition
        of its Kazakhstan mineral interests in March 2001. For the period from December
        1998 until July 2000, the Company pursued the acquisition of Regal Petroleum
        Corporation (“Regal”) and its oil and gas interests in the Ukraine and Romania.
        The acquisition was never completed as financing could not be arranged. Goldbelt
        and Regal dissolved plans to merge in July 2000.
  16
 In
        March 2001, the Company sold its last remaining interest in Kazakhstan to
        Celtic
        Resources Holdings PLC (“Celtic Holdings”), a public company traded in the
        United Kingdom and the successor company to Dabney Industries. The Company
        sold
        its 60% interest in the Abyz deposit owned by Karagai Gold, its 25% interest
        in
        Dostyk Minerals, an exploration company with two mineral licenses in Kazakhstan,
        and its 50% interest in Kazgold and any claim Kazgold may have to the
        Leninogorsk tailings deposits. In exchange, Celtic Resources Holdings granted
        Goldbelt 1.2 million (pre-consolidation) unrestricted, ordinary shares in
        Celtic
        Resources Holding, a public company traded in the United Kingdom. In fiscal
        2004, the Company disposed of its remaining investments in the shares of
        Celtic
        Resources Holdings and Regal for proceeds of $1,217,743 resulting in a gain
        of
        $872,239.
  On
        December 8, 1998, the Company’s shares were halted from trading on the Vancouver
        Stock Exchange pending an announcement. In February 1999, the Company announced
        a proposed acquisition of Regal, which would have resulted in a reverse
        takeover. On April 2, 2001, trading in the shares of the Company resumed
        under
        the Inactive designation upon the Company announcing that its proposed reverse
        takeover and acquisition had terminated. Effective as of November 20, 2002,
        the
        Company’s shares were halted from further trading by the TSX Venture Exchange
        for failing to maintain Tier 2 Maintenance Requirements and resumed trading
        on
        September 25, 2003 on the facilities of the TSX Venture Exchange NEX board.
 
 On
        March 3, 2005, the Company resumed trading on the TSX Venture Exchange after
        achieving Tier 2 Maintenance and Minimum Listing Requirements through the
        acquisition of its Burkina Faso properties and a simultaneous $8,000,000
        private
        placement. On September 18, 2006, the Company met the requirements of TSX
        Venture Exchange Policy 2.5, and accordingly, the Company’s tier classification
        changed from Tier 2 to Tier 1.
 
 The
        Company has undertaken a detailed evaluation of the mineralisation of the
        Inata
        Project portion of the Belahouro License and partial work on its additional
        exploration licenses in Burkina Faso. In December 2005 the Company submitted
        an
        application for an Exploitation License on the Inata Project.
 
 Goldbelt
        released a Prefeasibility Study for the Inata project on November 1, 2006
        which
        outlined annual production of 106,500oz for the first five years.  The
        Company believes there is excellent potential to expand the annual production
        rate as well as the mine life for this project. It is anticipated that results
        from Goldbelt’s ongoing 2006 exploration program will give rise to an updated
        resource statement, which will be part of the final feasibility study expected
        in 2007.
 
 The
        Company’s acquisition of Resolute (West Africa) Limited (“RWA”) is discussed in
        detail at Item 4.B.1.
 
 17
 ***5.*** ***Principal
        Business and Capital Investment in the Last Five
        Years***
  Since
        the disposition of its properties in Kazakhstan in fiscal 1998 and prior
        to the
        acquisition of its mineral properties in Burkina Faso in March 3, 2005, the
        Company did not incur expenditures on other properties. In fiscal 2006 and
        2005,
        Goldbelt Resources’ principal capital expenditures have been on or in connection
        with its properties in Burkina Faso.
  From
        1999 to 2004 there were no financings. In fiscal 2005 the Company raised
        $8,000,000 via private placement of which $2.9 million was spent on its Burkina
        Faso properties. The Company acquired these properties for approximately
        $8
        million of which $3.9 million was in the form of shares.
  On
        May 9, 2006, the Company entered into an exclusive option agreement with
        Tanami
        Gold NL (Australia) (“Tanami”) for the purchase of a used gold processing plant
        currently located 150 km south of Darwin in the Northern Territory, Australia.
        Pursuant to the agreement, the Company paid A$2.0 million plus A$200,000
        in
        Australian Goods & Services Tax and a security bond of
        A$200,000.
 
 As
        of November 30, 2006, approximately $17 million has been invested in these
        properties.
  ***6.*** ***Principal
        Capital Expenditures in Progress***
  The
        development of the Inata mining permit, exploration programs and the planned
        transport, reconstruction and enhancement of a used gold processing plant
        are
        the significant expenditures in progress. All exploration has been funded
        by
        external financing through issue of securities of Goldbelt
        Resources.
  ***7.*** ***Takeover
        Offers***
  There
        has been no indication of public takeover offers in respect of Goldbelt
        Resources’ shares.
  **B.** **Business
        Overview**
  ***1.*** ***The
        Business of the Company***
  **Cautionary
        Note to U.S. Investors concerning estimates of Measured and Indicated
        Resources**
  This
        section uses the terms “measured resources”, “indicated resources” and “inferred
        resources”. We advise U.S. investors that, while those terms are recognized and
        required by Canadian regulations, the U.S. Securities and Exchange Commission
        does not recognize them. **U.S.
        investors are cautioned not to assume that any part or all of mineral deposits
        in these categories will ever be converted into reserves.**
  18
 Goldbelt
        is a Canadian based resource company with mineral properties in Burkina Faso,
        West Africa. The common shares of Goldbelt trade on the TSX Venture Exchange
        under the symbol GLD.
  Goldbelt
        Resources has been exclusively in the business of acquiring and exploring
        resource properties. The Company is committed to establishing Goldbelt as
        a
        significant and profitable mining company in West Africa by exploring and
        developing known gold prospects that will create long-life mines. The Company
        is
        also focused on maximizing its opportunities for growth through acquisitions
        and
        mergers and return on its shareholders’ investment, while being safety conscious
        and environmentally responsible.
  On
        November 19, 2004, the Company entered into an Amended and Restated Share
        Purchase Agreement (the “Agreement”), with Resolute Mining Limited (“Resolute”)
        of Perth, Australia, an Australian Stock Exchange listed company, to acquire
        Resolute’s 100% owned subsidiary, RWA. The primary assets of RWA were
        exploration properties in Burkina Faso in western Africa. These permits
        consisted of the Belahouro exploration permit and additional exploration
        permits
        in the rest of the country. The Belahouro exploration permit covered a 1,187
        km2
area in northern Burkina Faso, close to the Mali-Burkina Faso border.
 
 On
        March 3, 2005, the Company completed the acquisition (the “Acquisition”) of RWA
        and a concurrent private placement of 16,000,000 units at $0.50 per unit
        for
        gross proceeds of $8,000,000.
 
 RWA
        was acquired in consideration for $1,873,350 (US$1,500,000) on closing,
        $1,951,056 (US$1,573,686) on or before January 31, 2006, 7,529,412 common
        shares
        of the Company and 7,529,412 common share purchase warrants valued at $3,764,706
        and allocated to mineral properties. Included in the warrants are 1,882,353
        exercisable at $0.50 until March 3, 2007, 1,882,353 exercisable at $0.65
        until
        March 3, 2007 and 3,764,706 exercisable at $0.65 until September 3, 2006.
        The
        Company also paid due diligence costs of $330,035 (US$250,000) and issued
        250,000 units valued at $125,000, consisting of one common share and one-half
        of
        one common share purchase warrant. Each whole warrant entitles the holder
        to
        acquire an additional common share at $1.00 until March 3, 2007.
 
 In
        January 2006, pursuant to Goldbelt's obligations under the Agreement with
        Resolute, Goldbelt issued to Resolute 723,982 common shares of the Company
        and
        361,990 common share purchase warrants with a value of $470,588 and allocated
        to
        mineral properties. Included in the warrants are 180,995 exercisable at $0.65
        until January 13, 2008 and 180,995 exercisable at $0.845 until January 13,
        2008.
 
 In
        April 2006, the Company agreed to issue an aggregate of 1,670,000 Goldbelt
        shares to Resolute to repay the US$1,575,685 payable to Resolute for the
        2004
        drilling program under the Agreement and settle other amounts claimed by
        Goldbelt to be owed by Resolute. In addition and as a result of Goldbelt
        satisfying its obligation to raise, by January 31, 2006, a minimum of
        $10,625,000 by way of one or more private placements, Goldbelt issued to
        Resolute 1,176,471 common shares and 588,326 common share purchase warrants
        valued at $764,706 and allocated to mineral properties. Included in the warrants
        are 294,118 exercisable at $0.75 until January 17, 2008 and 294,118 exercisable
        at $0.98 until January 17, 2008.
 
 19
 Resolute
        surrendered for cancellation 1,176,471 previously issued Goldbelt warrants
        exercisable at $0.65 until September 3, 2006. This settlement of shares and
        warrants is in addition to the shares and warrants issued pursuant to the
        January 13, 2006 private placement. The remaining 2,588,235 warrants exercisable
        at $0.65 until September 3, 2006 were exercised in May 2006. On November
        3,
        2006, Resolute exercised 4,714,932 outstanding warrants to acquire common
        shares
        of the Company for proceeds of $2,944,118.
 
 **Belahouro
        tenements and the Inata Project**
 
 The
        Belahouro tenements consist of 12 contiguous tenements, with an area of 2,996
        km2, and are located approximately 220 km north of Ouagadougou, the capital of
        Burkina Faso. On December 23, 2005, the Company lodged an application for
        a
        mining permit on the Inata Project, within the Belahouro region, with the
        government of Burkina Faso and is currently awaiting the results of the
        governmental review of this application, the results of which are expected
        before the end of calendar 2006. The Inata Project covers an area of 26
        km 2 .
 
 In
        April 2006 Goldbelt established 948,000 ounces of Measured and Indicated
        and
        190,000 ounces of Inferred Mineral Resources at the Inata Project. The resource
        statement was prepared and reported as of April 24, 2006 in accordance with
        NI
        43-101 by RSG Global, a qualified resource consulting firm based in Perth,
        Australia. The Company is in the process of completing an active drilling
        campaign of 35,000 meters and has completed a pre-feasibility study (the
        “Study”) on the Inata Project. The Study concludes that Inata will process
        633,000 ounces of gold with an average annual gold production of 106,500
        ounces
        of gold for the first five years. The Study proposes open pit mining with
        the
        ore to be processed through a conventional CIL plant with a design capacity
        of
        1.5 million tonnes per annum. GBM Minerals Engineering Consultants Ltd. was
        the
        lead consultant engaged by Goldbelt to oversee completion of the Study. A
        technical report entitled Prefeasibility Study Report for the Belahouro Gold
        Mine Project dated September 18, 2006 (the “Prefeasibility Study”) has been
        furnished to the SEC on Form 6-K on December 22, 2006.
 
 The
        Company has exercised its option to purchase the Brocks Creek processing
        plant
        currently located in northern Australia and is obligated to dismantle this
        plant
        at an estimated cost of $1.2 million. The Company is currently assessing
        the
        costs to refurbish and transport the plant to Burkina Faso.
 
 **Other
        exploration tenements**
 
 In
        addition to the Belahouro area exploration tenements, Goldbelt has been issued
        8
        highly prospective exploration tenements. Seven of these exploration tenements
        cover 1,655 km2 in the Houndé and Bougouriba regions located in the southwest
        part of Burkina Faso and 1 permit covers 65 km2 in the Koupela region in the
        southeast part of Burkina Faso. Goldbelt’s geologists have been actively
        exploring the Houndé and Bougouriba tenements. To date approximately 17,000 soil
        and rock samples have been collected and assayed. These geochemical assay
        results and earlier geophysical survey results are currently being collated
        to
        provide an updated geological model of the tenements. The Company completed
        6,000 meters of drilling on the Karba permit in Houndé which have shown
        promising results. Eleven of these holes indicated intervals of 4 meters
        of 1.67
        g/t to 4.47 g/t close to surface.
 
 20
 The
        Company also completed 2,000 meters of reconnaissance drilling on the Mandiasso
        and Diosso contiguous tenements in Bougouriba and early drill results have
        been
        encouraging. At Mandiasso, 5 holes indicated between 1 g/t and 5.7 g/t over
        intervals of 2 to 10 meters. At Diosso, 5 holes indicated between 1 and 8
        g/t
        over intervals of 2 to 6 meters, also close to surface. The Company plans
        to
        conduct a geophysical exploration program at Karba, Mandiasso and Diosso
        in
        order to identify drill targets in 2007. The Company is required under Burkina
        Faso Mining Laws to spend approximately $600/km 2 annually in order to keep these exploration tenements in good
        standing.
 
 Goldbelt’s
        plans are to complete the drilling program in Belahouro with the intention
        of
        adding to the current resource base at Inata. The Company has completed the
        major requirements in the approval process for the Inata Mining Permit and
        once
        this Mining Permit is received, the Company will negotiate a Mining Convention
        with the Government of Burkina Faso. The Company has experienced good relations
        with government officials of Burkina Faso in obtaining and renewing its
        exploration tenements and in the application process for the Inata Mining
        Permit
        and expects this relationship to continue in developing its mining projects
        in
        the country. The Company is progressing with the plans for dismantling the
        Brocks Creek process plant in Australia and the associated refurbishment.
        This
        process plant will be incorporated into the Inata feasibility study. The
        Company
        has received promising results from its 2006 drill programs in its other
        exploration tenements at Houndé and Bougouriba in south-west Burkina, and will
        accordingly focus its future exploration activities on recognized target
        areas.
        Goldbelt remains open to the review of opportunities for possible merger
        or
        acquisition of mineral properties in Africa, particularly West
        Africa.
  The
        climate in Burkina Faso permits the Company to conduct its exploration work
        year
        round with some interruptions during the rainy season in May to July. Goldbelt
        Resources has not encountered difficulties in complying with regulations
        regarding environmental protection.
  The
        Company does not own any patents, trademarks or franchises that may materially
        affect its business. The Company, through its subsidiaries, is the registered
        owner of the 20 exploration permits and 1 mining permit (undergoing approval)
        described above.
  The
        Company has not earned any revenues in the past three years and is currently
        focused on the development of its mineral properties in Burkina
        Faso.
  21
 ***2.*** ***Effect
        of Government Regulation***
  All
        of Goldbelt’s mineral properties are currently located in Burkina Faso, which is
        a politically stable country with newly developed mining and environmental
        legislation in place.  The fiscal laws and practices are well established
        and generally consistent with Western rules and regulations.  However,
        there is no assurance that future political and economic conditions in this
        country will not result in its government adopting different policies respecting
        foreign development and ownership of mineral properties. Any changes in laws,
        regulations or shifts in political attitudes regarding foreign direct investment
        in the Burkina Faso mining industry are beyond its control and may adversely
        affect its business. Goldbelt’s exploration and development activities may be
        affected in varying degrees by a variety of economic and political risks,
        including cancellation or renegotiation of contracts, changes in Burkina
        Faso
        domestic laws or regulations, changes in tax laws, royalty and tax increases,
        restrictions on production, price controls, expropriation of property,
        fluctuations in foreign currency, foreign exchange controls, import and export
        regulations, restrictions on the export of gold, restrictions on the ability
        to
        repatriate earnings and pay dividends offshore, restrictions on the ability
        to
        hold foreign currencies in offshore bank accounts, environmental legislation,
        employment practices and mine safety. In the event of a dispute regarding
        any of
        these matters, Goldbelt may be subject to the jurisdiction of courts outside
        of
        Canada, which could have adverse implications on the outcome.
   22
  **C.** **Organizational
        Structure**
  The
        following chart presents the Company’s legal corporate structure, jurisdictions
        of incorporation and percentage ownership of its significant
        subsidiaries.
  
  **D.** **Property,
        Plants and Equipment**
  **Cautionary
        Note to U.S. Investors concerning estimates of Measured and Indicated
        Resources**
  This
        section uses the terms “measured resources”, “indicated resources” and “inferred
        resources”. We advise U.S. investors that, while those terms are recognized and
        required by Canadian regulations, the U.S. Securities and Exchange Commission
        does not recognize them. **U.S.
        investors are cautioned not to assume that any part or all of mineral deposits
        in these categories will ever be converted into reserves.**
  **The
        Inata Project -** **Property
        Description and Location**
 
 The
        Inata Project is the Company’s most advanced exploration license. The Inata
        Project covers an area of 26 km2 which overlies all the known Inata trend
        mineral resources within the western portion of this previously permitted
        area.
 
 23
 The
        following reports were published in the last 24 months and present information
        related to the Inata project which is the Company’s material property. They were
        prepared pursuant to the provisions of NI 43-101 in Canada and filed on
        EDGAR:
  (a)
              Report
                  entitled “Prefeasibility Report for the Belahouro Gold Mine Project,
                  Burkina Faso” (the “Study”) and dated September 18, 2006. This report was
                  prepared by GBM Consultants, Engineers and Contractors,independent
                  “Qualified Persons” within the meaning of section 1.4 of NI
                  43-101.
 (b)
              Report
                  entitled “Inata, Minfo and Sayouba Deposits - Database Review, Geological
                  Modelling, and Resource Estimate” (the “RSG Report II”) and dated April
                  30, 2006. This report wasprepared
                  by Beau Nicholls, BSc., Geology, David Slater, B.App.Sci. (Geol.),
                  and D
                  Slater, B.App.Sci. (Geology), under the supervision of Brett Gossage,
                  B.App.Sci (Geology), employees ofRSG
                  Global (“RSG”) of Perth, Australiaand independent “Qualified Persons” within the meaning of section 1.4 of
                  NI 43-101.
 (c)
              Report
                  entitled “Analysis of Technical Criteria for the Belahouro Gold Mine
                  Project, Burkina Faso, for Goldbelt Resources Limited” dated December 2,
                  2005, prepared by or under the supervision of Michael Short (C.
                  Eng.) and
                  Alex Mitchell (C. Eng.), employees of GBM and Qualified Persons
                  under NI
                  43-101.
 (d)
              Report
                  entitled “Belahouro Gold Project, Burkina Faso, West Africa, Inata
                  Deposits - Database Review, Geological Modelling and Resource Estimate,
                  September 2005 Update” (the “RSG Report I”) and dated September 30, 2005
                  which was prepared by or under the supervision of Beau Nicholls,
                  BSc.,
                  Geology, David Slater, B. App Sci. (Geol.), and Brett Gossage,
                  BAppSc
                  (Geology), employees of RSG and independent “Qualified Persons” within the
                  meaning of section 1.4 of NI
                  43-101.
 (e)
              Report
                  entitled “Belahouro Gold Project, Burkina Faso, West Africa, Independent
                  Technical Report” and dated June 23, 2005 which was prepared by or under
                  the supervision of Beau Nicholls, BSc., Geology, David Slater,
                  B. App Sci.
                  (Geol.), and Brett Gossage, BAppSc (Geology), employees of RSG
                  and
                  independent “Qualified Persons” within the meaning of section 1.4 of NI
                  43-101.
 
 The
        Belahouro tenements are located approximately 220 km north of Ouagadougou,
        the
        capital of Burkina Faso. Goldbelt initially acquired a permit within the
        Belahouro region which covered an area of 1,187 km2 and had an expiry date of
        April 3, 2006. In accordance with Burkina Faso mining laws, the Company was
        required to apply for a mining permit within the term of this permit and
        no
        later than three months prior to the final expiry date of April 3, 2006.
 
 The
        Belahouro Permit was granted to BHP Minerals International Exploration Inc.
        in
        October 1994. The first renewal was granted in October 1998, the second renewal,
        with a subsequent reduction in area, was granted in October 2001 and a third
        renewal, for a period of 1.5 years, was granted in October 2004. In July
        2006,
        the Company received 10 new exploration permits which replaced the original
        Belahouro permit. On December 23, 2005, the Company lodged an application
        for a
        mining permit on the Inata Project with the government of Burkina Faso. On
        November 27, 2006 the Company has been advised that the National Commission
        for
        Mines has given a positive notice in its review of the project. The application
        has successfully progressed to the final stage in the approval process.
 
 24
 The
        government maintains a 10% carried interest in all permits within the country.
        This government interest does not vest until the Exploitation Stage. The
        property is subject to a 3% royalty on gross sales payable to the Burkina
        Faso
        government and a 2.5% royalty on gross sales payable to a third party. The
        permit has been granted to the Company by the Ministère des Mines, des Carrières
        et de l'Energie and cannot be contested by any other company.
 
 At
        the time of application for the Inata mining permit, the Company applied
        for and
        subsequently received (in July and August 2006) 10 new contiguous exploration
        tenements covering an area of 2,224 km2 which includes the original area of the
        previous Belahouro permit. The Company has 2 additional tenements covering
        an
        area of 496 km2 which are contiguous to these tenements and which were granted
        in August 2005 and April 2006. These 12 exploration tenements and the Inata
        mining permit application together cover an area of 2,720 km2 within the
        Belahouro region.
 
 The
        Company is in the process of completing an active drilling campaign of 35,000
        meters and recently completed a pre-feasibility Study on the Inata Project.
        The
        focus of this drilling campaign which has incurred approximately $1.2 million
        in
        direct drilling costs, is the expansion and definition of the resources at
        Inata
        and developing further resources within the Belahouro tenements. The expanded
        Inata resource base will form the nucleus of the Inata feasibility study,
        which
        is expected to be completed in calendar 2007.
 
 The
        Pre-Feasibility Study is based on the resources published in April, 2006.
        The
        Study concludes that Inata will process 633,000 ounces of gold with an average
        annual gold production of 106,500 ounces of gold for the first five years.
        The
        average cash operating cost will be US$290 per ounce over a 6.1 year mine
        life.
        The Study is based on mineable reserves of 9.2 million tonnes of ore with
        an
        average grade of 2.15 grams per tonne calculated at an un-hedged gold price
        of
        US$550 per ounce. The Study proposes open pit mining with the ore to be
        processed through a conventional CIL plant with a design capacity of 1.5
        million
        tonnes per annum. Oxide ore will be the main mill feed for the early part
        of the
        project life, and average gold recoveries are estimated at 95% for the first
        four years, and 93% thereafter. The Study reports a Net Present Value of
        US$44
        million at a 5% discount rate and an Internal Rate of Return of 28%. Total
        capital costs are estimated to be US$65.8 million.
 
 In
        April 2006, Goldbelt established 948,000 ounces of Measured Mineral Resources
        and Indicated Mineral Resources and 190,000 ounces of Inferred Mineral Resources
        at the Inata Project. The resource statement was prepared and reported as
        of
        April 24, 2006 in accordance with NI 43-101 by RSG Global, a qualified resource
        consulting firm based in Perth, Australia.
 
 25
 The
        Company has exercised its option to purchase the Tanami processing plant
        currently located in northern Australia and is obligated to dismantle this
        plant
        at an estimated cost of $1.2 million. The Company is currently assessing
        the
        costs to refurbish and transport the plant to Burkina Faso. The economic
        analysis in the above mentioned Study included costs for a new plant. It
        is
        expected that as a result of this acquisition there will be an improvement
        in
        the capital cost and schedule in the final feasibility study.
 
 A
        major component of the 2006 drill program included resource expansion drilling
        at Inata. GBM has identified in the Prefeasibility Study that significant
        potential exists to identify further resources at the Souma and Fété Kolé
Trends. It is believed that mineralization controls on the Inata, Minfo and
        Sayouba deposits are generally well understood, allowing effective targeting
        for
        future exploration programs including further step out drilling for the
        development of known resources along strike and down dip of the current Inata
        North, Central and South deposits.
 
 **Accessibility,
        Climate, Local Resources, Infrastructure and Physiography**
 
 The
        Inata Project is located close to the international border with Mali in
        north-central Burkina Faso, approximately 220km north-northeast of the capital
        Ouagadougou. The nearest town to the project is Djibo, approximately 60km
        to the
        southeast.
 
 Access
        to the Inata Project is either via 200km of gravel road from Ouagadougou
        to
        Kongoussi and Djibo, or via 180km of sealed road to Ouahigouya and then 110km
        of
        gravel road to Djibo. From Djibo to the project is approximately 60km along
        unsealed village tracks. Access to Belahouro is more difficult during the
        monsoonal season due to heavy flooding within drainages and inundation of
        broader, low-lying areas.
 
 Burkina
        Faso is typical of Sudanian and Sahel areas immediately south of the Sahara
        Desert. The Inata project exhibits slightly undulating topography with peneplain
        relief. Vegetation throughout the project areas is generally of savannah
        type
        with trees of karib, nere and baobab. Northern Burkina Faso has an arid climate,
        with a well-defined rainy season from July to September. Average rainfall
        is
        approximately 500mm per annum with temperatures reaching over 45oC during the
        hottest part of the year (March to May).
 
 Over
        80% of the population of Burkina Faso is engaged in subsistence agriculture
        and
        nomadic stock keeping. A significant proportion of the male labour force
        migrates annually to neighbouring countries, particularly Ghana and Cote
        D'Ivoire, for seasonal employment. Most workers are employed in the agriculture
        sector growing peanuts, shea nuts, cotton, millet, corn rice, sesame sorghum
        and
        tending livestock. Burkina Faso exports cotton, animal products and gold,
        and
        imports machinery, food products and petroleum.
 
 26
 Belahouro
        is the largest permanent village located approximately 30km east of the Inata
        project. A number of nomadic communities exist in the surrounding district.
        These communities survive on subsistence farming and small artisan gold mining
        operations. The artisan workings are based on outcropping mineralisation
        and the
        reworking of anomalous laterite gravels.
 
 As
        is common in most of the countries in this part of West Africa, regional
        infrastructure in Burkina Faso is poor, with few sealed roads and limited
        power
        distribution. Water during the dry season in Belahouro is only available
        from
        limited water bores operated by hand pumps. Village housing is a combination
        of
        mud huts and portable straw huts.
 
 The
        Goldbelt central camp situated near the Belahouro village has 2 generators,
        comfortable accommodation for up to 40 people, 30,000 litre diesel storage
        and a permanent supply of bore water.
 
 **History**
 
 Exploration
        at Belahouro commenced in the early 1980’s with four different operators
        exploring. The Bureau des Mines et de la Geologie du Burkina (BUMIGEB) explored
        the Belahouro Project between 1984 and 1991, prior to BHP Mineralis
        International Exploration (BHP) being granted tenure over Belahouro in 1994.
        Subsequently, Resolute Limited (Resolute) entered into a joint venture with
        BHP.
        The Resolute-BHP joint venture was in effect from 1998-2001 after which the
        concession was operated by Resolute which continued the program on its
        own.
 
 In
        February 2004, Goldbelt entered into an agreement with Resolute for the
        acquisition of Resolute's 100% interest in six gold exploration properties
        in
        Burkina Faso. The properties are known as the Belahouro, Wakui, Karba, Kopoi
        and
        Bouhaoun properties which are held by RWA, an indirect subsidiary of Resolute.
        Goldbelt acquired RWA for cash and securities of Goldbelt in March 2005.
        Under
        the agreement, Goldbelt acquired the Burkina Faso assets of Resolute by the
        purchase from a subsidiary of Resolute of all the outstanding shares of RWA.
 
 Early
        exploration by BUMIGEB (1984-1991), focused predominately on the regions
        near
        the villages of Belahouro and Souma. This exploration targeted quartz veining
        in
        the Inata, Souma and Fété Kolé prospect areas. BHP began work at Belahouro in
        1994, mapping and interpreting the project geology with the aid of available
        airborne magnetics. BHP’s exploration included soil geochemistry
        (“B” horizon soil sampling), which identified numerous gold anomalies. BHP
        used the soil geochemistry and surface mapping to guide further exploration
        which included trenching and wide spaced RC and diamond core drilling mainly
        at
        Fété Kolé, Inata and Souma.
 
 Resolute,
        as operators of the Resolute-BHP joint venture from 1998 to 2001, focused
        exploration activities on the Inata deposit, with minor work also carried
        out at
        Souma. The principal objective of the joint venture was to develop the Inata
        deposit, locate possible mineralised extensions and to outline additional
        resources at Souma. The exploration completed included RAB, RC, and DD drilling
        and further soil geochemistry. In addition, other targets were tested including
        Pali and Fété Kolé as well as other targets elsewhere in the Belahouro
        property.
 
 27
 After
        assuming full ownership in 2001, Resolute completed additional rock and soil
        sampling, ground geophysics (TEM and magnetometer surveys) and additional
        geological mapping. Detailed Transient Electromagnetic (TEM) data were acquired
        over Inata in late 2002/2003 using a SiroTEM Mk II transmitter/receiver through
        a 200m2 loop with 200m moves between stations and 400m between traverses. The
        TEM data appears effective in locating shear zones, and therefore likely
        zones
        of gold mineralisation. This data has allowed existing mineralisation to
        be
        modelled within a much more detailed geological framework and has therefore
        led
        to the generation of new exploration targets. This data will assist follow-up
        exploration.
 
 **Production
        History**
 
 The
        historic production derived from the Belahouro artisanal workings is unknown.
        Artisan workings to the west and outside of the Inata Central resource visibly
        have small “manhole” shafts down 15 to 20m and represent an insignificant amount
        of material removed from any potential insitu resource at Inata. The artisan
        workings at Inata are not extensive and have mostly been created by illegal
        miners. BHP and Resolute established control over artisanal operations from
        the
        late 1990’s in order to restrict any activity over the known Inata resource
        areas. Goldbelt has and is continuing to enforce this control. The Inata
        area
        has also been and is currently protected by government regulations.
 
 **Geological
        Setting**
 
 The
        Belahouro Project is located in the western portion of the Birimian Djibo
        Greenstone Belt. The belt has undergone regional lower greenschist metamorphism
        and is comprised of intermediate to mafic volcano-sedimentary successions
        and
        syn to post kinematic granite and gabbro intrusions dispersed within sedimentary
        and tuffaceous schists. A prominent marker horizon consisting of black
        iron-bearing quartzite lenses is observed within the volcano-sedimentary
        succession. Further emplacement of dolerite and felsic-porphyry has also
        occurred during and after mineralising events. Tarkwaian facies arkosic
        sandstone overlies the volcano-sedimentary sequence at the eastern border
        of the
        Belahouro granite.
 
 The
        project can be separated into three principal geological domains. The
        Damba-Inata domain occurs in the westernmost portion of the project area.
        Central to the property is the Belahouro-Sona Basin, and the Fété Kolé province
        occurs in the eastern region.
 
 The
        Damba-Inata trend is dominated by metasediments and intermediate to mafic
        volcanics and volcanoclastics. To the west of the Inata trend, strong magnetic
        signatures are present in aeromagnetic data indicating the presence of mafic
        volcanics or sedimentary derivatives. The trend varies over the strike of
        the
        prospect, from north-northwest in the south to north in the central area
        and
        north-northeast in the northern area.
 
 28
 The
        Belahouro-Sona Basin consists of turbiditic metasediments and minor
        volcanoclastics and provides the key elements to comprehension of the regional
        tectonic framework subsequent to basin formation. The basin is bounded to
        the
        east, west and south by early basin forming structures (D1) that have later
        been
        reactivated in subsequent phases of compressional deformation (D2). Arcuate,
        generally south dipping thrusts abut the southern margin of the basin indicating
        a significant north-south compressional event (D3). Late mineralised (D4)
        040°
and 330° faults crosscut the entire basin and adjacent volcano-sedimentary
        terranes.
 
 Fété
        Kolé to the east of the Sona Basin, is a complex of felsic to mafic volcanics
        and sedimentary derivatives, and various pre-, syn- and post deformation
        granitoid intrusions. The final phase of intrusion is gabbroic, which is
        also
        associated with minor volcanic ultramafic sequences.
 
 The
        basement geology of the Belahouro Gold Project represents part of the
        Baoulé-Mossi Domain of the West African Craton which is mainly formed by
        Birimian volcano-sedimentary series, which dominates the basement geology
        of the
        West African Shield. The Birimian Series is composed of volcanic and plutonic
        bodies (basalt, andesite, rhyolite, rhyodacite, dacite, felsic tuff, gabbro,
        diorite and ultramafic rocks) distributed within a generally schistose and
        vertically titled sedimentary and tuffaceous succession of black shale,
        sandstone, pelitic schists, tuffaceous schist, greywacke, quartzite and chert.
        This basement succession is overlain by Tarkwaian siliceous and arkosic
        sandstone and conglomerate.
 
 The
        Birimian Series of West Africa is host to some of the largest gold deposits
        in
        the world, including Sadiola, Yatela, Morila and Syama in Mali, Obuasi, Bogosu,
        Prestea and Bibiani in Ghana, and Siguiri in Guinea.
 
 **Project
        Geology**
 
 The
        Birimian volcano-sedimentary series was extensively deformed and metamorphosed
        during the Eburnean Orogeny. Metamorphic mineral assemblages reflect low-grade
        regional metamorphism to greenschist facies. However, in the Belahouro-Souma
        area, kyanite bearing mica schist and pelite indicate higher grade metamorphic
        regime. The succession is strongly affected by polyphase deformation displaying
        recumbent folding and strong sub vertical dominant schistosity with transposed
        bedding plans in some areas. Syn to post-tectonic granitoids intrude the
        basement succession.
 
 The
        entire stratigraphy has been intruded by massive post Birimian dolerite dykes
        and sills with higher magnetic susceptibility that makes them readily
        distinguishable in airborne magnetic data. Throughout the Belahouro Project
        exposures of the Birimian basement succession are rare. Weathering is extensive,
        persisting up to 100 metres depth with a typical lateritic
        profile.
 
 29
 The
        gross structure of the Belahouro Project relies on interpretation of the
        airborne magnetic data. Gold mineralisation is dominantly associated with
        stockwork and sheeted quartz-carbonate-sulphide veining, stockworks of
        albite-carbonate-sulphide veinlets, or as sulphidic haematitic
        breccia.
 
 Pyrite
        is the dominant sulphide species, present as discreet poikilitic euhedra
        ranging
        from a fraction to a few millimetres in size, largely confined to vein margins
        or disseminated within alteration selvedges. Traces of other sulphides,
        principally chalcopyrite, galena, pyrrhotite, arsenopyrite, bornite, tennantite,
        linneite and mackinauwite are present as veins, fracture fillings and localized
        disseminations adjacent to veins. Gold is largely developed within fractures
        in
        pyrite grains, rarely larger than 50 microns, and is
        non-refractory.
 
 Extensive
        weathering and lateritisation of the mineralisation and surrounding host
        rocks
        has occurred. The base of oxidation extends to over 60m in places, but may
        be
        locally depressed within zones of fracturing and brecciation. There appears
        to
        be little evidence of depletion and corresponding supergene enrichment within
        the weathering profile, and the width and grade of primary mineralised zones
        appears to be minimally different than their equivalents within the saprolite
        profile.
 
 **Mineralisation**
 
 Gold
        within the Belahouro Project is exclusively associated with mesothermal vein
        style mineralisation, entirely consistent with the majority of Archaean and
        Proterozoic terrains worldwide, including the Birimian Series of West Africa.
        This style of mineralisation is generally associated with regionally
        metamorphosed terrains that have experienced considerable deformation. As
        such,
        the deposits are structurally rather than lithologically controlled, however
        the
        dominance of structural control invariably increases in a manner commensurate
        with the metamorphic grade.
 
 The
        principal gold mineralisation within the Belahouro Project is confined to
        the
        Inata and Souma Trends. The three Inata deposits (North, Central and South)
        are
        located over a strike length of 4km. The deposits are interpreted to be related
        to the same structural event and are associated with shearing. The Inata
        Central
        and Inata South represent the same mineralised trend, separated by lower
        grade
        mineralisation and cross-cutting faults. Inata North lies some 300m west
        of the
        Inata Central-South trend. The Inata shear trends north-northeast and dips
        steeply to the west-northwest. Gold mineralisation is present as free grains
        and
        is generally associated with carbonate-pyrite alteration within quartz
        veins.
 
 Sayouba
        is a small zone (strike 100m) of north-northwest trending gold mineralisation
        with a dip of 60° to 70° west. It occurs in shale, siltstone, minor intermediate
        volcanics, and felsic porphyry. The zone is transgressive to the regional
        foliation (030° to 040°).
 
 Minfo
        lies on the Minfo-Filio east-west shear zone. The shear zone can be traced
        over
        a distance of 20km and is characterised by a wide zone of shearing (up to
        400m)
        associated with a strong aeromagnetic trend. Mineralisation is associated
        with
        massive and stringer quartz veining in black shales within an intermediate
        volcanic shale/siltstone package.
 
 30
 **Exploration**
 
 Prior
        to commencement of the Goldbelt exploration programs (February 2004 onwards),
        considerable exploration was completed by operators BHP and Resolute. Goldbelt’s
        strategy was designed to define sufficient resources and reserves to justify
        investigation of the development of a 2,000,000 metric tonnes per annum
        (“2Mtpa”) CIL processing operation producing approximately 150,000oz to
        200,000oz of gold per year. The programs focused primarily on infill drilling
        of
        the project resources identified with the objective of improving the confidence
        category of the identified Mineral Resources.
 
 A
        secondary objective of the drilling program was to expand the resource base
        in
        order to enhance the mine life of a proposed CIL operation. This strategy
        has
        been successful, with additional higher grade zones of oxide and primary
        mineralisation defined. It is hoped that ongoing exploration will continue
        to
        identify extensions to existing mineralisation or new mineralisation elsewhere
        within the permit.
 
 Exploration
        surveys and interpretations completed to date within the Belahouro Gold Project,
        have largely been planned, executed and supervised by national and expatriate
        Goldbelt personnel, supplemented by consultants and contractors for more
        specialised or technical roles.
 
 ***Other
        exploration tenements***
 
 In
        addition to the Belahouro area exploration tenements, Goldbelt has been issued
        8
        highly prospective exploration tenements. Seven of these exploration tenements
        cover 1,655 km2 in the Houndé and Bougouriba regions located in the southwest
        part of Burkina Faso and 1 permit covers 65 km2 in the Koupela region, in the
        southeast part of Burkina Faso. Goldbelt’s geologists have been actively
        exploring the Houndé and Bougouriba tenements. To date approximately 17,000 soil
        and rock samples have been collected and assayed. These geochemical assay
        results and earlier geophysical survey results are currently being collated
        to
        provide an updated geological model of the tenements. The Company completed
        6,000 meters of drilling on the Karba permit in Houndé which have shown
        promising results.
 
 Eleven
        of these holes indicated intervals of 4 meters of 1.67 g/t to 4.47 g/t close
        to
        surface. The Company also completed 2,000 meters of reconnaissance drilling
        on
        the Mandiasso and Diosso contiguous tenements in Bougouriba and early drill
        results have been encouraging. At Mandiasso, 5 holes indicated between 1
        g/t and
        5.7 g/t over intervals of 2 to 10 meters. At Diosso, 5 holes indicated between
        1
        and 8 g/t over intervals of 2 to 6 meters, also close to surface. The Company
        plans to conduct a geophysical exploration program at Karba, Mandiasso and
        Diosso in order to identify drill targets in 2007.
 
 31
 **Item
        4A.  Unresolved Staff
        Comments.**
  Not
        applicable.
  **Item
                  5.**
              **Operating
                  and Financial Review and
                  Prospects**
  **A.** **Operating
        results.**
  The
        following discussion of Goldbelt Resources’ operations and financial condition
        describes financial data prepared using Canadian GAAP. The differences between
        US GAAP and Canadian GAAP are described in Note 12 to the accompanying audited
        financial statements.
  Significant
        accounting policies applied in preparing Goldbelt Resources’ financial
        statements are set out in Note 2 to the accompanying audited financial
        statements.
  **Year
                  Ended June**
                **30,
                  2006**
              **Year
                  Ended**
                **June**
                **30,
                  2005**
              **Year
                  Ended**
                **June**
                **30,
                  2004**
              **Year
                  Ended**
                **June**
                **30,
                  2003**
              **Year
                  Ended**
                **June**
                **30,
                  2002**Expenses
              (3,515,323)
              (1,767,641)
              (444,039)
              (164,986)
              (113,494)Other
                  income
              202,708
              31,122
              979,960
              6,928
              6,949(Loss)
                  net income for the year
              (3,312,615)
              (1,736,519)
              535,921
              (158,058)
              (106,545)(Loss)
                  Earnings per Share
              (0.09)
              (0.10)
              0.08
              (0.03)
              (0.02)Total
                  Assets
              20,681,494
              14,862,378
              1,074,334
              361,565
              479,301Net
                  Assets
              20,311,485
              11,031,761
              1,057,933
              24,366
              182,424Dividends
                  per share
              -
              -
              -
              -
              -Retained
                  Earnings (Deficit)
              (4,671,271)
              (1,358,656)
              377,863
              (158,058)
              (48,194,465)Capital
                  Stock
              23,242,232
              11,737,625
              662,424
              182,424
              48,124,162Weighted
                  Average Number of Shares
              38,475,471
              17,274,397
              6,834,589
              4,655,137
              4,655,137
  The
        Company's loss for the year was $3,312,615; a loss of $0.09 per share, as
        compared to a loss of $1,736,519 in 2005; a loss of $0.10 per share. The
        increase in loss in 2006 is due mostly to the Company having one full year
        of
        operations after its March 3, 2005 acquisition of the Burkina Faso properties.
        Total assets increased from $14,862,378 to $20,681,494. This $5.8 million
        increase in assets is due mainly to $8 million raised through private placement,
        warrant and option exercises, $4 million of which was spent on exploration
        properties and capitalized.
 
 32
 Expenses
        increased from $1,767,641 in 2005 to $3,515,323 in 2006 reflecting the fact
        that
        the Company moved from relatively inactive to active status with the acquisition
        of its properties. Travel and promotion expenses increased by $278,000 and
        consulting fees increased by $153,000 due to a full year’s activity on corporate
        and property matters. Salaries and benefits increased by $473,000 due to
        a full
        year’s salary for the President and CEO; a new CFO and two administrative staff
        who were hired in fiscal Q2 2006. Office and occupancy costs increased by
        $130,000 and telecommunications increased by $37,000 due to a full year’s
        occupancy at the Company’s head office in Toronto compared to four months’
occupancy in fiscal 2005. The Company paid $26,000 (2005: $nil) in directors’
fees to non-executive directors based on its new policy of director
        compensation. Professional fees and shareholder relations declined by $71,000
        and $88,000, respectively, as the Company resumed normal activities following
        the property acquisition in March 2005. Stock-based compensation expense increased
        by $805,000 as a result of the granting of 3,785,000 stock options in 2006
        (2005: 1,325,000 granted). These options were granted to various directors,
        officers and consultants of the Company. The Black-Scholes option pricing
        model
        was used to calculate an estimated fair value which is amortized over the
        vesting period of the respective options.
 
 Foreign
        exchange gain included $125,000 (2005: $17,000) relating to the re-measurement
        of the US dollar denominated Resolute debt which was extinguished in April
        2006.
        Interest income increased to $68,000 (2005: $4,000) due to surplus cash from
        the
        March 2005 and subsequent financings in 2006.
 
 **Inflation** did
        not affect Goldbelt Resources’ operating results.
  **Foreign
        currency fluctuations** had a very limited negative effect on Goldbelt Resources’ other income and
        expenses. The impact of a rising Canadian dollar (or devaluing US dollar)
        could
        have significant effect on concentrate product sales in the future, since
        all
        such sales are conducted in US currency, while costs are incurred in Canadian
        dollars and CFA francs (Euro-based) giving rise to potential significant
        foreign
        currency transaction exposure which could have a significant impact on the
        Company’s financial condition and results of operations.
  **B.** **Liquidity
        and capital resources**
  The
        Company’s main sources of financing are its cash balances, equity markets and
        its outstanding warrants and options. As at June 30, 2006, the Company had
        cash
        of $6,119,181 compared to the June 30, 2005 balance of $4,530,762. The overall
        net increase from June 30, 2005 is due to proceeds obtained from a private
        placement, exercise of warrants and net of expenditures incurred from the
        conclusion of the drilling program on the Inata deposit and subsequent technical
        studies to support the
 Company’s
        Exploitation License Application on the Inata Project as well as general
        and
        administrative expenses.
 
 During
        the third quarter of 2006, the Company raised $2,625,000 through a private
        placement of $1,000,000, and $1,625,000 from the exercise of 2,500,000 warrants
        granted as part of the March 2005 offering of units. In the fourth quarter
        of
        2006, the Company received $5,257,000 through the exercise of the remaining
        8,088,235 warrants which were granted as part of the March 2005 offering
        of
        units. These remaining warrants were exercised before the expiry date of
        September 3, 2007 as the Company’s share price attained the required trading
        level and as such triggered the accelerated expiry date of May 10,
        2006.
 
 33
 Additional
        funds were raised through the exercise of agents’ compensation options and
        warrants for a total of approximately $460,000 and the exercise of 660,000
        options by three directors for $66,000. As a result of the $1,000,000 private
        placement and pursuant to Goldbelt's obligations under the Agreement with
        Resolute dated November 19, 2004, Goldbelt issued to Resolute 723,982 common
        shares, 180,995 common share purchase warrants exercisable at $0.65 until
        January 13, 2008 and 180,995 common share purchase warrants exercisable at
        $0.845 until January 13, 2008.
 
 As
        a result of the March 3, 2005 unit offering of $8,000,000, the private placement
        of $1,000,000, and the exercise of warrants for $1,625,000, the Company
        completed its obligation to raise $10,625,000 by January 31, 2006 in accordance
        with the Agreement with Resolute. On April 17, 2006, the Company issued an
        aggregate of 1,670,000 Goldbelt shares to Resolute to repay the US$1,575,685
        payable to Resolute for the 2004 drilling program under the Agreement and
        settle
        other amounts claimed by Goldbelt to be owed by Resolute. In addition and
        as a
        result of Goldbelt satisfying its obligation to raise the minimum of $10,625,000
        by way of one or more private placements, Goldbelt issued 1,176,471 shares,
        294,118 common share purchase warrants exercisable at $0.75 until January
        17,
        2008 and 294,118 common share purchase warrants exercisable at $0.98 until
        January 17, 2008. Resolute surrendered 1,176,471 previously issued Goldbelt
        warrants exercisable at $0.65 until September 3, 2006 and which were subject
        to
        an accelerated expiry date of May 10, 2006. This settlement of shares and
        warrants is in addition to the shares and warrants issued at the January
        13,
        2006 private placement as described above.
 At
        the date of this report, the Company had 4,725,329 warrants outstanding which
        expire on March 3, 2007 and represent $2,700,000 in cash if all were
        exercised.
 
 The
        Company had working capital of $5,866,202 as at June 30, 2006. The Company
        completed a pre-feasibility study based on the Inata Project in September
        2006.
        On September 27, 2006 , the Company raised $7,980,000 though a private placement
        of 7,600,000 shares. This placement is intended to principally cover costs
        related to the planned bankable feasibility study for 2007, additional drilling
        to expand the resource base on the Belahouro tenements and to actively drill
        the
        Houndé and Bougouriba tenements which show significant assay results from the
        ongoing
 drilling
        campaign.
 
 On
        October 31, 2006 the Company paid A$1 million under the terms of the agreement
        with Tanami to purchase the Brocks Creek process plant. In November 2006
        the
        Company paid the remaining A$1.2 million under this agreement which includes
        a
        A$200,000 security bond at the end of November 2006. The Company is obligated
        to
        dismantle this plant which is estimated to cost approximately $1.2
        million.
 
 On
        November 3, 2006 the Company issued 4,714,932 common shares for proceeds
        of
        $2,944,118 pursuant to the exercise of all of the 4,714,932 warrants held
        by
        Resolute.
 
 The
        Company has adequate working capital to fund its current
        requirements.
 
 34
 The
        Company plans to fund the development of the Inata mine through additional
        equity and/or debt financing. The Company is actively pursuing sources of
        financing to proceed towards developing the Inata Project and to further
        its
        exploration activities within the Belahouro and other license areas in Burkina
        Faso. While the Company has been successful in the past in raising financing,
        there is no guarantee that the Company will be as successful in the
        future.
 
 **C.** **Research
        and development, patents and licenses, etc.** ****
  Not
        applicable.
  **D.** **Trend
        information** ****
  Not
        applicable.
  **E.** **Off-balance
        sheet arrangements** ****
  We
        have no material off-balance sheet arrangements.
  **F.** **Tabular
        disclosure of contractual obligations**
  Not
        applicable.
  **Item
                  6.**
              **Directors,
                  Senior Management and
                  Employees**
  **A.** **Directors
        and senior management**
  **Paul
        J. Morgan** ,
        60, Executive Chairman and a Director since March 1992, is a geologist with
        more
        than 30 years of mining experience in third-world and developing countries.
        A
        Fellow of the Australian Institute of Mining and Metallurgy, he built two
        gold
        mines and a rutile/zircon mine in Australia, and is a founding director of
        Gabriel Resources Ltd. He was previously President and CEO of Regal
        Petroleum.
  **Collin
        Ellison** ,
        59, is Chief Executive Officer of Goldbelt and has more than 30 years experience
        in developing and placing mines into production. Mr. Ellison was Project
        Director and Study Manager of the Olympic Dam Project of Western Mining
        Corporation, General Manager/Project Manager of the Shaimerden zinc-oxide
        project in Kazakhstan, and managed the preparation of feasibility studies
        and
        established development and infrastructure contracts for a number on mining
        operations worldwide.
  **Hemdat
        Sawh** ,
        51, is Chief Financial Officer of Goldbelt and has 16 years experience in
        the
        public accounting profession culminating with the position of Principal at
        Grant
        Thornton LLP, Chartered Accountants, where he dealt with a number of Canadian
        public companies operating in the resource sector in Canada, Eastern Europe
        and
        Africa. Mr. Sawh commenced his mining industry related career after obtaining
        a
        B.Sc. in geology from Concordia University and a post graduate diploma in
        geology from McGill University prior to obtaining his M.B.A. from York
        University.
  35
 **Dr.
        Peter Turner** ,
        39, was appointed VP Exploration and Business Development on October 27,
        2006.
        Dr. Turner has over 15 years experience in West Africa, having worked
        extensively in Côte d’Ivoire, Ghana, Mali and Burkina Faso. He has held senior
        exploration and development roles in Africa, Asia and Australia with many
        internationally recognized companies, including Golden Star, Placer Dome
        Asia
        Pacific and Delta Gold. Peter holds a BSc in Geology, and a PhD concerning
        Birimian greenstone belts in West Africa.
  **Dr.
        Morou Francois Ouedraogo** ,
        50, is Chief Geologist with more than sixteen years of expertise in the West
        African mining industry. He is the co-author of the United Nations sponsored
        geological map of West Africa with particular responsibility for Burkina
        Faso.
  **Paul
        Naughton** ,
        58, a Director since March 1992, has founded a number of successful companies
        over the years, ranging from financial services to oil and gas exploration
        and
        mining companies. He is currently a principal in an Australian/US Venture
        Capital Fund.
  **Brian
        C. Irwin** ,
        66, is Corporate Secretary and Director of Goldbelt since April 1996 and
        has 41
        years of corporate and securities law practice. He holds a number of
        directorship positions mostly relating to the mining sector. He was previously
        a
        partner with DuMoulin Black LLP (Securities Law). He presently holds positions
        in the following publicly listed companies: secretary and director of Callinan
        Mines Limited, secretary and director of Brazauro Resources Corporation,
        director of Carlin Gold Corporation, director of Constantine Metal Resources
        Ltd., director of International Northair Mines Limited and Chairman and Director
        of Ashton Mining of Canada Ltd.
  **Laurence
        D. Marsland** ,
        52, is Director of Goldbelt Resources and has over 25 years experience in
        the
        mining industry both in management and precious metals evaluation, development
        and implementation most recently with Dundee Precious Metals’ Bulgarian mineral
        assets and previously with Gabriel Resources’ Rosia Montana project in Romania
        and a variety of other projects in Peru, Central America and
        Australia.
  **Elizabeth
        A. Martin** ,
        50, is Director of Goldbelt Resources and is a Certified Management Accountant
        with a strong financial background in international exploration and mining
        projects. She has, over the years, assumed increasingly senior roles in base
        metal and precious metal companies such as Northgate Mines Inc., WMC Limited,
        IAMGOLD Corporation and High River Gold Mines Ltd. She has had extensive
        experience with projects in Burkina Faso, West Africa, Russia and other areas
        of
        the world.
 
 There
        are no arrangements or understandings with any major shareholders, customers,
        suppliers or others, pursuant to which any person referred to above was selected
        as a director or member of Goldbelt Resources’ board of directors or senior
        management.
 
 **B.** **Compensation**
  The
        following is a description of all compensation and benefits paid or granted
        in
        kind to Goldbelt Resources’ directors and members of its administrative,
        supervisory and management bodies during the fiscal year ended June 30, 2006
        for
        services in all capacities to the Company.
  36
 For
        purposes of reporting compensation and benefits under governing Canadian
        securities legislation and policy and stock exchange rules, the following
        terms
        are used:
  **“SAR”** is an acronym for “Stock Appreciation Right”, which means a right, granted by an
        issuer or any of its subsidiaries as compensation for services rendered or
        otherwise in connection with office or employment, to receive a payment of
        cash
        or an issue or transfer of securities based wholly or in part on changes
        in the
        trading price of publicly traded securities;
  **“LTIP”** is an acronym for “Long-term Incentive Plan”, which means any plan providing
        compensation intended to serve as incentive for performance to occur over
        a
        period longer than one financial year, whether the performance is measured
        by
        reference to financial performance of the issuer or an affiliate of the issuer,
        the price for the issuer’s securities, of any other measure, but does not
        include option or SAR plans or plans for compensation through restricted
        shares
        or restricted share units.
  The
        amount of compensation paid to Goldbelt Resources’ directors and members of its
        administrative, supervisory or management bodies for the last full financial
        year 2006 is set out below:
  **Name
                  and**
                **Principal**
                **Position**
              **Fiscal**
                **Year**
                **Ended**
                **June**
                **30**
              **Annual
                  Compensation**
              **Long
                  Term Compensation**
              **All
                  other**
                **Compensation****Awards**
              **Payouts****Salary**
                **$**
              **Fees**
                **$**
              **Other**
                **$**
              **Securities**
                **Under**
                **Options
                  or**
                **SARs
                  Granted**
              **Restricted**
                **Shares
                  or**
                **Restricted**
                **Units
                  ($)**
              **LTIP
                  P****ayouts
                  ($)****Paul
                  J. Morgan**
                Chairman,
                  Former President & CEO
              2006
                2005
                2004
                2003
              Nil
                Nil
                Nil
                Nil
              97,000
                52,000
                Nil
                Nil
              Nil
                184,305
                Nil
                Nil
              470,000
                275,000
                220,000
                Nil
              Nil
                Nil
                Nil
                Nil
              Nil
                Nil
                Nil
                Nil
              Nil
                Nil
                Nil
                Nil**Collin
                  Ellison**
                President
                  & CEO
              2006
                2005
              250,000
                65,500
              Nil
                Nil
              Nil
                Nil
              1,250,000
                Nil
              Nil
                Nil
              Nil
                Nil
              Nil
                Nil**Hemdat
                  Sawh**
                CFO
              2006
                2005
              112,500
                Nil
              Nil
                Nil
              Nil
                Nil
              200,000
                Nil
              Nil
                Nil
              Nil
                Nil
              Nil
                Nil**Dr.
                  Morou Francois Ouedraogo**
                Chief
                  Geologist
              2006
                2005
              72,000
                29,200
              Nil
                Nil
              Nil
                Nil
              100,000
                Nil
              Nil
                Nil
              Nil
                Nil
              Nil
                Nil**Paul
                  Naughton**
              2006
                2005
                2004
                2003
              Nil
                Nil
                Nil
                Nil
              Nil
                Nil
                Nil
                Nil
              Nil
                184,305
                Nil
                Nil
              445,000
                275,000
                220,000
                Nil
              Nil
                Nil
                Nil
                Nil
              Nil
                Nil
                Nil
                Nil
              Nil
                Nil
                Nil
                Nil**Brian
                  C. Irwin**
              2006
                2005
                2004
                2003
              Nil
                Nil
                Nil
                Nil
              48,000
                Nil
                Nil
                Nil
              Nil
                Nil
                Nil
                Nil
              445,000
                200,000
                220,000
                Nil
              Nil
                Nil
                Nil
                Nil
              Nil
                Nil
                Nil
                Nil
              Nil
                Nil
                Nil
                Nil**Laurence
                  D. Marsland**
              2006
                2005
              Nil
                Nil
              Nil
                Nil
              Nil
                Nil
              225,000
                200,000
              Nil
                Nil
              Nil
                Nil
              Nil
                Nil**Elizabeth
                  Martin**
              2006
                2005
              Nil
                Nil
              Nil
                Nil
              Nil
                Nil
              300,000
                Nil
              Nil
                Nil
              Nil
                Nil
              Nil
                Nil
 
  37
  The
        amount of securities under options that have been issued to Goldbelt Resources’
directors and members of its administrative, supervisory or management bodies
        and outstanding as at the end of fiscal 2006 is set out below:
  **Name
                  and Principal Position**
              **Common
                  Shares under Option**
              **Exercise
                  price**
              **Date
                  granted**
              **Expiry
                  date****Paul
                  J. Morgan**
                Chairman,
                  Former President & CEO
              220,000
                250,000
                200,000
                75,000
              $0.89
                $0.62
                $0.72
                $0.25
              February
                  10, 2006
                November
                  25, 2005
                March
                  9, 2005
                July
                  12, 2004
              February
                  10, 2011
                November
                  25, 2010
                March
                  9, 2010
                July
                  12, 2009**Collin
                  Ellison**
                President
                  & CEO
              1,250,0000
              $0.69
              December
                  16, 2005
              December
                  16, 2010**Hemdat
                  Sawh**
                CFO
              200,000
              $0.54
              September
                  26, 2005
              September
                  26, 2010**Dr.
                  Morou Francois Ouedraogo**
                Chief
                  Geologist
              100,000
              $0.54
              September
                  26, 2005
              September
                  26, 2010**Paul
                  Naughton**
              220,000
                225,000
                200,000
                75,000
              $0.89
                $0.62
                $0.72
                $0.25
              February
                  10, 2006
                November
                  25, 2005
                March
                  9, 2005
                July
                  12, 2004
              February
                  10, 2011
                November
                  25, 2010
                March
                  9, 2010
                July
                  12, 2009**Brian
                  C. Irwin**
              220,000
                225,000
                200,000
              $0.89
                $0.62
                $0.72
              February
                  10, 2006
                November
                  25, 2005
                March
                  9, 2005
              February
                  10, 2011
                November
                  25, 2011
                March
                  9, 2010**Laurence
                  D. Marsland**
              225,000
                200,000
              $0.62
                $0.72
              November
                  25, 2005
                March
                  9, 2005
              November
                  25, 2010
                March
                  9, 2010**Elizabeth
                  Martin**
              300,000
              $0.69
              December
                  16, 2005
              December
                  16, 2010
  The
        Company does not have an **LTIP** for its executive officers.
  As
        of June 30, 2006, no **SAR** s
        had been granted.
  A
        total of 3,785,000 options were granted during the last completed financial
        year
        ended June 30, 2006. At the date of this statement there were outstanding
        options in respect of a total of 5,110,000 unissued Common Shares, all of
        which
        were held by directors and members of the Company’s administrative, supervisory
        or management bodies.
  The
        Company does not have any amount set aside or accrued to provide pension,
        retirement or similar benefits.
  **C.** **Board
        practices**
  ***1.*** ***Term
        of Office***
  Under
        Goldbelt Resources’ Articles the office of director expires at each annual
        meeting of shareholders. A director holds office as such until the next annual
        meeting of shareholders when he/she may stand for re-election. The Board
        of
        Directors as a group determines in advance of each annual meeting of
        shareholders who will be put forward for re-election. See item 6.A for the
        period during which each director has served in that capacity.
  38
 Under
        the Business Corporations Act (British Columbia) annual meetings of shareholders
        are required to be held in every calendar year and not longer than 15 months
        after the last annual meeting of shareholders.
  ***2.*** ***Service
        Contracts***
  No
        directors have service contracts providing for benefits upon termination
        of
        employment.
  ***3.*** ***Audit
        Committee and Remuneration Committee***
  The
        Company has an executive compensation and corporate governance committee,
        which
        reviews executive remuneration.
  The
        audit committee consists of three directors: Elizabeth A. Martin, Paul J.
        Morgan
        and Laurence D. Marsland. Elizabeth A. Martin and Laurence D. Marsland are
        independent directors.
  **Audit
        Committee Charter**
  The
        Audit Committee (the “Committee”) is a standing committee of the Board of
        Directors (the “Board”) of the Company charged with assisting the Board in
        fulfilling its responsibility to the shareholders and investment community.
        Its
        role is to:
  (a)  serve
        as an independent and objective party to oversee the Company’s accounting and
        financial reporting processes, internal control system and audits of its
        financial statements;
  (b)  review
        and appraise the audit efforts of the Company’s external auditors;
        and
  (c)  provide
        an open avenue of communication among the external auditors, financial and
        senior management and the Board.
  **Committee
        Membership**
  The
        Board of the Company shall annually appoint a minimum of three directors
        to the
        Committee all of whom shall be directors of the Company who are, to the extent
        practicable, independent of management and free from any material relationship
        that, in the opinion of the Board, would interfere with the director’s exercise
        of independent judgment as a member of the Committee.
  All
        members of the Committee must be financially literate, or if not financially
        literate at the time of their appointments, must become so within a reasonable
        period of time following their appointments. For the purposes of this Charter,
        the definition of “financially literate” is the ability to read and understand a
        balance sheet, an income statement and a cash flow statement. The definition
        of
“accounting or related financial management expertise” is the ability to analyze
        and interpret a full set of financial statements, including the notes attached
        thereto, in accordance with Canadian generally accepted accounting
        principles.
  39
 Members
        of the Committee shall be appointed at the first meeting of the Board of
        Directors typically held following the Annual General Meeting of the
        Company.
  A
        member may resign from the Committee and may be removed and replaced at anytime
        by the Board of Directors. A member of the Committee will automatically cease
        to
        be a member at such time as that individual ceases to be a director of the
        Company.
  **Chair
        of the Committee**
  The
        Board shall in each year appoint a Chair of the Committee from among the
        members
        of the Committee. In the Chair’s absence, or if the position is vacant, the
        Committee may select another member to act as interim Chair.
  The
        Chairman of the Audit Committee has the responsibility to ensure that the
        Committee executes its mandate to the satisfaction of the Board.
  *Specific
        Role and Responsibilities*
  In
        cooperation with the Chief Financial Officer, the Chairman of the Audit
        Committee will:
  •
              Prepare
                  the Committee meetings’ agendas to ensure that all tasks of the Committee
                  are covered in a timely fashion and that each topic is documented
                  in a
                  manner that allows the making of informed recommendations to the
                  Board.
  •
              Ensure
                  that follow-up matters are being
                  addressed.
  •
              Direct
                  the Committee’s meetings in a manner that facilitates the exchange of
                  constructive and objective points of view and opinions, that encourages
                  all Committee members to participate and that is conducive to good
                  decision-making. Also ensure that there are private sessions that
                  allow
                  the Committee to meet with the external auditors separately from
                  management and vice-versa.
  •
              Ensure
                  that the meetings’ minutes properly reflect the discussions,
                  recommendations and disagreements, if any, and that they are circulated
                  in
                  a timely fashion to the other members of the Committee and to the
                  Board
                  subsequently. The Chairman is responsible for reporting to the
                  Board the
                  finding of the Committee.
   40
  •
              Maintain
                  a close liaison with the Chairman of the Board and cooperate with
                  him on
                  any issue facing the Committee or any special request he might
                  have.
  •
              Maintain
                  a direct and personal line of communication with the external auditors
                  in
                  a manner to ensure their full independence with management. He
                  will
                  cooperate with the external auditors to find the best process to
                  address
                  any concern that they may have regarding the affairs of the
                  Company.
  •
              Promote
                  the annual review of the Committee’s performance including the review of
                  his own performance on a planned basis and encourage ways and means
                  to
                  ensure that the scope of the mandate consistently reflects the
                  requirements of the various regulators, as well as accounting and
                  auditing
                  profession standards.
  •
              Ensure
                  that communications regarding the Audit Committee’s work and duties in the
                  information circular are accurate.
  •
              Work
                  with the Executive Compensation and Corporate Governance Committee
                  in the
                  evaluation of the performance of the CFO and the review and establishment
                  of his individual objectives.
  Responsibilities
  The
        Committee is responsible to:
  *Audit*
 (a)  make
        recommendations to the Board regarding the selection and compensation of
        the
        external auditor to be engaged to prepare or issue an auditor’s report or
        perform other audit, review or attest services for the Company who shall
        report
        directly to the Committee;
  (b)  obtain
        and review a report from the external auditor at least annually
        regarding:
  (i)
              the
                  external auditor’s internal quality-control
                  procedures;
  (ii)
              any
                  material issues raised by the most recent internal quality-control
                  review,
                  or peer review, of the external audit firm, or by any inquiry or
                  investigation by governmental or professional authorities within
                  the
                  preceding five years respecting one or more independent audits
                  carried out
                  by the firm;
   41
  (iii)
              any
                  steps taken to deal with any such issues;
                  and
  (iv)
              all
                  relationships between the external auditor and the Company including
                  non-audit services,
  (c)  evaluate
        the qualifications, performance and independence of the external auditor,
        including considering whether the external auditor’s quality controls are
        adequate and the provision of permitted non-audit services is compatible
        with
        maintaining the auditor’s independence, taking into account the opinions of
        management and, internal auditors and to present its conclusions with respect
        to
        the external auditor to the Board;
  (d)  satisfy
        itself of the rotation of the audit partners as required by law and consider
        whether, in order to assure continuing auditor independence, it is appropriate
        to adopt a policy of rotating the external auditing firm on a regular
        basis;
  (e)  meet
        with the external auditor and financial management of the Company to review
        the
        scope of the proposed audit for the current year and the audit procedures
        to be
        used;
  (f)  oversee
        the work of the external auditor engaged to prepare or issue an auditor’s report
        or perform other audit, review or attest services for the Company, including
        the
        resolution of any disagreements between management and the external auditor
        regarding financial reporting;
  (g)  pre-approve
        all non-audit services to be provided to the Company or any of its subsidiaries
        by the Company’s external auditor;
  (h)  review
        the performance of the external auditors;
  (i)  review
        with management and the external auditors:
  (i)
              the
                  Company’s audited financial statements and footnotes, MD&A and any
                  annual or interim earnings press releases before the Company publicly
                  discloses this information;
  (ii)
              any
                  significant changes required in the external auditors’ audit plan and any
                  serious difficulties or disputes with management encountered during
                  the
                  course of the audit; and
  (iii)
              other
                  matters related to the conduct of the audit that are to be communicated
                  to
                  the Committee under generally accepted auditing
                  standards,
   42
  (j)  satisfy
        itself that the Company’s annual audited financial statements are fairly
        presented in accordance with applicable Canadian generally accepted accounting
        principles and recommend to the Board whether the annual financial statements
        should be approved and included in the Company’s Annual Report;
  (k)  review
        with the external auditors and management the quality of the Company’s
        accounting principles as applied in its financial reporting process and any
        proposed changes in accounting principles;
  (l)  satisfy
        itself that the Company has implemented appropriate systems of internal control
        over accounting, financial reporting and the safeguarding of the Company’s
        assets and other “risk management” functions (including the identification of
        significant risks and the establishment of appropriate procedures to manage
        those risks and the monitoring of corporate performance in light of applicable
        risks) affecting the Company’s assets, management and financial and business
        operations and that these are operating effectively;
  (m)  establish
        procedures for the receipt, retention and treatment of complaints received
        by
        the Company regarding accounting, internal accounting controls, or auditing
        matters and for the confidential, anonymous submission by the Company’s
        employees of concerns regarding questionable accounting or auditing
        matters.
  (n)  review
        and approve the Company’s hiring policies regarding partners, employees and
        former partners and employees of the present and former external auditor
        of the
        Company; and
  (o)  perform
        any other activities consistent with this Charter, the Company’s By-Laws and
        governing law, as the Committee or the Board deems necessary or
        appropriate.
  The
        Committee may delegate to one or more independent members the authority to
        pre-approve non-audit services in satisfaction of Section 4.1(g) above, provided
        that the pre-approval by any member to whom authority has been delegated
        must be
        presented to the Committee at its first scheduled meeting following such
        pre-approval.
  **Meetings**
  The
        Chairman will appoint a secretary who will keep minutes of all meetings (the
        “Secretary”). The Secretary does not have to be a member of the Committee or a
        director and can be changed by simple notice from the Chair.
  No
        business shall be transacted by the Committee unless a quorum of the Committee
        is present or the business is transacted by resolution in writing signed
        by all
        members of the Committee. A majority of the Committee shall constitute a
        quorum,
        provided that if the number of members of the Committee is an even number,
        one
        half of the number of members plus one shall constitute a quorum.
  43
 The
        Committee shall meet as often as it deems necessary to carry out its
        responsibilities but not less frequently than quarterly.
  The
        time at which, and the place where the meetings of the Committee shall be
        held,
        and the procedure in all respects of such meetings shall be determined by
        the
        Committee, unless otherwise provided for in the articles of association of
        the
        Company or otherwise determined by resolution of the Board.
  Meetings
        may be held in person, by teleconferencing or by videoconferencing.
  Any
        decision made by the Committee shall be determined by a majority vote of
        the
        members of the Committee present. A member will be deemed to have consented
        to
        any resolution passed or action taken at a meeting of the Committee unless
        the
        member dissents.
  Minutes
        of the Committee will be kept by the Secretary. The approved minutes of the
        Committee shall be circulated to the Board forthwith and shall be duly entered
        in the books of the Company.
  **Access
        to Management and Outside Advisors**
  The
        Committee shall have full, free and unrestricted access to management and
        employees and to the relevant books and records of the Company.
  The
        Committee may invite such other persons (i.e. the CEO, CFO, Controller) to
        its
        meetings, as it deems necessary.
  The
        Committee shall have the authority to
  (a)
              retain
                  independent legal, accounting or other relevant advisors as it
                  may deem
                  necessary or appropriate to allow it to discharge its responsibilities;
                  and
  (b)
              set
                  and pay the compensation of any such advisors, at the expense of
                  the
                  Company.
  Any
        advisors retained shall report directly to the Committee.
  **Reporting
        Requirements**
  The
        Committee shall make regular reports to the Board following meetings of the
        Committee.
  **Annual
        Review and Assessment**
  The
        Committee shall review and assess the adequacy of this Charter annually and
        recommend any proposed changes to the Board for approval.
  The
        performance of the Committee shall be reviewed annually by the Company’s
        Corporate Governance Committee.
  44
 **Remuneration**
  The
        members of the Committee shall be entitled to receive such remuneration for
        acting as members of the Committee as the Board may from time to time
        determine.
  **D.** **Employees**
  At
        fiscal year end 2006 the Company had 4 full time employees (2005: 1 full
        time
        and 2 contract) in Canada, and 20 (2005:15) employees working on a full time
        basis in Burkina Faso. The Company engages consultants or service firms to
        attend to requirements on a fee-for-services basis.
  The
        Company anticipates that will change if and when mine development program
        or
        mining operations begins. No labour union is certified to represent workers
        at
        any site of the Company, nor to bargain with the Company for any
        employee(s).
  **E.** **Share
        Ownership**
  The
        following sets forth the share ownership and options held by Goldbelt Resources’
directors and members of its administrative, supervisory and management bodies
        as at November 30, 2006. Percentages are based on there being 63,787,885
        Common
        Shares outstanding at November 30, 2006. All shares are of the same class
        with
        the same voting rights.
  **Common
                  Share Holdings**
              **Options
                  to Purchase Common Shares****Name
                  and Position**
                **with
                  the Company**
              **Number
                  of**
                **Shares
                  Held**
              **Percentage
                  of**
                **all
                  Issued Shares**
              **Number
                  of**
                **Shares
                  Under**
                **Options
                  Held**
              **Exercise**
                **Price
                  Per**
                **Share**
              **Date
                  of**
                **Grant**
              **Expiry****Date**Paul
                  J. Morgan, Executive Chairman and Director
              2,590,400
              4.10%
              75,000
                200,000
                250,000
                220,000
              $0.25
                $0.72
                $0.62
                $0.89
              12-Jul,
                  2004
                9-Mar,
                  2005
                25-Nov,
                  2005
                10-Feb,
                  2006
              12-Jul,
                  2009
                9-Mar,
                  2010
                25-Nov,
                  2010
                10-Feb,
                  2011Paul
                  G. Naughton, Director
              283,500
              <1%
              75,000
                200,000
                225,000
                220,000
              $0.25
                $0.72
                $0.62
                $0.89
              12-Jul,
                  2004
                9-Mar,
                  2005
                25-Nov,
                  2005
                10-Feb,
                  2006
              12-Jul,
                  2009
                9-Mar,
                  2010
                25-Nov,
                  2010
                10-Feb,
                  2011Brian
                  C. Irwin
                Secretary
                  and Director
              217,500
              <1%
              200,000
                225,000
                220,000
              $0.72
                $0.62
                $0.89
              9-Mar,
                  2005
                25-Nov,
                  2005
                10-Feb,
                  2006
              9-Mar,
                  2010
                25-Nov,
                  2010
                10-Feb,
                  2011Laurence
                  D. Marsland
                Director
              Nil
              Nil
              200,000
                225,000
              $0.72
                $0.62
              9-Mar,
                  2005
                25-Nov,
                  2005
              9-Mar,
                  2010
                25-Nov,
                  2010Elizabeth
                  Martin
              Nil
              Nil
              300,000
              $0.69
              16-Dec,
                  2005
              16-Dec,
                  2010Collin
                  Ellison, President and CEO
              Nil
              Nil
              1,250,000
              $0.69
              16-Dec,
                  2005
              16-Dec,
                  2010Hemdat
                  Sawh, CFO
              1,000
              <1%
              200,000
              $0.54
              26-Sep,
                  2005
              26-Sep,
                  2010Morou
                  Francois Ouedraogo, Chief Geologist, West Africa
              Nil
              Nil
              100,000
              $0.54
              26-Sep,
                  2005
              26-Sep,
                  2010
 
  45
 **Stock
        Option Plan**
  The
        Company has a stock option plan (the “Plan”) whereby, from time to time at the
        discretion of the Board of Directors, stock options are granted to directors,
        officers, employees and certain consultants to the lesser of 10% and 9,000,000
        of the issued shares in the capital of the Company. The exercise price of
        each
        option is based on the market price of the Company’s common stock at the date of
        grant less an applicable discount, subject to a minimum price of $0.10. As
        a
        result of the Company attaining Tier 1 status on the TSX-V, the Directors,
        subject to the policies of the TSX-V, may determine and impose terms upon
        which
        each option shall become vested in respect of option shares although no vesting
        period shall be mandatory.
  **Item
                  7.**
              **Major
                  Shareholders and Related Party
                  Transactions**
  **A.** **Major
        shareholders**
  The
        Company is authorized to issue an unlimited number of common shares without
        par
        value. At November 30, 2006 the Company had 63,787,885 outstanding common
        shares. There are no disproportionate or weighted voting privileges attaching
        to
        any shares of the Company.
  Goldbelt’s
        securities are recorded on the books of its transfer agent in registered
        form.
        The majority of such shares are registered in the name of intermediaries
        such as
        brokerage houses and clearinghouses on behalf of their respective clients.
        Goldbelt does not have knowledge of the beneficial owners thereof. As of
        November 30, 2006 and to the knowledge of the directors and senior officers
        of
        the Company, the only persons who beneficially own, directly or indirectly,
        or
        exercise control or direction over voting securities carrying more than 5%
        of
        the voting rights attached to any class of voting securities of the Company
        areas follows:
  **Name**
              **Number
                  of Common Shares**
              **Percentage**Dundee
                  Precious Metals Inc
              30,111,494
              47.2%
  Significant
        changes in shareholdings over the past 3 years and as at November 30, 2006
        are
        as follows:
  **As
                  at**
                **November
                  30,**
                **2006**
              **Year
                  Ended**
                **June****30,**
                **2006**
              **Year
                  Ended**
                **June****30,**
                **2005**
              **Year
                  Ended**
                **June****30,**
                **2004**Resolute
                  Limited
              Nil
              13,688,099
                26.69%
              7,529,412
                22.04%
              -Dundee
                  Precious Metals Inc.
              30,111,494
                47.2%
              9,038,462
                17.62%
              5,000,000
                13.73%
              -
 
  46
 At
        November 30, 2006 there were a total of 177 registered shareholders of Goldbelt
        Resources. Of a total 177 shareholders of record, 39 were Canadian holders
        of an
        aggregate 54,218,282 common shares, 130 were US shareholders of an aggregate
        of
        5,401,244 common shares.
  To
        the knowledge of Goldbelt Resources it is not controlled directly or indirectly
        by another corporation, any foreign government or by any other natural or
        legal
        person(s) severally or jointly.
  Goldbelt
        Resources is not aware of any arrangements, the operation of which may at
        a
        later date result in a change in control of the Company.
  **B.** **Related
        Party Transactions**
  The
        Company entered into the following transactions with related parties not
        disclosed elsewhere:
  a) At
        June 30, 2006, the Company owed $Nil (2005 - $337,848; 2004 - $6,113; 2003
        -
        $302,033) for acquisition and financing costs to directors, which are included
        within accounts payable and accrued liabilities.
  b) At
        June 30, 2006, the Company had a prepaid expense amount of $Nil (2005 - $Nil;
        2004 - $8,270; 2003 - $378) from funds advanced to a director related entity
        as
        a prepayment for disbursements.
  c) During
        fiscal 2004, the Company paid a director $150,000 in settlement of accounts
        payable of $254,972 resulting in a gain on settlement of $104,972.
  d) The
        following table discloses the related party transactions for the financial
        years
        as follows:
  Services
              Year
                  Ended
                June
                30,
                  2006
              Year
                  Ended
                June
                30,
                  2005
              Year
                  Ended
                June
                30,
                  2004
              Year
                  Ended
                June
                30,
                  2003
              Year
                  Ended
                June
                30,
                  2002Director
                  relatedentities
              Professional
                  fees
              -
              189,045
              69,238
              37,868
              25,891Directors
              Consulting
              -
              -
              32,273
              12,912
              -Directors
              Acquisition
              -
              230,381
              -
              -
              -Directors
              Financing
              -
              138,229
              -
              -
              -Director
              Management
                  fees
              145,000
              52,000
              -
              -
              -
 
  47
 **C.** **Interests
        of experts and counsel**
  Not
        applicable.
  **Item
                  8.**
              **Financial
                  Information**
  **A.** **Consolidated
        Statements and Other Financial Information**
  See
        Item 17: Financial Statements
  There
        are no legal or arbitration proceedings in process, pending or threatened
        against the Company.
  **B.** **Significant
        Changes**
  Significant
        changes since the date of the June 30, 2006 audited financial statements
        were as
        follows:
 
 •
              On
                  September 27, 2006 , the Company raised $7,980,000 though a private
                  placement of 7,600,000 shares. This placement is intended to principally
                  cover costs related to the planned bankable feasibility study for
                  2007,
                  additional drilling to expand the resource base on the Belahouro
                  tenements
                  and to actively drill the Houndé and Bougouriba tenements which show
                  significant assay results from the ongoing drilling
                  campaign.
 
 •
              On
                  October 31, 2006 the Company paid A$1 million under the terms of
                  the
                  agreement with Tanami to purchase the Brocks Creek process plant.
 
 •
              On
                  November 3, 2006 the Company issued 4,714,932 common shares for
                  proceeds
                  of $2,944,118 pursuant to the exercise of all of the 4,714,932
                  warrants
                  held by Resolute.
 
 •
              On
                  November 30, 2006, the Company paid the remaining A$1.2 million
                  under the
                  agreement to purchase the Brocks Creek processing plant, which
                  included a
                  A$200,000 security bond. The Company is obligated to dismantle
                  this plant
                  which is estimated to cost approximately $1.2
                  million.
  **Item
                  9.**
              **The
                  Offer and Listing**
  **A.**  **Offer
        and listing details**
  The
        Company is a reporting issuer in British Columbia, Alberta, Ontario and the
        United States, and is a multiple jurisdiction filer with SEDAR and an EDGAR
        filer. Goldbelt common shares are listed on the TSX Venture Exchange (the
        TSXV)
        under the symbol “GLD”.
  48
 The
        following is the price history of the Company’s stock on the TSXV:
  (a)  for
        the five most recent full financial years
  **Last
                  Five Full Fiscal Years**
              **High
                  ($)**
              **Low
                  ($)**June
                  30, 2006
              1.55
              0.46June
                  30, 2005
              0.89
              0.25June
                  30, 2004
              0.90
              0.03June
                  30, 2003
              0.09
              0.03June
                  30, 2002
              0.15
              0.05
  (b)
              for
                  each financial quarter of the six most recent full financial
                  years
  **Year
                  2006 Fiscal Quarters**
              **High
                  ($)**
              **Low
                  ($)**
              **Year
                  2005 Fiscal Quarters**
              **High
                  ($)**
              **Low
                  ($)**July
                  1 to September 30
              0.73
              0.55
              July
                  1 to September 30
              0.56
              0.26October
                  1 to December 31
              0.75
              0.48
              October
                  1 to December 31
              0.50
              0.25January
                  1 to March 31
              1.37
              0.70
              January
                  1 to March 31
              0.89
              0.36April
                  1 to June 30
              1.55
              0.85
              April
                  1 to June 30
              0.79
              0.46
  **Year
                  2004 Fiscal Quarters**
              **High
                  ($)**
              **Low
                  ($)**
              **Year
                  2003 Fiscal Quarters**
              **High
                  ($)**
              **Low
                  ($)**July
                  1 to September 30
              0.06
              0.03
              July
                  1 to September 30
              0.09
              0.03October
                  1 to December 31
              0.18
              0.05
              October
                  1 to December 31
              0.06
              0.05January
                  1 to March 31
              0.50
              0.11
              January
                  1 to March 31
              No
                  trade
              No
                  tradeApril
                  1 to June 30
              0.90
              0.35
              April
                  1 to June 30
              No
                  trade
              No
                  trade
  **Year
                  2002 Fiscal Quarters**
              **High
                  ($)**
              **Low
                  ($)**
              **Year
                  2001 Fiscal Quarters**
              **High
                  ($)**
              **Low
                  ($)**July
                  1 to September 30
              0.11
              0.07
              July
                  1 to September 30
              No
                  trade
              No
                  tradeOctober
                  1 to December 31
              0.10
              0.05
              October
                  1 to December 31
              No
                  trade
              No
                  tradeJanuary
                  1 to March 31
              0.10
              0.06
              January
                  1 to March 31
              No
                  trade
              No
                  tradeApril
                  1 to June 30
              0.15
              0.06
              April
                  1 to June 30
              0.30
              0.20
  (c)  for
        each month for the most recent six months
  **Most
                  Recent Six Months**
              **High
                  ($)**
              **Low
                  ($)**June
                  2006
              1.30
              0.85July
                  2006
              1.24
              0.89August
                  2006
              1.28
              1.00September
                  2006
              1.19
              0.95October
                  2006
              1.15
              0.99November
                  2006
              1.33
              1.12
 
  49
 See
        Item 4.A.4. for discussion of trading suspensions relating to Goldbelt’s common
        shares.
  **B.** **Plan
        of distribution**
  Not
        applicable.
  **C.** **Markets** ****
  See
        Item 9.A. for discussion of the market for Goldbelt’s securities.
  **D.** **Selling
        shareholders**
  Not
        applicable.
  **E.** **Dilution** ****
  Not
        applicable.
  **F.** **Expenses
        of the issue**
  Not
        applicable.
  **Item
                  10.**
              **Additional
                  Information**
  **A.** **Share
        capital**
  Not
        applicable.
  **B.** **Memorandum
        and articles of association**
  1.    Goldbelt
        was incorporated under the Company Act (British Columbia) on July 23, 1976
        as a
        specially limited company with the name of Goldbelt Mines Inc. (Non-Personal
        Liability), converted to a limited company pursuant to the Company Act (British
        Columbia) with the name Goldbelt Mines Inc. on October 5, 1984, amalgamated
        with
        North American Metal Corporation on October 22, 1984 as one company with
        the
        name Goldbelt Mines Inc., changed its name to Goldbelt Resources Ltd. on
        July
        15, 1991 and amalgamated with Comptoir International du Commerce Ltee on
        July 9,
        1997 as one company with the name Goldbelt Resources Ltd. In August 2001
        the
        Company continued its corporate jurisdiction into Yukon Territory. On February
        16, 2006, the Company continued its corporate jurisdiction into the Province
        of
        British Columbia.
  Under
        the British Columbia Business Corporations Act (“BCBA”), Goldbelt Resources is
        permitted to conduct any lawful business that it is not restricted from
        conducting by its memorandum and articles, neither of which contain any
        restriction on the business the Company may conduct.
  50
 2.    A
        director who, in any way, directly or indirectly, is interested in a proposed
        contract or transaction with the Company must disclose in writing the nature
        and
        extent of the director’s interest at a meeting of directors and abstain from
        voting on approval of the matter. The Articles of the Company permit an
        interested director to be counted in the quorum and the BCBA provides that
        a
        director of a company is not deemed to be interested in a proposed contract
        or
        transaction merely because the proposed contract or transaction relates,
        among
        other things, to an indemnity, liability insurance or the remuneration of
        a
        director in that capacity. Hence, directors can vote compensation to themselves
        or any of their members. The board of directors has an unlimited power to
        borrow, issue debt obligations and to charge the assets of the Company, provided
        only that such power is exercised bona fide and in the best interests of
        the
        Company. There is no mandatory retirement age for directors. A director is
        not
        required to have any share qualification.
  3.    The
        Company has only one class of common shares, without any special rights or
        restrictions. The dividend entitlement of a shareholder of record is fixed
        at
        the time of declaration by the board of directors. A vested dividend entitlement
        does not lapse, but unclaimed dividends are subject to a statutory six year
        contract debts limitation. Each common share is entitled to one vote on the
        election of each director. There are no cumulative voting rights, in consequence
        of which a simple majority of votes at the annual meeting can elect all the
        directors of the Company. Each common share carries with it the right to
        share
        equally with every other common share in dividends declared and in any
        distribution of surplus assets of the Company after payment to creditors
        on any
        winding up, liquidation or dissolution. There are no sinking fund provisions.
        All common shares must be fully paid prior to issue and are thereafter subject
        to no further capital calls by the Company. There exists no discriminatory
        provision affecting any existing or prospective holder of common shares as
        a
        result of such shareholder owning a substantial number of shares.
  4.    Under
        the BCBA, the rights of shareholders may be changed only by the shareholders
        passing a special resolution approved by 2/3 of the votes cast at a general
        meeting of the Company, the notice of which is accompanied by a circular
        describing the proposed action and its effect on the shareholders. Shareholders
        representing 10% of the Company who vote against such a resolution may apply
        to
        the Court to set aside the resolution and the Court may set aside, affirm
        or
        affirm and order the Company to purchase the shares of any member at a price
        determined by the Court.
  5.    The
        Board of Directors must call an annual general meeting once in each calendar
        year and not later than 15 months after the last such meeting. The Board
        may
        call an extraordinary general meeting at any time. Notice of such meetings
        must
        be accompanied by an information circular describing the proposed business
        to be
        dealt with and making disclosures as prescribed by statute. A shareholder
        or
        shareholders having in the aggregate 5% of the issued shares of the Company
        may
        requisition a meeting and the Board is required to hold such meeting within
        four
        months of such requisition. Admission to such meetings is open to registered
        shareholders and their duly appointed proxies. Others may be admitted subject
        to
        the pleasure of the meeting.
  51
 6.    The
        memorandum and articles of the Company contain no limitations on the rights
        of
        non-resident or foreign shareholders to hold or exercise rights on the shares
        of
        the Company.
  There
        is no limitation at law upon the right of a non-resident to hold shares in
        a
        Canadian company. However, the Investment Canada Act (Canada) requires certain
        non-Canadian individuals, governments, corporations, agencies or entities
        who
        wish to acquire ‘a Canadian business’ or to establish ‘a new Canadian business’
as those terms are defined in that Act, to file a notification or an application
        for review with Investment Canada, a Canadian federal governmental
        agency. The Investment Canada Act requires that certain acquisitions of
        control of a Canadian business by a non-Canadian must be reviewed by the
        Minister responsible for the Act and approved on the basis that the Minister
        is
        satisfied that the acquisition is likely to be of net benefit to Canada,
        having
        regard to the criteria set forth in the Act. The Act makes the acquisition
        of
        control a reviewable event. The Act sets out detailed rules for determining
        whether control has been acquired. The acquisition of one-third or more of
        the
        voting shares of a corporation may, in some circumstances, be deemed to
        constitute acquisition of control. A reviewable acquisition of control may
        not
        be implemented before being approved by the Minister. If not ultimately
        approved, a reviewable acquisition that has been completed may be subject
        to an
        order to divest, enforceable by injunction or a court order directing
        disposition of assets or shares.
  7.    There
        are no provisions in Goldbelt Resources’ memorandum and articles that would have
        an effect of delaying, deferring or preventing a change in control of the
        Company and that would operate only with respect to a merger, acquisition
        or
        corporate restructuring involving the Company or any of its
        subsidiaries.
  8.    There
        is no provision in the Company’s articles setting a threshold or requiring or
        governing disclosure of shareholder ownership above any level. Securities
        Acts,
        regulations and the policies and rules thereunder in the Provinces of Ontario,
        Alberta and British Columbia, where the Company is a reporting company, require
        any person holding or having control of more than 10% of the issued shares
        of
        the Company to file insider returns disclosing such share holdings.
  9.    The
        Company’s articles and other constituent documents do not contain provisions
        governing changes in capital that are more stringent than required by
        law.
  **C.** **Material
        Contracts**
  Resolute
        Mining Limited
  On
        November 19, 2004, the Company entered into an Amended and Restated Share
        Purchase Agreement (the “Agreement”) with Resolute Mining Limited (“Resolute”)
        of Perth, Australia, an Australian Stock Exchange listed company, to acquire
        Resolute’s 100% owned subsidiary, Resolute (West Africa) Limited (“RWA”). The
        primary assets of RWA are exploration properties in Burkina Faso in western
        Africa known as the Belahouro permit, and Houndé area permits.
  52
 On
        March 3, 2005, the Company completed the acquisition (the “Acquisition”) of the
        subsidiary of Resolute and a concurrent private placement of 16,000,000 units
        at
        $0.50 per unit for gross proceeds of $8,000,000.
  The
        subsidiary was acquired in consideration for $1,873,350 (US$1,500,000) on
        closing, $1,951,056 (US$1,575,685) on or before January 31, 2006, 7,529,412
        common shares of the Company and 7,529,412 common share purchase warrants
        valued
        at $3,764,706 and allocated to mineral properties. Included in the warrants
        are
        1,882,353 exercisable at $0.50 until March 3, 2007, 1,882,353 exercisable
        at
        $0.65 until March 3, 2007 and 3,764,706 exercisable at $0.65 until September
        3,
        2006. The Company also paid due diligence costs of $330,035 (US$250,000)
        and
        issued 250,000 units valued at $125,000 consisting of one common share and
        one-half of one common share purchase warrant. Each whole warrant entitles
        the
        holder to acquire an additional common share at $1.00 until March 3,
        2007.
  In
        January 2006, pursuant to Goldbelt's obligations under the Agreement with
        Resolute, Goldbelt issued to Resolute 723,982 common shares of the Company
        and
        361,990 common share purchase warrants with a value of $470,588 and allocated
        to
        mineral properties. Included in the warrants are 180,995 exercisable at $0.65
        until January 13, 2008 and 180,995 exercisable at $0.845 until January 13,
        2008.
  In
        April 2006, the Company agreed to issue an aggregate of 1,670,000 Goldbelt
        shares to Resolute to repay the US$1,575,685 payable to Resolute for the
        2004
        drilling program under the Agreement and settle other amounts claimed by
        Goldbelt to be owed by Resolute. In addition and as a result of Goldbelt
        satisfying its obligation to raise, by January 31, 2006, a minimum of
        $10,625,000 by way of one or more private placements, Goldbelt issued to
        Resolute 1,176,471 common shares and 588,326 common share purchase warrants
        valued at $764,706 and allocated to mineral properties. Included in the warrants
        are 294,118 exercisable at $0.75 until January 17, 2008 and 294,118 exercisable
        at $0.98 until January 17, 2008.
  Resolute
        surrendered for cancellation 1,176,471 previously issued Goldbelt warrants
        exercisable at $0.65 until September 3, 2006. This settlement of shares and
        warrants is in addition to the shares and warrants issued at the January
        13,
        2006 private placement. The remaining 2,588,235 warrants exercisable at $0.65
        until September 3, 2006 were exercised in May 2006.
  Tanami
        gold NL
  On
        May 9, 2006, the Company entered into an exclusive option agreement with
        Tanami
        Gold NL (Australia) (“Tanami”) for the purchase of a used gold processing plant
        currently located 125km south of Darwin in the Northern Territory, Australia.
        The Company paid A$2,000,000, A$200,000 Australian Goods and Services Tax
        and
        A$200,000 security bond. The Company is obligated to dismantle this plant
        which
        is estimated to cost approximately $1,200,000.
 
 53
 **D.** **Exchange
        controls**
  There
        are no governmental laws, decrees, regulations or other legislation in Canada
        that affect the export or import of capital, including the availability of
        cash
        or cash equivalents for use by the Company, or the remittance of dividends,
        interest or other payments to nonresident holders of the Company’s
        shares.
  **E.** **Taxation**
  The
        following information concerning the Canadian taxes to which a non-resident
        of
        Canada may be subject is of a general nature only. A shareholder or a person
        considering an investment in the Company’s shares should consult their tax
        advisers and accountants or tax counsel as to how and to what extent the
        tax
        laws and rules of both Canada and of the shareholder’s or potential investor’s
        own country will or may affect such holdings or investment
        decision.
  Canadian
        federal tax legislation generally requires a 25% withholding from dividends
        paid
        or deemed to be paid to the Company’s non-resident shareholders. Under the tax
        treaty with the United States, this withholding rate is reduced to 15%. Stock
        dividends paid to non-residents of Canada are subject to withholding tax
        at the
        same rate. For tax purposes, the amount of a stock dividend would generally
        be
        equal to the amount by which stated capital is increased by the payment of
        such
        dividend. In either event, the Company will provide further information at
        the
        time, if such dividend is paid. Interest paid or deemed to be paid on any
        debt
        security of the Company held by a non-resident of Canada may also be subject
        to
        withholding, depending upon the terms and conditions of the security and
        the
        applicable tax treaty.
  Unless
        a US shareholder owned more than 25% of the Company’s issued shares or was not
        dealing at arm’s length with the Company, capital gains derived from disposition
        of shares of the Company would likely be exempt from tax in Canada by virtue
        of
        the Canada-US tax Treaty.
  Tax
        consequences depend upon each investor’s individual circumstances and should be
        determined in consultation with the investor’s own tax counsel.
  **F.** **Dividends
        and paying agents**
  Not
        applicable.
  **G.** **Statement
        by experts**
  Not
        applicable.
  54
 **H.** **Documents
        on display**
  The
        Company’s annual and periodic reports filed with the U.S. Securities and
        Exchange Commission may be inspected and copied at the Commission’s public
        reference facilities in Room 5080, 100F Street, N.E., Washington, D.C., 20549,
        and at the regional offices of the Commission. The Commission may be reached
        at
        1-800-SEC-0330 for further information on the public reference rooms. These
        Commission filings are also available to the public from commercial document
        retrieval services. Reports furnished by the Company with the Commission
        since
        November 26, 2002 are also maintained electronically on the Commission’s
        website, www.sec.gov.
  **I.** **Subsidiary
        Information**
  Not
        applicable.
  **Item
                  11.**
              **Quantitative
                  and Qualitative Disclosures About Market
                  Risk.**
  Not
        applicable.
  **Item
                  12.**
              **Description
                  of Securities Other than Equity
                  Securities**
  Not
        applicable
  **PART
        2**
  **Item
                  13.**
              **Defaults,
                  Dividend Arrearages and Delinquencies******
  Not
        applicable.
  **Item
                  14.**
              **Material
                  Modifications to the Rights of Security Holders and Use of
                  Proceeds**
  Not
        applicable.
  **Item
                  15.**
              **Controls
                  and Procedures**
  Disclosure
        Controls and Procedures. Our principal executive officer and principal financial officer, after
        evaluating the effectiveness of our disclosure controls and procedures (as
        defined in Exchange Act Rules 13a-14(c) and 15d-14(c)) as of June 30, 2006,
        have
        concluded that, as at such date, our disclosure controls and procedures were
        effective.
  Notwithstanding
        the foregoing, there can be no assurance that our disclosure controls and
        procedures will detect or uncover all failures within our company to disclose
        all material information otherwise required to be set forth in our periodic
        reports.
  Changes
        in Internal Control Over Financial Reporting. There was no change in our internal control over financial reporting that
        occurred during the period covered by this report that has materially affected,
        or is reasonably likely to materially affect, our internal control over
        financial reporting.
  55
  **Item
                  16A.**
              **Audit
                  Committee Financial
                  Expert.**
  Goldbelt’s
        board of directors has determined that Elizabeth A. Martin is an “audit
        committee financial expert”. Elizabeth A. Martin is independent as that term is
        defined under the rules and regulations of the New York Stock
        Exchange **.**
  **Item
                  16B.**
              **Code
                  of Ethics.**
  We
        have adopted a code of ethics that applies to our Chief Executive Officer,
        Chief
        Financial Officer and Corporate Controller. We have also adopted a code of
        ethics that applies to all of our officers and employees. Copies of the codes
        will be provided to any person without charge upon such person’s request in
        writing to our Chief Financial Officer at the address set forth on the cover
        of
        this annual report on Form 20-F.
  **Item
                  16C.**
              **Principal
                  Accountant Fees and
                  Services.**
  We
        paid the following fees to Davidson & Company LLP **** in
        each of the years ended June 30, 2006 and 2005 for professional
        services:
  **Fees**
              2006
              2005Audit
              $52,550
              $25,000Interim
                  reviews
              8,000
              NilIncome
                  tax preparation
              2,750
              NilOther
              Nil
              NilTotal
              $63,300
              $25,000
  The
        Audit Committee is responsible for overseeing the work of the external audit
        including approval of audit fees and the pre-approval of all non-audit services
        provided by the independent auditor.
  **Item
                  16D.**
              **Exemptions
                  from the Listing Standards for Audit
                  Committees.**
  Not
        applicable.
  **Item
                  16E.**
              **Purchases
                  of Equity Securities by the Issuer and Affiliated
                  Purchasers.**
  Not
        applicable.
  56
 **PART
        3**
  **Item
                  17.**
              **Financial
                  Statements**
  The
        Company’s financial statements are attached hereto as itemized under Item 19(A)
        and are incorporated herein by reference. The financial statements were prepared
        in accordance with generally accepted accounting principles in Canada and
        are
        reconciled to United States generally accepted accounting principles as
        described in the auditor’s report and in Note 12 to the financial statements.
        All figures are expressed in Canadian dollars.
  **Item
                  18.**
              **Financial
                  Statements**
  Not
        applicable.
  **Item
                  19.**
              **Exhibits**
  **A.**  **Financial
        Statements**
  (i)
        Auditors' Report.
  (ii)
        Consolidated Balance Sheets as at June 30, 2006 and 2005.
  (iii)
        Consolidated Statements of Operations and Deficit for the years ended June
        30,
        2006, 2005 and 2004.
  (v)
        Consolidated Statements of Cash Flows for the years ended June 30, 2006,
        2005
        and 2004.
  (vi)
        Notes to the Financial Statements.


57




































**CONSOLIDATED
      FINANCIAL STATEMENTS**


**(Expressed
      in Canadian Dollars)**





**JUNE
      30, 2006**










58




DAVIDSON
              & COMPANY
              LLP             Chartered
              Accountants
            A
                Partnership of Incorporated
                Professionals





**INDEPENDENT
      AUDITORS' REPORT**





To
      the Shareholders of


Goldbelt
      Resources Ltd.





We
      have audited the consolidated balance sheets of Goldbelt Resources Ltd. as
      at
      June 30, 2006 and 2005, and the consolidated statements of operations and
      (deficit) retained earnings and cash flows for the years ended June 30, 2006,
      2005 and 2004. 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 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 an
      audit
      to obtain reasonable assurance whether the financial statements are free of
      material misstatement. An audit includes examining, on a test basis, evidence
      supporting the amounts and disclosures in the financial statements. An audit
      also includes assessing the accounting principles used and significant estimates
      made by management, as well as evaluating the overall financial statement
      presentation.





In
      our opinion, these consolidated financial statements present fairly, in all
      material respects, the financial position of the Company as at June 30, 2006
      and
      2005, and the results of its operations and its cash flows for the years ended
      June 30, 2006, 2005 and 2004 in accordance with Canadian generally accepted
      accounting principles.





**“DAVIDSON
      & COMPANY LLP”**





Vancouver,
                Canada
            Chartered
                AccountantsAugust
                4, 2006








**COMMENTS
      BY AUDITORS FOR U.S. READERS ON CANADA -**


**U.S.
      REPORTING DIFFERENCE**





In
      the United States, reporting standards for auditors require the addition of
      an
      explanatory paragraph (following the opinion paragraph) when the consolidated
      financial statements are affected by conditions and events that cast substantial
      doubt on the Company's ability to continue as a going concern, such as those
      described in Note 1 to the consolidated financial statements. Our report to
      shareholders dated August 4, 2006 is expressed in accordance with Canadian
      reporting standards which do not permit a reference to such events and
      conditions in the auditors’ report when these are adequately disclosed in the
      financial statements.





**“DAVIDSON
      & COMPANY LLP”**





Vancouver,
                Canada
            Chartered
                AccountantsAugust
                4, 2006




A
                Member of***SC****INTERNATIONAL*
 
 1200
        - 609
        Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, BC, Canada,
        V7Y
        1G6
 Telephone
        (604) 687-0947 Fax (604) 687-6172


59


***Goldbelt
      Resources Ltd.***


**Consolidated
      Balance Sheets**


***As
      at June 30***


*(Expressed
      in Canadian Dollars)*




**2006**
            
            2005$
            
            $**ASSETS****Current**Cash
            
            
            **6,119,181**
            
            
            4,530,762Receivables
            
            
            **51,284**
            
            
            -Prepaid
                expenses
            
            
            **65,746**
            
            
            44,984**6,236,211**
            
            
            4,575,746**Mill
                deposit**(Note
                3)
            
            
            **187,301**
            
            
            -**Equipment**(Note 3)
            
            
            **200,622**
            
            
            45,429**Mineral
                properties**(Note 4)
            
            
            **14,057,360**
            
            
            10,241,203**20,681,494**
            
            
            14,862,378**LIABILITIES
                AND SHAREHOLDERS' EQUITY****Current**Accounts
                payable and accrued liabilities
            
            
            **370,009**
            
            
            1,897,029Due
                to Resolute Mining Limited (Note 4)
            
            
            **-**
            
            
            1,933,588**370,009**
            
            
            3,830,617**Shareholders’
                equity**Capital
                stock (Note 5)
            
            
            **23,242,232**
            
            
            11,737,625Contributed
                surplus (Note 5)
            
            
            **1,740,524**
            
            
            652,792Deficit
            
            
            **(4,671,271**
            **)**
            
            (1,358,656
            )**20,311,485**
            
            
            11,031,761**20,681,494**
            
            
            14,862,378








**Nature
      of operations** (Note
      1)


**Subsequent
      event** (Note
      11)





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





**Approved
      by the Board of Directors**





**“Elizabeth
      A. Martin”**  **“Paul
      J. Morgan”**


*Director*   *Director*




60




***Goldbelt
      Resources Ltd.***


**Consolidated
      Statements of Operations and (Deficit) Retained Earnings**


***Years
      ended June 30***


*(Expressed
      in Canadian Dollars)*







**2006**
            
            2005
            
            2004$
            
            $
            
            $**Expenses**Professional
                fees
            
            
            **265,231**
            
            
            336,727
            
            
            99,716Travel
                and promotion
            
            
            **651,638**
            
            
            372,696
            
            
            187,189Stock-based
                compensation
            
            
            **1,217,332**
            
            
            412,146
            
            
            17,646Consulting
                fees
            
            
            **299,904**
            
            
            147,000
            
            
            92,773Salaries
                and benefits
            
            
            **564,923**
            
            
            91,860
            
            
            16,021Transfer
                agent and filing fees
            
            
            **75,193**
            
            
            88,094
            
            
            10,570Shareholder
                relations
            
            
            **188,560**
            
            
            276,955
            
            
            9,656Office
                and occupancy costs
            
            
            **162,329**
            
            
            32,148
            
            
            8,806Telecommunications
            
            
            **45,914**
            
            
            9,358
            
            
            1,662Directors’
                fees
            
            
            **26,395**
            
            
            -
            
            
            -Amortization
            
            
            **17,904**
            
            
            657
            
            
            -**Loss
                before other items**
            
            
            **(3,515,323**
            **)**
            
            (1,767,641
            )
            
            (444,039
            )**Other
                items**Foreign
                exchange gain (loss)
            
            
            **134,463**
            
            
            26,871
            
            
            (1,188
            )Interest
                income
            
            
            **68,245**
            
            
            4,251
            
            
            3,937Gain
                on sale of long-term investments (Note 1)
            
            
            -
            
            
            -
            
            
            872,239Gain
                on settlement of accounts payable (Note 6)
            
            
            -
            
            
            -
            
            
            104,972**202,708**
            
            
            31,122
            
            
            979,960**(Loss)
                net income for the year**
            
            
            **(3,312,615**
            **)**
            
            (1,736,519
            )
            
            535,921**(Deficit)
                retained earnings, beginning of year**
            
            
            **(1,358,656**
            **)**
            
            377,863
            
            
            (158,058
            )**(Deficit)
                retained earnings, end of year**
            
            
            **(4,671,271**
            **)**
            
            (1,358,656
            )
            
            377,863**(Loss)
                Earnings per common share**Basic
            
            
            **(0.09**
            **)**
            
            (0.10
            )
            
            0.08Diluted
            
            
            **(0.09**
            **)**
            
            (0.10
            )
            
            0.07**Weighted
                average number of common shares**Basic
            
            
            **38,475,471**
            
            
            17,274,397
            
            
            6,834,589Diluted
            
            
            **38,475,471**
            
            
            17,274,397
            
            
            8,209,589








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




61


***Goldbelt
      Resources Ltd.***


**Consolidated
      Statements of Cash Flows**


*Years
      ended June 30*


*(Expressed
        in Canadian Dollars)*




**2006**
            
            2005
            
            2004$
            
            $
            
            $**Cash
                flows used in operating activities**(Loss)
                net income for the year
            
            
            **(3,312,615**
            **)**
            
            (1,736,519
            )
            
            535,921Items
                not affecting cash:Amortization
            
            
            **17,904**
            
            
            657
            
            
            -Stock-based
                compensation
            
            
            **1,217,332**
            
            
            412,146
            
            
            17,646Gain
                on
                sale of investments
            
            
            **-**
            
            
            -
            
            
            872,239
            )Gain
                on
                settlement of accounts payable
            
            
            **-**
            
            
            -
            
            
            (104,972
            )Gain
                on
                foreign exchange
            
            
            **(125,419**
            **)**
            
            (17,468
            )
            
            -Changes
                in non-cash working capital items:(Increase)
                decrease in receivables
            
            
            **(20,850**
            **)**
            
            3,823
            
            
            (2,361
            )Increase
                in
                prepaid expenses
            
            
            **(19,358**
            **)**
            
            (20,055
            )
            
            (9,366
            )(Decrease)
                increase in accounts payable and accrued
                liabilities
            
            
            **(186,870**
            **)**
            
            220,065
            
            
            (215,826
            )Net
                cash used in operating activities
            
            
            **(2,429,876**
            **)**
            
            (1,137,351
            )
            
            (651,197
            )**Cash
                flows used in investing activities**Acquisition
                of mineral properties
            
            
            **(3,805,555**
            **)**
            
            (717,203
            )
            
            -Acquisition
                of equipment
            
            
            **(182,164**
            **)**
            
            (36,775
            )
            
            -Mill
                deposit
            
            
            **(187,301**
            **)**
            
            -
            
            
            -Acquisition
                of subsidiaries
            
            
            -
            
            
            (2,183,225
            )
            
            -Proceeds
                from sale of investments
            
            
            -
            
            
            -
            
            
            1,217,463Net
                cash (used in) provided by investing activities
            
            
            **(4,175,020**
            **)**
            
            (2,937,203
            )
            
            1,217,463**Cash
                flows from financing activities**Proceeds
                on issuance of capital stock
            
            
            **8,408,494**
            
            
            8,200,000
            
            
            480,000Share
                issue costs
            
            
            **(215,179**
            **)**
            
            (653,275
            )
            
            -Net
                cash provided by financing activities
            
            
            **8,193,315**
            
            
            7,546,725
            
            
            480,000**Increase
                in cash**
            
            
            **1,588,419**
            
            
            3,472,171
            
            
            1,046,266**Cash,
                beginning of year**
            
            
            **4,530,762**
            
            
            1,058,591
            
            
            12,325**Cash,
                end of year**
            
            
            **6,119,181**
            
            
            4,530,762
            
            
            1,058,591**Cash
                paid for interest**
            
            
            -
            
            
            -
            
            
            -**Cash
                paid for income taxes**
            
            
            -
            
            
            -
            
            
            -





**Supplemental
      disclosure with respect to cash flows (Note 9)**





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





62


***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*








**1.**  **NATURE
      OF OPERATIONS**





Until
      March
      3, 2005 Goldbelt Resources Ltd. (the “Company” or “Goldbelt”) was designated
      inactive by the TSX Venture Exchange. During fiscal 2004, the Company disposed
      of its remaining investments in its shares of Celtic Resources Holdings Plc
      and
      Regal Petroleum Plc for proceeds of $1,217,463 resulting in a gain of $872,239.
      The Company subsequently completed the acquisition of mineral exploration
      properties in Burkina Faso in Western Africa and raised $8,000,000 in fiscal
      2005 by way of a private placement. The Company has undertaken a detailed
      evaluation of the mineralization of the Inata Gold Project portion of the
      Belahouro License and partial work on its additional exploration licenses in
      Burkina Faso. The Company has completed a scoping study, environmental impact
      study and is in the process of completing a pre-feasibility study of the Inata
      Gold Project and has applied for an exploitation permit to mine this
      property.





The
      recoverability of the carrying values of mineral properties and the Company’s
      continued existence is dependent upon the discovery of economically recoverable
      reserves, the preservation of the Company’s interest in the underlying mineral
      claims, the ability of the Company to obtain financing necessary to complete
      development of the properties, and the future profitable production there from
      or alternatively upon the Company’s ability to dispose of its interests on an
      advantageous basis. In addition, the properties may be subject to sovereign
      risk, including political and economic instability, government regulations
      relating to mining, currency fluctuations and local inflation. Changes in future
      conditions could require material write-downs of the carrying
      values.





These
      consolidated financial statements have been prepared on the basis of accounting
      principles applicable to a going concern, which assume that the Company will
      continue in operation for the foreseeable future and will be able to realize
      its
      assets and discharge its liabilities in the normal course of
      operations.





If
      the going
      concern assumption were not appropriate for these consolidated financial
      statements, then adjustments would be necessary in the carrying values of assets
      and liabilities, the reported revenues and expenses, and the balance sheet
      classifications used.







63




***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*








**2.**  **SIGNIFICANT
      ACCOUNTING POLICIES**





**Sources
      of GAAP**


These
      consolidated financial statements have been prepared in accordance with Canadian
      generally accepted accounting principles. A summary of the significant policies
      are as follows:





**Basis
      of consolidation**


These
      consolidated financial statements include the accounts of the Company and its
      significant wholly-owned subsidiaries, Resolute (West Africa) Limited (Jersey)
      and Goldbelt Resources (West Africa) S.A.R.L. (Burkina Faso). All intercompany
      balances and transactions are eliminated upon consolidation.





**Use
      of estimates**


The
      preparation of financial statements in accordance with Canadian generally
      accepted accounting principles requires management to make estimates and
      assumptions that affect the reported amount of assets and liabilities and
      disclosure of contingent assets and liabilities at the date of the financial
      statements and the reported amount of revenues and expenses during the reporting
      period. Significant estimates and assumptions include those related to the
      recoverability of mineral properties, estimated useful lives of equipment,
      determinations as to whether costs are expensed or deferred and stock
      compensation valuation assumptions. Financial results as determined by actual
      events could differ from those estimates.





**Cash
      and cash equivalents**


Cash
      is
      comprised of cash on hand and demand deposits.





Cash
      equivalents are short-term, highly liquid investments with original maturities
      of three months or less that are readily convertible to known amounts of cash
      and which are subject to an insignificant risk of change in value.





**Equipment**


Equipment
      is
      recorded at cost. Amortization of equipment used for exploration and development
      is capitalized to mineral properties.





Amortization
      is recorded using the straight-line method based on a useful life of five years
      for office and field equipment, and three years for computer
      equipment.






64




***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*








**2.**  **SIGNIFICANT
      ACCOUNTING POLICIES (** **continued)**





**Investments**


Long-term
      investments in which the Company does not exercise significant influence are
      recorded at cost. Long-term investments are written down to net-realizable
      value
      if there is a decline in their carrying value that is other than
      temporary.





**Income
      taxes**


Income
      taxes
      are accounted for under the asset and liability method. Under this method,
      future tax assets and liabilities are recognized for the future tax consequences
      attributable to differences between the financial statement carrying value
      and
      the tax basis of assets and liabilities.





Future
      tax
      assets and liabilities are measured using the enacted or substantively enacted
      tax rates expected to apply to taxable income in the years in which those
      temporary differences are expected to be recovered or settled. The effect on
      future tax assets and liabilities of a change in tax rates is recognized in
      income in the period during which the change in rates is considered to be
      substantively enacted. To the extent that the Company does not consider it
      more
      likely than not that a future tax asset will be recovered, it provides a
      valuation allowance against the excess.





**Stock-based
      compensation**


The
      grants
      of stock options to officers, directors and consultants are recognized as
      compensation expense based on the estimated fair value at the date of the
      grant.





**Mineral
      properties**


All
      costs
      related to the acquisition, exploration and development of mineral properties
      are capitalized by property. If economically recoverable ore reserves are
      developed, capitalized costs of the related property are reclassified as mining
      assets and amortized using the unit of production method. When a property is
      abandoned, all related costs are written off to operations. If, after management
      review, it is determined that the carrying amount of a mineral property is
      impaired, that property is written down to its estimated net realizable value.
      A
      mineral property is reviewed for impairment whenever events or changes in
      circumstances indicate that its carrying amount may not be
      recoverable.





The
      amounts
      capitalized represent costs to be charged to operations in the future and do
      not
      necessarily reflect the present or future values of the particular
      properties.





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







65


***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*




**2.**  **SIGNIFICANT
      ACCOUNTING POLICIES (** **continued)**





**Foreign
      currency translation**


The
      Company’s subsidiaries are integrated foreign operations and are translated into
      Canadian dollars using the temporal method. Monetary items are translated at
      the
      exchange rate in effect at the balance sheet date and non-monetary items are
      translated at historical exchange rates. Income and expense items are translated
      at rates approximating those in effect at the time of transactions. Translation
      gains and losses are reflected in loss for the year.





**Comparative
      figures**


Certain
      comparative figures have been reclassified, where necessary, to conform to
      the
      current year’s presentation.





**Earnings
      (loss) per share**


Earnings
      (loss) per share computations are based upon the weighted average number of
      common shares outstanding during the year. The Company uses the treasury stock
      method to compute the dilutive effect of options, warrants and similar
      instruments. Under this method it is assumed that the proceeds deemed to be
      received on the exercise of these instruments are applied to reacquire common
      shares at the average market price during the year. The effect of potential
      issuances of shares under options and warrants is presented as
      follows:




**2006**
            
            2005
            
            2004Basic
                weighted average number of common shares
            
            
            **38,475,471**
            
            
            17,274,397
            
            
            6,834,589Effect
                of dilutive stock options and warrants
            
            
            -
            
            
            -
            
            
            1,375,000Diluted
                weighted average number of common shares
            
            
            **38,475,471**
            
            
            17,274,397
            
            
            8,209,589





**Asset
      retirement obligation**


In
      fiscal
      2004, the Company adopted the CICA Handbook Section 3110, “Asset Retirement
      Obligations”, which established standards for asset retirement obligations and
      the associated retirement costs related to site reclamation and abandonment.
      The
      fair value of the liability for an asset retirement obligation is recorded
      when
      it is incurred and the corresponding increase to the asset is depreciated over
      the life of the asset. The liability is increased over time to reflect an
      accretion element considered in the initial measurement at fair value. At June
      30, 2006, the Company has not incurred or committed to any reclamation
      obligation on its mineral properties.







66


***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*




**3.**  **EQUIPMENT**





**2006**
            
            2005$
            
            $Computer
                equipment
            
            
            **38,748**
            
            
            10,206Field
                equipment
            
            
            **158,168**
            
            
            20,960Office
                equipment
            
            
            **35,830**
            
            
            19,416**232,746**
            
            
            50,582Less:
                Accumulated amortizationComputer
                equipment
            
            
            **10,890**
            
            
            1,224Field
                equipment
            
            
            **5,195**
            
            
            2,725Office
                equipment
            
            
            **16,039**
            
            
            1,204**32,124**
            
            
            5,153Net
                book valueComputer
                equipment
            
            
            **27,858**
            
            
            8,982Field
                equipment
            
            
            **152,973**
            
            
            18,235Office
                equipment
            
            
            **19,791**
            
            
            18,212**200,622**
            
            
            45,429





**Mill
      deposit**


On
      May 9,
      2006, the Company entered into an exclusive option agreement with Tanami Gold
      NL
      (Australia) (“Tanami”) for the purchase of a used gold processing plant
      currently located 125km south of Darwin in the Northern Territory, Australia.
      The agreement entails an Australian $200,000 (CAD$187,301) non-refundable
      deposit which was paid in May 2006. Goldbelt may finalize the purchase of the
      plant with payment of A$1 million by October 31, 2006 or any time prior to
      this
      date with the commencement of removal of the plant, whichever is earlier. A
      further sum of A$500,000 will be due November 30, 2006 and a final payment
      of
      A$300,000 will be due no later than December 29, 2006. An additional payment
      of
      A$200,000 will be required should the plant removal be delayed beyond November
      30, 2006. Any portion of the additional payment not utilized by Tanami for
      plant
      and cleanup costs will be returned to the Company.







67





***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*




**4.**  **MINERAL
      PROPERTIES**





On
      November
      19, 2004, the Company entered into an Amended and Restated Share Purchase
      Agreement (the “Agreement”) with Resolute Mining Limited (“Resolute”) of Perth,
      Australia, an Australian Stock Exchange listed company, to acquire Resolute’s
      100% owned subsidiary, Resolute (West Africa) Limited (“RWA”). The primary
      assets of RWA are exploration properties in Burkina Faso in western Africa
      known
      as the Belahouro permit, and Houndé area permits.





On
      March 3,
      2005, the Company completed the acquisition (the “Acquisition”) of the
      subsidiary of Resolute and a concurrent private placement of 16,000,000 units
      at
      $0.50 per unit for gross proceeds of $8,000,000 (Note 5).





The
      subsidiary was acquired in consideration for $1,873,350 (US$1,500,000) on
      closing, $1,951,056 (US$1,575,685) on or before January 31, 2006, 7,529,412
      common shares of the Company and 7,529,412 common share purchase warrants valued
      at $3,764,706 and allocated to mineral properties. Included in the warrants
      are
      1,882,353 exercisable at $0.50 until March 3, 2007, 1,882,353 exercisable at
      $0.65 until March 3, 2007 and 3,764,706 exercisable at $0.65 until September
      3,
      2006. The Company also paid due diligence costs of $330,035 (US$250,000) and
      issued 250,000 units valued at $125,000 consisting of one common share and
      one-half of one common share purchase warrant. Each whole warrant entitles
      the
      holder to acquire an additional common share at $1.00 until March 3,
      2007.





In
      January
      2006, pursuant to Goldbelt's obligations under the Agreement with Resolute,
      Goldbelt issued to Resolute 723,982 common shares of the Company and 361,990
      common share purchase warrants with a value of $470,588 and allocated to mineral
      properties. Included in the warrants are 180,995 exercisable at $0.65 until
      January 13, 2008 and 180,995 exercisable at $0.845 until January 13,
      2008.





In
      April
      2006, the Company agreed to issue an aggregate of 1,670,000 Goldbelt shares
      to
      Resolute to repay the US$1,575,685 payable to Resolute for the 2004 drilling
      program under the Agreement and settle other amounts claimed by Goldbelt to
      be
      owed by Resolute. In addition and as a result of Goldbelt satisfying its
      obligation to raise, by January 31, 2006, a minimum of $10,625,000 by way of
      one
      or more private placements, Goldbelt issued to Resolute 1,176,471 common shares
      and 588,326 common share purchase warrants valued at $764,706 and allocated
      to
      mineral properties. Included in the warrants are 294,118 exercisable at $0.75
      until January 17, 2008 and 294,118 exercisable at $0.98 until January 17, 2008.
      Resolute surrendered for cancellation, previously issued 1,176,471 Goldbelt
      warrants exercisable at $0.65 until September 3, 2006. This settlement of shares
      and warrants is in addition to the shares and warrants issued at the January
      13,
      2006 private placement as described in Note 5. The remaining 2,588,235 warrants
      exercisable at $0.65 until September 3, 2006 were exercised in May
      2006.







68


***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*







**4.**  **MINERAL
      PROPERTIES** ( **continued)**





The
      Acquisition of RWA has been accounted for using the purchase method. The total
      purchase price of $8,044,147 at March 3, 2005 has been allocated as
      follows:





Cash
            
            $
            20,160Prepaids
            
            
            13,009Equipment
            
            
            14,089Mineral
                properties
            
            
            8,029,872Accounts
                payable and accrued liabilities
            
            
            (32,983
            )$
            8,044,147





Belahouro
            
            Other
                permits
            
            Total$
            
            $
            
            $**Balance
                - June 30, 2004**
            
            
            -
            
            
            **-**
            
            
            **-**Acquisition
                from Resolute
            
            
            7,694,024
            
            
            335,848
            
            
            8,029,872Administrative
            
            
            48,392
            
            
            1,464
            
            
            49,856Assay
                and sampling
            
            
            212,726
            
            
            149,227
            
            
            361,953Camp
                and general
            
            
            15,281
            
            
            483
            
            
            15,764Communications
            
            
            11,657
            
            
            1,031
            
            
            12,688Drilling
            
            
            1,156,244
            
            
            -
            
            
            1,156,244Equipment
                amortization
            
            
            4,496
            
            
            -
            
            
            4,496Field
                supplies
            
            
            44,131
            
            
            -
            
            
            44,131Maps
            
            
            262
            
            
            88
            
            
            350Project
                engineering
            
            
            5,398
            
            
            -
            
            
            5,398Repairs
                and maintenance
            
            
            17,043
            
            
            1,715
            
            
            18,758Resource
              and mine
              engineering
            
            
            162,923
            
            
            -
            
            
            162,923Safety
            
            
            3,071
            
            
            862
            
            
            3,933Salaries
                and benefits
            
            
            254,067
            
            
            -
            
            
            254,067Taxes
            
            
            20,360
            
            
            6,648
            
            
            27,008Training
            
            
            3,668
            
            
            326
            
            
            3,994Travel
                and fuel
            
            
            87,577
            
            
            2,191
            
            
            89,768**Balance
                - June 30, 2005**
            
            
            **9,741,320**
            
            
            **499,883**
            
            
            **10,241,203**





69


***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*




**4.**  **MINERAL
      PROPERTIES** ( **continued)**





Belahouro
            
            Other
                permits
            
            Total$
            
            $
            
            $**Balance
                - June 30, 2005**
            
            
            **9,741,320**
            
            
            **499,883**
            
            
            **10,241,203**Acquisition
                from Resolute
            
            
            1,183,613
            
            
            51,681
            
            
            1,235,294Administrative
            
            
            100,116
            
            
            25,916
            
            
            126,032Assay
                and sampling
            
            
            165,311
            
            
            68,308
            
            
            233,619Camp
                and general
            
            
            42,289
            
            
            9,125
            
            
            51,414Communications
            
            
            31,800
            
            
            5,582
            
            
            37,382Drilling
            
            
            382,266
            
            
            -
            
            
            382,266Environmental
                studies
            
            
            93,911
            
            
            746
            
            
            94,657Equipment
                amortization
            
            
            7,955
            
            
            -
            
            
            7,955Field
                supplies
            
            
            77,516
            
            
            6,198
            
            
            83,714Geophysical
            
            
            14,387
            
            
            -
            
            
            14,387Hydrogeology
            
            
            15,442
            
            
            -
            
            
            15,442Maps
            
            
            3,419
            
            
            241
            
            
            3,660Project
                engineering
            
            
            386,915
            
            
            -
            
            
            386,915Repairs
                and maintenance
            
            
            53,956
            
            
            12,103
            
            
            66,059Resource
                and mine engineering
            
            
            275,209
            
            
            -
            
            
            275,209Safety
            
            
            3,121
            
            
            602
            
            
            3,723Salaries
                and benefits
            
            
            418,044
            
            
            119,892
            
            
            537,936Taxes
            
            
            14,815
            
            
            47,955
            
            
            62,770Training
            
            
            983
            
            
            1,204
            
            
            2,187Travel
                and fuel
            
            
            175,091
            
            
            20,445
            
            
            195,536**Expenditures
                in fiscal 2006**
            
            
            3,446,159
            
            
            369,998
            
            
            3,816,157**Balance
                - June 30, 2006**
            
            
            **13,187,479**
            
            
            **869,881**
            
            
            **14,057,360**





The
      Belahouro exploration license which encompassed an area of 1,187 km2 and
      contained the Inata Gold Project expired in April 2006. The Company has
      submitted an application for an exploitation license on the Inata Gold Project
      which covers an area of approximately 26 km2. Prior to the expiration of the
      Belahouro license, the Company applied for and subsequently received 10 new
      exploration licenses covering an area of 2,474 km2. These new licenses include
      the remaining area of the previous Belahouro license and surround the Inata
      Gold
      Project. The Inata Gold Project is subject to a third party royalty of 2.5%
      and
      a government royalty of 3% on gross sales.





In
      addition
      to the Belahouro area exploration licenses and the Inata Gold Project whose
      exploitation license application is under review, Goldbelt has been issued
      ten
      exploration licenses covering an area of approximately 2,216 km2. Two licenses
      covering 496 km2 lie immediately north of the Belahouro exploration permits.
      Seven licenses are located in the Houndé and Bougouriba provinces of
      southwestern Burkina Faso covering an area of approximately 1,655 km2. The
      Ouedogo license, located in southeastern Burkina Faso, covers a 65 km2
area.







70




***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*







**5.**  **CAPITAL
      STOCK AND CONTRIBUTED SURPLUS**





Capital
                StockNumber
            
            
            
            Contributedof
                Shares
            
            Amount
            
            Surplus$
            
            $AuthorizedUnlimited
                number of common shares without par value**Balance
                June 30, 2003**
            
            
            **4,655,137**
            
            
            **182,424**
            
            
            **-**Issued
                for cash
            
            
            3,500,000
            
            
            480,000
            
            
            -Stock-based
                compensation
            
            
            -
            
            
            -
            
            
            17,646**Balance,
                June 30, 2004**
            
            
            **8,155,137**
            
            
            **662,424**
            
            
            **17,646**Exercise
                of
                warrants
            
            
            2,000,000
            
            
            200,000
            
            
            -Rounding
                adjustment
            
            
            3
            
            
            -
            
            
            -Private
                placement
            
            
            16,000,000
            
            
            8,000,000
            
            
            -Shares
                issued for mineral properties
            
            
            7,529,412
            
            
            3,764,706
            
            
            -Shares
                issued for sponsor’s fees
            
            
            175,000
            
            
            87,500
            
            
            -Shares
                issued for finder’s fees for mineral properties
            
            
            250,000
            
            
            125,000
            
            
            -Stock-based
                compensation
            
            
            -
            
            
            -
            
            
            412,146Agents’
                compensation
            
            
            -
            
            
            -
            
            
            223,000Share
                issue costs
            
            
            -
            
            
            (1,102,005
            )
            
            -**Balance,
                June 30, 2005**
            
            
            **34,109,552**
            
            
            **11,737,625**
            
            
            **652,792**Private
                placement
            
            
            1,538,462
            
            
            1,000,000
            
            
            -Exercise
                of
                warrants
            
            
            10,588,235
            
            
            6,882,353
            
            
            -Shares
                issued for mineral properties
            
            
            1,900,453
            
            
            1,235,294
            
            
            -Shares
                issued for settlement of debt
            
            
            1,670,000
            
            
            1,808,169
            
            
            -Exercise
                of agents’ compensation warrants
            
            
            255,398
            
            
            166,009
            
            
            -Exercise
                of
                options
            
            
            660,000
            
            
            66,000
            
            
            -Exercise
                of
                agents’ compensation options
            
            
            565,647
            
            
            294,132
            
            
            -Stock-based
                compensation
            
            
            -
            
            
            -
            
            
            1,217,332Agents’
                compensation
            
            
            -
            
            
            -
            
            
            25,000Exercise
                of
                options
            
            
            -
            
            
            154,600
            
            
            (154,600
            )Share
                issue costs
            
            
            
            
            
            (101,950
            )
            
            -**Balance,
                June 30, 2006**
            
            
            **51,287,747**
            
            
            **23,242,232**
            
            
            **1,740,524**





Included
      in
      issued capital stock are 8,530,588 common shares subject to an escrow agreement
      that may not be transferred, assigned or otherwise dealt with without the
      consent of the regulatory authorities.







71





***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*




**5.**  **CAPITAL
      STOCK AND CONTRIBUTED SURPLUS** ( **continued)**





**Private
      placements**




***Fiscal
      2005***


During
      fiscal 2005, the Company issued 16,000,000 units for $0.50 per unit for gross
      proceeds of $8,000,000 consisting of one common share and one half of one common
      share purchase warrant. Each whole share purchase warrant entitles the holder
      to
      purchase one additional common share at $0.65 until September 3, 2006. If the
      closing price of the shares of the Company on the TSX Venture Exchange exceeds
      $0.95 for 21 consecutive trading days, holders may be given written notice
      of a
      period of 30 days within which to exercise the share purchase warrants, failing
      which they will then expire. The Company paid commissions and issuance costs
      of
      $791,505, issued 175,000 common shares valued at $87,500 as sponsor’s fees, and
      granted to the underwriters compensation options valued at $223,000 to purchase
      1,068,550 units, with terms identical to the placement units, exercisable at
      $0.50 per unit until March 3, 2007.





***Fiscal
      2006***


On
      January
      13, 2006, the Company completed a private placement by issuing 1,538,462 common
      shares at $0.65 per share for gross proceeds of $1,000,000. The Company paid
      commissions and issuance costs of $76,950; and granted 107,692 common share
      purchase warrants valued at $25,000 and exercisable at $0.71 per share until
      January 13, 2007.





**Stock
      option plan**


The
      Company
      has a stock option plan (the “Plan”) whereby, from time to time at the
      discretion of the Board of Directors, stock options are granted to directors,
      officers, employees and certain consultants to a maximum of 5,000,000 shares
      in
      the capital of the Company. The exercise price of each option is based on the
      market price of the Company’s common stock at the date of grant less an
      applicable discount, subject to a minimum price of $0.10. The options can be
      granted for a maximum term of 5 years. In accordance with current policies
      of
      the TSX Venture Exchange (“TSXV”), for so long as the Company is a Tier 2 issuer
      on the TSXV, options granted under the Plan shall vest and be exercisable as
      to
      25% of the option upon the grant date and as to 12 1/2% every quarter thereafter
      unless otherwise determined by the directors of the Company and acceptable
      to
      the TSXV. At any time after the Company becomes a Tier 1 issuer on the TSXV,
      the
      Directors, subject to the policies of the TSXV, may determine and impose terms
      upon which each option shall become vested in respect of option shares, but
      no
      vesting period shall be required. As at June 30, 2006, options to acquire
      5,110,000 common shares, including 660,000 subject to shareholders’ approval,
      were outstanding, of which 2,869,375 were exercisable. Stock option transactions
      are summarized as follows:







72


***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*




**5.**  **CAPITAL
      STOCK AND CONTRIBUTED SURPLUS** ( **continued)**





Options
            
            Weighted
                AverageExercise
                Price**2006**
            
            
            
            2005
            
            **2006**
            
            2005$
            
            $Outstanding,
                beginning of year
            
            
            **1,985,000**
            
            
            
            
            
            660,000
            
            
            **0.43**
            
            
            0.10Granted
            
            
            **3,785,000**
            
            
            
            
            
            1,325,000
            
            
            **0.69**
            
            
            0.60Exercised
            
            
            **(660,000**
            **)**
            
            
            
            
            -
            
            
            **(0.10**
            **)**
            
            -Outstanding,
                end of year
            
            
            **5,110,000**
            
            
            
            
            
            1,985,000
            
            
            **0.67**
            
            
            0.43





Number
            
            Exercise
            
            ExpiryFiscal
                year granted
            
            of
                Options
            
            Price
            
            Date$2005
            
            
            375,000
            
            
            0.48
            
            
            December
                1, 2007150,000
            
            
            0.25
            
            
            July
                12, 2009800,000
            
            
            0.72
            
            
            March
                9, 20102006
            
            
            500,000
            
            
            0.54
            
            
            September
                26, 2010925,000
            
            
            0.62
            
            
            November
                25, 20101,550,000
            
            
            0.69
            
            
            December
                16, 2010150,000
            
            
            0.71
            
            
            January
                9, 2011660,000
            (1)
            
            0.89
            
            
            February
                10, 2011Total
            
            
            5,110,000





(1)  These
      options which were granted to three directors are subject to shareholders’
approval at the Company’s next annual general meeting.





**Warrants
      and agents’ compensation options**


The
      following table reflects the continuity of warrants and compensation options
      to
      acquire common shares of the Company for the year ended June 30,
      2006:





Number
                of common sharesExercise
            
            Opening
            
            
            
            
            
            
            
            ClosingExpiry
                Date
            
            Price
            
            Balance
            
            Issued
            
            Exercised
            
            Cancelled
            
            Balance$September
                3, 2006
            
            
            0.65
            
            
            11,764,706
            (1)
            
            -
            
            
            (10,588,235
            )
            
            (1,176,471
            )
            
            -March
                3, 2007
            
            
            0.50
            
            
            1,882,353
            
            
            -
            
            
            -
            
            
            -
            
            
            1,882,353March
                3, 2007
            
            
            0.65
            
            
            1,882,353
            
            
            -
            
            
            -
            
            
            -
            
            
            1,882,353March
                3, 2007
            
            
            1.00
            
            
            125,000
            
            
            -
            
            
            -
            
            
            -
            
            
            125,000March
                3, 2007
            
            
            0.65
            
            
            -
            (1)
            
            255,898
            
            
            (255,398
            )
            
            -
            
            
            500March
                3, 2007
            
            
            0.50
            
            
            1,602,825
            (2)
            
            -
            
            
            (767,702
            )
            
            -
            
            
            835,123January
                13, 2007
            
            
            0.71
            
            
            -
            
            
            107,692
            
            
            (53,846
            )
            
            -
            
            
            53,846January
                13, 2008
            
            
            0.65
            
            
            -
            
            
            180,995
            
            
            -
            
            
            -
            
            
            180,995January
                13, 2008
            
            
            0.845
            
            
            -
            
            
            180,995
            
            
            -
            
            
            -
            
            
            180,995January
                17, 2008
            
            
            0.75
            
            
            -
            
            
            294,118
            
            
            -
            
            
            -
            
            
            294,118January
              17, 2008
            
            
            0.98
            
            
            -
            
            
            294,118
            
            
            -
            
            
            -
            
            
            294,11817,527,237
            
            
            1,313,816
            
            
            (11,665,181)
            
            
            (1,176,471)
            
            
            5,729,401







73


***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*







**5.**  **CAPITAL
      STOCK AND CONTRIBUTED SURPLUS** ( **continued)**





The
      following table reflects the continuity of warrants and compensation options
      to
      acquire common shares of the Company for the year ended June 30,
      2005:





Number
                of common sharesExercise
            
            Opening
            
            
            
            
            
            
            
            ClosingExpiry
                Date
            
            Price
            
            Balance
            
            Issued
            
            Exercised
            
            Cancelled
            
            Balance$September
                3, 2006
            
            
            0.65
            
            
            -
            
            
            11,764,706
            
            
            -
            
            
            -
            
            
            11,764,706March
                3, 2007
            
            
            0.50
            
            
            -
            
            
            1,882,353
            
            
            -
            
            
            -
            
            
            1,882,353March
                3, 2007
            
            
            0.65
            
            
            -
            
            
            1,882,353
            
            
            -
            
            
            -
            
            
            1,882,353March
                3, 2007
            
            
            1.00
            
            
            -
            
            
            125,000
            
            
            -
            
            
            -
            
            
            125,000March
                3, 2007
            
            
            0.50
            
            
            -
            
            
            1,602,825
            (2)
            
            -
            
            
            -
            
            
            1,602,825-
            
            
            17,257,237
            
            
            -
            
            
            -
            
            
            17,257,237




(1)
              If
                  the
                  closing price of the shares of the Company on the TSX Venture Exchange
                  exceeds $0.95 for 21 consecutive trading days, holders may be given
                  written notice of a period of 30 days within which to exercise
                  the share
                  purchase warrants, failing which they will then expire.(2)
              The
                  Company issued 1,068,550 units as agents’ compensation options on the
                  March 3, 2005 private placement. Each agent’s compensation option is
                  exercisable at $0.50 into one common share and one-half of one
                  common
                  share purchase warrant. Each whole warrant entitles the holder
                  to acquire
                  one additional common share at an exercise price of $0.65 until
                  March 3,
                  2007. These warrants




**Valuation
      of stock-based compensation and agents’ compensation
      options**


The
      fair
      value of 3,785,000 (2005: 1,325,000; 2004: 660,000) options granted during
      the
      year ended June 30, 2006 has been estimated at the date of grant using a
      Black-Scholes option pricing model. The valuation was calculated with the
      following assumptions: weighted average risk free interest rate of 3.9% (2005:
      3.3%; 2004: 4.1%); annualized volatility factor of the expected market price
      of
      the Company’s common stock of 70% (2005: 70%; 2004: 110%); weighted average
      expected life of the options of 5.0 years (2005: 4.3 years; 2004: 5 years),
      and
      expected dividend yield of 0% (2005: 0%; 2004: 0%). The resulting weighted
      average fair value per option granted was $0.42 (2005: $0.14; 2004: $0.05).
      The
      estimated fair value of the options is expensed over the vesting
      period.







74


***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*




**5.**  **CAPITAL
      STOCK AND CONTRIBUTED SURPLUS** ( **continued)**





The
      Company
      recorded a fair value of $25,000 (2005: $223,000) for the 107,692 (2005:
      1,068,550) agents’ compensation options granted during the year ended June 30,
      2006, using the Black-Scholes option pricing model. This amount was recorded
      as
      cost of share issue and contributed surplus. The valuation was calculated with
      the following assumptions: risk free interest rate of 2.8% (2005: 1.2%);
      annualized volatility factor of the expected market price of the Company’s
      common stock of 80% (2005: 70%); expected life of the options of 1 year (2005:
      1
      year), and expected dividend yield of 0% (2005: 0%).





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.








**6.**  **RELATED
      PARTY TRANSACTIONS**





The
      Company
      entered into the following transactions with related parties not disclosed
      elsewhere:


a)
              At
                  June 30, 2006, the Company owed $Nil (2005: $337,848) to a director
                  for
                  consulting fees, which are included in accounts payable and accrued
                  liabilities.b)
              During
                  fiscal 2004, the Company paid a director $150,000 in settlement
                  of
                  accounts payable of $254, 972 resulting in a gain on settlement
                  of
                  $104,972.c)
              The
                  following table discloses the related party transactions, which
                  were in
                  the normal course of operations and were measured at the exchange
                  amounts,
                  for the financial periods as
                  follows:





**Type
                ofTerms and conditions****Related
                party**
            **fees**
            
            **2006**
            2005
            2004**$**
            $
            $Directors
            Consulting
            Normal
                commercial
            **145,000**
            52,000
            32,273Director
                related entities
            Professional
            Normal
                commercial
            -
            189,045
            69,238Directors
            Acquisition
            Normal
                commercial
            -
            230,381
            -Directors
            Financing
            Normal
                commercial
            **-**
            138,229
            -**145,000**
            609,655
            101,511





75


***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*




**7.**  **INCOME
      TAXES**





a)  A
      reconciliation of income taxes at statutory rates with reported taxes is as
      follows:







**2006**
            
            2005
            
            2004$
            
            $
            
            $(Loss)
                income before income taxes
            
            
            **(3,312,615**
            **)**
            
            (1,736,519
            )
            
            535,921Income
                (taxes) recovery
            
            
            **1,176,000**
            
            
            616,000
            
            
            (191,000
            )Stock-based
                compensation not deductiblefor
                income tax purposes
            
            
            **(432,000**
            **)**
            
            (146,000
            )
            
            (6,000
            )Non-taxable
                portion of gainon
                sale
                of investments
            
            
            -
            
            
            -
            
            
            155,000(Unrecognized)
                recognized benefit of net operating losses
            
            
            **(744,000**
            **)**
            
            (470,000
            )
            
            42,000-
            
            
            -
            
            
            -




b)  Significant
      components of the Company’s future income tax assets are as
      follows:




**2006**
            
            2005$
            
            $Future
                income tax assetsLosses
                available for future periods
            
            
            **1,530,000**
            
            
            917,000Financing
                costs
            
            
            **190,000**
            
            
            250,000**1,720,000**
            
            
            1,167,000Valuation
                allowance
            
            
            **(1,720,000**
            **)**
            
            (1,167,000
            )Net
                future income taxes
            
            
            **-**
            
            
            -





At
      June 30,
      2006, the Company has available for deduction against Canadian future taxable
      income, non-capital losses of approximately $4,311,000 and unamortized financing
      costs of approximately $536,000. The losses, if not utilized, will expire
      through 2016. In addition, the Company has capital loss carry forwards, subject
      to certain restrictions, for Canadian income tax purposes, which may be carried
      forward indefinitely, subject to final determination by taxation authorities.
      Future tax benefits which may arise as a result of these non-capital losses
      and
      financing costs have not been recognized in these financial statements and
      have
      been offset by a valuation allowance.





76


***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*




**8.**  **SEGMENTED
      INFORMATION**





All
      of the
      Company’s operations are in the mineral resource exploration industry with its
      principal business activity in the acquisition and development of mineral
      resource properties. The Company has mineral resource properties located in
      Burkina Faso. Geographic information is as follows:





**2006**
            
            2005$
            
            $Equipment
                and mineral properties:Burkina
                Faso
            
            
            **14,234,022**
            
            
            10,270,475Canada
            
            
            **23,960**
            
            
            16,157**14,257,982**
            
            
            10,286,632





**9.**   **SUPPLEMENTAL
      DISCLOSURE WITH RESPECT TO CASH FLOWS**




The
      significant non-cash transactions during the year ended June 30, 2006
      included:


a)  Issuance
      of
      1,176,471 common shares valued at $764,706 pursuant to the acquisition agreement
      (Note 4).


b)  Issuance
      of
      723,982 common shares valued at $470,588 pursuant to the acquisition agreement
      (Note 4).


c)  Issuance
      of
      1,670,000 common shares valued at $1,808,169 to settle the Resolute debt (Note
      4).


d)  Issuance
      of
      107,692 agents’ compensation warrants valued at $25,000 as agents’ compensation
      on a private placement (Note 5).


e)  Accounts
      payable of $212,416 and receivables of $30,434 related to the acquisition of
      mineral properties.





The
      significant non-cash transactions during the year ended June 30, 2005
      included:


a)  Issuance
      of
      7,529,412 common shares valued at $3,764,706, 250,000 units valued at $125,000
      as finder’s fees and a payable of $1,933,588 due to Resolute Mining Limited
      pursuant to the acquisition agreement (Note 4).


b)  Issuance
      of
      175,000 common shares valued at $87,500 as sponsor’s fees in relation to the
      private placement completed March 3, 2005 (Note 5).


c)  Issuance
      of
      1,068,550 agents’ compensation units valued at $223,000 as agents’ compensation
      on a private placement (Note 5).


d)  Accrued
      liabilities of $1,414,335 related to the acquisition of mineral
      properties.


e)  Accrual
      of
      liabilities $138,230 related to share issuance costs.





There
      were
      no non-cash transactions during the year ended June 30, 2004.




77


***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*





**10.**  **FINANCIAL
      INSTRUMENTS**





The
      Company’s financial instruments consist of cash, receivables, accounts payable
      and accrued liabilities and due to Resolute Mining Limited. Unless otherwise
      noted, it is management’s opinion that the Company is not exposed to significant
      interest, currency or credit risks arising from these financial instruments.
      The
      Company is exposed to financial risk arising from fluctuations in foreign
      exchange rates and the degree of volatility of these rates. The Company does
      not
      use derivative instruments to reduce its exposure to foreign currency risk.
      The
      fair value of these financial instruments approximates their carrying values,
      unless otherwise noted.








**11.**  **SUBSEQUENT
      EVENT**





Subsequent
      to June 30, 2006 the Company issued 26,923 common shares for proceeds of $19,115
      pursuant to the exercise of agents’ warrants.








**12.**   **DIFFERENCES
      BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
      PRINCIPLES**





These
      consolidated financial statements have been prepared in accordance with
      generally accepted accounting principles in Canada (“Canadian GAAP”). Material
      variations in the accounting principles, practices and methods used in preparing
      these financial statements from principles, practices and methods accepted
      in
      the United States (“U.S. GAAP”) are described and quantified below.




a)    Net
      income (loss) and per share information


**2006**
            
            2005
            
            2004$
            
            $
            
            **$**(Loss)
                net income under Canadian GAAP
            
            
            **(3,312,615**
            **)**
            
            (1,736,519
            )
            
            535,921Mineral
                properties expenditures expensedunder
                U.S. GAAP (Note 12(d))
            
            
            **(2,632,544**
            **)**
            
            (2,547,179
            )
            
            -(Loss)
                net income under U.S. GAAP
            
            
            **(5,945,159**
            **)**
            
            (4,283,698
            )
            
            535,921(Loss)
                earnings per share U.S. GAAPBasic
            
            
            **(0.15**
            **)**
            
            (0.25
            )
            
            0.08Diluted
            
            
            **(0.15**
            **)**
            
            (0.25
            )
            
            0.07Weighted
                average number of shares outstandingBasic
            
            
            **38,475,471**
            
            
            17,274,397
            
            
            6,834,589Diluted
            
            
            **38,475,471**
            
            
            17,274,397
            
            
            8,209,589







78


***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*







**12.**   **DIFFERENCES
      BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES** ( **continued)**




b)  Balance
      sheets




The
      following table summarizes the balance sheet items which vary significantly
      under U.S. GAAP:





**2006**
            
            2005$
            
            $Mineral
                propertiesAs
                determined under Canadian GAAP
            
            
            **14,057,360**
            
            
            10,241,203Adjustment
                for
                expenditures expensed (Notes 12 (d))
            
            
            **(5,179,723**
            **)**
            
            (2,547,179
            )Mineral
                properties as determined under U.S. GAAP
            
            
            **8,877,637**
            
            
            7,694,024Shareholders’
                equityCapital
                stockAs
                determined under Canadian GAAP
            
            
            **23,242,232**
            
            
            11,737,625Amortization
                of
                note discount (Note 12 (e))
            
            
            **(394,285**
            **)**
            
            (394,285
            )Compensation
                expense (Note 12(f))
            
            
            **717,990**
            
            
            717,990As
                determined under U.S. GAAP
            
            
            **23,565,937**
            
            
            12,061,330Contributed
                surplus as determined under Canadian GAAP and U.S. GAAP
            
            
            **1,740,524**
            
            
            652,792DeficitAs
                determined under Canadian GAAP
            
            
            **(4,671,271**
            **)**
            
            (1,358,656
            )Amortization
                of
                note discount (Note 12 (e))
            
            
            **394,285**
            
            
            394,285Compensation
                expense (Note 12(f))
            
            
            **(717,990**
            **)**
            
            (717,990
            )Mineral
                properties expenditures expensed under U.S. GAAP (Note 12
                (d))
            
            
            **(5,179,723**
            **)**
            
            (2,547,179
            )As
                determined under U.S. GAAP
            
            
            **(10,174,699**
            **)**
            
            (4,229,540
            )Shareholders’
                equity as determined under U.S. GAAP
            
            
            **15,131,762**
            
            
            8,484,582








79


***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*







**12.**   **DIFFERENCES
      BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES** ( **continued)**





c)  Statements
      of cash flows





The
      impact
      of the differences between Canadian GAAP and U.S. GAAP on the statements of
      cash
      flows would be as follows:





**2006**
            
            2005
            
            2004$
            
            $
            
            $Net
                cash used in operating activitiesCanadian
                GAAP
            
            
            **(2,429,876**
            **)**
            
            (1,137,351
            )
            
            (651,197
            )Mineral
                properties expensed under U.S. GAAP
            
            
            **(3,805,555**
            **)**
            
            (717,203
            )
            
            -Net
                cash used in operating activities, U.S. GAAP
            
            
            **(6,235,431**
            **)**
            
            (1,854,554
            )
            
            (651,197
            )Net
                cash (used in) provided by investing activitiesCanadian
                GAAP
            
            
            **(4,175,020**
            **)**
            
            (2,937,203
            )
            
            1,217,463Mineral
                properties expensed under US GAAP
            
            
            **3,805,555**
            
            
            717,203
            
            
            -Net
                cash (used in) provided by investing activities, U.S. GAAP
            
            
            **(369,465**
            **)**
            
            (2,220,000
            )
            
            1,217,463Financing
                activitiesCanadian
                GAAP
                and U.S. GAAP
            
            
            **8,193,315**
            
            
            7,546,725
            
            
            480,000Increase
                in cash during the year
            
            
            **1,588,419**
            
            
            3,472,171
            
            
            1,046,266Cash,
                beginning of year
            
            
            **4,530,762**
            
            
            1,058,591
            
            
            12,325Cash,
                end of year
            
            
            **6,119,181**
            
            
            4,530,762
            
            
            1,058,591




d)
              Under
                  Canadian GAAP, the Company accounts for mineral properties as described
                  in
                  Note 2. In March 2004, the Emerging Issues Task Forces (“EITF”) reached a
                  consensus that mineral interests conveyed by leases should be considered
                  tangible assets. On April 30, 2004, the FASB issued a FASB Staff
                  Position
                  (”FSP”) amending SFAS 141 and SFAS 142, “Goodwill and Other Intangible
                  Assets”, to provide that certain mineral use rights are considered
                  tangible assets and that mineral use rights should be accounted
                  for based
                  on their substance. The FSP is effective for the first reporting
                  period
                  beginning after April 29, 2004, with early adoption permitted.
                  The Company
                  considered the effects of this statement on its mineral properties
                  and
                  concluded that the acquisition costs relating to its mineral properties
                  in
                  Burkina Faso should be considered as tangible
                  assets.
 80
  ***Goldbelt
      Resources Ltd.***


**Notes
      to the Consolidated Financial Statements**


***June
      30, 2006***


*(Expressed
      in Canadian Dollars)*




12
              **DIFFERENCES
                BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
                PRINCIPLES**(**continued)**In
                  March 2004, in its report on “Mining Assets: Impairment and Business
                  Combinations” the EITF reached a consensus that an entity should include
                  the cash flows associated with value beyond proven and probable
                  reserves
                  in estimates of future cash flows (both undiscounted and discounted)
                  used
                  for determining whether a mining asset is impaired under Statement
                  No.
                  144, “Accounting for the Impairment or Disposal of Long-Lived Assets”. The
                  Company applied this consensus and others within this EITF report
                  using
                  the technical reports on the measured and indicated reserves on
                  its
                  Belahouro property. The Company concluded that the acquisition
                  costs of
                  $8,877,637 relating to the Belahouro property was not
                  impaired.Under
                  U.S. GAAP, the recoverability of capitalized mineral properties
                  exploration expenditures are generally considered insupportable
                  until a
                  commercially mineable deposit is determined; therefore, all mineral
                  properties exploration expenditures are expensed as incurred. As
                  the
                  Company does not have reports on proven and probable reserves on
                  any of
                  its mineral properties, all exploration expenditures incurred on
                  the
                  Belahouro property, other than its acquisition costs, and its other
                  mineral properties have been expensed as incurred.e)
              Under
                  Canadian GAAP, the Company is required to credit capital stock
                  for the
                  estimated value of the conversion feature of a convertible note
                  and
                  amortized this amount over the term to maturity of the note. The
                  treatment
                  of convertible note under Canadian GAAP is not applicable under
                  U.S.
                  GAAP.f)
              The
                  Company accounts for stock-based compensation as disclosed in Note
                  2 and
                  accordingly there is no difference between Canadian GAAP and U.S.
                  GAAP for
                  the fiscal years ended June 30, 2006, 2005 and 2004. Prior to fiscal
                  2004,
                  for U.S. GAAP purposes, the Company elected to account for stock-based
                  compensation using Accounting Principles Board Opinion No. 25,
“Accounting
                  for Stock Issued to Employees”. Accordingly, compensation cost for stock
                  options was measured as the excess, if any, of the quoted market
                  price of
                  the Company’s stock at the date of grant over the option
                  price.g)
              Under
                  U.S. GAAP, Statement of Financial Accounting Standards No. 143,
                  “Accounting for Asset Retirement Obligations” requires companies to record
                  the fair value of the liability for closure and removal costs associated
                  with the legal obligations upon termination or removal of any tangible
                  long-lived assets for years beginning after January 1, 2003. Under
                  this
                  standard, the initial recognition of the liability is capitalized
                  as part
                  of the asset cost and depreciated over its estimated useful life.
                  Under
                  Canadian GAAP, the Company was not required to record asset retirement
                  obligations as at June 30, 2004. The Company has determined that
                  there
                  were no asset retirement obligations as at June 30, 2006 and
                  2005.h)
              In
                  May
                  2005, FASB issued Statement of Financial Accounting Standards No.
                  154
                  Accounting Changes and Error Corrections - A Replacement of APB
                  Opinion
                  No. 20 and FASB Statement No.3 (“SFAS 154”), which is effective for fiscal
                  years beginning after December 15, 2005. SFAS 154 requires that
                  changes in
                  accounting policy be accounted for on a retroactive
                  basis.





81


B.
      Exhibits




**Exhibit
                Number**
            **Description
                of Exhibit**1.1*
            Articles
                of Continuance1.2*
            By-laws4.1*
            Brian
                C. Wilson consulting agreement4.2*
            Amended
                and Restated Share Purchase Agreement, dated as of November 19, 2004,
                among Associated Gold Fields N.L., Resolute Limited and Goldbelt
                Resources
                Ltd.4.3**
            Agreement
                with Tanami Gold NL (Australia) dated May 9, 20068.1**
            List
                of Significant subsidiaries11.1*
            Code
                of Conduct for Chief Executive and Senior Financial
                Officers11.2*
            Code
                of Conduct for Officers and Employees12.1**
            Certification
                of Chief Executive Officer required by 17 CFR
                240.13a-14(a)12.2**
            Certification
                of Chief Financial Officer required by 17 CFR
                240.13a-14(a)13.1**
            Certification
                of Chief Executive Officer required by 17 CFR 240.13a-14(b) and 18
                U.S.C.
                135013.2**
            Certification
                of Chief Financial Officer required by 17 CFR 240.13a-14(b) and 18
                U.S.C.
                1350




*
      Incorporated by reference to the Registrant's Form 20-F for the fiscal year
      ended June 30, 2005, filed with the Securities and Exchange Commission on
      January 19, 2006.




**
      Filed herewith.














82


**SIGNATURES**




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




GOLDBELT
      RESOURCES
      LTD.


/s/
      Collin
      Ellison


Collin
      Ellison


President
      and Chief
      Executive Officer




Date:
      December 22, 2006












83