Ireland Inc.: Exhibit 10.16 - Filed by newsfilecorp.com






OFFICER NON-QUALIFIED STOCK OPTION AGREEMENT

OF
IRELAND INC.
A Nevada Corporation

THIS AGREEMENT is made between IRELAND INC., a
Nevada corporation (hereinafter referred to as the "Company"), and DOUGLAS
D.G. BIRNIE of 2733 King Louis Street, Henderson, NV 89044 (hereinafter
referred to as the “Optionee”), an officer of the Company, effective as of the
23rd day of April, 2012 (the “Grant Date”).

1.          
Options Granted. The Company hereby grants the Optionee non-qualified stock
options to purchase an aggregate of Eight Hundred Thousand (800,000)
shares of the Company’s Common Stock exercisable at a price of $0.90 per
share (the “Exercise Price”) for a term commencing on the vesting dates set out
below (the “Vesting Date”) and expiring at 5:00 pm (Pacific Time) on the date
that is five (5) years after the respective Vesting Date (the “Expiration
Date”), subject to termination as set forth herein:

	  	 	Number of 	 	 	Vesting Date 
	 
	  	 	Options to Vest 	 	 	  	 	 	  	 
	(a) 		200,000 			
      The date that the Corporation has successfully completed
      the following two performance milestones, which date shall be reasonably
      determined by the Board of Directors: 
	
	  	 	  	 	 	
       
	
       
	
       
	
       
	 
						
    (i) 
	
      

      
	
      

      
	
      completed installation of a new precious metals
      extraction circuit at the Corporation’s Columbus Project (the “Extraction
      Circuit”), and 
	
	  	 	  	 	 	
       
	
       
	
       
	
       
	 
						
    (ii) 
	
      

      
	
      

      
	
      the Extraction Circuit has been satisfactorily operated
      for 30 consecutive working days. 
	
	  	 	  	 	 	
       
	
       
	
       
	
       
	 
	(b) 		200,000 			
      The date that the Corporation has successfully processed
      1,500 tons of mineralized material extracted from the Columbus Project
      through the Extraction Circuit, which date shall be reasonably determined
      by the Board of Directors. 
	
	  	 	  	 	 	
       
	
       
	
       
	
       
	 
	(c) 		200,000 			
      The first date after the Grant Date that the closing
      price for the Corporation’s common stock (as quoted by the principal
      market or exchange on which such shares trade) exceeds $2.00 per share for
      20 consecutive trading days. 
	
	  	 	  	 	 	
       
	
       
	
       
	
       
	 
	(d) 		200,000 			
      The first date after the Grant Date that the closing
      price for the Corporation’s common stock (as quoted by the principal
      market or exchange on which such shares trade) exceeds $2.50 per share for
      20 consecutive trading days. 
	
	  	 	  	 	 	  	 	 	  	 
	  	 	800,000 	 	 	Total 	 


No option may be exercised unless the option has vested. The
vesting of all options will be cumulative. All options which have not vested
will terminate on the date of termination of the options in accordance with this
Agreement.

2.          
Method of Exercise. The options may be exercised to the extent they have
vested and become exercisable and not yet been forfeited or terminated by
written notice delivered to the Company at its principal place of business,
stating the number of shares for which the option is being exercised. The notice
must be accompanied by a check or other methods of payment acceptable to the
Plan Administrator for the amount of the purchase price, and comply with all the
requirements of the Company’s 2007 Stock Incentive Plan dated March 27, 2007, a
copy of which has been provided to the Optionee.

3.          
Capital Adjustments. The existence of the options shall not affect in any
way the right or power of the Company or its stockholders to: (1) make or
authorize any or all adjustments, recapitalizations, reorganizations, or other
changes in the Company's capital structure or its business; (2) enter into any
merger or consolidation; (3) issue any bonds, debentures, preferred or prior preference
stocks ahead of or affecting the common stock or the rights thereof, (4) issue
any securities convertible into any common stock, (5) issue any rights, options,
or warrants to purchase any common stock, (6) dissolve or liquidate the Company,
(7) sell or transfer all or any part of its assets or business, or (8) take any
other corporate act or proceedings, whether of a similar character or
otherwise.




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4.          
Adjustments for Reorganizations and Recapitalizations. If there shall, prior
to the exercise of any of the options provided for by this Agreement, be any
stock dividend, stock split, spin-off, combination or exchange of shares,
recapitalization, merger, consolidation, distribution to stockholders (other
than a normal cash dividend) or other change in the Company’s corporate or
capital structure that results in (a) the Company’s outstanding shares of common
stock (or any securities exchanged therefore or received in their place) being
exchanged for a different number or kind of securities of the Company or any
other corporation, or (b) new, different or additional securities of the Company
or of any other corporation being received by the holders of shares of the
Company’s common stock, then there shall automatically be an adjustment in
either the number of shares which may be purchased pursuant hereto, the type of
shares which may be purchased pursuant hereto or the price at which such shares
may be purchased, or any combination thereof, so that the rights evidenced
hereby shall thereafter as reasonably as possible be equivalent to those
originally granted hereby. The Company shall have the sole and exclusive power
to make such adjustments as it considers necessary and desirable.

5.          
Transfer of the Options. During the Optionee's lifetime, the options shall
be exercisable only by the Optionee. The options shall not be transferable by
the Optionee other than by the laws of descent and distribution upon the
Optionee's death. In the event of the Optionee's death during the term of this
Agreement, the Optionee's personal representatives may exercise any portion of
the options that remains vested and unexercised at the time of the Optionee's
death, provided that any such exercise must be made, if at all, during the
period within six (6) months after the Optionee's death, and subject to the
option termination date specified in Section 7.

6.          
Changes in Control.

	(a) 	
      Notwithstanding any other provision in this Agreement to
      the contrary, all unvested options outstanding under this Agreement shall
      immediately vest and become exercisable upon a Change in
Control.

	 	 	 
	(b) 	
      “Change in Control” means any of the following
    events:

	 	 	 
		(i) 	
      Approval by the stockholders of the Company of a merger
      or consolidation of the Company with any other corporation, other than a
      merger or consolidation that would result in the voting securities of the
      Company outstanding immediately prior to such merger or consolidation
      continuing to represent (either by remaining outstanding or being
      converted into voting securities of the surviving entity) more than fifty
      percent (50%) of the total voting power of the voting securities of the
      Company, the surviving entity or any parent thereof outstanding
      immediately after such merger or consolidation;

	 	 	 
		(ii) 	
      Approval by the stockholders of the Company of (i) a plan
      of complete liquidation or dissolution of the company or (ii) a sale by
      the Company of all of its property and assets pursuant to Section 78.565
      of the Nevada Revised Statutes (the “NRS”); or

	 	 	 
		(iii) 	
      Any person or group of persons (as defined in Section
      13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange
      Act”)) together with its affiliates, but excluding (i) the Company or any
      of its subsidiaries; (ii) any employee benefit plan of the Company or
      (iii) a corporation or other entity owned, directly or indirectly, by the
      stockholders of the Company in substantially the same proportions as their
      ownership of stock of the Company (individually a “Person” and
      collectively, “Persons”) is or becomes, directly or indirectly, the
      beneficial owner (as defined in Rule 13d-3 promulgated under the Exchange
      Act) of 50% or more of the combined voting power of the Company’s then
      outstanding securities.







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	7. 	Termination of Option. 
	  	  
	
      (a) 
	
      The Optionee’s right to exercise any options that have
      vested and are exercisable shall terminate on the earliest of the
      following dates: 




	 	(i) 	
      The Expiration Date;

	 	 	 
	 	(ii) 	
      Subject to subsections (c) and (d) below, the date which
      is six (6) months from the date on which the Optionee ceases to act as an
      officer of the Company or any subsidiary of the Company;

	 	 	 
	 	(iii) 	
      In the event of the termination of the Optionee as an
      officer of the Company or any subsidiary of the Company as a result of a
      breach of the Optionee’s obligations to the Company or any subsidiary of
      the Company, or as a result of any dishonesty, fraud, misconduct, the
      unauthorized use or disclosure of confidential information or trade
      secrets, or conviction or confession of a crime punishable by law (except
      minor violations) (each of which being a termination for “Cause”), the
      earliest date on which the Optionee is notified by the Company of such
      termination; and

	 	 	 
	 	(iv) 	
      The date which is six (6) months from the date of the
      Optionee’s death or the date the Optionee is determined by the Company to
      be unable to perform his or her duties as an officer of the Company or any
      subsidiary of the Company as a result of any mental or physical disability
      that is expected to result in death or that is expected to last for a
      continuous period of twelve (12) months or more (the “Disability
      Determination Date”).




	(b) 	
      The Optionee’s right to exercise any options that have
      not vested and are not exercisable shall terminate on the earliest of the
      following dates:

	 	 	 
		(i) 	
      The date the Optionee ceases to act as an officer of the
      Company or any subsidiary of the Company;

	 	 	 
		(ii) 	
      In the case of the termination of the Optionee as an
      officer of the Company or any subsidiary of the Company for Cause, on the
      earliest date on which the Optionee is notified by the Company of such
      termination; and

	 	 	 
		(iii) 	
      The date of the Optionee’s death or the Disability
      Determination Date, as applicable.




	(c) 	
      For purposes of this Section 7, the Optionee will be
      deemed not to have ceased to act as an officer of the Company or any
      subsidiary of the Company (the “Original Position”) if the Optionee
      continues to act as an employee, officer, director or consultant of the
      Company or a subsidiary of the Company in some other capacity immediately
      upon ceasing to act in the Original Position.

	 	 
	(d) 	
      Also notwithstanding the forgoing, if the Optionee dies
      after he or she ceases to be an officer of the Company or any subsidiary
      of the Company for reasons other than a termination for Cause or for
      disability in accordance with the above, the Optionee’s right to exercise
      any options that have vested and are exercisable on the date the Optionee
      ceases to be an officer of the Company or any subsidiary of the Company
      shall terminate on the earliest of the Expiration Date and the date which
      is six (6) months after the date of death.




	8. 	
      Rights as Shareholder. The Optionee will not be
      deemed to be a holder of any shares pursuant to the exercise of these
      options until he or she pays the option price and a stock certificate is
      delivered to him or her for those shares. No adjustment shall be made for
      dividends or other rights for which the record date is prior to the date
      the stock certificate is delivered.

	 	 
	9. 	
      Integration with the Company’s 2007 Stock Incentive
      Plan. All of the terms and conditions of the Company’s 2007 Stock
      Incentive Plan, a copy of which has been provided to the Optionee, are
      specifically made a part of this Agreement and shall control with regard
      to the interpretation or construction of any provision that is inconsistent
      herewith. This Agreement will be governed by and construed in accordance
  with the laws of the State of Nevada.







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	10. 	
      Withholding Taxes. The Optionee authorizes the
      Company to withhold from any payments due to the Optionee by the Company,
      whether pursuant to this Agreement or otherwise, any amounts required to
      be withheld and remitted by the Company on account of any income and
      employment taxes resulting from this Agreement.

	 	 
	11. 	
      Miscellaneous.





	 	(a) 	
      Any notice required or permitted to be given under this
      Agreement shall be in writing and may be delivered personally or by fax,
      or by prepaid registered post addressed to the parties at such address of
      which notice may be given by either of such parties. Any notice shall be
      deemed to have been received, if personally delivered or by fax, on the
      date of delivery, and, if mailed as aforesaid, then on the fifth business
      day after and excluding the day of mailing.

	 	 	 
	 	(b) 	
      This Agreement and the rights and obligations and
      relations of the parties shall be governed by and construed in accordance
      with the laws of the State of Nevada and the federal laws of the United
      States applicable therein (but without giving effect to any conflict of
      laws rules). The parties agree that the courts of the State of Nevada
      shall have jurisdiction to entertain any action or other legal proceedings
      based on any provisions of this agreement. Each party attorns to the
      jurisdiction of the courts of the State of Nevada.

	 	 	 
	 	(c) 	
      Time shall be of the essence of this agreement and of
      every part of it and no extension or variation of this agreement shall
      operate as a waiver of this provision.

	 	 	 
	 	(d) 	
      This Agreement may be executed in one or more
      counterparts, each of which so executed shall constitute an original and
      all of which together shall constitute one and the same
  agreement.



IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the 23rd day of April, 2012.

	IRELAND INC. 	 
	by its authorized signatory: 	 
	 	 
	/s/ Robert D. McDougal 	 
	 	 
	ROBERT D. McDOUGAL, 	 
	CFO & TREASURER 	 
	  	 
	 	 
	OPTIONEE: 	 
	 	 
	/s/ Douglas D.G. Birnie 	 
	 	 
	SIGNATURE OF OFFICER 	 
	 	 
	DOUGLAS D.G.
      BIRNIE 	 
	NAME OF OFFICER 	 
	 	 
	2733 King Louis Street 	 
	Henderson, NV
      89044 	 
	ADDRESS 	 
	 	 
	800,000 	 
	NUMBER OF OPTIONS