UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

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#### FORM 20-F Amendment I

(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

|
|
|

##### TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 For the transition period from to

OR SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 Date of event requiring this shell company report__________________ For the
transition period from to

Commission file number 0-28980

##### ROYAL STANDARD MINERALS INC.

(Exact name of Registrant as specified in its charter)

(Translation of Registrant's name into English)

##### CANADA

(Jurisdiction of incorporation or organization)

##### 3258 MOB NECK ROAD HEATHSVILLE, VIRGINIA 22473

(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 registered

Securities registered or to be registered pursuant to Section 12(g) of the Act. COMMON
SHARES

(Title of Class)

(Title of Class) Securities for which there is a reporting obligation
pursuant to Section 15(d) of the Act.

(Title of Class)

##### SEC 1852 (05-06) Persons who respond to the collection of
information contained in

this form are not required to respond unless the form displays a currently valid OMB
control number

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.

78,275,275 Common Shares

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

______Yes __X___No

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

__X__Yes ____No Note – Checking the box above will not relieve any registrant
required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 from their obligations under those sections.

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

______Yes __X___No Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange
Act. (Check Below)

Large accelerated filer _____ Accelerated filer _____ Non-accelerated filer __X___

Indicate by check mark which financial statement item the registrant has elected to
follow.

___X___ Item 17 _____ Item 18 If this is an annual report, indicated by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).

______Yes __X___No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE
YEARS)

Indicate by check mark whether the registrant has filed all documents and reports
required to be filed by Sections 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.

______Yes _____No

|PART I  |                                                                |   
|------- | -------------------------------------------------------------- | --
|ITEM 1  | IDENTITY OF DIRECTORS, SENIOR
    MANAGEMENT AND ADVISERS      | 5 
|ITEM 2  | OFFER STATISTICS AND EXPECTED
    TIMETABLE                    | 5 
|ITEM 3  | KEY INFORMATION                                                | 5 
|A.      | Selected financial data                                        | 5 
|B.      | Capitalization and indebtedness                                | 6 
|C.      | Reasons for the offer and use of
    proceeds                  | 6 
|D.      | Risk factors                                                   | 6 
|ITEM 4  | INFORMATION ON THE COMPANY                                     | 9 
|A.      | History and development of the
    company                     | 9 
|B.      | Business overview                                              | 9 
|C.      | Organizational structure                                       | 16
|D.      | Property, plants and equipment                                 | 16
|ITEM 5  | OPERATING AND FINANCIAL REVIEW
    AND PROSPECTS               | 37
|A.      | Operating results                                              | 37
|B.      | Liquidity and capital resources                                | 42
|C.      | Research and development, patents
    and licenses, etc.       | 45
|D.      | Trend information                                              | 45
|E.      | Off balance sheet arrangements                                 | 45
|F.      | Tabular disclosures of
    contractual obligations             | 45
|G.      | Safe harbor                                                    | 46
|ITEM 6  | DIRECTORS, SENIOR MANAGEMENT AND
    EMPLOYEES                 | 46
|A.      | Directors and senior management                                | 46
|B.      | Compensation                                                   | 48
|C.      | Board practices                                                | 52
|D.      | Employees                                                      | 56
|E.      | Share ownership                                                | 57
|ITEM 7  | MAJOR SHAREHOLDERS AND RELATED
    PARTY TRANSACTIONS          | 57
|A.      | Major shareholders                                             | 57
|B.      | Related party transactions                                     | 57
|C.      | Interests of experts and counsel                               | 58
|ITEM 8  | FINANCIAL INFORMATION                                          | 58
|A.      | Consolidated statements and other
    financial information    | 58
|B.      | Significant changes                                            | 59
|ITEM 9  | THE OFFER AND LISTING                                          | 59
|A.      | Offer and listing details                                      | 59
|B.      | Plan of distribution                                           | 61
|C.      | Markets                                                        | 61
|D.      | Selling shareholders                                           | 61
|E.      | Dilution                                                       | 61
|F.      | Expenses of the issue                                          | 61
|ITEM 10 | ADDITIONAL INFORMATION                                         | 61
|A.      | Share capital                                                  | 61
|B.      | Memorandum and articles of
    association                     | 61
|C.      | Material contracts                                             | 61
|D.      | Exchange controls                                              | 62
|E.      | Taxation                                                       | 65
|F.      | Dividends and paying agents                                    | 65
|G.      | Statement by experts                                           | 65
|H.      | Documents on display                                           | 66
|I.      | Subsidiary information                                         | 66
|ITEM 11 | QUANTITATIVE AND QUALITATIVE
    DISCLOSURES ABOUT MARKET RISK | 66

|ITEM 12  | DESCRIPTION OF SECURITIES OTHER THAN
    EQUITY SECURITIES                       | 66 
|-------- | -------------------------------------------------------------------------------- | ---
|PART II  |                                                                                  |    
|ITEM 13  | DEFAULTS, DIVIDEND ARREARAGES AND
    DELINQUENCIES                              | 66 
|ITEM 14  | MATERIAL MODIFICATIONS TO THE RIGHTS
    OF SECURITY HOLDERS AND USE OF PROCEEDS | 66 
|ITEM 15  | CONTROLS AND PROCEDURES                                                          | 66 
|ITEM 16  | [RESERVED]                                                                       | 67 
|ITEM 16A | AUDIT COMMITTEE FINANCIAL REPORT                                                 | 67 
|ITEM 16B | CODE OF ETHICS                                                                   | 67 
|ITEM 16C | PRINCIPAL ACCOUNTANT FEES AND
    SERVICES                                       | 67 
|ITEM 16D | EXEMPTIONS FROM THE LISTING
    STANDARDS FOR AUDIT COMMITTEES                   | 67 
|ITEM 16E | PURCHASES OF EQUITY SECURITIES BY
    THE ISSUER AND AFFILIATED PURCHASERS       | 68 
|PART III |                                                                                  |    
|ITEM 17  | FINANCIAL STATEMENTS                                                             | 68 
|         | MANAGEMENT'S DISCUSSION &
    ANALYSIS                                           | 106
|ITEM 18  | FINANCIAL STATEMENTS                                                             | 120
|ITEM 19  | EXHIBITS                                                                         | 120
|         |                                                                                  |    
|         | SIGNATURES                                                                       | 120
|         | CERTIFICATIONS                                                                   | 121
|         | CERTIFICATIONS PURSUANT TO
    SECTION 906                                       | 123

### PART I

Item 1. Identity of Directors, Senior Management and Advisers

Not Applicable

Item 2. Offer Statistics and Expected Timetable

Not Applicable

Item 3. Key Information

#### A. Selected financial data.

The table below presents selected statement of operations and
balance sheet data for Royal Standard Minerals Inc. as at and for the fiscal years ended
January 31, 2007, 2006, 2005, 2004 and 2003. The selected financial data presented herein
is prepared in accordance with accounting principles generally accepted in Canada
("Canadian GAAP") and include the accounts of the Company and its wholly-owned
subsidiaries, Southeastern Resources Inc., Pinon Exploration Corporation, Standard Energy
Inc., and Manhattan Mining Co., all United States Companies.

A summary of the differences between accounting principles generally
accepted in Canada ("Canadian GAAP") and those generally accepted in the United
States ("US GAAP") which affect the Company is contained in Note 16 of the
Consolidated Financial Statements included with this report.

Royal Standard Minerals Inc. 
(An Exploration Stage Enterprise) 
Consolidated Financial Statement Data 
For the Years Ended January 31 
(Expressed in US Currency)

|              | 2007        
|------------- | ------------
|              |             
|$0            | $0          
|$391,420      | $0          
|($5,441,870)  | ($1,493,095)
|($5,431,480)  | ($1,611,057)
|($9,463,890)  | ($7,852,833)
|($14,895,370) | ($9,463,890)
|              |             
|($0.07)       | ($0.03)     
|($0.07)       | ($0.03)     
|              |             
|73,771,233    | 53,907,094  



|Balance Sheet |            | Year Ended January 31
|------------- | ---------- | ---------------------
|2007          | 2006       | 2005                 
|$10,438,324   | $1,445,200 | $541,835             
|$7,788,107    | $3,810,519 | $2,664,127           
|$2,056,392    | $1,258,994 | $37,735              
|$20,464,590   | $6,646,480 | $3,237,383           
|$202,157      | $221,733   | $104,087             
|$20,080,666   | $6,292,080 | $3,133,296           

Currency Exchange Rates

Except where otherwise indicated, all dollar figures in this annual
report on Form 20-F, including the financial statements, refer to United States currency.
The following table sets forth, for the periods indicated, certain exchange rates based on
the exchange rates reported by the Federal Reserve Bank of New York as the noon buying
rates in New York City for cable transfers in foreign currencies as certified for customs
purposes (the "Noon Buying Rate"). Such rates quoted are the number of U.S.
dollars per Cdn $1.00 and are the inverse of rates quoted by the Federal Reserve Bank of
New York for the number of Canadian dollars per U.S. $1.00.



|Year Ended December 31,
|-----------------------
|.8532                  
|.7992                  
|.8308                  
|.8358                  

(1) Based on the average exchange rates on the last day of each month
during the applicable period.

#### B. Capitalization and indebtedness.

Not Applicable

#### C. Reasons for the offer and use of proceeds.

Not Applicable

#### D. Risk factors.

The operations of Royal Standard involve a number of substantial
risks and the securities of Royal Standard are highly speculative in nature. The following
risk factors should be considered:

Absence of Public Market

Trading of the Common Shares of Royal Standard on the TSX Venture
Exchange and OTC Bulletin Board has been sporadic and very limited and no assurance can be
given that an active trading market will develop or be sustained. Investment in Royal
Standard is, therefore, not suitable for any investors who may have to liquidate their
investments on a timely basis and should only be considered by investors who are able to
make a long term investment in Royal Standard.

Risk Inherent to Royal Standard's Proposed Mining Activities

1. Royal Standard is engaged in the business of acquiring and exploring
    mineral properties in the hope of locating an economic deposit or deposits of minerals.
    The property interests of the Company are in the exploration stage only and are without a
    known body of commercial ore. There can be no assurance that the Company will generate any
    revenues or be profitable or that the Company will be successful in locating an economic
    deposit of minerals.
2. There are a number of uncertainties inherent in any exploration and
    development program, including the location of economic ore bodies, the development of
    appropriate metallurgical processes, the receipt of necessary governmental permits, and
    the construction of mining and processing facilities. Substantial expenditures will be
    required to pursue such exploration and development activities. Assuming discovery of an
    economic ore body, and depending on the type of mining operation involved, several years
    may elapse from the initial stages of development until commercial production is
    commenced. New mining operations frequently experience unexpected problems during the
    exploration and development stages and during the initial production phase. In addition,
    preliminary reserve estimates may prove inaccurate. Accordingly, there can be no assurance
    that the Company's current exploration and development programs will result in any
    commercial mining operations.
3. The Company may become subject to liability for cave-ins and other
    hazards of mineral exploration against which it cannot insure or against which it may
    elect not to insure because of high premium costs or other reasons. Payment of such
    liabilities would reduce funds available for acquisition of mineral prospects or
    exploration and development and would have a material adverse effect on the financial
    position of the Company.

History of Losses

At January 31, 2007, the Company had an
accumulated deficit of U.S. $14,895,370. There can be no assurance that the Company will
ever achieve revenues from operations or that its operations will ever be profitable.

Additional Capital

The terms of the Company's rights to its properties require that the
Company expend significant funds on exploratory and other pre-production activities.
Should the Company fail to make these expenditures on a timely basis, it would forfeit its
rights to the particular projects, including the sums expended through the dates of such
forfeitures. The Company's present capital resources are sufficient to fund these costs.
There can be no assurance that the Company will be able to raise additional capital on
acceptable terms or at all. In any event, any additional issuance of equity would be
dilutive to the Company's current shareholders.

No History of Operations

The Company is an exploration stage enterprise
with no history of prior operations and no earnings. There can be no assurance that the
Company's operations will become profitable in the future. The success of the Company will
be dependent on the expertise of its management, the quality of its properties, and its
ability to raise the necessary capital to carry out its business plan. If financing is
unavailable for any reason, the Company will be unable to acquire and retain its mineral
concessions and carry out its business plan.

Regulatory and Economic Factors

Any exploration operations carried on by the
Company are subject to government legislation, policies and controls relating to
prospecting, development, production, environmental protection, mining taxes and labor
standards. In addition, the profitability of any mining prospect is affected by the market
for minerals which is influenced by many factors including changing production costs, the
supply and demand for minerals, the rate of inflation, the inventory of mineral producers,
the political environment and changes in international investment patterns.

Competition

There is significant competition for the
acquisition of properties producing or capable of producing gold and precious minerals.
The Company may be at a competitive disadvantage in acquiring additional mining properties
since it must compete with other individuals and companies, many of which have greater
financial resources and larger technical staffs than the Company. As a result of this
competition, the Company may be unable to acquire attractive mining properties on terms it
considers acceptable.

Title to Properties

The validity of unpatented mining claims on
public lands, which constitute most of the property holdings is often uncertain and may be
contested and subject to title defects.

Conflict of Interest

Certain directors and officers of the Company are
also directors and officers of other natural resource and base metal exploration and
development companies. As a result, conflicts may arise between the obligations of these
directors to the Company and to such other companies.

Dependence on Key Personnel

The Company's success will be dependent upon the
services of its President and Chief Executive Officer, Mr. Roland Larsen.

Effect of Outstanding Warrants and Options; Negative Effect of
Substantial Sales

As of January 31, 2007, the Company had outstanding options and
warrants to purchase an aggregate of 19,045,783 Common Shares. All of the foregoing
securities represent the right to acquire Common Shares of the Company during various
periods of time and at various prices. Holders of these securities are given the
opportunity to profit from a rise in the market price of the Common Shares and are likely
to exercise its securities at a time when the Company would be able to obtain additional
equity capital on more favorable terms. Substantial sales of Common Shares pursuant to the
exercise of such options and warrants could have a negative effect on the market price for
the Common Shares.

Dividends

The Company does not anticipate paying dividends in the foreseeable
future.

Item 4. Information on the Company

A. History and development of the company.

Royal Standard Minerals Inc. herein referred to as "Royal
Standard" or the "Company", was incorporated pursuant to the laws of Canada
by articles of incorporation dated December 10, 1986 under its former name, Ressources
Minieres Platinor Inc. ("Ressources"). On April 30, 1996, Royal Standard
shareholders approved the acquisition of all the issued and outstanding shares of
Southeastern Resources, Inc. ("Southeastern") in a reverse take-over
transaction. Pursuant to this transaction, articles of amendment were filed effective May
14, 1996, pursuant to which the name of Royal Standard was changed to its current form of
name and its shares issued and outstanding at that time were consolidated on a 7.5:1
basis. On June 28, 1996, the Common Shares commenced trading on the Montreal Exchange. The
Company is continued under the New Brunswick Business Corporations Act and its common
shares are listed on the TSX Venture Exchange symbol RSM. The Company also trades in the
United States Overthe-Counter Bulletin Board symbol RYSMF.

The registered office of Royal Standard is located at 360 Bay Street,
Suite 500, Toronto, Ontario M5H, 2V6 and the principal office of Royal Standard is located
at 3258 Mob Neck Road, Heathsville, Virginia 22473. The Company also has an office at One
Main Street, Manhattan, Nevada, 89022.

#### B. Business overview.

Royal Standard is a mineral exploration company engaged in
locating, acquiring exploring and the development of gold and precious metal deposits in
the state of Nevada. The Company owns a 100% interest in eight (8) projects in four (4)
gold-silver districts in Nevada. These projects include the Goldwedge project in Nye
County, the Pinon, Railroad and Dark Star projects in Elko County, Mustang Canyon, in
Esmeraldo County, the Fondaway Canyon, Dixie-Comstock projects in Churchill County and the
Como project in Lyon County, Nevada.

At the present time, the Company's activities are limited to
exploratory searches for ore and energy minerals. The Company has not generated any
revenues from operations at this time. The Company is evaluating the potential for
economic extraction of known deposits of ore grade material on the Company's mineral
exploration properties. See Item # 3.D. - Risk Factors.

Como Project

Goldwedge
    Project

The Goldwedge, one of several gold deposits in the area, is considered
    one of the best known projects in the district for development of an underground mine. The
    property contains excellent exploration potential for future growth. Based upon the
    results of approximately 75 drill holes primarily within the central zone over a strike
    length of 1,000+ feet and 100'-500' of vertical extent reveal continuous gold oxide
    mineralization of potential mineable thickness and quality. RSM has analyzed all of the
    drill data as part of a detailed geologic inventory of the deposit.

The project ownership includes staked BLM lands; options of BLM claims
    owned by others and patented mining claims owned by the Company. All payments, maintenance
    fees, option payments and taxes to state and federal authorities are current under state
    and federal guidelines.

The Goldwedge deposit occurs at the intersection of north and northwest
    trending faults. In the deposit area, the north trending Reliance fault is mineralized
    within the Ordovician Zanzibar limestone and siltstone. The target mineralization occurs
    within multiple high angle structures over a width of between 100-200 feet primarily
    within the Zanzibar limestone. RSM has evaluated all of the pertinent drill data as part
    of a detailed inventory of the deposit geometry, size and overall grade. The current
    exploration model suggests that the Goldwedge deposit and the extensions may contain an
    economically significant gold resource at depth near the contact with the Manhattan
    Caldera margin.

The first potential mine development program is the 100% owned
    Goldwedge deposit located within the Manhattan Mining District. The Goldwedge deposit is
    located approximately 8 miles south of the large Round Mountain gold mine. All of the mine
    and mill (plant) and water use permits were achieved in early, 2004. Also, in 2004 the
    Company constructed a 700 foot (underground) decline and cross cut to test one of the gold
    mineralized structures within a 100+ wide structural zone. Additionally, RSM completed the
    surface facilities necessary to process the material to be mined onsite to include silt
    ponds, ore pad and the onsite gold processing plant. The Company acquired a full
    production scale gold recovery (gravity) plant that will be utilized to process the mined
    material as part of the test mining program.

The underground bulk sampling and decline development program continued
    during 2005 and was expanded in 2006. This effort included drifting on one of the
    mineralized zones and processing this material through an onsite (gravity) plant. The
    surface facilities and the gold recovery plant were completed in 2005 and modified in 2006
    as a means to improve gold recoveries.

Expenses during 2005 on the Goldwedge project were $1,176,419. In 2006
    expenses were $3,516,345 bringing total RSM expenses on this project to $6,153,207. Future
    expenditures are expected to be an additional $1 million over the next two years.

Currently Sierra Power, a commercial electric supplier, services this
    site. The Company has all of the necessary water rights secured from the State of Nevada.

#### This project is an advanced exploration project without known
    reserves and the proposed program is exploratory in nature.

The underground program has several objectives including a test
    mining program and the establishment of the appropriate mining methods that will be
    applied to the future development of the property.

The underground development as well as surface and underground drilling
    will be directed toward expanding the resources on this property as well as the completion
    and testing of the recovery plant design. The gold recovery plant has been modified to
    included two ball mill circuits and will include a floatation circuit

Pinon and Railroad Projects-Carlin Trend South

This project is located south of the town of Carlin, Nevada in Elko
    County, Nevada. The project land position is located east of Nevada state route 276 and
    extends for 10+ miles in a north-south direction south of the town of Carlin. The best
    access to the project is via I-80 to Carlin and south on route 276 to the property
    position.

The land position includes unpatented BLM lands, patented lands and fee
    lands. All payments, maintenance fees to federal and state authorities are current.
    Landowner option payments are also current and in good standing for this more than 15,000
    acre land position.

The Pinon properties are located on the southern portion of the Carlin
    gold belt about 10 miles south of Newmont's Rain mine Since its inception, various
    joint-venture partners have spent more than $10 MM on the project.

The Pinon and Railroad projects are located on the southern portion of
    the Carlin Trend immediately south of Newmont's Rain gold district. The Carlin Trend is
    one of the most prolific gold trends in the world and has produced more than 50 million
    ounces of gold. The properties are located within a well-mineralized region, which only
    adds to the potential for expanding the known gold deposits and making new discoveries.
    Much of the district wide exploration was undertaken prior to the start of the 1980's and
    1990's. Since the mid-1990's the cumulative knowledge of "Carlin-type" gold
    deposits has expanded tremendously. This expanded knowledge can be used to re-interpret
    all of the available data, which may identify new exploration targets on the ground
    controlled by RSM. Also, during the past 10+ years numerous high-grade gold deposits have
    been discovered along the Carlin Trend that can be mined using underground techniques.
    Many of these deeper deposits are associated with surface oxidized gold deposits.
    Essentially no deeper exploration has been conducted under the Pinon and Railroad
    deposits, or at other places on the property. The exploration opportunity offers the
    possibility for discovery of additional gold deposits at Pinon-Railroad.

The Railroad project increased the property position within the
    district to approximately 10,500 acres of leases and includes unpatented and patented
    mining claims. This effort included the acquisition of nearly 500 unpatented and 19
    patented mining claims that lie south of Newmont's Mining's Rain district in Elko County,
    Nevada.

The Webb Formation is mineralized above the Devils Gate limestone at
    both deposits. At Rain, the mineralization occurs within and closely associated with the
    Rain Fault. On the southern portion of the property position, the Pinon Au-Ag project, the
    known mineralization has not been connected to a strongly mineralized fault. However,
    higher-grade economic mineralization has been encountered at very shallow depths,
    mineralized oxide zones occur along a 1,300 feet strike length and occur less than 90 feet
    below the surface.

The Pinon and Railroad projects include approximately 17,000 acres
    comprising unpatented BLM lode mining claims, patents and leased fee lands. The focus of
    RSM's current effort is to identify and develop near surface oxide gold-silver deposits.
    Approximately 600 shallow drill holes have been completed on 6 near surface gold-silver
    deposits. The depth extensions of these deposits are not well understood, as deeper
    drilling has not been sufficient to develop an acceptable understanding of this
    mineralization.

The Company has developed the necessary construction plans for the
    Pinon-Railroad project including surface, heap leach facilities design and open pit
    modeling of the deposits. The 2004-2006 program involved work on the BLM permit
    application. All of this work has been completed in preparation for the filing of a mining
    permit application with the US Bureau of Mines (BLM) by year-end 2007. A second objective
    is to complete feasibility studies for the Pinon and Railroad near surface oxide deposits.

Total exploration expenditures on this project have exceeded $10
    million and an additional $20 million will be required to develop a 5,000 ton per day heap
    leach operation on this project. As of January 31, 2006, RSM and its partners have spent
    approximately $3.1 million on the Pinon and Railroad projects. Plans include the
    achievement of a mining permit in 2007 followed project financing.

#### The property is without known reserves and the proposed program is
    exploratory in nature.

Fondaway Canyon Project

The 100% controlled Fondaway Canyon gold project is located in
    Churchill County, Nevada in the Stillwater range. The project is accessible east from
    Fallon, Nevada via State of Nevada route 116 an unpaved road. The Fondaway deposit is
    located on the west flank of the Stillwater Range at Fondaway Canyon.

The Fondaway Canyon gold property consists of 148 unpatented BLM lode
    mining claims (approximately 3,000 acres) located on the western slope of the Stillwater
    Range. This area is included with the Stillwater Wilderness area. All of the maintenance
    filing fees are current and in good standing. Nearly-vertical, east-west trending
    mineralized shear zones host the Half Moon, Paperweight, Hamburger Hill and South Pit gold
    resources that is hosted within a Mesozoic sedimentary package. The Mesozoic sedimentary
    package has been intruded by a Mesozoic-Tertiary aged intrusive.

The vertical extent tested by recent drilling of the higher grade gold
    mineralized shear zones is greater than 1,000 feet. Horizontal continuation of gold
    mineralization as at the Paperweight and Hamburger Hill mineralized shear zone is 3,700
    feet with widths commonly between 5'-20+ feet. Drilling and assay records indicate that
    568 holes have been drilled for a total estimated footage of 200,000 feet of RC drilling
    and 22,000 feet of core drilling to include 455 reverse circulation, 49 core holes and 64
    air track holes over a strike length of approximately 12,000 feet. Tenneco Minerals Inc.,
    the most active company, drilled approximately 350 holes (130,000 feet) and drove a 500'
    adit for sulfide metallurgical sampling during the period 1987-1996. Tenneco also operated
    a small oxide gold open pit mine for a short time during this period. Nevada Contact Inc.
    (NCI) acquired the property in 2001 and drilled 11 reverse circulation holes, RSM acquired
    the property from NCI in early 2003 as part of a property swap with NCI retaining a 1% NSR
    overriding royalty in the Fondaway Canyon property and $25,000 advance minimum royalty
    payments to the claim holder until 2006 at which time the payments increase to $35,000 per
    year that includes a 3% NSR royalty until buyout. There is a buyout option of $600,000 for
    the owners' interest.

The initial plan for 2007 is to drill test the Tenneco heap leach pad
    to determine if it is feasible to re-permit a new pad and transfer the Tenneco leach pad
    to a new RSM leach pad. If feasible, this effort could allow an early start up of
    potential gold production at Fondaway. Following this effort, RSM plans to further drill
    test the sulfide resource as part of a program to upgrade the indicated and inferred
    resources on the property. This effort will involve drilling underground within the
    Tenneco adit along with a surface drilling program. A bulk sampling program for
    metallurgical analysis of the sulfide resource will also be included as part of an effort
    to develop a gold recovery process that will achieve the desired results.

No field work was completed on this project in 2004, 2005, or 2006. The
    only effort has been the renewal of the Company's water rights and related permits. Plans
    are to commence an exploration effort in 2006 that will include surface drilling within
    the vicinity of the Tenneco adit.

Sierra Pacific Power Co exists on the property. RSM has the current
    water rights to the property.

Estimates of prior expenditures on this property are approximately $5-6
    million. The largest portion of these expenditures was contributed by Tenneco Minerals and
    Tundra Mines LTD. This work included extensive drilling, development of a small open pit
    production project and an advanced exploration adit on the property. As of January 31,
    2007, RSM has spent $162,778 on this project.

#### The property is without known reserves and the proposed program is
    exploratory in nature.

Como District

The property is located approximately 8 miles southeast of the famous
    Comstock Lode and 2-3 miles southeast of the town of Dayton, Nevada, and includes 47
    unpatented lode claims and 5 patented claims.

The Como district consists of at least eight gold-silver bearing
    structures that occur within a Tertiary age andesitic volcanic sequence that hosts the
    mineralization. Prospectors looking for mineralization similar to the Comstock Lode
    discovered Como in 1860. The property has had some historical gold and silver underground
    production with the Como vein producing about 20,000 ounces of gold and 500,000 ounces of
    silver at a gold equivalent grade of nearly 0.3 opt. The higher-grade underground vein
    extensions are largely undrilled and will be tested by RSM. Over the past 20 years modern
    exploration methods have continued to advance the understanding of the geologic framework
    and have identified two bulk mineable gold-silver deposits that will require further work
    to ascertain the economic potential. Since the 1960's several large companies have
    explored the property to include St. Joe American, Amoco, Meridian Gold and Amax Gold Inc.
    (who identified a low-grade open pit resource, based on 46 holes.) for a large tonnage
    bulk mineable gold deposit. More recently (2000) Anglo Gold Corp. explored the property
    for a potential multi-million ounce deposit. Anglo released the property in 2001 after
    drilling 8 holes and completing considerable surface geologic mapping, rock chip and
    geochemical sampling. RSM acquired its option on the Como gold-silver project based upon
    the previous exploration results.

It is difficult to estimate prior expenditures on this property due to
    the large number of mining companies that have explored this property over the last 30
    years.

No exploration work was completed on the property in 2004, 2005 or
    2006. In 2007 RSM plans to complete surface geophysical, magnetics, and surface
    geochemical sampling.

Manhattan/Round Mountain Caldera Program

The project area is located southeast of the town of Round Mountain,
    Nevada east of State route 376. The town of Manhattan is located approximately 15 miles
    south of Round Mountain. The Manhattan project is located approximately 7 miles east of
    route 376 on route 377 and 1.5 miles west of the town of Manhattan.

The Manhattan/Round Mountain Caldera program is the Company's most
    advanced district play includes the Goldwedge advanced exploration program. The land
    position in the Manhattan Mining District is comprised of 70 unpatented and 3 patented
    lode-mining claims. An underground development program to include drill testing the
    extensions of the Goldwedge deposit in addition to the evaluation of several additional
    lode and placer properties that the Company controls in the district could significantly
    increase the gold resource estimates.

Freeport Gold, Tenneco (Echo Bay) recognized the potential of the
    district (to include the Goldwedge deposit that is currently under control by RSM)
    however, these deposits were not suited for open pit mining. At that time the large mining
    companies did not consider the underground development projects feasible. Although
    Sunshine Mining Co. considered an underground mine development in 1988 on the Goldwedge
    deposit, continued exploration by Crown Resources and others on the Company's claims
    indicated sections (5+'-30') of potentially mineable grades greater than 0.5 opt gold. The
    continued downturn in the gold market, tightened corporate budgets and high holding costs
    for the properties forced many companies to turn back the land positions to the claim
    owners. Currently, the Company controls approximately 4,000 feet of strike length.
    Approximately 1,000-1,200 feet of this strike length has been drill tested indicating
    positive results.

#### C. Organizational structure.

The Company has four wholly owned subsidiaries, Southeastern
    Resources Inc., Pinon Exploration Corporation, Standard Energy Inc., and Manhattan Mining
    Co., all United States Companies.

#### D. Property, plants and equipment.

The registered office of Royal Standard is located at 360 Bay
    Street, Suite 500, Toronto, Ontario M5H, 2V6 and the principal office of Royal Standard is
    located at 3258 Mob Neck Road, Heathsville, Virginia 22473. The Company also has an office
    at One Main Street, Manhattan, Nevada, 89022.

#### Nevada Projects

Goldwedge Project

The Gold Wedge Project is located in the Manhattan Mining District,
    section 18, T8N, R43E, Mount Diablo Meridian, 1/2 mile west of the town of Manhattan in
    Nye County, Nevada, (Figure 1 below). Located within the southern Toquima Range of central
    Nevada, the elevation ranges from 6,800 feet to 7,800 feet. The topography is gently
    rising to rolling and ruggedly steep along the north-south trending mountain range. The
    resource occurs under a gravel covered dry drainage valley north of paved highway 377. The
    town of Tonopah is 50 miles south of the deposit and is considered the most favorable
    location for accommodations. Tonopah is also the county seat for Nye County.

Currently Sierra Power, a commercial electric supplier, services this
    site. The Company has all of the necessary water rights secured from the State of Nevada.

### LOCATION
    MAP

Source: RSM 2003

The Goldwedge, one of several gold deposits in the area, is considered
    one of the best known projects in the district for development of an underground mine. The
    property contains excellent exploration potential for future growth. Based upon the
    results of approximately 75 drill holes primarily within the central zone over a strike
    length of 1,000+ feet and 100'-500' of vertical extent reveal continuous gold oxide
    mineralization of potential mineable thickness and quality. RSM has analyzed all of the
    drill data as part of a detailed geologic inventory of the deposit.

The project ownership includes staked BLM lands; options of BLM claims
    owned by others and patented mining claims owned by the Company. All payments, maintenance
    fees, option payments and taxes to state and federal authorities are current under state
    and federal guidelines. The land position controlled by RSM on the Goldwedge Project area
    is shown below:

|          
|----------
|Claim Type
|Unpatented
|Unpatented
|Patents   
|Patents   
|Unpatented
|          
|          



|Location of Claims                                                                                                               | # of Claims/Acres/Owner                  | Importance to Development                                                                                                                                  
|-------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|Goldwedge Deposit (option to Purchase 100% for $200,000)                                                                         | 4 Claims/50 Acres/Hill                   | 90% of known measured deposit and most of know indicated
        deposit, 3% NSR, - 5-year lease term, renewable                                           
|                                                                                                                                 |                                          |                                                                                                                                                            
|North Plunge of Goldwedge Deposit and 1.5 miles of
        Mineralized Caldera Margin Trend (RSM owns 100% of Unpatented Claims) | 34 Claims/450 Acres/RSM                  | Largest deep inferred and unexplored mineralized caldera
        margin                                                                                    
|                                                                                                                                 |                                          |                                                                                                                                                            
|South End of Goldwedge Deposit and East Caldera Margin
        Trend (RSM owns 100% of Patent Claim                              | 1 Claim/20.03 Acres/RSM (Orphant Patent) | Approximately 5% of known deposit, Private Land for Decline
        and Plant Site, and 1,500 feet of mineralized caldera trend, facility site plan, 1% NSR



|Goldwedge - Manhattan Project Area |                |                                      
|---------------------------------- | -------------- | -------------------------------------
|                                   |                |                                      
|Claim Name                         | BLM Serial No. | Nye County Recorder
        Book/Page
|April Fool                         | 117977         |                                      
|April Fool Fraction                | 117978         |                                      
|Tip Top                            | 117979         |                                      
|War Eagle                          | 117980         |                                      
|Future                             | 117981         | 108/106                              
|Future No. 01                      | 117982         | 108/106                              
|Future No. 02                      | 117093         | 108/107                              
|Future No. 03                      | 117984         | 108/107                              
|ABB No. 23                         | 744305         |                                      
|ABB No. 24                         | 744306         |                                      
|                                   |                |                                      
|PATENTED CLAIMS                    |                |                                      
|Claim Name                         | Parcel #       | Property Loc.                        
|Ida and Lottie                     | 000-006-74     | CLMS 2 LODE                          
|Wolftone and Wolftone Fraction     | 000-1575       | CLMS 2 LODE                          
|                                   |                |                                      
|KEYSTONE-JUMBO PROJECT AREA        |                |                                      
|Claim Name                         | BLM Serial No. | Nye County Recorder
        Book/Page
|WC NO. 01                          | 443681         | 367/82                               
|WC NO. 03                          | 443682         | 367/84                               
|WC NO. 05                          | 443683         | 367/86                               
|WC NO. 07                          | 443684         | 367/88                               
|WC NO. 09                          | 443685         | 367/90                               
|WC NO. 11                          | 443687         | 367/92                               
|WC NO. 45                          | 443704         | 367126                               
|WC NO. 47                          | 443705         | 367/128                              
|WC NO. 49                          | 443706         | 367/130                              
|WC NO. 51                          | 260915         | 367/132                              
|WC NO. 53                          | 260917         | 367/134                              
|WC NO. 55                          | 443707         | 367/136                              
|WC NO. 63                          | 443712         | 367/144                              
|WC NO. 64                          | 443713         | 367/145                              
|WC NO. 65                          | 443714         | 367/146                              
|WC NO. 66                          | 443715         | 367/147                              
|WC NO. 67                          | 443716         | 367/148                              
|WC NO. 68                          | 443717         | 367/149                              
|WC NO. 145                         | 443754         | 367/226                              
|South Main NO. 11                  | 443756         | 342/278                              
|South Main NO. 13                  | 241446         | .342/280                             
|Claim Name                         | BLM Serial No. | Nye County Recorder
        Book/Page
|CAPITAL                            | 117967         | 88/15                                
|CAPITAL NO. 01                     | 117968         | 88/15                                
|CAPITAL NO. 02                     | 117969         | 88/16                                
|CAPITAL NO. 03                     | 117970         | 88/16                                
|CAPITAL FRACTION                   | 117971         | 91/373                               
|KEYSTONE JR.                       | 117967         | 124/539                              
|APRIL FOOL NO. 01                  | 117985         | 124/539                              
|BIG SAM                            | 117986         | 124/537                              
|FORD                               | 117987         | 124/537                              
|FORD NO. 02                        | 117988         | 124/538                              
|FORD NO. 03                        | 117989         | 124/538                              
|BONANZA                            | 117990         | 124/538                              

Wm. Michael Donovan Jr., Professional Land Surveyor #2617, surveyed the
    land holdings in the immediate vicinity of the deposit to determine the exact land
    boundaries in relation to the gold deposit. These boundary locations will be used for
    determining royalty allocation if the remaining leased property is not purchased prior to
    the start of production. RSM currently has a 3.0% NSR royalty obligation that can be
    purchased for US$200,000 minus past lease payments of $15,000. This purchase option may be
    exercised prior to any full production decision. The Project's land holdings have been
    properly filed in year 2004 with all title payments currently paid. Holding costs, buyout
    costs and royalties will be even lower with the lease purchase and have little impact on
    the project's economics.

The Goldwedge deposit occurs at the intersection of north and northwest
    trending faults. In the deposit area, the north trending Reliance fault is mineralized
    within the Ordovician Zanzibar limestone and siltstone. The target mineralization occurs
    within multiple high angle structures over a width of between 100-200 feet primarily
    within the Zanzibar limestone. RSM has evaluated all of the pertinent drill data as part
    of a detailed inventory of the deposit geometry, size and overall grade. The current
    exploration model suggests that the Goldwedge deposit and the extensions may contain an
    economically significant gold resource at depth near the contact with the Manhattan
    Caldera margin.

The first potential mine development program is the 100% owned
    Goldwedge deposit located within the Manhattan Mining District. The Goldwedge deposit is
    located approximately 8 miles south of the large Round Mountain gold mine. All of the mine
    and mill (plant) and water use permits were achieved in early, 2004. Also, in 2004 the
    Company constructed a 700 foot (underground) decline and cross cut to test one of the gold
    mineralized structures within a 100+ wide structural zone. Additionally, RSM completed the
    surface facilities necessary to process the material to be mined onsite to include silt
    ponds, ore pad and the onsite gold processing plant. The Company acquired a full
    production scale gold recovery (gravity) plant that will be utilized to process the mined
    material as part of the test mining program.

The underground bulk sampling and decline development program continued
    during 2005 and was expanded in 2006. This effort included drifting on one of the
    mineralized zones and processing this material through an onsite (gravity) plant. The
    surface facilities and the gold recovery plant were completed in 2005 and modified in 2006
    as a means to improve gold recoveries.

Expenses during 2005 on the Goldwedge project were $1,176,419. In 2006
    expenses were $3,516,345 bringing total RSM expenses on this project to $6,153,207 (a
    detailed table of expenses follows). Future expenditures are expected to be an additional
    $1 million over the next two years.

|For the years ended January 31
|------------------------------
|                              
|$2,636,862                    
|171,376                       
|77,737                        
|293,519                       
|53,185                        
|5,023                         
|0                             
|1,377,706                     
|335,767                       
|30,063                        
|                              
|1,171,969                     
|3,516,345                     
|$6,153,207                    

The underground program has several objectives including a test mining program and the
    establishment of the appropriate mining methods that will be applied to the future
    development of the property.

The underground development as well as surface and underground drilling
    will be directed toward expanding the resources on this property as well as the completion
    and testing of the recovery plant design.  The gold recovery plant has been modified
    to include two ball mill circuits and will include a floatation circuit.

The results of the last 12 months support further investment and a
    continuation of the test mining and milling program established in late 2004 for this
    project.  The projected expenditures for the next 12 months are expected to be
    approximately $2 million.   Funding will include approximately $1.5 million allocated
    to underground development and the continuation of the test mining and approximately $0.5
    million of this funding will be allocated to an underground and surface drilling
    program.  The balance of approximately $0.5 million will be allocated to plant
    modification to include the addition of another ball mill and other  material
    handling improvements.  All of this work will be supervised by the CEO and carried
    out by experienced miners and plant employees currently working for the Company. 
    Consultants will be utilized in special instances to assist management with specific
    technical issues.  Funding for this activity will come from the Companys
    current cash.

This project is an advanced exploration project without known
    reserves and the proposed program is exploratory in nature.

Pinon and Railroad Projects-Carlin Trend South

The Pinon property is located in the southeast end of the famous
    Carlin Gold Trend about 10 miles south of Newmont's Rain mine, 25 miles
    southwest of Elko, Nevada. The main access from Elko is west on Interstate 80 to Carlin
    (25 miles) then south on State Highway 51 for 22 miles to the Trout Creek access road. The
    project area is 7 miles east along a well-maintained BLM gravel-dirt road to the area of
    extensive drilling.  There is no infrastructure in the vicinity of the property; the
    nearest power line is 7 miles to the west along State Highway 51.



The Pinon property currently consists of a contiguous land block of 39
    unpatented mining lode claims – claim fractions that are located in surveyed
    Township 30 North, Range 53 East, Section 22, (Mount Diablo Meridian), Elko County, Nevada
    (Fig 5.). The current Pinon land position covers an area of approximately 2,720 acres
    (approx. 1101 hectares). The land position includes unpatented BLM lands, patented lands
    and fee lands. All payments, maintenance fees to federal and state authorities are
    current. Landowner option payments are also current and in good standing for this more
    than 17,000 acre land position. Included in the land block are the following claims:

|                 |                            | County Recordation |             
|---------------- | -------------------------- | ------------------ | ------------
|Claim Name       | BLM Serial #               | Book               | Page        
|                 |                            |                    |             
|TC-1 thru TC-10  | NMC 125638 thru NMC 113862 | 304                | 6 thru 15   
|                 |                            |                    |             
|TC-11            | NMC 133862                 | 309                | 114         
|                 |                            |                    |             
|TC-12 thru TC-28 | NMC 148871 thru NMC 148887 | 329                | 58 thru 74  
|                 |                            |                    |             
|TC-29 thru TC-39 | NMC 403761 thru NMC 403771 | 558                | 426 thru 436

The TC claim group is under control (100%) of RSM. The TC claims
    are located on federal public domain lands that are managed (both surface and mineral
    estates) by the Bureau of Land Management ("BLM"). Initially staked in 1979,
    this ground was previously open to mineral location with no significant restrictions.
    Location certificates for all claims staked in the group were filed and recorded with the
    BLM and the Elko County Recorder's Office in Elko according to federal and state
    laws/regulations.

The TC claim group is surrounded by private fee lands containing a
    complicated mixture of severed surface and mineral estates that were previously controlled
    in part by the Pinon Joint Venture through various lease-option agreements. These lands
    have since been dropped by the joint venture. An ownership summary for several of the more
    important sections is shown below.

|T30N, R53E                                                                                        |                |                           
|------------------------------------------------------------------------------------------------- | -------------- | --------------------------
|Sectin 21:  All (640 acres)                                                                       |                |                           
|                                                                                                  | Surface estate | J. Tomera Ranch (100%)    
|                                                                                                  | Mineral estate | J. Tomera family (50%)    
|                                                                                                  |                | Etcheverry family (16.7%) 
|                                                                                                  |                | Rudnick Trust (16.7%)     
|                                                                                                  |                | L&R Rudnick family (16.6%)
|                                                                                                  |                |                           
|Section 27:  NE 1/4 NW 1/4, NE 1/4, NE1/4 SE 1/4 (640 acres)                                      |                |                           
|                                                                                                  | Surface estate | Pereira Trust (100%)      
|                                                                                                  | Mineral estate | Pereira Trust (50%)       
|                                                                                                  |                | Etcheverry family (16.67%)
|                                                                                                  |                | O. Rudnick family (16.67%)
|                                                                                                  |                | Rudnick Trust (8.33%)     
|                                                                                                  |                |                           
|Section 27:  NW 1/4 NW 1/4, S 1/2 NW 1/4, SW 1/4, NW 1/4
        SE 1/4, S 1/2 SE 1/4 (640 acres) |               
|                                                                                                  |                |                           
|                                                                                                  | Surface estate | J. Tomera Ranch (100%)    
|                                                                                                  | Mineral estate | J. Tomera family (50%)    
|                                                                                                  |                | Etcheverry family (16.67%)
|                                                                                                  |                | O. Rudnick family (16.67%)
|                                                                                                  |                | Rudnick Trust (8.33%)     
|                                                                                                  |                | R Rudnick family (8.3%)   
|                                                                                                  |                |                           

T30N, R53E

The Pinon properties are located on the southern portion of the
    Carlin gold belt about 10 miles south of Newmont's Rain mine Since its inception, various
    joint-venture partners have spent more than $10 MM on the project.

Required Cash Project Payments to Optionors Royalty Exercise of Option

|Railroad    | Commencing in fiscal 2003.      | 5% NSR | August 2008
|----------- | ------------------------------- | ------ | -----------
|Elko County | $15,000 in the first year and   |        | $2,000,000 
|            | increases by $5,000 each of the |        |            
|            | next six years                  |        |            

There are 493 Unpatented and 19 patented mining claims as follows:

Patented Mining Claims 
    Parcel No. OPM-464-030

|**NAME**           | **ACRES**
|------------------ | ---------
|Standing Elk       | 6.460    
|Millsite           | 4.590    
|Cleveland          | 12.730   
|Hoffman            | 8.800    
|Hecia              | 6.730    
|Silver King        | 6.520    
|Bullion            | 4.590    
|Sky Blue           | 18.870   
|Tripoli            | 4.590    
|Tripoli East Loade | 20.080   
|Webfoot            | 5.980    
|Mounted Lodge      | 20.660   
|                   |          
|Grey Eagle         |          
|Blue Eagle         |          
|Blue Jay           |          
|Tom Boy            |          
|Lucky Boy          |          
|Kansas City        |          
|Safety Pin         | 105.766  
|TOTAL              | 226.366  

Unpatented Mining Claims

**NAME**
        **BLM NMC NUMBER**
        **NO. OF CLAIMS**Black
        75973
        1Blue
        75974
        1Blurke Fraction
        75975
        1Canary
        75976
        1Dike No. 1-4
        75977-75980
        4Dike No. 6-9
        75981-75984
        4Dike No. 11
        75985
        1Eagle
        75986
        1Gold
        75984
        1Green
        75988
        1Hoffman Fraction
        75989
        1Holdup
        75990
        1Homestake
        75991
        1Key
        75992
        1Lark
        75993
        1Last Chance
        75994
        1**NAME**
        **BLM NMC NUMBER**
        **NO. OF CLAIMS**Mahogany
        75995
        1Mendota
        775996
        1Noon
        75997
        1Moon No. 1-2
        75998-75999
        2Nevada
        76000
        1Owl
        76001
        1Pink
        76002
        1Portal
        76003
        1Portal Fraction
        76004
        1Red
        76005
        1Snowbird
        76006
        1Spring
        76007
        1Star
        76008
        1Storm King
        76009
        1Uhalde-Borne
        76010
        1Uhalde-Borne North
        76011
        1Selco 1-89
        75884-75972
        89John
        75876
        1Bardy
        75877
        1Maggie
        75878
        1Rob
        75879
        1Hannah
        75880
        1Ken
        75881
        1Peter
        75882
        1Pam
        75883
        1B 1-5
        138543-138547
        5Home 1-18
        164143-164160
        18Home 19-31
        190211-190223
        13Home 41-52
        227247-227257
        11RR 1-39
        320216-320254
        39RR 40-54
        426606-426620
        15RR 55-64
        486934-466943
        10CISS 1-87
        407849-407935
        87CISS 106-119
        407954-407967
        14CISS 124-137
        407968-407981
        14LT 1-27
        504170-504176
        27WRN 1-12
        602701-602712
        12RF 1-8
        403753-403760
        8New 56-63
        202156-202163
        8New 65-72
        202165-202172
        8New135-138
        227243-227246
        4Pine 1-18
        407779-407796
        18Pine 58-66
        407836-407844
        9RN 1-25
        602676-602700
        25PIN 1-12
        696494-696505
        12


The Pinon and Railroad projects are located on the southern
    portion of the Carlin Trend immediately south of Newmont's Rain gold district. The Carlin
    Trend is one of the most prolific gold trends in the world and has produced more than 50
    million ounces of gold. The properties are located within a well-mineralized region, which
    only adds to the potential for expanding the known gold deposits and making new
    discoveries. Much of the district wide exploration was undertaken prior to the start of
    the 1980's and 1990's. Since the mid-1990's the cumulative knowledge of
    "Carlin-type" gold deposits has expanded tremendously. This expanded knowledge
    can be used to re-interpret all of the available data, which may identify new exploration
    targets on the ground controlled by RSM. Also, during the past 10+ years numerous
    high-grade gold deposits have been discovered along the Carlin Trend that can be mined
    using underground techniques. Many of these deeper deposits are associated with surface
    oxidized gold deposits. Essentially no deeper exploration has been conducted under the
    Pinon and Railroad deposits, or at other places on the property. The exploration
    opportunity offers the possibility for discovery of additional gold deposits at
    Pinon-Railroad.

The Railroad project increased the property position within the
    district to approximately 10,500 acres of leases and includes unpatented and patented
    mining claims. This effort included the acquisition of nearly 500 unpatented and 19
    patented mining claims that lie south of Newmont's Mining's Rain district in Elko County,
    Nevada.

The Webb Formation is mineralized above the Devils Gate limestone at
    both deposits. At Rain, the mineralization occurs within and closely associated with the
    Rain Fault. On the southern portion of the property position, the Pinon Au-Ag project, the
    known mineralization has not been connected to a strongly mineralized fault. However,
    higher-grade economic mineralization has been encountered at very shallow depths,
    mineralized oxide zones occur along a 1,300 feet strike length and occur less than 90 feet
    below the surface.

The Pinon and Railroad projects include approximately 17,000 acres
    comprising unpatented BLM lode mining claims, patents and leased fee lands. The focus of
    RSM's current effort is to identify and develop near surface oxide gold-silver deposits.
    Approximately 600 shallow drill holes have been completed on 6 near surface gold-silver
    deposits. The depth extensions of these deposits are not well understood, as deeper
    drilling has not been sufficient to develop an acceptable understanding of this
    mineralization.

The Company has developed the necessary construction plans for the
    Pinon-Railroad project including surface, heap leach facilities design and open pit
    modeling of the deposits. The 2004-2006 program involved work on the BLM permit
    application. All of this work has been completed in preparation for the filing of a mining
    permit application with the US Bureau of Mines (BLM) by year-end 2007. A second objective
    is to complete feasibility studies for the Pinon and Railroad near surface oxide deposits.

Total exploration expenditures on this project have exceeded $10
    million and an additional $20 million will be required to develop a 5,000 ton per day heap
    leach operation on this project. As of January 31, 2006, RSM and its partners have spent
    approximately $3.1 million on the Pinon and Railroad projects. Plans include the
    achievement of a mining permit in 2007 followed project financing. Following is a detailed
    table of RSM's expenditures.

|Cumulative
        from
|-----------------------
|
|
|2007                   
|                       
|$762,285               
|34,047                 
|0                      
|8,333                  
|0                      
|0                      
|15,296                 
|0                      
|151,133                
|167,785                
|9,380                  
|                       
|0                      
|385,974                
|$1,148,259             
|                       
|$175,670               
|40,143                 
|40,143                 
|$215,813               

The Pinon gold-silver project has been intensively explored with more
    than 300 drill holes in this Carlin-type surface bulk mineable target. In 2007, the
    Company completed drilling of the deposits for environmental data and completed drilling
    for similar information on the proposed leach pad. These data will be included in various
    state and federal applications toward achieving a mining permit for this project. The cost
    in 2007 has been approximately $200,000 for this drilling program. Engineering and
    analytical costs including report preparation is expected to be an additional $100,000
    this calendar year. Consulting environmental engineering, Dyre and Associates of Sparks,
    Nevada are completing the environmental reports. If more site work is required additional
    capital will have to be utilized to collect additional data.

In regard to the Railroad project, the Company expects to continue with
    the surface drilling program on the Copper-Molybdenum-precious metal target utilizing the
    two Company owned core drilling rigs. A total of five 5 core drill holes were completed on
    this project in 2007 at a cost of approximately $175,000. Experienced drillers are
    employed by the Company to operate our own drill rigs. Plans for this program in 2008 will
    include the continuation of this drilling program at a cost not to exceed $350,000.

The funding for these programs will come from the Company's current
    cash on its balance sheet.

#### The property is without known reserves and the proposed program is
    exploratory in nature.

Fondaway Canyon Project

The 100% controlled Fondaway Canyon gold project is located in
    Churchill County, Nevada in the Stillwater range. The Fondaway property is accessible from
    Fallon east along U.S. Highway 50, then north on Hwy 116 to the settlement of Stillwater,
    then north on an improved gravel road for 30 miles along the front range of the Stillwater
    Mountains to Fondaway Canyon. The elevation of the property ranges from 5000 to 6000 feet.
    Access east into Fondaway Canyon is steep but adequate with existing mine roads. The
    Fondaway deposit is located on the west flank of the Stillwater Range in Sections 1 and 2,
    T22N, R33E, and Sections 5 and 6, T22N, R34E.

Sierra Pacific Power Co exists on the property. RSM has the current
    water rights to the property.

The Fondaway
    Canyon property consists of 148 contiguous unpatented lode-mining claims (approximately
    3000 acres) on BLM land held under a lease agreement assigned from Nevada Contact Inc.
    (NCI) to Royal Standard Minerals Inc. (RSM). Eighteen claims were staked NCI, quitclaimed
    to the owner, and included in the assignment to RSM. The lease terms include a 3% net
    smelter return royalty to the owner Richard Fisk and advanced royalty payments of $25,000
    per year. The annual payments graduate to $35,000 in 2006 and years following. Details of
    the option agreement are as follows:

|Required Cash Payments to Optionors                            | Royalty | Exercise of Option
|-------------------------------------------------------------- | ------- | ------------------
|Commencing in fiscal 2003. $25,000
        in year one,        |         |                   
|$30,000 in years two and three and
        $35,000 each of the |         | July 2013         
|next seven years                                               | 3% NSR  | $600,000          

All of the maintenance filing fees are current and in good standing.

Nearly-vertical, east-west trending mineralized shear zones host the
    Half Moon, Paperweight, Hamburger Hill and South Pit gold resources that is hosted within
    a Mesozoic sedimentary package. The Mesozoic sedimentary package has been intruded by a
    Mesozoic-Tertiary aged intrusive.

The vertical extent tested by recent drilling of the higher grade gold
    mineralized shear zones is greater than 1,000 feet. Horizontal continuation of gold
    mineralization as at the Paperweight and Hamburger Hill mineralized shear zone is 3,700
    feet with widths commonly between 5'-20+ feet. Drilling and assay records indicate that
    568 holes have been drilled for a total estimated footage of 200,000 feet of RC drilling
    and 22,000 feet of core drilling to include 455 reverse circulation, 49 core holes and 64
    air track holes over a strike length of approximately 12,000 feet. Tenneco Minerals Inc.,
    the most active company, drilled approximately 350 holes (130,000 feet) and drove a 500'
    adit for sulfide metallurgical sampling during the period 1987-1996. Tenneco also operated
    a small oxide gold open pit mine for a short time during this period. Nevada Contact Inc.
    (NCI) acquired the property in 2001 and drilled 11 reverse circulation holes, RSM acquired
    the property from NCI in early 2003 as part of a property swap with NCI retaining a 1% NSR
    overriding royalty in the Fondaway Canyon property and $25,000 advance minimum royalty
    payments to the claim holder until 2006 at which time the payments increase to $35,000 per
    year that includes a 3% NSR royalty until buyout. There is a buyout option of $600,000 for
    the owners' interest.

The initial plan for 2007 is to drill test the Tenneco heap leach pad
    to determine if it is feasible to re-permit a new pad and transfer the Tenneco leach pad
    to a new RSM leach pad. If feasible, this effort could allow an early start up of
    potential gold production at Fondaway. Following this effort, RSM plans to further drill
    test the sulfide resource as part of a program to upgrade the indicated and inferred
    resources on the property. This effort will involve drilling underground within the
    Tenneco adit along with a surface drilling program. A bulk sampling program for
    metallurgical analysis of the sulfide resource will also be included as part of an effort
    to develop a gold recovery process that will achieve the desired results.

No field work was completed on this project in 2004, 2005, or 2006. The
    only effort has been the renewal of the Company's water rights and related permits. Plans
    are to commence an exploration effort in 2006 that will include surface drilling within
    the vicinity of the Tenneco adit.

Estimates of prior expenditures on this property are approximately $5-6
    million. The largest portion of these expenditures was contributed by Tenneco Minerals and
    Tundra Mines LTD. This work included extensive drilling, development of a small open pit
    production project and an advanced exploration adit on the property. As of January 31,
    2007, RSM has spent $162,778 on this project. A table of detailed expenditures follows:



|For the years ended January
        31 Fondaway Project | 2007     | 2006       | 2005        | Cumulative 
        from date of inception of exploration phase
|------------------------------------------------------- | -------- | ---------- | ----------- | ---------------------------------------------------------------
|$127,652                                                | $127,652 | $43,999    | $0         
|35,126 0                                                | 31,624 0 | 51,678 351 | 162,427 351
|35,126                                                  | 31,624   | 52,029     | 162,778    
|$162,778                                                | $127,652 | $96,028    | $162,778   

Project expenditures included a small sonic drilling program to test
    the Tenneco Minerals leach pad on this property. In 2008 the only program will include the
    completion of a ground magnetics survey of the entire property at a projected cost of
    approximately $50,000. These data will be utilized to plan a program of further drilling,
    possibly in 2009. This work will be completed by our employee, an experienced
    geophysicist. Funding will come from the cash on hand.

#### The property is without known reserves and the proposed program is
    exploratory in nature.

Como District

The Como gold property is located in the center of the old Como Mining
    District, Lyon County, Nevada, in the northern Pine Nut Mountains approximately eight
    miles southeast of the town of Dayton and 12 miles southeast of the famous Comstock Lode.
    The most direct access to the project is gained by traveling northeast on U.S. Highway 50
    from Carson City to the small town of Dayton, then southeast on the unpaved Old Como Road
    for approximately eight miles. The Old Como Road is a rough, boulder-strewn road requiring
    slow travel.

The Como District is at 7,200 feet elevation, in the north end of the
    Pine Nut Mountains. Heavy snows may occur during winter months. The climate is semi-arid
    with the average exploration season extending between early May and early November.
    Vegetation is rather heavy pinion-juniper forest. A main power line crosses the property.
    A perennial flowing creek originates on the property, indicating a shallow groundwater
    table. There are no buildings on the project.

The property consists of 79 unpatented lode claims and five patented
    lode claims (see table below) in Township 15 North and Range 22 East. Forty-seven of the
    unpatented claims (940 acres) and all of the patented claims (80 acres) are leased to RSM.
    Royal Standard Minerals staked and owns the additional 27 unpatented claims. Details of
    the option agreement are as follows:

Required Cash Payments to Optionors Royalty Exercise of Option Commencing in fiscal
    2003. $25,000in years one and 4% NSR May 2008 two covering years three and four, $20,000
    in year $1,000,000 five, $25,000 in year six

##### Claim Name Number Claim Name Number Claim Name Number

Delmonte USS 38 Colorado 102211 Angus #1 184308 Eureka USS 39
    Colorado Hill 102212 Angus #11 184318 Rapidan USS 40 Como Eureka 102213 Angus #12 184319
    Rock Point USS 41 Corona 102214 Angus #13 184320 North Rapidan USS 1727 Day After 102215
    Joe #3 700051 Alta 102194 Dora` 102217 Ramp #1 787123 Bear 102195 Hillcroft #1 102218 Ramp
    #2 787124 Clipper 102197 Hillcroft #2 102219 Ramp #3 787125 Crown Point 102199 Lucky
    Fraction 102220 Ramp #4 787126 Crown Point Fraction 102200 Maxwell 102221 Ramp #8 787130
    Denver 102201 Mountain Bell 102222 Ramp #9 787131 Fortuna 102203 North Point 102223 Ramp
    #15 787137 Midway 102205 Peer 102234 Ramp #18 787140 Oversight 102206 Star of the West
    102237 Ramp #22 787144 Palmyra 102207 Paymaster 104837 Ramp Fraction 787151 Palmyra
    Fraction 102208 Como Eureka Fraction 184306 Como #1 525293 Bernice 102209 Como #1 Fraction
    184307 Como #2 525294 Chicago 102210

CM1 to CM7 829828 to 829834 CM10 to CM34 829835 to 829840, 847321-847339

The Como district consists of at least eight gold-silver bearing
    structures that occur within a Tertiary age andesitic volcanic sequence that hosts the
    mineralization. Prospectors looking for mineralization similar to the Comstock Lode
    discovered Como in 1860. The property has had some historical gold and silver underground
    production with the Como vein producing about 20,000 ounces of gold and 500,000 ounces of
    silver at a gold equivalent grade of nearly 0.3 opt. The higher-grade underground vein
    extensions are largely undrilled and will be tested by RSM. Over the past 20 years modern
    exploration methods have continued to advance the understanding of the geologic framework
    and have identified two bulk mineable gold-silver deposits that will require further work
    to ascertain the economic potential. Since the 1960's several large companies have
    explored the property to include St. Joe American, Amoco, Meridian Gold and Amax Gold Inc.
    (who identified a low-grade open pit resource, based on 46 holes.) for a large tonnage
    bulk mineable gold deposit. More recently (2000) Anglo Gold Corp. explored the property
    for a potential multi-million ounce deposit. Anglo released the property in 2001 after
    drilling 8 holes and completing considerable surface geologic mapping, rock chip and
    geochemical sampling. RSM acquired its option on the Como gold-silver project based upon
    the previous exploration results.

It is difficult to estimate prior expenditures on this property due to
    the large number of mining companies that have explored this property over the last 30
    years. A table of

|RSM's expenditures
        follows:
|-----------------------------------
|
|
|
|2007                               
|                                   
|$108,050                           
|0                                  
|                                   
|0                                  
|0                                  
|0                                  
|0                                  
|0                                  
|0                                  
|0                                  
|$108,050                           

No exploration work was completed on the property in 2004, 2005 or
    2006. In 2007 RSM plans to complete surface geophysical, magnetics, and surface
    geochemical sampling.

The Company does not plan to complete any exploration program on this
    property in 2008.

#### The property is without known reserves and the proposed program is
    exploratory in nature.

Manhattan/Round Mountain Caldera Program

The project area is located southeast of the town of Round Mountain,
    Nevada east of State route 376. The town of Manhattan is located approximately 15 miles
    south of Round Mountain. The Manhattan project is located approximately 7 miles east of
    route 376 on route 377 and 1.5 miles west of the town of Manhattan.

The Manhattan/Round Mountain Caldera program is the Company's most
    advanced district play includes the Goldwedge advanced exploration program. The land
    position in the Manhattan Mining District is comprised of 70 unpatented and 3 patented
    lode-mining claims. An underground development program to include drill testing the
    extensions of the Goldwedge deposit in addition to the evaluation of several additional
    lode and placer properties that the Company controls in the district could significantly
    increase the gold resource estimates. Details of the option agreement are as follows:

On June 29, 2005 the Company entered into a 5-year Purchase Option Agreement with a
    private individual for all of his patented and unpatented mining claims in the Manhattan
    Mining District located in Nye County, Nevada. The land package totals approximately 1600
    acres (4 patented, 70 unpatented claims). This property position adjoins the Company's
    Goldwedge Mine. The land package includes a number of exploration targets which are of
    interest to the Company. In addition, the Company's option includes the Dixie Comstock
    claim group located in Churchill County, Nevada. The Dixie Comstock is a 1500 acre
    property containing an epithermal gold system that has been explored by a number of major
    mining companies over the past 20 years. It is considered to be an attractive advanced
    exploration project. The Company is currently engaged in the completion of a 43-101
    property report. The Company has agreed to pay $35,000 upon the execution of the
    Agreement. Annual option payments of $48,000 are to be applied to a total purchase price
    of $600,000 – there are no royalties. Freeport Gold, Tenneco (Echo Bay)
    recognized the potential of the district (to include the Goldwedge deposit that is
    currently under control by RSM) however, these deposits were not suited for open pit
    mining. At that time the large mining companies did not consider the underground
    development projects feasible. Although Sunshine Mining Co. considered an underground mine
    development in 1988 on the Goldwedge deposit, continued exploration by Crown Resources and
    others on the Company's claims indicated sections (5+'-30') of potentially mineable grades
    greater than 0.5 opt gold. The continued downturn in the gold market, tightened corporate
    budgets and high holding costs for the properties forced many companies to turn back the
    land positions to the claim owners. Currently, the Company controls approximately 4,000
    feet of strike length. Approximately 1,000-1,200 feet of this strike length has been drill
    tested indicating positive results.

Expenses to date by Royal Standard are as follows:



|Cumulative
        from date of
|-------------------------------
|
|
|2007                           
|                               
|$0                             
|0                              
|0                              
|0                              
|0                              
|0                              
|0                              
|0                              
|$0                             

The Company does not plan to complete any exploration program on this
    property in 2008.

The property is without known reserves and the proposed program is
    exploratory in nature.

#### Item 5. Operating and Financial Review and Prospects

A. Operating results.

Royal Standard is an exploration and pre-development stage
    enterprise and is in the process of exploring its resource properties and has not
    determined whether the properties contain economically recoverable reserves. The recovery
    of the amounts shown for the resource properties and the related deferred expenditures is
    dependent upon the existence of economically recoverable reserves, confirmation of the
    Company's interest in the underlying mineral claims, the ability of the Company to obtain
    necessary financing to complete the exploration and, upon future profitable production.

Royal Standard is an exploration-pre-development stage enterprise and,
    as such, currently has no producing properties and no operating income or cash flow, other
    than interest earned on funds invested in short-term deposits (see Item 3.D. –
    Key Information - Risk Factors).

Year Ended January 31, 2007 Compared to the Year Ended January
    31, 2006

The net loss for the year ending January 31, 2007 was $5,431,480 as
    compared to the net loss of $1,611,057 for the year ending January 31, 2006. The
    difference of $3,820,423 is principally the result of compensation expense resulting from
    stock options granted to officers, directors and a consultant during the current year in
    the amount of $3,838,926 versus $739,006 in the prior year for an increase of $3,099,920.

General and Administrative expenses increased from $266,505 for the
    year ended January 31, 2006 to $618,962 for the year ended January 31, 2007. The increase
    of $352,457 is mainly the result of Professional Fees which increased by $221,269,
    Corporate Development Expense which increased by $57,618 and Advertising Expense which
    increased by $45,539. Amortization increased from $191,877 in 2006 to $540,289 in 2007,
    for an increase of $348,412, and consulting fees which increased from $295,707 for the
    year ended January 31, 2006 to $443,693 for the year ending January 31, 2007, for an
    increase of $147,986. All increases are a direct result of increased activity on the
    Company's mineral projects.

Offsetting the aforementioned increases in expenses is interest income
    of $391,420 for the year ended January 31, 2007 versus none for the same period in 2006.
    In addition, the Company wrote off exploration properties amounting to $367,467 during the
    year ending January 31, 2006 versus none for the year ending January 31, 2007.

Year Ended January 31, 2006 Compared to the Year Ended January
    31, 2005

The net loss for the year ending January 31, 2006 was $1,611,057 as
    compared to $475,409 for the year ending January 31, 2005, a difference of $1,135,648. The
    majority of this difference is a result of stock-option compensation which increased from
    $150,606 in 2005 to $739,006 in 2006. During fiscal 2006 2,380,000 options were granted to
    employees and directors of the company, 200,000 were exercised and 695,000 were cancelled
    or expired (see note 9 of the January 31, 2006 audited financial statements for details).

Also contributing to the increased loss were write-offs of exploration
    properties totaling $367,467. During the year the Company wrote-off $192,523 of
    exploration expenditures relating to the Manhattan, Nye County project and $174,944
    relating to smaller projects that the Company was evaluating.

General and Administrative expenses increased from $193,287 for the
    year ending January 31, 2005 to $266,505 for the year ending January 31, 2006. Consulting
    fees increased from $213,504 for the year ending January 31, 2005 to $295,707 for the year
    ending January 31, 2006. These increases are a direct result of increased activity on the
    Company's mineral projects.

Year Ended January 31, 2005 Compared to the Year Ended January
    31, 2004

The net loss for the year ended January 31, 2005 was $475,409 as
    compared to $554,626 for the year ended January 31, 2004. General and Administrative
    expenses and Consulting fees decreased by a total of $103,832. However, Stock Option
    Compensation increased by $110,266 resulting in little change in total Expenses. Expenses
    were $578,632 for the year ended January 31, 2005 as compared to $565,907 for the year
    ended January 31 2004. The increase in Stock Option Compensation is attributed to the
    granting of 775,000 stock options to employees and directors of the Company on May 4,
    2004.

The Corporation owns 100% interest in five (5) projects in four (4)
    gold-silver districts in Nevada. These projects include the Gold Wedge, Nye County, Pinon
    and Railroad Projects, Elko County, Fondaway Canyon, Churchill County and Como, Lyon
    County, Nevada.

The Gold Wedge project represents the most advanced project located in
    the Manhattan district about eight (8) miles south of the Round Mountain mine and has been
    issued a mine and mill permit by the Nevada Department of Environmental Protection (NDEP).
    In March, 2004 the Company completed a $2.2 CDN million private placement. These funds
    were directed toward the construction of a 700 foot (underground) decline and cross cut to
    test one of the gold mineralized structures within a 100+ wide structural zone.
    Additionally, RSM completed the surface facilities necessary to process the material to be
    mined onsite to include silt ponds, ore pad and the onsite gold processing plant. The
    Company acquired a full production scale gold recovery (gravity) plant that will be
    utilized to process the mined material as part of the test mining program.

Year Ended January 31, 2004 Compared to the Year Ended January
    31, 2003

The net loss for the year ended January 31, 2004 was $516,869 as
    compared to $416,803 for the year ended January 31, 2003. The increase of $100,066 in net
    loss for the year is primarily attributable to an increase in expenses of the Corporation
    for the year ended January 31, 2004. Expenses were $565,907 for the year ended January 31,
    2004 as compared to $330,598 for the year ended January 31 2003. The increase of $235,309
    in the expenses of the Corporation for the year ended January 31, 2004 is attributable to,
    among other things, increased operating expenses on the Corporation's properties. In order
    to maintain the ongoing activities on the highest priority projects in Nevada the
    Corporation will contribute a minimum of $1,800,000 to maintain progress toward the Gold
    Wedge development program in 2004.

In 2004, work on the BLM permit application for the Pinon-Railroad
    project continued. The Company developed the necessary construction plans for the
    Pinon-Railroad project including surface, heap leach facilities design and open pit
    modeling of the deposits. All of this work was completed in preparation for the filing of
    a mining permit application with the US Bureau of Mines (BLM) by year-end 2005. A second
    objective is to complete feasibility studies for the Pinon/Railroad near surface oxide
    deposits.

The Corporation focused its efforts in 2003 on the Pinon and Railroad
    projects located on the southern portion of the Carlin Trend in Elko County, Nevada. The
    current land position includes more than 16,000 acres of unpatented, patented and fee
    leases. The effort in 2003 focused on the four (4) drilled out (600 drill holes) near
    surface measured oxide gold-silver resources. This work included drilling, trenching, pit
    modeling, plant and heap leach facility design and metallurgical (column) leach testing of
    the deposits. All of this work was to establish the economic potential of an open pit heap
    leach project and to develop the data necessary to complete a mine permit application to
    the US Bureau of Land Management (BLM). Expenditures on this project in 2003 were about $1
    million.

The Corporation carried out a detailed evaluation of all of the
    available data for the Fondaway gold and Como gold-silver projects and NI-43-101 reports
    were prepared for each project in 2003. These reports are filed on SEDAR along with the
    Goldwedge and Pinon-Railroad project reports.

Nevada Projects

In fiscal 2003 and 2002, the Company entered into certain option
    agreements to purchase up to 100% interest in patented and unpatented lode-mining claims
    in Nye, Elko and Lyon Counties, Nevada. Details of the option agreements are as follows:

Required Cash Project Payments to Optionors Royalty(1)Exercise of
    Option

|Gold Wedge | Commencing in fiscal 2002.      | 3% NSR | July 2006  
|---------- | ------------------------------- | ------ | -----------
|Nye County | $5,000 each in first two years; |        | $200,000   
|           | $10,000 in third year; $15,000  |        |            
|           | in fourth year and $20,000 in   |        |            
|           | fifth and sixth years           |        |            
|Manhattan  | Commencing in fiscal 2002.      | 5% NSR | August 2006
|Nye County | $1,000 per month from August    |        | $500,000   
|           | 2001 to August 2002; $2,000     |        |            
|           | per month from September        |        |            
|           | 2002 to July, 2006              |        |            

|Project          | Required Cash Payments to Optionors | Royalty(1) | Exercise of Option
|---------------- | ----------------------------------- | ---------- | ------------------
|                 | Commencing in fiscal 2003.          | 3% NSR     | July 2013         
|Fondaway Canyon  | $25,000 in year one, $30,000 in     |            | $600,000          
|Churchill County | years two and three and             |            |                   
|                 | $35,000 each of the next seven      |            |                   
|                 | years                               |            |                   
|Como             | Commencing in fiscal 2003.          | 4% NSR     | May 2008          
|Lyon County      | $25,000in years one and two         |            | $1,000,000        
|                 | covering years three and four,      |            |                   
|                 | $20,000 in year five, $25,000 in    |            |                   
|                 | year six                            |            |                   
|Railroad         | Commencing in fiscal 2003.          | 5% NSR     | August 2008       
|Elko County      | $15,000 in the first year and       |            | $2,000,000        
|                 | increases by $5,000 each of the     |            |                   
|                 | next six years                      |            |                   

(1) NSR – Net Smelter Royalty

Gold Wedge Project

On June 29, 2005 the Company entered into a 5-year purchase option
    agreement with a private individual for all of his patented and unpatented mining claims
    in the Manhattan Mining District located in Nye County, Nevada. The land package totals
    approximately 1600 acres (4 patented, 70 unpatented claims). This property position
    adjoins the Company's Goldwedge Mine. The land package includes a number of exploration
    targets which are of interest to the Company. In addition, the Company's option includes
    the Dixie-Comstock claim group located in Churchill County, Nevada. The Dixie Comstock is
    a 1500 acre property containing an epithermal gold system that has been explored by a
    number of major mining companies over the past 20 years. It is considered to be an
    attractive advanced exploration project. The Company has yet to complete a 43-101 property
    report. The Company agrees to pay $35,000 upon the execution of the Agreement. Annual
    option payments of $48,000 are to be applied to a total purchase price of $600,000
    – there are no royalties.

The Company has recorded an asset retirement obligation on its Gold
    Wedge Project, representing the estimated costs of the Company's obligation to restore the
    Gold Wedge properties to their original condition as required by the State of Nevada
    regulatory authorities. At the present time, the Company cannot reasonably estimate the
    fair value of these costs. As such, the Company has recorded an asset retirement
    obligation in the amount of $181,767, the amount of the reclamation bond posted by the
    Company with the State of Nevada.

Como Project

On September 15, 2004, the Company granted an option (the
    "Option") to Sharpe Resources Corporation ("Sharpe") to acquire a 60%
    interest in the Company's gold project located in Lyon County, Nevada (the
    "Project"), in consideration for which Sharpe has issued 2,000,000 common shares
    to the Company at a deemed value of $78,125 ($100,000 CDN). To exercise the option, Sharpe
    must maintain the unpatented and patented mining claims on the Project, must pay all
    required options, annual advanced minimum royalty payments and deliver a completed
    positive feasibility study in compliance with National Instrument 43-101 in respect of the
    Project.

On December 5, 2006, Sharpe withdrew from this project without any
    further financial obligations.

Pinon Project – Cord Lease

In August 2002, the Company entered into a mining lease agreement to
    lease certain properties located in Elko County, Nevada for a period of five years. The
    lessors will retain a 5% net smelter royalty with no option to purchase. These properties
    are to be extended in 2007. In 2006 RSM leased section 25 and 13 from the Periera Trust.
    The Dark Star gold-silver resources lie within Section 25. Additionally, in 2007 RSM plans
    to lease portions of sections 27, 15, and 23 that it currently does not control.

Pinon Project – Tomera Lease

In August 2002, the Company entered into a mining lease agreement to
    lease certain properties located in Elko County, Nevada for a period of seven years. The
    lessor will retain a 5% net smelter royalty.

In addition, the Company entered into an irrevocable lease agreement
    with the surface and minerals rights owners of the Pinon Project properties.

Other Projects

During 2006, the Company wrote-off $192,523 of exploration expenditures
    relating to the Manhattan, Nye County project and $174,944 relating to smaller projects
    that the Company was evaluating. Exploration expenditures written-off during fiscal 2006
    amounted to $367,467. No expenditures were written off during fiscal 2007.

The Company signed an Exploration and Option Agreement with Metallic
    Ventures ("Metallic") to explore the Mustang Canyon Project in Esmeralda County,
    Nevada. The agreement gives the Company the exclusive option to acquire 50% interest in
    the Mustang Canyon Project by spending $20,000 per year in exploration expenditures with
    the objective to identify a measured resource by June 30, 2010. Upon identification of a
    measured resource and completion of a 43-101 report, the Company will earn a 50% interest
    in the project. The Company may terminate the Agreement at any time after spending the
    initial $20,000 by providing 30 days written notice to Metallic. When the Company has
    exercised its option to acquire a 50% interest in the project, Metallic and the Company
    will establish a Joint Venture in respect to the project, on a 50/50 basis. Further
    expenditures on the Mustang Canyon Project will then be made by the Joint Venture. The
    Company will be the operator of the joint venture as long as it has at least a 50%
    interest in the joint venture.

#### B. Liquidity and capital resources.

Year Ended January 31, 2007 Compared to the Year Ended
    January 31, 2007

The Company's cash and cash equivalents balance as of January 31, 2007
    was $9,654,288 compared to $795,095 at January 31, 2006, an increase of $8,859,193. The
    increase is attributable to the private placement offerings completed during the first
    quarter of 2006. The Company also had $433,699 in short term investments at January 31,
    2007, compared to $436,378 in 2006.

On April 27, 2006, the Company completed a private placement of
    12,975,967 units of the Company at $1.15 CDN per unit raising gross proceeds of
    $13,286,762 ($14,922,362 CDN). Each unit consists of one common share of the Company and
    one-half of one common share purchase warrant. Each whole common share purchase warrant is
    exercisable at $1.75 CDN into one common share of the Company until April 26, 2008. The
    fair value of the common share purchase warrants was estimated, on the date of closing,
    using the Black-Scholes option pricing model, with the following assumptions: dividend
    yield 0%, expected volatility of 98%, risk-free interest rate of 4.13% and an expected
    life of 24 months. The value assigned to the warrants is $2,847,058 ($3,198,582 CDN).

Current assets as at January 31, 2007 were $10,438,324 as compared to
    $1,445,200 at January 31, 2006. Exploration properties at January 31, 2007 were $7,788,107
    compared to $3,810,519 at January 31, 2006 and represent an increase of $3,977,588.
    Equipment increased from $1,258,994 at January 31, 2006 to $2,056,392 at January 31, 2007
    resulting in an increase of $797,398, net of amortization. Both increases are the result
    of continued construction at the Gold Wedge Project. Total assets as at January 31, 2007
    were $20,464,590 as compared to $6,646,480 at January 31, 2006. This represents an
    increase of $13,818,110 and is due primarily to cash remaining from the aforementioned
    private placement offerings and continued operations on the Gold Wedge project.

Current liabilities as at January 31, 2007 were $202,157 compared to
    $221,733 at January 31, 2006, and represent current trade payables.

Year Ended January 31, 2006 Compared to the Year Ended January
    31, 2005

The Company's cash balance as of January 31, 2006 was $795,095 compared
    to $392,697 at January 31, 2005. The Company also had $436,378 (market value) in short
    term investments at January 31, 2006 compared to $0 in 2005. The increases are
    attributable to the private placement offerings completed during the first two quarters of
    2005.

On March 31, 2005 the Company completed the first round of a private
    placement by issuing 8,750,000 units at a price of $0.35 CDN for gross proceeds of
    $2,531,829 ($3,062,500 CDN). Each unit consisted of one common share and one-half common
    share purchase warrant. Each whole warrant will entitle the holder to subscribe for one
    additional share at a price of $0.50 CDN until March 31, 2007.

In addition, the agent for the offering, as partial compensation for
    its services, received 82,000 common shares and 1,353,500 warrants. Each warrant entitles
    the agent to acquire one additional common share of the Company at an exercise price of
    $0.50 CDN until March 31, 2007.

A second round of the financing was completed on April 26, 2005,
    whereby 1,500,000 units were issued at a price of $0.35 CDN for gross proceeds of $426,615
    ($525,000 CDN). Each unit consists of one common share and one-half common share purchase
    warrant. Each whole warrant entitles the holder to subscribe for one additional share of
    the Company's common stock at a price of $0.50 CDN per share until April 26, 2007.

As partial compensation for their services, the agents for this
    financing received 45,000 common shares and 247,500 warrants. Each warrant entitles the
    agents to acquire one additional common share of the Company at an exercise price of $0.50
    CDN until April 26, 2007.

On April 29, 2005, the Company issued 50,000 units at a price of $0.35
    CDN per unit for gross proceeds of $14,296 ($17,500 CDN). Each unit consists of one common
    share and one-half common share purchase warrant. Each whole warrant entitled the holder
    to subscribe for one additional share of common stock at a price of $0.50 CDN per share
    until April 29, 2007.

On May 5, 2005, the Company completed the third and final round of
    private placements by issuing 1,831,000 units at a price of $0.35 CDN for gross proceeds
    of $495,808 ($640,850 CDN). Each unit consists of one common share and one-half common
    share purchase warrant. Each whole warrant entitled the holder to subscribe for one
    additional share of common stock at a price of $0.50 CDN per share until May 5, 2007.

Current assets as at January 31, 2006 were $1,445,200. Total assets as
    at January 31, 2006 were $6,646,480 as compared to $3,375,464 at January 31, 2005. This
    represents an increase of $3,271,016 due to the increased financing activity. Exploration
    properties at January 31, 2006 were $3,810,519 compared to $2,664,127 at January 31, 2005.
    This represents an increase of $1,146,392 resulting from continued construction at the
    Gold Wedge Project.

Current liabilities as at January 31, 2006 were $221,733 compared to
    $104,087 at January 31, 2005, and represent current trade payables.

Year Ended January 31, 2005 Compared to the Year Ended January
    31, 2004

The Company's cash balance as of January 31, 2005 was $392,697 compared
    to $189,732 at January 31, 2004. The increase in the cash balance is attributable to the
    private placement offerings completed during the fiscal year 2004. On February 3, 2004,
    the Company closed a private placement offering of 1,075,000 units at a price of $0.25 CDN
    per unit for gross proceeds of $268,750 CDN. Each unit consisted of one common share and
    one-half common share purchase warrant. Each whole purchase warrant entitled the holder to
    subscribe for one additional common share at a price of $0.30 CDN until February 2, 2005.

On April 16, 2004, the Company closed a private placement offering o
    6,320,000 units at a price of $0.35 CDN per unit for gross proceeds of $2,212,000 CDN.
    Each unit consisted of one common share and one-half common share purchase warrant. Each
    whole purchase warrant entitles the holder to subscribe for one additional common share at
    a price of $0.50 CDN until April 15, 2006.

Current assets as at January 31, 2005 were $541,835. Total assets as at
    January 31, 2005 were $3,237,383 as compared to $1,579,391 at January 31, 2004. This
    represents an increase of $1,657,992 from 2004 due to the increased activity on the
    Company's projects, particularly at the Gold Wedge Project where the Company completed
    construction of a 700 foot (underground) decline and cross cut. Additionally, RSM
    completed the surface facilities necessary to process the material to be mined onsite
    including silt ponds, ore pad and the onsite gold processing plant. Additionally, the
    Company acquired a full production scale gold recovery (gravity) plant that will be
    utilized to process the mined material as part of the test mining program.

Current liabilities as at January 31, 2005 were $104,087 compared to
    $106,178 in 2004, and represent current trade payables.

On a forward going basis equity and debt financings will remain the
    single major source of cash flow for the Company. The primary reason is that current
    production cash flow is insufficient to allow the Company to grow at a rate to increase
    the necessary production capacity to achieve profitability in the near term. As revenue
    from operations improve the capital requirement of the Company will also improve. However,
    debt and equity financings will continue to be a source of capital to expand the
    Corporation's activities in the future.

The Company is authorized to issue an unlimited number of Common Shares
    of which 43,143,518 are outstanding as at January 31, 2005. As at January 31, 2005 the
    Corporation had outstanding options to purchase 4,185,000 common shares with exercise
    prices from $0.17-0.40 per share and expiration dates ranging from May 2005 to May 2009.

Year Ended January 31, 2004 Compared to the Year Ended January
    31, 2003

The Company's cash balance as of January 31, 2004 was $189,732 compared
    to $283,030 at January 31, 2003. The fact that there is little change in the cash balance
    is attributable to the completion of a C$1.5 million equity financing in July, 2003
    coupled with large expenditures before yearend. Current assets as at January 31, 2004 were
    $273,291 Total assets as at January 31, 2004 were $1,617,148 representing an increase of
    $404,668 from 2002 due to the addition of the Fondaway Canyon project and additional
    expenditures on the Corporation's Pinon-Railroad project. Current liabilities as at
    January 31, 2004 were $106,178 compared to $82,300 and represent current trade payables as
    at January 31, 2003.

Expenses include a charge of $20,950, representing the unrecovered
    portion of a contingency fee paid in connection with a failed financing.

On May 2, 2002, the Company completed a private placement of 7 million
    shares of the Company at $0.15 CDN per share for proceeds of $1,050,000 CDN (approximately
    US $650,000).

Due to the nature of the Company's mining business, the acquisition,
    exploration, and, if warranted, the development of mining properties requires significant
    expenditures prior to achieving commercial production. Royal Standard will seek to finance
    such expenditures through the sale of equity, joint venture arrangements with other mining
    companies or the sale of interests in its properties. There can be no assurance, however,
    that the Company will be successful in raising capital on acceptable terms or in amounts
    sufficient to finance exploration expenditures and/or satisfy its commitments under its
    agreements with third parties. In the event that the Company does not raise capital as
    planned, it will forfeit its rights to the properties, including the sums expended through
    the dates of such forfeitures. See Item 3.D. – Key Information - Risk Factors.

#### C. Research and development, patents and licenses, etc.

See Items 4.B, 4D, and 5.A. above.

#### D. Trend information.

See Items 4.B. and 5.A. above.

#### E. Off balance sheet arrangements.

None

F. Tabular disclosures of contractual obligations.

|Less Than 1 |      |           | More     
|----------- | ---- | --------- | ---------
|Total       | Year | 1-3 Years | 3-5 Years
|            |      |           |          

Asset Retirement Obligation(1)$181,767 $181,767

(1) The Company is required to recognize a liability for a legal
    obligation to perform asset retirement activities, including decommissioning, reclamation
    and environmental monitoring activities once any of its projects are permanently closed.
    Although these activities are conditional upon future events, the Company is required to
    make a reasonable estimate of the fair value of the liability. Based on the existing level
    of terrestrial disturbance and water treatment and monitoring requirements, the
    undiscounted asset retirement obligation ("ARO's") were estimated to be $250,930
    as at January 31, 2007, assuming payments made over a five year period.

Determination of the undiscounted ARO and the timing of these
    obligations were based on internal estimates using information currently available,
    existing regulations, and estimates of closure costs. The discount rate used when
    estimating the fair value of the ARO is a credit-adjusted risk-free interest rate with the
    same maturity as the removal obligation. The Company used a credit-adjusted risk-free
    interest rate of 5% to calculate the present value of the ARO, which was $181,767.

G. Safe harbor.

Not applicable.

Item 6. Directors, Senior Management and
    Employees

A. Directors and senior management.

The following table sets out the names of and related information
    concerning each of the officers and directors of Royal Standard.

BOARD TERM NAME OFFICE HELD SINCE EXPIRES

|Roland M. Larsen Heathsville, VA                            | President, Chief Executive Officer
        and Director | May, 1996       | June, 2008                   
|----------------------------------------------------------- | ------------------------------------------------------- | --------------- | -----------------------------
|Samuel Gulko                                                | Chief Financial Officer                                 | November, 2006  | N/A                          
|Kimberly L. Koerner Brambleton, VA NAME                     | Director, Secretary/Treasurer OFFICE
        HELD       | May, 2001 SINCE | June, 2008 BOARD TERM EXPIRES
|MacKenzie I. Watson Monteral,
        Quebec                | Director                                                | May, 1996       | June, 2008                   
|James C. Dunlop Toronto, Ontario                            | Director, Chairman of Audit
        Committee           | May, 1996       | June, 2008                   
|Jeffrey B. Wolin*                                           | Director                                                | May, 2007       | June, 2008                   
|* Mr. Wolin resigned
        as a Director on July 9, 2007. |                                                         |                

The following discussion provides information on the principal
    occupations of the above-named directors and executive officers of the Company within the
    preceding five years.

Roland M. Larsen

Mr. Larsen has 30 years of experience in the natural resource industry,
    both in exploration and management roles. From November 1993 to the present, he has been
    serving as the President of Sharpe Resources Corporation, a junior natural resource
    issuer. From 1981 to 1991, Mr. Larsen served District/Regional Exploration Manager with
    Inc. and BHP Minerals, Inc., both of which are junior natural resource issuers. Earlier in
    his career, he worked with BHP Minerals International Inc. for a period of ten years,
    where he was the Exploration Manager of the Eastern United States and the North Atlantic
    Region. Prior to that he was the Senior Geologist for NL Industries, Inc. In addition, he
    has several years of experience working with consulting engineering firms including Derry,
    Michner and Booth, and Watts Griffis & McOuat Limited. He is a member of the Society
    of Economic Geologists, the American Association of Professional Geologists and the
    Society of American Institute of Mining, Metallurgy, and Exploration Inc. Mr. Larsen holds
    a B.Sc. and M.Sc. degrees in geology.

Samuel Gulko

Mr. Gulko joined the Company effective November 1, 2006. For 18 years
    until he retired in 1987 he was an audit partner with an international "big 4"
    accounting firm. Subsequent to 1987 and continuing through the present, he serves as the
    financial and tax advisor to a number of business and private individuals. In addition,
    from 1987 through 1996, Mr. Gulko was the Chief Financial Officer of several private
    companies. From July 1996 through August 2002 he was the Chief Financial Officer; Senior
    Vice President of Finance and Secretary-Treasurer of Neotherapeutics, Inc. (renamed
    "Spectrum Pharmaceuticals, Inc."), a public company. He was also a member of its
    Board of Directors during this period. From October 2004 to the present, he has served as
    a member of the Board of Directors and Chairman of the Audit Committee of Smith Micro
    Software, Inc., a public company. Mr. Gulko is a graduate of the University of Southern
    California with a B.Sc. degree in accounting. He presently serves the Company on a
    part-time basis.

Kimberly L. Koerner

Ms. Koerner is a Financial Analyst and Consultant. She has been serving
    as the Treasurer of the Company from May 1996 to the present. Ms. Koerner has also been
    serving as the Secretary and Treasurer of Sharpe Energy Company, a U.S. subsidiary of
    Sharpe Resources Corporation, from November, 1995 to the present. From April 1992 to
    February 1994, she served as the Assistant Director of the National Association of
    Printing and Publishing Technology, a trade association. Ms. Koerner has B.Sc. degree in
    Finance from the University of South Carolina. Ms. Koerner is the daughter of Roland

M. Larsen, President, Chief Executive Officer and a Director.

MacKenzie I. Watson

From October 1986 to the present, Mr. Watson has been the Chief
    Executive Officer and a director of Freewest Resources Inc., a junior natural resource
    issuer. A geological consultant, he also serves as a director of Sharpe and as President
    and a director of Consolidated Gold Hawk Resources Inc., a junior natural resource issuer.
    He was involved in the discovery of the Holloway Gold deposit in the Province of Ontario
    with Hemlo Gold Mines. Earlier in his career, he was President and Exploration Manager of
    Lynx-Canada Exploration Ltd., which, under his leadership, discovered numerous precious,
    base metals and coal deposits. Prior thereto, he was a project geologist for the Icon
    Syndicate, where he participated in the discovery of the Sullivan Mines in Chibougamau,
    Quebec. He is currently a director of the Prospectors and Developers Association of
    Canada. Mr. Watson holds a B.Sc. from the University of New Brunswick.

James C. Dunlop

From October 1994 to the present, Mr. Dunlop has been serving as the
    Managing Director of Canada Trust Investment Group Inc., a subsidiary of Canada Trust. He
    also serves as a director of Sharpe. From October 1986 to October 1994, he served as the
    Senior Vice President of CIBC-Investment Management Corp. Since graduating with a

B.A. from University of Western Ontario in 1972, Mr. Dunlop has worked
    at increasingly senior positions within the Canadian investment community. Royal Standard
    benefits from Mr. Dunlop's counsel on economic and commodity matters and from his contacts
    in the investment community.

Jeffrey B. Wolin

Mr. Wolin is the president of Brighton Capital, Ltd, a boutique
    investment banking firm representing parties in mergers and acquisitions, public and
    private placements, convertible preferred/debt offerings, debt/equity swaps, senior debt
    offerings and related services. .Mr. Wolin is a graduate of Columbia University with a
    B.S. in Chemical and Biomedical Engineering and a graduate of the University of Miami with
    a J.D. Mr. Wolin resigned as a Director on July 9, 2007. The Company anticipates that it
    will continue to retain his services as a consultant.

B. Compensation.

Compensation of Officers

The following table summarizes, for the three most recently completed
    financial years of the Corporation, information concerning the compensation earned by the
    Chief Executive Officer of the Corporation, the Chief Financial Officer of the
    Corporation, each the Corporation's three most highly compensated executive officers of
    the Corporation who was serving as an executive officer as at the end of the most recently
    completed financial year or who was not serving as an officer of the Corporation at the
    end of the most recently completed financial year-end, and whose aggregate compensation
    exceeded $150,000 (the "Named Executive Officer").

Summary Compensation Table Summary Compensation Table

|               |                                                          | Annual Compensation                             | Long Term
        Compensation                 |                    |                             
|-------------- | -------------------------------------------------------- | ----------------------------------------------- | ---------------------------------------------- | ------------------ | ----------------------------
|               | Securities                                               | Restricted                                      |                                               
|Year           | Other Annual Salary Bonus Compen(US$) (US$) sation (US$) | Under Options Granted (#)                       | Shares or Restricted Share Units
        (US$) | LTIP Payouts (US$) | All Other Compensation (US$)
|2007 2006 2005 | $252,621 Nil Nil $96,000 $170,000
        $0 Nil Nil     | 1,408,000 (1) 1,130,000
        (2) 675,000 (3) | Nil Nil Nil                                    | Nil Nil Nil        | Nil Nil 36,000              
|               |                                                          |                                                 |                                                |                    |                             
|               |                                                          |                                                 |                                                |                    |                             
|2007           | $7,155 Nil Nil                                           | Nil                                             | Nil                                            | Nil                | Nil                         

Notes:

Mr. Larsen was granted 1,408,000 options on May 2, 2006 having an exercise price of
      Cdn$1.44 and expiring May 2, 2006;

Mr. Larsen was granted 400,000 options on April 13, 2005 having an exercise price of
      Cdn$0.39 expiring April 13, 2010; 600,000 options issued on May 16, 2005 having an
      exercise price of Cdn$0.29 expiring May 16, 2010; 130,000 options issued on January 20,
      2006 having an exercise price of Cdn$0.87 expiring January 20, 2011.

Mr. Larsen was granted 675,000 options on May 4, 2004 having an exercise price of
      Cdn$0.36 and expiring May 4, 2009.

Mr. Gulko was appointed Chief Financial Officer of the Company, on a part-time basis,
      effective November 1, 2006. Under his contract of employment, Mr. Gulko is entitled to the
      award of options to purchase 100,000 shares of common stock at the price of US$0.60 a
      share. These options were awarded in July, 2007. Had he been employed by the Company for
      the entire fiscal year (also on a part-time basis), he could have earned approximately
      US$60,000 in salary and approximately Nil in bonuses. These amounts are estimates only and
      are based on a grossed-up calculation of the amounts Mr. Gulko actually received in the
      fiscal year ended January 31, 2007. Prior to Mr. Gulko's appointment, the Company did not
      have a have Chief Financial Officer, and the Corporate Secretary of the Company, Kimberly
      Koerner, acted in this capacity for the fiscal period ended January 31, 2006.

Stock Option Plan

The Corporation maintains a "rolling" stock option plan (the
    "Plan") for directors, officers, consultants who provide ongoing services, and
    employees of the Corporation and its affiliates. The purpose of the Plan is to develop the
    interest of bona fide Officers, Directors, Employees, Management Corporation Employees,
    and Consultants of Royal Standard Minerals Inc. and it subsidiaries in the growth and
    development of the Corporation by providing them with the opportunity through stock
    options to acquire an increased proprietary interest in the Corporation. The Plan is
    administered by the Board of Directors of the Corporation. The Board may from time to time
    designate those to whom options to purchase common shares of the Corporation may be
    granted, and the number of Common Shares to be optioned to each, provided that:

the total number of Common Shares issuable pursuant to the Plan shall not exceed 10% of
      the issued and outstanding Common Shares, subject to adjustment as set forth in section 10
      of the Plan and further subject to the applicable rues and regulations of all regulatory
      authorities to which the Corporation is subject;

the number of Common Shares reserved for issuance, within a one-year period, to any one
      Optionee shall not exceed 5% of the Outstanding Common Shares;

the number of Common Shares reserved for issuance, within a one-year period, to any one
      Consultant of the Corporation may not exceed 2% of the Outstanding Common Shares;

the aggregate number of Common Shares reserved for issuance, within a one-year period,
      to Employees or Consultants conducting Investor Relations Activities may not exceed 2% of
      the Outstanding Common Shares.

In the case of Options granted to Employees, Consultants, or Management Corporation
      Employees, the Company represents that the Optionee is a bona fide Employee, Consultant or
      Management Corporation Employee, as the case may be.

Compensation of Directors

Directors who are not officers of the corporation are not currently paid any fees for
    their services as directors; however, such directors are entitled to receive compensation
    from the corporation to the extent that they provide services to the corporation. Any such
    compensation is based on rates that would be charged by such a director for such services
    to an arm's length party. During the twelve months ended January 31, 2007, no such
    services were rendered and, accordingly, no compensation was paid.

All directors are reimbursed for their expenses and travel incurred in connection with
    attending directors meetings. Special remuneration, at per diem rates, may be paid to any
    director (other than executive officers of the Corporation) undertaking special services,
    at the request of the directors, any committee of the directors or the President of the
    Corporation, beyond those services ordinarily required of a director of the Corporation.

Directors who are not officers are also entitled to participate in the Corporation's
    Stock Option Plan and, at the time of joining the board, directors may be granted options
    to purchase Common Shares. During the twelve months ended January 31, 2007, options were
    granted to acquire 3,423,500 common shares of the Corporation to directors of the
    Corporation under the Corporation's Stock Option Plan.

Other Compensation Matters

There were no long-term incentive awards made to the executive officers of the
    Corporation during the twelve months ended January 31, 2007. There are no pension plan
    benefits in place for the Named Executive Officer. In addition, there are no plans in
    place with respect to the Named Executive Officer for termination of employment or change
    in responsibilities.

Compensation Policy

The executive compensation policy of the Corporation is determined with
    a view to securing the best possible talent to run the Corporation. Executives expect to
    reap additional income from the appreciation in the value of the Common Shares they hold
    in the Corporation, including stock options.

Salaries are commensurate with those in the industry with additional
    options awarded to executive officers in lieu of higher salaries. Bonuses may be paid in
    the future for significant and specific achievements, which have a strategic impact on the
    fortunes of the Corporation. Salaries and bonuses are determined on a judgmental basis
    after review by the board of directors of the contribution of each individual, including
    the executive officers of the Corporation. Although they may be members of the board of
    directors, the executive officers do not individually make any decisions with respect to
    their respective salary or bonus. In certain cases, bonuses of certain individuals, other
    than the executive officers, may be tied to specific criteria put in place at the time of
    engagement.

The grant of stock options under the Corporation's Stock Option Plan is
    designed to give each option holder an interest in preserving and maximizing shareholder
    value in the longer term and to reward employees for both past and future performance.
    Individual grants are determined by an assessment of an individual's current and expected
    future performance, level of responsibilities and the importance of his/her position with
    and contribution to the Corporation.

Employment Contracts

There are current employment contracts in place between the Company and
    each of the Chief Executive Officer, Mr. Larsen, and Chief Financial Officer, Mr. Gulko.
    Other than as described herein or in the financial statements accompanying this Circular,
    there are no other employment contracts between either the Company or its subsidiaries and
    the above-named executive officers.

The employment contract of Mr. Larsen has been renewed twice, each time
    for a five year term. The contract was last renewed on January 1, 2006 and includes a base
    salary of US$250,000 per year and provides for an additional annual bonus payments. The
    contract also includes an early termination compensation clause which would entitle Mr.
    Larsen to receive, should the contract be terminated prior to the end of its specified
    term, the total amount still outstanding for the remainder of the specified term of the
    contract.

The employment contract of Mr. Gulko, the Chief Financial Officer of
    the Company, was entered into on October 25, 2006 and became effective as of November 1,
    2006 for a term of 12 months at a rate of US$5,000 per month. The contract is terminable
    by either Mr. Gulko or the Company upon the delivery of thirty days' written notice to the
    other party.

Neither the Company or any of its subsidiaries has any plan or
    arrangement with respect to compensation to its executive officers which would result from
    the resignation, retirement or any other termination of employment of the executive
    officers' employment with the Company and its subsidiaries or from a change of control of
    the Company or any subsidiary of the Company or a change in the executive officers'
    responsibilities following a change in control, where in respect of an Executive Officer
    the value of such compensation will be subject to the employment contract currently in
    place.

#### C. Board practices.

Information regarding the current term of office and length of
    service of the members of the Board of Directors is shown on item 6A.

In April 2003 the Company implemented new corporate governance policies
    pursuant to which the Company has begun to implement new, improved corporate governance
    practices.

#### Responsibilities of the Board of Directors

The Board recognizes it is responsible for the stewardship of the
    business and affairs of the Company and has adopted a set of principles and practices
    setting out its stewardship responsibilities. Under its mandate, the Board seeks to
    discharge such responsibility by reviewing, discussing and approving the Company's
    strategic planning and organizational structure, and supervising management to ensure that
    the foregoing enhance and preserve the underlying value of the Company for the benefit of
    all shareholders. As part of the strategic planning process, the Board contributes to the
    development of a strategic direction for the Company by reviewing, on an annual basis, the
    Company's principal opportunities, the processes that are in place to identify such
    opportunities and the full range of business risks facing the Company, including
    strategic, financial, operational, leadership, partnership and reputation risks. On an
    ongoing basis, the Board also reviews with management how the strategic environment is
    changing, what key business risks and opportunities are appearing and how they are
    managed, including the implementation of appropriate systems to manage these risks and
    opportunities. The performance of management, including the Company's Chief Executive
    Officer, is also supervised to ensure that the affairs of the Company are conducted in an
    ethical manner. The Board, directly and through its committees, ensures that the Company
    puts in place, and reviews at least on an annual basis, comprehensive communication
    policies to address how the Company (i) interacts with analysts, investors, other key
    stakeholders and the public, and (ii) complies with its continuous and timely disclosure
    obligations and avoids selective. Finally, the Board monitors the integrity of corporate
    internal control procedures and management information systems to manage such risks and
    ensure that the value of the underlying asset base is not eroded.

The Board from time to time delegates to senior executives the
    authority to enter into certain types of transactions, including financial transactions,
    subject to specified limits. According to the Company's policy, investments and other
    similar expenditures above the specified limits, including major capital projects as well
    as material transactions outside the ordinary course of business, whether on or off
    balance sheet, are reviewed by, and subject to, the prior approval of the Board.

Following are the principles of the Company's corporate governance
    arrangements:

- Subject to the relatively small size of the Company and to business
        needs, the size of the Board must be kept to a sufficiently low number to facilitate open
        and effective dialogue and full participation and contribution of each Director.
- The Board must function as a cohesive team, with shared responsibilities
        and accountabilities that are clearly defined, understood and respected.
- The Board must have the ability to exercise all its supervisory
        responsibilities independent of any influence by management.
- The Board must have access to all the information needed to carry out
        its full responsibilities. Information must be available in a timely manner and in a
        format conducive to effective decision making.
- The Board must develop, implement, and measure effective corporate
        governance practices, processes and procedures.

#### Committees of the Board

There are currently two committees of the board of directors. The
    board does not have, nor does it currently intend to form, a nominating committee. It is
    the view of the board of directors that its current size (five) is small enough to make
    such additional committees counter productive. In addition to regularly scheduled meetings
    of the board, its members are in continuous contact with one another and with the members
    of senior management. If the size of the board were to be enlarged or if the Company were
    to undergo a substantial change in its business and operations, consideration would at
    that point be given to the formation of additional committees, including a nominating
    committee. The mandate and activities of each of the Company's committees are as follows:

Audit Committee

The Audit Committee shall be composed of three members or such greater
    number as the board of directors may from time to time determine. A majority of the
    members of the Audit Committee shall be resident Canadians and unrelated to the
    Corporation and all members of the Audit Committee shall be non-management directors.
    Members shall be appointed annually from among the members of the board of directors. The
    Chair of the Audit Committee shall be appointed by the board of directors. All members of
    the Audit Committee shall be financially literate. An Audit Committee member who is not
    financially literate may be appointed to the Audit Committee provided that the member
    becomes financially literate within a reasonable period of time. The following persons
    have been initially appointed to the Audit Committee, with the Chair to be as designated:

James C. Dunlop (Chair) Kimberly L. Koerner Mackenzie I. Watson

The Audit Committee's primary duties and responsibilities are to:

a) Identify and monitor the management of the principal risks that could impact the
    financial reporting of the Corporation; b) Monitor the integrity of the Corporation's
    financial reporting process and system of internal controls regarding financial reporting
    and accounting compliance; c) Monitor the independence and performance of the
    Corporation's external auditors; d) Provide an avenue of communication among the external
    auditors, management and the Board of Directors.

The Audit Committee has the authority to conduct any investigation appropriate to
    fulfilling its responsibilities, and it has direct access to the external auditors as well
    as anyone in the organization. The Audit Committee has the ability to retain, at the
    Corporation's expense, special legal, accounting, or other consultants or experts it deems
    necessary in the performance of its duties.

The Audit Committee shall, in addition to any other duties and responsibilities
    specifically assigned or delegated to it from time to time by the board of directors:

a) Meet with the independent external auditors (the "auditors") and the
    senior management of the Corporation to review the year-end audited financial statements
    of the Corporation which require approval by the board of directors, prior to the issuance
    of any press release in respect thereof; b) Review with senior management and, if
    necessary, the auditors, the interim financial statements of the Corporation prior to the
    issuance of any press release in respect thereof; c) Review the MD&A and press
    releases containing financial results of the Corporation; d) Review all prospectuses,
    material change reports and annual information forms; e) Review the audit plans and the
    independence of the auditors; f) Meet with the auditors independently of management; g) In
    consultation with senior management, review annually and recommend for approval by the
    board of directors:

the appointment of auditors at the annual general meeting of shareholders of the
      Corporation;

the remuneration of the auditors; and

(iii) pre-approve all non audit services to be provided to the Corporation

by the external auditor; h) review with the auditors:

the scope of the audit;

significant changes in the Corporation's accounting principles, practices or policies;
      and

(iii) new developments in accounting principles, reporting matters or industry
    practices which may materially affect the financial statements of the Corporation;

i) review with the auditors and senior management the results of the annual audit, and
    make appropriate recommendations to the board of directors, having regard to, among other
    things:

the financial statements;

management's discussion and analysis and related financial disclosure contained in
      continuous disclosure documents;

(iii) significant changes, if any, to the initial audit plan;

accounting and reporting decisions relating to significant current year events and
      transactions;

the audit findings report and management letter, if any, outlining the auditors'
      findings and recommendations, together with management's response, with respect to
      internal controls and accounting procedures; and

any other matters relating to the conduct of the audit, including the review and
      opportunity to provide comments in respect of any press releases announcing year end
      financial results prior to issue and such other matters which should be communicated to
      the Audit Committee under generally accepted auditing standards;

j) Review with the auditors the adequacy of management's internal control procedures
    and management information systems and inquiring of management and the auditors about
    significant risks and exposures to the Corporation that may have a material adverse impact
    on the Corporation's financial statements, and inquiring of the auditors as to the efforts
    of management to mitigate such risks and exposures; k) Monitor policies and procedures for
    reviewing directors' and officers' expenses and perquisites, and inquire about the results
    of such reviews; l) Review and approve written risk management policies and guidelines
    including the effectiveness of the overall process for identifying the principal risks
    affecting financial reporting; m) Review issues relating to legal, ethical and regulatory
    responsibilities to monitor management's efforts to ensure compliance Including any legal
    matters that could have a significant impact on the Corporation's financial statements,
    the Corporation's compliance with applicable laws and regulations and inquiries received
    from regulators of governmental agencies; and, n) Establish procedures for:

the receipt, retention and treatment of complaints received by the issuer regarding
      accounting, internal accounting controls, or auditing matters; and

the confidential, anonymous submission by employees of the issuer of concerns regarding
      questionable accounting or auditing matters.

Corporate Governance Committee

The Corporate Governance Committee is responsible for the development,
    maintenance, and disclosure of the Company's corporate governance practices. The mandate
    of the committee includes:

- developing criteria governing the size and overall composition of the
        Board;
- conducting an annual review of the structure of the Board and its
        committees, as well as of the mandates of such committees;
- recommending new nominees for the Board (in consultation with the
        Chairman and the Chief Executive Officer); and
- recommending the compensation of directors ensuring that the Company's
        policy on disclosure and insider trading, including communication to the different
        stakeholders about the Company and its subsidiaries, documents filed with securities
        regulators, written statements made in documents pertaining to the Company's continuous
        disclosure obligations, information contained on the Company's Web site and other
        electronic communications, relationships with investors, the media and analysts is timely,
        factual and accurate, and broadly disseminated in accordance with all applicable legal and
        regulatory requirements.

The committee also coordinates the annual evaluation of the Board, the
    committees of the Board and individual directors. All issues identified through this
    evaluation process are then discussed by the Corporate Governance Committee and are
    reported to the Board. Finally, it also has the responsibility for annually initiating a
    discussion at the Board level on the performance evaluation and remuneration of the
    President and Chief Executive Officer.

Conflicts of Interest

Some of the directors and officers of Royal Standard also serve as
    directors and officers of other companies involved in the resource exploration sector.
    Consequently, there exists a possibility for any such officer or director to be placed in
    a position of conflict. Each such director or officer is subject to fiduciary duties and
    obligations to act honestly and in good faith with a view to the best interests of the
    Company. Similar duties and obligations will apply to such other companies. Thus any
    future transaction between the Company and such other companies will be for bona fide
    business purposes and approved by a majority of disinterested directors of the Company.

#### D.Employees.

In addition to the listed officers, at January 31, 2007, the
    Company had twenty-three full- time and one part-time employee.

E. Share ownership.

|Name                | Office Held               | Number of Common Shares Beneficially
        Owned or Over Which Control is Exercised1
|------------------- | ------------------------- | --------------------------------------------------------------------------------------
|Roland M. Larsen    | President, CEO & Director | 2,021,997                                                                             
|                    |                           |                                                                                       
|Samuel Gulko        | Chief Financial Officer   | Nil                                                                                   
|                    |                           |                                                                                       
|Mackenzie I. Watson | Director                  | 153,500                                                                               
|                    |                           |                                                                                       
|James C. Dunlop     | Director                  | Nil                                                                                   
|                    |                           |                                                                                       
|Kimberly L. Koerner | Director                  | 920,350                                                                               
|                    |                           |                                                                                       
|Jeffrey B. Wolin    | Director                  | Nil                                                                                   

1. The information as to shares beneficially owned or over which
    control or direction is exercised not being within the knowledge of the corporation has
    been furnished by the respective individuals.

Item 7. Major Shareholders and Related Party Transactions

A. Major Shareholders

As of May 11, 2007, to the knowledge of the directors and officers
    of the Company, no person beneficially owned, directly or indirectly, or exercised control
    or direction over, 10% or more of the Company's outstanding common shares, except the
    following:

|Name of Shareholder        | Number of Common Shares Owned | Percentage of Common Shares
        Outstanding (1)
|-------------------------- | ----------------------------- | ---------------------------------------------------
|Sprott Asset Management(2) | 14,200,000                    | 16.9%                                              
|Notes:                     |                               |                                                    

Based on 83,929,825 Common Shares issued and outstanding as at May 11. 2007.

This is a nominee account. To the knowledge of the Company, there is no beneficial
      ownership of these shares by this nominee. The shares are held by a number of securities
      dealers and other intermediaries holding shares on behalf of their clients who are the
      beneficial owners.

B. Related party transactions.

No director, senior officer, principal holder of securities or any
    associate or affiliate thereof of Royal Standard or the Company has any material interest,
    direct or indirect, in any transaction since the commencement of the Corporation's last
    completed financial year or in any proposed transaction which, in either case, has or will
    materially affect the Corporation, except as disclosed in the financial statements
    included herein.

#### C. Interests of experts and counsel.

Not Applicable.

Item 8. Financial Information

A. Consolidated Statements and Other Financial Information

Following is a list of financial statements filed as part of the
    annual report under Item #17

− Auditor's Report for Royal Standard Minerals Inc. for the year ended
    January 31, 2007, 2006, 2005 − Consolidated Balance Sheets of Royal Standard
    Minerals Inc. as at January 31, 2007 and 2006 − Consolidated Statements of
    Operations and Deficit of Royal Standard Minerals Inc. for the years ended January 31,
    2007, 2006, 2005 − Consolidated Statements of Cash Flows of Royal Standard
    Minerals Inc. for the years ended January 31, 2007, 2006, 2005 − Notes to the
    Consolidated Financial Statements of Royal Standard Minerals Inc.

The consolidated financial statements of Royal Standard Minerals Inc.
    were prepared in accordance with generally accepted accounting principles in Canada and
    are expressed in United States dollars. For a discussion of the reconciliation of such
    financial statements to United States generally accepted accounting principles, see note
    #17 of the notes to the consolidated financial statements of Royal Standard Minerals Inc.

B. Significant Changes.

The Accounting Standard Board issued new accounting standards,
    effective for financial statements relating to fiscal years beginning on or after October
    1, 2006, dealing with the recognition, measurement and disclosure of financial
    instruments, hedges and comprehensive income. Consistent with US and international
    reporting requirements, these standards require that certain gains and losses be recorded
    in a separate statement as comprehensive income. Fair value is considered the most
    relevant measure for financial instruments, which are any contracts that give rise to a
    financial asset of one party and a financial liability or equity instrument of another
    party. The company intends to adopt these policies effective February 1, 2007 and will
    report comprehensive income, equity and financial instruments in accordance with the
    relevant sections of the CICA Handbook (sections 1530, 3251, and 3855, respectively).

In addition to disclosing a new comprehensive income statement, the
    primary effect on the Company will be that all financial instruments will be measured at
    fair value. The Company will be required to separately disclose available-for-sale
    financial assets, which are those non-derivative financial assets that are designated as
    available for sale, or that are not classified as loans and receivables, held-to maturity
    investments, or held for trading.

Any gains and losses arising from a change in the fair value of a
    financial asset or financial liability that is classified as held for trading (including
    assets previously disclosed as marketable securities, but excluding hedges) will be
    recognized in net income in the periods in which they arise. Certain gains and losses on
    financial assets classified as available for sale will be recognized in other
    comprehensive income until the financial asset is no longer recognized or becomes
    impaired.

In January 2005, the Canadian Institute of Chartered Accountants issued
    four new accounting standards: Handbook Section 1530, Comprehensive Income, Handbook
    Section 3251, Equity, Handbook Section 3855, Financial Instruments – Recognition
    and Measurement and Handbook Section 3865, Hedges. These standards are effective for
    interim and annual consolidated financial statements for the Company's reporting periods
    beginning November 1, 2006.

On April 27, 2006, the Company completed a private placement of
    12,975,967 units of the Company at $1.15 CDN per unit raising gross proceeds of
    $13,286,762 ($14,922,362 CDN). Each unit consists of one common share of the Company and
    one-half of one common share purchase warrant. Each whole common share purchase warrant is
    exercisable at $1.75 CDN into one common share of the Company until April 26, 2008. The
    fair value of the common share purchase warrants was estimated, on the date of closing,
    using the Black-Scholes option pricing model, with the following assumptions: dividend
    yield 0%, expected volatility of 638%, risk-free interest rate of 4.13% and an expected
    life of 24 months. The value assigned to the warrants is $6,643,382 ($7,461,182 CDN).

On May 2, 2006 the Company granted 3,140,000 common share stock options
    to certain directors and a consultant. The options are exercisable at $1.44 CDN for a
    period of 5 years. The fair value of the options was estimated using the Black-Scholes
    option pricing model, with the following assumptions: dividend yield 0%, expected
    volatility of 859%, risk-free interest rate of 4.36% and an expected life of 5 years. The
    value assigned to the options is $4,086,399 ($4,521,600 CDN).

Item 9. The Offer and Listing

A. Offer and listing details.

The only share capital of Royal Standard is its Common Shares. The
    Common Shares of Royal Standard are without nominal or par value. Each Common Share ranks
    equally with all other Common Shares with respect to dissolution, liquidation or
    winding-up of Royal Standard and payment of dividends. The holders of Common Shares are
    entitled to one vote for each share held of record on all matters to be voted on by such
    holders and are entitled to receive pro rata such dividends as may be declared by the
    board of directors of Royal Standard out of funds legally available therefore and to
    receive pro rata the remaining property of Royal Standard on dissolution. The holders of
    Common Shares have no pre-emptive or conversion rights. The rights attaching to the Common
    Shares can only be modified by the affirmative vote of at least two-thirds of the votes
    cast at a meeting of shareholders called for that purpose.

The following table sets forth the reported high and low sales prices
    (stated in Canadian currency) and the average daily trading volume of the outstanding
    Common Shares on the Montreal Exchange for the periods January 1998 through September 2001
    and the TSX Venture Exchange for the periods October 2001 through June 2007.

Average Daily

|High | Low                | Volume
|---- | ------------------ | ------
|to   | March 31, 1998     | $0.80 
|to   | June 30, 1998      | $0.45 
|to   | September 30, 1998 | $0.40 
|to   | December 31, 1998  | $0.20 
|to   | March 31, 1999     | $0.25 
|to   | June 30, 1999      | $0.13 
|to   | September 30, 1999 | $0.19 
|to   | December 31, 1999  | $0.12 
|to   | March 31, 2000     | $0.17 
|to   | June 30, 2000      | $0.39 
|to   | September 30, 2000 | $0.28 
|to   | December 31, 2000  | $0.27 
|to   | March 31, 2001     | $0.30 
|to   | June 30, 2001      | $0.18 
|to   | September 30, 2001 | $0.13 
|to   | December 31, 2001  | $0.09 
|to   | March 31, 2002     | $0.34 
|to   | June 30, 2002      | $0.48 
|to   | September 30, 2002 | $0.35 
|to   | December 31, 2002  | $0.36 
|to   | March 31, 2003     | $0.00 
|to   | June 30, 2003      | $0.40 
|to   | September 30, 2003 | $0.40 
|to   | December 31, 2003  | $0.47 
|to   | March 31, 2004     | $0.46 
|to   | June, 30, 2004     | $0.46 
|to   | September 30, 2004 | $0.42 
|to   | December 31, 2004  | $0.47 
|to   | March 31, 2005     | $0.45 
|to   | June 30, 2005      | $0.43 
|to   | September 30, 2005 | $0.75 
|to   | December 31, 2005  | $1.00 
|to   | March 31, 2006     | $1.45 
|to   | June 30, 2006      | $1.65 
|to   | September 30, 2006 | $1.15 
|to   | December 31, 2006  | $0.79 
|to   | March 31, 2007     | $0.64 
|to   | June 30, 2007      | $0.85 

B. Plan of Distribution

Not Applicable

#### C. Markets

The Common Shares have been listed for trading on the TSX Venture
    Exchange (formerly the CDNX) since October 2001 under the trading symbol "RSM".
    The common shares were traded on the Montreal Exchange from June 28, 1996 until October
    2001. Prior to such date, there was no established trading market for the Common Shares
    and no quotations or prices are available because of the sporadic and very limited trading
    that took place.

The common shares are also listed on the US-OTC Bulletin Board under
    the symbol "RYSMF".

#### 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.

These documents were filed with the registration statement in
    November 1996.

C. Material contracts.

On January 1, 2006, the Company entered into a management employment agreement with the
      President of the Company for management and consulting services for $250,000 per annum
      which expires in January 1, 2011. On January 1, 2007 and on each January 1 during the term
      of the agreement, the compensation may be increased by 10% per annum. This agreement can
      be renewed for an additional five years.

On October 23, 2006, the Company entered into an agreement with a company for
      investors' relation services for $7,500 per month which expires October 31, 2007.

(iii) On October 25, 2006 (amended to be effective November 1, 2006),
    the Company entered into an employment agreement with the Chief Financial Officer for
    $5,000 per month which expires October 31, 2007. In addition, the Company is committed to
    issue options to purchase 100,000 shares of the Company as per the employment agreement.
    The options are exercisable at $0.60 until November 1, 2011. The fair value of the stock
    options is estimated to be $33,300 using the Black-Scholes option pricing model. The
    following assumptions were made in estimating the fair value of the stock options:
    dividend yield, 0%; risk-free interest rate, 3.91%; estimated life, 2.5 years and
    volatility, 92%. The options were granted in July, 2007.

The Company is obligated to incur an additional $45,000 in option costs before the end
      of fiscal 2009 pursuant to the agreement of the Como Project.

The Company is obligated to incur an additional $144,000 in option costs before July 1,
      2009 pursuant to the agreement of the Gold Wedge Project.

The Company is obligated to incur an additional $120,000 in option costs before the end
      of fiscal 2010 pursuant to the agreement of the Railroad Project.

(vii)The Company is obligated to incur an additional $80,000 in
    exploration expenditures before June 30, 2010 pursuant to the agreement of the Mustang
    Canyon Project.

(viii)The Company is obligated to incur an additional $260,000 in
    exploration expenditures and $38,320 in option costs before July 31, 2011 pursuant to the
    agreement of the Darkstar gold property.

(ix) The Company is obligated to incur an additional $175,000 in option
    costs before the end of fiscal 2012 pursuant to the agreement of the Fondaway Project.

D. Exchange controls.

There is no law, governmental decree or regulation in Canada that
    restricts the export or import of capital, including foreign exchange controls, or that
    affects the remittance of dividends, interest or other payments to non-resident holders of
    Common Shares, other than withholding tax requirements and potential capital gain on the
    disposition of the Common Shares under certain circumstances. (See Item 10. E. -
    Taxation.)

There is no limitation imposed by Canadian law or by the Articles or
    other charter documents of the Company on the right of a non-resident to hold or vote
    Common Shares, other than as provided by the Investment Canada Act (Canada) as amended,
    including as amended by the World Trade Organization Implementation Act (Canada). The
    following summarizes the principal features of the Investment Canada Act for non-Canadians
    who propose to acquire Common Shares.

The Investment Canada Act (the "Act") enacted on June 20,
    1985, as amended, including as amended by the World Trade Organization Implementation Act
    (Canada), requires notification and, in certain cases, advance review and approval by the
    Government of Canada of the acquisition by a "non-Canadian" of
    "control" of a "Canadian business," all as defined in the Act.
    "Non-Canadian" generally means an individual who is not a Canadian citizen or
    permanent resident, or a Corporation, partnership, trust or joint venture that is
    ultimately controlled by non-Canadians. For purposes of the Act, "control" can
    be acquired through the acquisition of all or substantially all of the assets used in the
    Canadian business, or the direct or indirect acquisition of voting interests or shares in
    an entity that carries on a Canadian business or which controls the entity which carries
    on the Canadian business whether or not the controlling entity is Canadian. Under the Act,
    control of a Corporation is deemed to be acquired through the acquisition of a majority of
    the voting shares of a Corporation, and is presumed to be acquired where at least
    one-third, but less than a majority, of the voting shares of a Corporation or of an
    equivalent undivided ownership interest in the voting shares of a Corporation are acquired
    unless it can be established that the Corporation is not controlled in fact through the
    ownership of voting shares. Other rules apply with respect to the acquisition of
    non-corporate entities.

All investments to acquire control of a Canadian business are
    notifiable, unless they are reviewable. Investments requiring review and approval include:
    (i) a direct acquisition of control of a Canadian business with assets with a value of
    Cdn. $5,000,000 or more; (ii) an indirect acquisition of control of a Canadian business
    where the value of the assets of the Canadian business and of all other Canadian entities
    the control of which is acquired directly or indirectly is Cdn. $50,000,000 or more; and
    (iii) an indirect acquisition of control of a Canadian business and of all other Canadian
    entities the control of which is acquired directly or indirectly is Cdn. $5,000,000 or
    more and represents greater than 50% of the total value of the assets of all of the
    entities, control of which is being acquired. Subject to certain exceptions, where an
    investment is made by a "WTO Investor" (generally, nationals or permanent
    residents of World Trade Organization member states, or entities controlled by residents
    or nationals of WTO member states) or the Canadian business is controlled by a WTO
    Investor, the monetary thresholds discussed above are higher. In these circumstances the
    monetary threshold with regard to direct acquisitions is Cdn. $160,000,000 in constant
    1995 dollars as determined in accordance with the Act. Indirect acquisitions of Canadian
    businesses by or from WTO Investors are not subject to review. The United States is a WTO
    member state.

Special rules apply with respect to investments by non-Canadians
    (including WTO Investors) to acquire control of Canadian businesses that engage in certain
    specified activities, including financial services, transportation services and activities
    relating to Canada's cultural heritage or national identity.

If an investment is reviewable, an application for review in the form
    prescribed by regulation is normally required to be filed with the Investment Review
    Division of Industry Canada prior to the investment taking place and the investment may
    not be normally implemented until the review has been completed and ministerial approval
    obtained.

The Investment Review Division will submit the application for review
    to the Minister of Industry (Canada), together with any other information or written
    undertakings given by the acquirer and any representations submitted to the division by a
    province that is likely to be significantly affected by the investment. The Minister will
    then determine whether the investment is likely to be of "net benefit to
    Canada," taking into account the information provided and having regard to certain
    factors of assessment prescribed under the Act. Among the factors considered are: (i) the
    effect of the investment on the nature and level of economic activity in Canada, including
    the effect on employment, on resource processing, on the utilization of parts, components
    and services produced in Canada, and on exports from Canada; (ii) the degree and
    significance of participation by Canadians in the Canadian business and in any industry in
    Canada of which it forms a part; (iii) the effect of the investment on productivity,
    industrial efficiency, technological development, product innovation and product variety
    in Canada; (iv) the effect of the investment on competition within any industry or
    industries in Canada; (v) the compatibility of the investment with national industrial,
    economic and cultural objectives enunciated by the government or legislature of any
    province likely to be significantly affected by the investment; and (vi) the contribution
    of the investment to Canada's ability to compete in world markets.

Within 45 days after completed application for review has been
    received, the Minister must notify the investor that (a) he is satisfied that the
    investment is likely to be of "net benefit to Canada," or (b) he is unable to
    complete his review in which case he shall have 30 additional days to complete his review
    (unless the investor agrees to a longer period) or (c) he is not satisfied that the
    investment is likely to be of "net benefit to Canada." If the Minister is unable
    to complete his review and no decision has been taken within the prescribed or agreed upon
    time, the Minister is deemed to be satisfied that the investment is likely to be of
    "net benefit to Canada."

Where the Minister has advised the investor that he is not satisfied
    that the investment is likely to be of "net benefit to Canada," the acquirer has
    the right to make representations and submit undertakings within 30 days of the date of
    notice (or any further period that is agreed upon between the investor and the Minister).
    On the expiration of the 30-day period (or an agreed extension), the Minister must notify
    the investor whether or not he is satisfied that the investment is likely to be of
    "net benefit to Canada." In the latter case, the investor may not proceed with
    the investment, or if the investment has already been implemented, must divest itself of
    control of the Canadian business.

No securities of the Company are subject to escrow.

Pursuant to an escrow agreement dated June 17, 1996, (the "Escrow
    Agreement"), among the Company, Montreal Trust Company (the "Trustee"), and
    Sharpe, as the escrowed shareholder, an aggregate of 5,061,615 Common Shares of the
    Company are held by the Trustee in escrow. The Escrow Agreement was entered into as a
    condition of the Montreal Exchange approving the listing of the Company's Common Shares on
    the Montreal Exchange. The first 250,000 Common Shares are released in accordance with the
    provisions of Section 5 of General Policy Q-4 of the Quebec Securities Commission, and the
    balance are released upon a mineral property being placed in commercial production. The
    escrow agreement expired on November 30, 2001 and as a result the Quebec Securities
    Commission canceled all of the escrow shares granted under the June 17, 1996 agreement.

E. Taxation

The following is a summary of certain Canadian federal income tax
    provisions applicable to United States corporations, citizens and resident alien
    individuals purchasing Common Shares. The discussion is only a general summary and does
    not purport to deal with all aspects of Canadian federal taxation that may be relevant to
    shareholders, including those subject to special treatment under the income tax laws.
    Shareholders are advised to consult their own tax advisors regarding the Canadian federal
    income tax consequences of holding and disposing of the Company's Common Shares, as well
    as any consequences arising under US federal, state or local tax laws or tax laws of other
    jurisdictions outside the United States. The summary is based on the assumption that, for
    Canadian tax purposes, the purchasers or shareholders (i) deal at arm's-length with the
    Company, (ii) are not residents of Canada, (iii) hold the Common Shares as capital
    property and (iv) do not use or hold Common Shares in, or in the course of, carrying on
    business in Canada (a "Non-Resident Holder").

Dividends paid to US residents by the Company on the Common Shares
    generally will be subject to Canadian non-resident withholding taxes. For this purpose,
    dividends will include amounts paid by the Company in excess of the paid-up capital of the
    Common Shares on redemption or a purchase for cancellation of such shares by the Company
    (other than purchases on the open market). For US corporations owning at least 10% of the
    voting stock of the Company, the dividends paid by the Company are subject to a
    withholding tax rate of 6% in 1996 and 5% thereafter under the Canada-U.S. Income Tax
    Convention (1980), as amended by the Protocol signed on March 17, 1995 (the
    "Treaty"). For all other US shareholders, the Treaty reduces the withholding tax
    rate from 25% to 15% of the gross dividend. Other applicable tax treaties may reduce the
    Canadian tax rate for other Non-Resident Holders.

A Non-Resident Holder will generally not be subject to tax in Canada on
    capital gains realized from disposition of Common Shares, unless such shares are
    "taxable Canadian property" within the meaning of the Income Tax Act (Canada).
    Generally, the Common Shares would not be taxable Canadian property unless the
    Non-Resident Holder, together with related parties, at any time during the five years
    prior to the disposition of the Common Shares owned not less than 25% of the issued shares
    of any class of the capital stock of the Company. Under the Treaty, a resident of the
    United States will not be subject to tax under the Income Tax Act (Canada) in respect of
    gains realized on the sale of Common Shares which constitute "taxable Canadian
    property", provided that the value of the Common Shares at the time of disposition is
    not derived principally from real property located in Canada.

#### F. Dividends and paying agents.

Not applicable.

#### G. Statement by experts

Not applicable.

#### H. Documents on display.

Company documents can be reviewed at 3258 Mob Neck Road, Heathsville, VA 22473 or
    One Main Street, Manhattan, Nevada, 89022. You can also obtain copies by writing to either
    of these addresses.

#### I. Subsidiary Information

Not applicable.

Item 11. Quantitative and Qualitative Disclosures about Market
    Risk.

At January 31, 2007, the Company's financial instruments consisted of cash and cash
    equivalents, common shares of Sharpe Resources, receivables and payables and accruals. The
    Company estimates that the fair value of its other financial assets and liabilities
    approximates the carrying values due to their short-term nature.

It is management's opinion that the Company is not exposed to significant interest,
    currency or credit risks arising from these financial instruments.

Item 12. Description of Securities Other than Equity
    Securities.

Not applicable.

### PART II

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

As of the end of the period covered by this report and based on their evaluation
    the Company's principal executive officer and principal financial officer have concluded
    that the Company's disclosure controls and procedures (as defined in Exchange Act Rules
    13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in
    Exchange Act Rules 13a-15(f) and 15d-15(f)) were effective to ensure that the information
    required to be disclosed by the Company in reports that it files or submits under the
    Exchange Act is recorded, processed, summarized and reported within the time period
    specified in Securities and Exchange Commission rules and forms. There were no significant
    changes in the Company's internal controls or in other factors that could significantly
    affect these controls subsequent to the date of their evaluation, including any corrective
    actions with regard to significant deficiencies and material weaknesses.

Item 16. [Reserved]

Item 16A. Audit Committee Financial Expert.

The board of directors has determined that Director and Audit Committee Member Mr.
    James Dunlop has the necessary attributes and independence for designation as the audit
    committee's financial expert and has designated Mr. Dunlop as the financial expert.

#### Item 16B. Code of Ethics.

The company has adopted a Code of Ethics that applies to its Directors and
    Executive Officers. The Code of Ethics can be viewed at 3258 Mob Neck Road, Heathsville,
    Virginia 22473. It can also be obtained, without charge, by writing to this address.

Item 16C. Principal Accountant Fees and Services.

#### Year Ending January 31, 2007 2006 2005

Audit Fees $42,500 $35,500 $23,500 Audit Related Fees $0 $0 $0 Tax Fees $2,500
    $2,500 $1,500 All Other Fees $680 $568 $0

Policies and Procedures

The Audit Committee, in consultation with senior management, reviews annually and
    recommends for approval by the board of directors;

- the appointment of independent auditors at the annual general meeting of shareholders of
        the Corporation;
- the remuneration of the auditors; and
- pre-approval of all non-audit services to be provided to the Corporation by the external
        auditor.

Since the commencement of the Corporation's most recently completed financial year,
    every recommendation of the Audit Committee to nominate or compensate an external auditor
    was adopted by the Board of Directors.

#### Item 16D. Exemptions from the Listing Standards for Audit Committees.

The Company is relying on the exemption in section 6.1 in Multilateral Instrument
    52-110 "Audit Committees" which provides that venture issuers (as that term is
    defined therein) are not required to comply with certain audit committee composition
    requirements and have different reporting obligations, as specified by the Multilateral
    Instrument..

#### Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers.

Not applicable.

### PART III

Item 17. Financial Statements.

Following is a list of financial statements filed as part of the annual report.

− Auditor's Report for Royal Standard Minerals Inc. for the year ended
    January 31, 2007, 2006, 2005 − Consolidated Balance Sheets of Royal Standard
    Minerals Inc. as at January 31, 2007 and 2006 − Consolidated Statements of
    Operations and Deficit of Royal Standard Minerals Inc. for the years ended January 31,
    2007, 2006 2005 − Consolidated Statements of Cash Flows of Royal Standard
    Minerals Inc. for the years ended January 31, 2007, 2006, 2005 − Notes to the
    Consolidated Financial Statements of Royal Standard Minerals Inc.

The consolidated financial statements of Royal Standard Minerals Inc.
    were prepared in accordance with generally accepted accounting principles in Canada and
    are expressed in United States dollars. For a discussion of the reconciliation of such
    financial statements to United States generally accepted accounting principles, see note
    #17 of the notes to the consolidated financial statements of Royal Standard Minerals Inc.

#### Auditors' Report

To the Shareholders of Royal Standard Minerals Inc.

We have audited the consolidated balance sheets of Royal Standard
    Minerals Inc. as at Monday, January 31, 2005 and 2004 and the consolidated statements of
    exploration properties, operations and deficit and cash flows for each of the years then
    ended. 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 auditing standards generally
    accepted in Canada and the standards issued by 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 Monday, January 31,
    2005 and 2004 and the results of its operations and its cash flows for each of the years
    then ended in accordance with Canadian generally accepted accounting principles.

The consolidated statements of exploration properties, operations and
    deficit and cash flows for the year ended January 31, 2003 were audited by other auditors
    who expressed an opinion without reservation on the financial statements in their report
    dated April 17, 2003.

"McCarney Greenwood LLP" Toronto, Canada McCarney Greenwood LLP
    Chartered Accountants

Comments by Auditors on United States of America-Canada Reporting
    Difference

United States of America reporting standards require the addition of an
    explanatory paragraph when the financial statements are affected by conditions and events
    that cast doubt on the company's ability to continue as a going concern, such as those
    described in note 1 to the financial statements. Although we conducted our audits in
    accordance with both United States of America and Canadian generally accepted auditing
    standards, our report to the shareholders dated March 29, 2005 is expressed in accordance
    with Canadian reporting standards which do not permit a reference to such conditions and
    events in the auditor's report when these are adequately disclosed in the financial
    statements.

"McCarney Greenwood LLP" Toronto, Canada McCarney Greenwood LLP
    Chartered Accountants

#### Royal Standard Minerals Inc.

(Continued under the New Brunswick Corporation Act) (An Exploration
    Stage Company)

(Expressed in United States dollars) Consolidated Financial
    Statements

#### January 31, 2007 and 2006

Royal Standard Minerals Inc. Consolidated Financial Statements
    January 31, 2007 and 2006

(Audited)

INDEX

Page Audit Report of Independent Registered Public Accounting Firm 1 Consolidated
    Balance Sheets 2 Consolidated Statements of Mineral Properties 3-5 Consolidated Statements
    of Operations and Deficit 6 Consolidated Statements of Cash Flows 7 Notes to the Financial
    Statements 8-34

##### REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders of Royal Standard Minerals Inc.

We have audited the consolidated balance sheets of Royal
    Standard Minerals Inc. (An Exploration Stage Company) as at January 31, 2007 and 2006 and
    the consolidated statements of mineral properties, operations and deficit and cash flows
    for each of the years in the three-year period ended January 31, 2007. 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, the consolidated financial statements referred to above
    present fairly, in all material respects, the financial position of the Company as at
    January 31, 2007 and 2006 and the results of its operations and its cash flows for each of
    the years in the three-year period ended January 31, 2007 in accordance with Canadian
    generally accepted accounting principles.

|"McCarney Greenwood
        LLP"
|--------------------------------
|McCarney Greenwood LLP          
|Chartered Accountants           
|Licensed Public Accountants     

##### Comments by Auditors on United States of America-Canada Reporting
    Difference

In the United States, reporting standards for auditors require the
    addition of an explanatory paragraph (following the opinion paragraph) when the financial
    statements are affected by conditions and events that cast 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 the shareholders dated April 16, 2007 is expressed in
    accordance with Canadian reporting standards which do not require a reference to such
    conditions and events in the auditor's report when these are adequately disclosed in the
    financial statements.

"McCarney Greenwood LLP"

Toronto, Canada McCarney Greenwood LLP April 16, 2007 Chartered
    Accountants

Licensed Public Accountants

1

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
    Company)

Consolidated Balance Sheets

|As at January 31                                                                                                                                                                                                                |   | 2007                                             |   | 2006                                              
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------------------------------------------ | - | --------------------------------------------------
|Assets Current assets Cash and cash equivalents (Note 2(b)) Short-term investments, at cost which
        approximates market Marketable securities (Note 3) Sundry receivables and prepaids Due from related parties (Note 13) | $ | 9,654,288 433,699
        86,124 141,827 122,386 | $ | 795,095 436,378
        86,124 1,261 126,342      
|                                                                                                                                                                                                                                |   | 10,438,324                                       |   | 1,445,200                                         
|Reclamation bond (Note 4) Mineral
        properties (Note 5) Equipment, net (Note 6)                                                                                                                                           |   | 181,767 7,788,107 2,056,392                      |   | 131,767 3,810,519 1,258,994                       
|                                                                                                                                                                                                                                | $ | 20,464,590                                       | $ | 6,646,480                                         
|LiabilitiesCurrent
        liabilities Accounts payable and accrued liabilities                                                                                                                                                 | $ | 202,157                                          | $ | 221,733                                           
|Asset retirement obligation (Note
        7)                                                                                                                                                                                    |   | 202,157 181,767                                  |   | 221,733 131,767                                   
|                                                                                                                                                                                                                                |   | 383,924                                          |   | 353,500                                           
|Shareholders' EquityShare
        capital (Note 8) Shares to be issued (Note 9) Warrants (Note 9) Contributed surplus (Note
        10) Deficit                                                                                 |   | 25,403,464 -3,546,935 6,025,637 (14,895,370)     |   | 11,832,670 119,325 1,440,009 2,364,866 (9,463,890)
|                                                                                                                                                                                                                                |   | 20,080,666                                       |   | 6,292,980                                         
|                                                                                                                                                                                                                                | $ | 20,464,590                                       | $ | 6,646,480                                         

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

Approved by the Board"Roland M. Larsen"Director
    "Kimberly L. Koerner"Director

2

|Royal Standard Minerals Inc.
        (Expressed in United States Dollars) (An Exploration Stage Company) Consolidated
        Statements of Mineral Properties Cumulative from date of inception of exploration For the
        years ended January 31 2007 2006 2005 phase Gold Wedge ProjectOpening balance $
        2,636,862 $ 1,460,443 $ 264,119 $ -Property acquisition costs Travel Mine development
        costs Drilling General exploration Professional fees Consulting fees and payroll Office
        and general Analysis and assays Supplies, equipment and transportation 171,376 184,892 111,122 506,399 77,737 70,862 40,770 212,553 293,519 237,867 207,662 741,133 53,185 78,790 146,441 278,416 5,023 38,776 8,188 133,353 -33,740 29,513 72,636 1,377,706 243,297 619,528 2,324,926 335,767 79,701 -415,968 30,063 22,240 18,222 94,722 1,171,969 186,254 14,878 1,373,101 Activity during the period 3,516,345 1,176,419 1,196,324
        6,153,207 Closing balance $ 6,153,207 $ 2,636,862 $ 1,460,443 $ 6,153,207 Pinon ProjectOpening balance $ 762,285 $ 600,538 $ 511,043 $ -Property acquisition costs Travel Drilling General exploration Professional
        fees Office and general Geologist Consulting fees and payroll Reclamation costs Analysis
        and assays Supplies, equipment and transportation 34,047 40,258 42,156 425,570 -801 1,201 11,850 8,333 72,780 2,259
        130,600 ---7,765 ---66,273 15,296 2,698 7,983 43,707
        -25,008 3,127 32,653 151,133 19,537 6,192 194,902 167,785
        --167,785 9,380 382 26,577 66,871 -283 -283 Activity
        during the period 385,974 161,747 89,495 1,148,259 Closing balance $
        1,148,259 $ 762,285 $ 600,538 $ 1,148,259
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|

3 4 The accompanying notes are integral part of these consolidated
    financial statements.

|Royal Standard Minerals
        Inc.
|------------------------------------
|
|
|
|
|
|
|
|2007                                
|                                    
|$ 175,670                           
|40,143                              
|40,143                              
|$ 215,813                           
|$ 127,652                           
|35,126                              
|-                                   
|35,126                              
|$ 162,778                           
|                                    
|$ 108,050                           
|-                                   
|-                                   
|-                                   
|-                                   
|-                                   
|-                                   
|-                                   
|-                                   
|$ 108,050                           
|                                    

|Royal Standard Minerals Inc.
        (Expressed in United States Dollars) (An Exploration Stage Company) Consolidated
        Statements of Mineral Properties For the years ended January 31 2007 | 2006                                           | 2005                                                         | Cumulative from date of
        inception of exploration phase
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------- | ------------------------------------------------------------ | --------------------------------------------------------------
|$ 191,065 --1,458
        --(192,523) (191,065) $ -                                                                                                                                                | $ 172,031 --19,034
        ---19,034 $ 191,065 | $ -27,707 28,253
        63,219 47,743 25,601 (192,523) -$ -
|$ 54,053 -120,891
        (174,944) (54,053) $ -                                                                                                                                                   | $ 13,396 -40,657
        -40,657 $ 54,053      | $ -3,410,396 161,548 (3,571,944) -$ -                       
|$ 3,810,519                                                                                                                                                                                        | $ 2,664,127                                    | $ 7,788,107                                                 

5

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
    Company)

Consolidated Statements of Operations and Deficit

Cumulative from date of inception

For the years ended January 31 2007 2006 2005 June 26, 1996

Expenses

General and administrative (Note 16) 618,962 266,505 193,287 2,499,742 Consulting fees and payroll 443,693 295,707 213,504 1,513,777 Stock-option compensation (Note 10)
    3,838,926 739,006 150,606 4,768,878 General exploration ---152,051
    Amortization 540,289 191,877 14,921 770,794

5,441,870 1,493,095 572,318 9,705,242

Loss before the following (5,441,870) (1,493,095) (572,318) (9,705,242)

Interest income 391,420 --410,034 Repayment of interest
    ---(67,117) Write-off of advances to related company ---(75,506) Write-off
    of mineral properties -(367,467) (34,397) (3,798,864) Gain
    on disposal of marketable securities ---47,988 Write-down of marketable
    securities ---(407,105) Loss on sale in mineral property ---(474,187) Foreign
    exchange (loss) gain (381,030) 249,505 131,306 (84,631)

Net loss (5,431,480) (1,611,057) (475,409)
    (14,154,630)

Deficit, beginning of period (9,463,890) (7,852,833) (7,377,424) (740,740)

Deficit, end of period $ (14,895,370) $ (9,463,890) $ (7,852,833)
    $ (14,895,370)

Basic and diluted loss per share (Note 11)$ (0.07) $ (0.03) $ (0.01)

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

6

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
    Company)

Consolidated Statements of Cash Flows

Cumulative from date of inception

For the years ended January 31 2007 2006 2005 June 26, 1996

Cash and cash equivalents provided by (used in):

Operating activities

|Net loss $                                             | (5,431,480) $ | (1,611,057) $ | (475,409) $ | (14,154,630)
|------------------------------------------------------ | ------------- | ------------- | ----------- | ------------
|Operating items not involving cash:                    |               |               |             |             
|Amortization                                           | 540,289       | 191,877       | 14,921      | 770,794     
|Stock-option compensation                              | 3,838,926     | 739,006       | 150,606     | 4,768,878   
|Write-off of bad debt                                  | -             | -             | 20,950      | 20,950      
|Write-off of mineral properties                        | -             | 367,467       | 34,397      | 3,798,864   
|Loss on sale of mineral properties                     | -             | -             | -           | 474,187     
|Gain on disposal of marketable
        securities      | -             | -             | -           | (47,988)    
|Write-down of advances to related
        company      | -             | -             | -           | 75,506      
|Write-down of marketable securities                    | -             | -             | -           | 407,105     
|Changes in non-cash working capital:                   |               |               |             |             
|Sundry receivables and prepaids                        | (140,566)     | (484)         | (69,012)    | (210,621)   
|Accounts payable and accrued
        liabilities       | (19,576)      | 117,646       | (2,091)     | 202,157     
|Cash (used in) operating
        activities            | (1,212,407)   | (195,545)     | (325,638)   | (3,894,798) 
|Financing activities                                   |               |               |             |             
|Issue of common shares, net of issue
        costs     | 15,380,240    | 4,025,421     | 2,065,648   | 30,110,481  
|Repayments from (loans to) related
        parties     | 3,956         | (64,105)      | (62,237)    | (197,892)   
|Cash provided by financing
        activities          | 15,384,196    | 3,961,316     | 2,003,411   | 29,912,589  
|Investing activities                                   |               |               |             |             
|Funds held in trust                                    | -             | -             | 54,050      | (20,950)    
|Sale (purchase) of short-term
        investments      | 2,679         | (436,378)     | -           | (433,699)   
|Additions to mineral properties                        | (3,977,588)   | (1,513,859)   | (1,528,858) | (12,726,297)
|Purchase of equipment                                  | (1,337,687)   | (1,413,136)   | -           | (2,827,187) 
|Purchase of marketable securities                      | -             | -             | -           | (1,057,976) 
|Proceeds on disposal of marketable                     |               |               |             |             
|securities                                             | -             | -             | -           | 690,859     
|Proceeds on sale of mineral
        properties         | -             | -             | -           | 11,747      
|Cash (used in) investing
        activities            | (5,312,596)   | (3,363,373)   | (1,474,808) | (16,363,503)
|Change in cash and cash
        equivalents            | 8,859,193     | 402,398       | 202,965     | 9,654,288   
|Cash and cash equivalents,
        beginning of period | 795,095       | 392,697       | 189,732     | -           

Cash and cash equivalents,end of period $
    9,654,288 $ 795,095 $ 392,697 $ 9,654,288 (Note 2(b))

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

7

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
    Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
    2005

1. The Company and Operations

Royal Standard Minerals Inc. (the "Company") is a
    publicly held company, engaged in the acquisition, exploration and development of gold and
    silver resource properties. The Company is continued under the New Brunswick Business
    Corporations Act and its common shares are listed on the TSX Venture Exchange and traded
    on the OTC Bulletin Board. The Company is in the exploration stage and has adopted the
    Accounting Guideline 11 as required by the Canadian Institute of Chartered Accountants
    ("CICA") Handbook. The date of inception has been deemed to be June 26, 1996,
    the date on which the Company acquired all of the outstanding common shares of
    Southeastern Resources Inc. ("SRI").

The business of mining and exploring for minerals involves a high
    degree of risk and there can be no assurance that current exploration programs will result
    in profitable mining operations. The recoverability of the carrying value of the
    exploration properties and the Company's continued existence is dependent upon the
    preservation of its interest in the underlying properties, the discovery of economically
    recoverable reserves, the achievement of profitable operations, or the ability of the
    Company to raise alternative financing, if necessary, or alternatively upon the Company's
    ability to dispose of its interests on an advantageous basis. Changes in future conditions
    could require material write-downs of the carrying values.

These financial statements have been prepared on the basis of
    accounting principles applicable to a going concern, which contemplates the realization of
    its assets and the settlement of its liabilities in the normal course of operations. The
    Company's ability to continue its operations is dependent upon obtaining necessary
    financing to complete the development of its properties and/or the realization of the
    proceeds from the sale of one or more of its properties. These financial statements do not
    include adjustments related to the carrying values and classifications of assets and
    liabilities that would be necessary should the Company be unable to continue in business.

2. Significant Accounting Policies

The consolidated financial statements have been prepared in
    accordance with accounting principles generally accepted in Canada.

A summary of the differences between accounting principles generally
    accepted in Canada ("Canadian GAAP") and those generally accepted in the United
    States ("US GAAP") which affect the Company is contained in Note 17.

The preparation of financial statements in conformity with Canadian
    generally accepted accounting principles requires management to make estimates and
    assumptions that affect the reported amounts of assets and liabilities, the disclosure of
    contingent assets and liabilities at the date of the financial statements and reported
    amounts of revenues and expenses during the reporting period. Significant areas requiring
    the use of management estimates relate to the determination of the recoverability of
    mineral property costs, the asset retirement obligation, the valuation allowance of future
    tax asset, and the calculation of stock-based compensation expense. Actual results could
    differ from those estimates.

The significant accounting policies are as follows:

(a) Principles of consolidation

These consolidated financial statements include the accounts of the
    Company and its wholly-owned subsidiaries, Southeastern Resources Inc., Pinon Exploration
    Corporation, Standard Energy Inc., and Manhattan Mining Co., all United States companies.

8

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
    Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
    2005

2. Significant Accounting Policies (Continued)

(b) Cash and cash equivalents

Cash and cash equivalents are carried in the consolidated balance sheets at cost
    and they are comprised of cash on hand, term deposits held with banks and other short-term
    liquid investments generally with original maturities of three months or less.

|2007             
|-----------------
|322,693 9,331,595
|9,654,288        

(c) Equipment

Equipment is recorded at cost less accumulated amortization.
    Amortization is provided using the declining balance method using the following rates:

Exploration equipment -25% to 30%

Office equipment -20%

Equipment is assessed for future recoverability or impairment on an
    annual basis by estimating future net undiscounted cash flows and residual value or by
    estimating replacement values. When the carrying amount of equipment exceeds the estimated
    net recoverable amount, the asset is written down to fair value with a charge to income in
    the period that such determination is made.

(d) Mineral properties

All costs related to the acquisition, exploration and development
    of mineral properties are capitalized by property. Costs includes any cash consideration
    and advance royalties paid. Properties acquired under option agreements, whereby payments
    are made at the sole discretion of the Company, are recorded in the accounts when the
    payments are made.

If the economically recoverable precious metal reserves are developed,
    capitalized costs of the related property will be reclassified as mining assets and
    amortized using the unit production method. When a mineral 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 when
    events or changes in circumstances indicate that its carrying amount may not be
    recoverable.

The amounts shown for mineral properties do not necessarily represent
    present or future values. Their recoverability is dependent upon the discovery of
    economically recoverable reserves, the ability of the Company to obtain the necessary
    financing to complete the development, and future profitable production or proceeds from
    the disposition thereof.

9

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
    Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
    2005

2. Significant Accounting Policies (Continued)

(e) Asset retirement obligation

Section 3110 of the CICA Handbook requires the recognition of a
    liability for obligations relating to the retirement of property, plant and equipment and
    obligations arising from acquisition, construction, development or normal operations of
    those assets. The Company recognizes the fair value of a liability for an asset retirement
    obligation ("ARO") in the year in which a reasonable estimate of the fair value
    can be made. The estimates are based principally on legal and regulatory requirements. It
    is quite possible that the Company's estimates of its ultimate reclamation and closure
    liabilities associated with any mine or facility built will change as a result of changes
    in regulations, changes in the extent of environmental remediation required, changes in
    the means of reclamation or changes in cost estimates. Consequently, changes resulting
    from revisions to the timing or the amount of the original estimated of undiscounted cash
    flows will be recognized as an increase or a decrease to the carrying amount of the
    liability and related long-lived asset. The liability will be increased for the passage of
    time and reported as an operating expense (accretion cost).

(f) Stock-based compensation plans

The fair value of the stock options granted is determined using the
    Black-Scholes option pricing model and management's assumptions as disclosed in Note 10
    and recorded as stock-based compensation expense over the vesting period of the
    stock-options, with the offsetting credit recorded as an increase in contributed surplus.

If the stock options are exercised, the proceeds are credited to share
    capital and the fair value at the date of grant is reclassified from contributed surplus
    to share capital.

(g) Income taxes

Future income tax assets and liabilities are determined based on
    temporary differences between the accounting and tax base of the assets and liabilities,
    and are measured using the tax rates expected to be in effect when these temporary
    differences are likely to reverse. The amount of future income tax assets recognized is
    limited to the amount of the benefit that is more likely than not to be realized, and a
    valuation allowance is applied against any future tax asset if it is more likely than not
    that the asset will not be realized.

(h) Loss per common share

Basic loss per share is computed by dividing the loss for the
    period by the weighted average number of common shares outstanding during the period,
    including contingently issuable shares which are included when the conditions necessary
    for issuance have been met. Diluted earnings per share is calculated in a similar manner,
    except that the weighted average number of common shares outstanding is increased to
    include potentially issuable common shares from the assumed exercise of common share
    purchase options and warrants, if dilutive. The number of additional shares included in
    the calculation is based on the treasury stock method for options and warrants.

10

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
    Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
    2005

2. Significant Accounting Policies (Continued)

(i) Foreign currency translation

The Company uses the United States Dollar as its reporting
    currency, as the majority of its transactions are denominated in this currency and the
    operations of its subsidiaries are considered to be of an integrated nature.

Monetary assets and liabilities of the parent company denominated in
    Canadian funds are translated into United States funds at period end rates of exchange.
    Other assets and liabilities and share capital of the parent company are translated at
    historical rates. Revenues and expenses of the parent company are translated at the
    average exchange rate for the period. Gains and losses on foreign exchange are recorded in
    operations in the current period.

(j) Marketable securities

Marketable securities are carried at the lower of cost and market.

(k) Short-term investments

Short-term investments are liquid investments with a maturity
    greater than three months but less than one year.

(l) Financial instruments, Equity and Comprehensive Income

The Company's financial instruments consist of cash and cash
    equivalents, short-term investment, marketable securities, sundry receivables, and
    accounts payable. The carrying values of these financial instruments approximate their
    fair market values due to the relatively short periods to maturity or capacity for prompt
    liquidation of these instruments. The company's operating cash flows are substantially
    independent of changes in market interest rates.

The Accounting Standard Board issued new accounting standards,
    effective for financial statements relating to fiscal years beginning on or after October
    1, 2006, dealing with the recognition, measurement and disclosure of financial
    instruments, hedges and comprehensive income. Consistent with US and international
    reporting requirements, these standards require that certain gains and losses be recorded
    in a separate statement as comprehensive income. Fair value is considered the most
    relevant measure for financial instruments, which are any contracts that give rise to a
    financial asset of one party and a financial liability or equity instrument of another
    party. The company intends to adopt these policies effective February 1, 2007 and will
    report comprehensive income, equity and financial instruments in accordance with the
    relevant sections of the CICA Handbook (sections 1530, 3251, and 3855, respectively).

In addition to disclosing a new comprehensive income statement, the
    primary effect on the Company will be that all financial instruments will be measured at
    fair value. The Company will be required to separately disclose available-for-sale
    financial assets, which are those non-derivative financial assets that are designated as
    available for sale, or that are not classified as loans and receivables, held-tomaturity
    investments, or held for trading.

Any gains and losses arising from a change in the fair value of a
    financial asset or financial liability that is classified as held for trading (including
    assets previously disclosed as marketable securities, but excluding hedges) will be
    recognized in net income in the periods in which they arise. Certain gains and losses on
    financial assets classified as available for sale will be recognized in other
    comprehensive income until the financial asset is no longer recognized or becomes
    impaired.

11

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
    Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
    2005

3. Marketable Securities

Marketable securities consist of common shares of Sharpe Resources Corporation
    ("Sharpe"), a publicly held Canadian company engaged in the exploration for
    precious metals in the United States. Sharpe Resources is considered to be related to the
    Company because of common management. The market value of the shares at January 31, 2007
    was $118,720 (2006 -$226,538; 2005 -$96,684).

The shares are carried at the lower of cost and quoted market values.

4. Reclamation Bond

The Company has posted reclamation bonds for its mining projects, as required by
    the State of Nevada, to secure clean-up costs if the projects are abandoned or closed.

5. Mineral Properties

|Name of Mineral Property                                                                                                                         |   | 2007                                                   |   | 2006                                                 |   | 2005                                                          
|------------------------------------------------------------------------------------------------------------------------------------------------ | - | ------------------------------------------------------ | - | ---------------------------------------------------- | - | --------------------------------------------------------------
|Gold Wedge project (i) Pinion
        project (ii) Railroad project Fondaway project Como project (iii) Manhattan project Other
        projects | $ | 6,153,207 1,148,259
        215,813 162,778 108,050 -- | $ | 2,636,862 762,285
        175,670 127,652 108,050 -- | $ | 1,460,443 600,538
        175,670 96,028 86,330 191,065 54,053
|                                                                                                                                                 | $ | 7,788,107                                              | $ | 3,810,519                                            | $ | 2,664,127                                                     

(i) Gold Wedge Project

On June 29, 2005 the Company entered into a 5-year purchase option
    agreement with a private individual for all of his patented and unpatented mining claims
    in the Manhattan Mining District located in Nye County, Nevada. The land package totals
    approximately 1600 acres (4 patented, 700 unpatented claims). This property position
    adjoins the Company's Goldwedge Mine. The land package includes a number of exploration
    targets which are of interest to the Company. In addition, the Company's option includes
    the Dixie Comstock claim group located in Churchill County, Nevada. The Dixie Comstock is
    a 1500 acre property containing an epithermal gold system that has been explored by a
    number of other major mining companies over the past 20 years. It is considered to be an
    attractive advanced exploration project. The Company is currently engaged in the
    completion of a 43-101 property report. The Company agreed to pay $35,000 upon the
    execution of the Agreement. Annual option payments of $48,000 are to be applied to a total
    purchase price of $600,000 – there are no royalties.

The Company has recorded an asset retirement obligation on its Gold
    Wedge Project, representing the estimated costs of the Company's obligation to restore the
    Gold Wedge properties to their original condition as required by the State of Nevada
    regulatory authorities. As such, the Company has recorded an asset retirement obligation
    in the amount of $181,767, the amount of the reclamation bond posted by the Company with
    the State of Nevada.

12

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
    Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
    2005

5. Mineral Properties (Continued)

(ii) Pinon Project

Pinon Project -Cord Lease

In August 2002, the Company entered into a mining lease agreement
    to lease certain properties located in Elko County, Nevada for a period of five years. The
    lessors will retain a 5% net smelter royalty.

Pinon Project -Tomera Lease

In August 2002, the Company entered into a mining lease agreement
    to lease certain properties located in Elko County, Nevada for a period of seven years.
    The lessors will retain a 5% net smelter royalty.

In addition, the Company entered into an irrevocable lease agreement
    with the surface and minerals rights owners of the Tomera Lease properties.

Pinon Project -Mustang Canyon

In July 2005, the Company signed an Exploration and Option
    Agreement with Metallic Nevada Inc. ("Metallic") to explore the Mustang Canyon
    Project in Esmeralda County, Nevada for a period of five years. Metallic has granted to
    the Company a mining lease on 27 unpatented lode mining claims located in Esmeralda
    County, Nevada.

The agreement gives the Company the exclusive option to acquire 50%
    interest in the Mustang Canyon Project by spending $20,000 per year in exploration
    expenditures with the objective to identify a measured resource by June 30, 2010. Upon
    identification of a measured resource and completion of a 43-101 report, the Company will
    acquire an undivided 50% interest in the project.

The Company may terminate the Agreement at any time after spending the
    initial $20,000, by providing 30 days written notice to Metallic. When the Company has
    exercised its option to acquire a 50% interest in the project, Metallic and the Company
    will establish a Joint Venture in respect to the project, on a 50/50 basis. Further
    expenditures on the Mustang Canyon Project will then be made by the Joint Venture. The
    Company will be the operator of the Joint Venture as long as it has at least a 50%
    interest therein.

Pinon Project -Darkstar Lease

In July 2006, the Company entered into a mining lease agreement to
    lease certain properties near the proposed Pinon minesite in Elko County, Nevada for a
    period of five years. The Darkstar gold property is located less than 2 miles from the
    Pinon property. The Company agreed to pay $6,400 on execution of the Agreement. The
    Company is committed to pay Annual option payments of $7,600 in 2007, $8,960 in 2008,
    $10,240 in 2009 and $11,520 in 2010. The lessor will also retain a 5% net smelter royalty.

(iii) Como Project

On December 2003, the Company entered into a mining lease agreement
    to lease certain properties located in Lyon County, Nevada. The Company agreed to pay
    $25,000 upon execution of the Agreement. The Company was committed to pay an annual option
    of $25,000 in 2005. Future payments are $20,000 in 2008 and $25,000 in 2009.

13

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
    Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
    2005

5. Mineral Properties (Continued)

(iii)Como Project (Continued)

On September 15, 2004, the Company granted an option (the "Option") to
    Sharpe to acquire a 60% interest in the Company's gold project located in Lyon County,
    Nevada (the "Project"), in consideration for which Sharpe has issued 2,000,000
    common shares to the Company at a deemed value of $78,125 ($100,000 CDN). To exercise the
    option, Sharpe was required to maintain the unpatented and patented mining claims on the
    Project, and to pay all required options, annual advanced minimum royalty payments and
    deliver a completed positive feasibility study in compliance with National Instrument
    43-101 in respect of the Project. On December 5, 2006, Sharpe withdrew from this project
    without any further financial obligations.

Nevada Projects

In fiscal 2003 and 2002, the Company entered into certain option agreements to
    purchase up to 100% interest in patented and unpatented lode mining claims in Nye, Elko
    and Lyon Counties, Nevada. Detail of the payments required to maintain its option rights
    and to exercise its option is as follows:

|Required Option Payments                                                                                                                                                                           | Royalty (1) | Exercise of Option     
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------- | -----------------------
|Gold Wedge -Nye County Commencing in
        fiscal 2002, $5,000 each in first two years; $10,000 in third year, $15,000 in the fourth
        year and $20,000 each in the fifth and sixth years. | 3% NSR      | July 2006 -$200,000    
|Manhattan -Nye County Commencing in
        fiscal 2002, $1,000 per month from August 2001 to August 2002: $2,000 per month from
        September 2002 to July 2006.                              | 5% NSR      | August 2006 -$500,000  
|This project was discontinued and
        all exploration expenditures were written-off in 2005.                                                                                                   |             |                        
|Fondaway -Canyon Churchill County
        Commencing in fiscal 2003, $25,000 in year one, $30,000 in years two and three and $35,000
        each of the next seven years.                         | 3% NSR      | July 2013 -$600,000    
|Como -Lyon County Commencing in
        fiscal 2003, $25,000 in years one and two covering years three and four, $20,000 in year
        five, $25,000 in year six.                                | 4% NSR      | May 2008 -$1,000,000   
|Railroad -Elko County Commencing
        in fiscal 2003, $15,000 in the first year and increases by $5,000 each of the next six
        years.                                                     | 5% NSR      | August 2008 -$2,000,000
|(1) NSR -Net Smelter Royalty                                                                                                                                                                       |             |                        

During the year ended January 31, 2006, the Company wrote-off $192,523
    of exploration expenditures relating to the Manhattan, Nye County project and $174,944
    relating to smaller projects that the Company was evaluating. Total exploration
    expenditures written-off amounted to $367,467 during the year ended January 31, 2006.
    There were no similar write-offs in 2007.

14 Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration
    Stage Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
    2005 Equipment
      Asset retirement obligation2007
        2006
        
        2005Cost Exploration
        equipment Office equipment
        $ 2,808,573
        21,253
        $ 1,475,201
        16,936
        $
        62,065 16,9362,829,826
        1,492,137
        
        79,001Accumulated amortizationExploration
        equipment Office equipment
        759,636 13,798
        220,669 12,474
        
        34,537 6,729773,434
        233,143
        
        41,266Net carrying valueExploration
        equipment Office equipment
        2,048,937 7,455
        1,254,532 4,462
        
        27,528 10,207$ 2,056,392
        $ 1,258,994
        $
        37,735

The Company is required to recognize a liability for a legal obligation
    to perform asset retirement activities, including decommissioning, reclamation and
    environmental monitoring activities once any of its projects are permanently closed.
    Although these activities are conditional upon future events, the Company is required to
    make a reasonable estimate of the fair value of the liability. Based on the existing level
    of terrestrial disturbance and water treatment and monitoring requirements, the
    undiscounted asset retirement obligation ("ARO's") were estimated to be $250,930
    as at January 31, 2007, assuming payments made over a five year period.

Determination of the undiscounted ARO and the timing of these
    obligations were based on internal estimates using information currently available,
    existing regulations, and estimates of closure costs. Following is the reconciliation of
    the asset retirement obligation:

2007 2006 2005

Balance, beginning of year $ 131,767 $ 131,767 $
    131,767 Accretion cost 50,000 -

Balance, end of year $ 181,767 $ 131,767 $ 131,767

The discount rate used when estimating the fair value of the ARO is a
    credit-adjusted risk-free interest rate with the same maturity as the removal obligation.
    The Company used a credit-adjusted risk-free interest rate of 5% to calculate the present
    value of the ARO, which was $181,767.

15

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
    Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
    2005

8. Share Capital Authorized

The authorized capital of the Company consists of an unlimited number of common
    shares without par value.

Issued

Changes in the Company's share capital were as follows:

|Common shares issued                                                                                                                                                                                                                                                                                                    | Shares                                                |   | Amount                                                                             
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------- | - | -----------------------------------------------------------------------------------
|Balance at January 31, 2004 Shares
        issued for cash, less issue costs of $360,964 Warrant valuation Shares issued to broker as
        compensation Shares issued on warrants exercised Fair value of warrants exercised                                                                                         | 34,141,338 7,395,000 -349,680 1,257,500 -             | $ | 7,221,581 1,486,784
        (428,918) 91,117 318,352 90,345                        
|Balance at January 31, 2005 Shares
        issued for cash, less issue costs of $295,750 Warrant valuation Shares issued to brokers
        as compensation Shares issued on warrants exercised Fair value of warrants exercised
        Shares issued on stock options exercised Fair value of stock options exercised | 43,143,518 12,131,000 -127,000 2,221,060 -200,000 -   |   | 8,779,261 3,117,705
        (1,132,581) 35,553 692,984 255,491 64,824 19,433       
|Balance at January 31, 2006 Shares
        issued after January 31, 2006 Shares issued for cash, less issue costs of $879,172 Warrant
        valuation Shares issued on stock options exercised Fair value of stock options exercised
        Shares issued on warrants exercised Fair value of warrants exercised     | 57,822,578 100,000 12,975,967 -1,250,000 -6,126,730 - |   | 11,832,670 119,325
        12,407,590 (2,847,058) 332,784 178,155 2,639,865 740,133
|Balance, January 31, 2007                                                                                                                                                                                                                                                                                               | 78,275,275                                            | $ | 25,403,464                                                                         

On February 3, 2004, the Company closed a private placement offering of
    1,075,000 units at a price of CDN $0.25 per unit for gross proceeds of $200,935 ($268,750
    CDN). Each unit consists of one common share and one-half common share purchase warrant
    ("Warrant"). Each warrant will entitle the holder to subscribe for one
    additional common share at a price of CDN $0.30 until February 2, 2005.

On February 17, 2004, articles of amendment were filed to authorize the
    issuance of an unlimited number of special shares without par value.

On April 16, 2004, the Company closed a private placement offering of
    6,320,000 units at a price of CDN $0.35 per unit for gross proceeds of $1,646,813
    ($2,212,000 CDN). Each unit consists of one common share and one-half common share
    purchase warrant. Each warrant entitled the holder to subscribe for one additional common
    share at a price of CDN $0.50 until April 15, 2006.

16

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
    Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
    2005

8. Share Capital (Continued)

Canaccord Capital Corporation ("Canaccord") acted as an agent of the
    private placement offering of 6,320,000 and was paid the following fees:

An Agent's fee consisting of an 8% commission of the proceeds, paid in cash of $89,572
      CDN and issuance of 249,680 in Agent's units. Each Agent's unit consists of one common
      share and one-half Agent's common share purchase warrant (Agent's Warrant"). Each
      Agent's Warrant entitled the holder to subscribe for one common share at a price of $0.50
      per Agent's Warrant until April 15, 2006.

A Corporate Finance fee of 100,000 Corporate Finance units; and an Administration fee
      of $5,584 ($7,500 CDN). Each Corporate Finance unit consists of one common share and one
      half Corporate Finance warrant. Each Corporate Finance warrant entitled the holder to
      subscribe for one common share at a price of $0.50 per Corporate Finance warrant until
      April 15, 2006.

(iii) The Agent's fee also included 1,264,000 Agent's Warrants equal to 20% of the
    number of units issued on the private placement. Each Agent's Warrant entitled the holder
    to subscribe for one common share at a price of $0.50 per Agent Warrant until April 15,
    2006.

The fair value of the common share purchase warrants and agent's warrants issued in
    fiscal 2005 were estimated using the Black-Scholes pricing model based on the following
    assumptions:

Warrants issued on private placement Dividend yield 0%, expected volatility 55%, risk
      -free interest rate 4.5% and an expected life of 12 months. Value assigned to 537,500
      warrants is $34,379 ($45,688 CDN).

Warrants issued on private placement Dividend yield 0%, expected volatility 55%, risk
      -free interest rate 4.5% and an expected life of 24 months. Value assigned to 3,160,000
      warrants is $374,270 ($502,440 CDN).

(iii) Agent's warrants Dividend yield 0%, expected volatility 55%, risk -free interest
    rate 4.5% and an expected life of 24 months. Value assigned to 1,438,840 compensation
    warrants is $170,416 ($228,776 CDN).

On March 31, 2005, the Company completed a private placement by issuing 8,750,000 units
    at a price of $0.35 CDN for gross proceeds of $2,531,829 ($3,062,500 CDN). Each unit
    consists of one common share and one-half common share purchase warrant. Each warrant will
    entitle the holder to subscribe for one additional share at a price of $0.50 CDN per share
    until March 31, 2007.

Canaccord, the agent acting for the offering, as partial compensation for their
    services, received 82,000 common shares and 1,353,500 Warrants. Each warrant entitling
    Canaccord to acquire one additional common share of the Company at an exercise price of
    $0.50 CDN until March 31, 2007.

On April 26, 2005, the Company issued 1,500,000 units at a price of $0.35 CDN for gross
    proceeds of $426,615 ($525,000 CDN). Each unit consists of one common share and one-half
    common share purchase Warrant. Each warrant will entitle the holder to subscribe for one
    additional share at a price of $0.50 CDN per share until April 26, 2007.

Haywood Securities Inc. ("Haywood") and Canaccord (the "Agents")
    acted as agents in this round of financing. As partial compensation for their services,
    the Agents received 45,000 common shares and 247,500 Warrants. Each warrant entitled the
    Agents to acquire one additional common share of the Company at an exercise price of $0.50
    CDN until April 26, 2007.

17

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
    Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
    2005

8. Share Capital (Continued)

On April 29, 2005, the Company issued 50,000 units at a price of $0.35 CDN per unit
    for gross proceeds of $14,296 ($17,500 CDN). Each unit consists of one common share and
    one-half common share purchase Warrant. Each warrant entitled the holder to subscribe for
    one additional share at a price of $0.50 CDN per share until April 29, 2007.

On May 5, 2005, the Company completed another private placements by issuing 1,831,000
    units at a price of $0.35 CDN for gross proceeds of $495,808 ($640,850 CDN). Each unit
    consists of one common share and one-half common share purchase warrant. Each warrant
    entitled the holder to subscribe for one additional share at a price of $0.50 CDN per
    share until May 5, 2007.

The fair value of the common share purchase warrants and agent warrants issued in
    fiscal 2006 were estimated using the Black-Scholes pricing model based on the following
    assumptions:

Warrants issued on private placement -8,750,000 units Dividend yield 0%, expected
      volatility 109%, risk -free interest rate 3.22% and an expected life of 24 months. Value
      assigned to 4,375,000 warrants is $625,723 ($756,875 CDN).

Warrants issued on private placement -1,500,000 units Dividend yield 0%, expected
      volatility 109%, risk -free interest rate 3.06% and an expected life of 24 months. Value
      assigned to 750,000 warrants is $104,183 ($129,750 CDN).

(iii) Warrants issued on private placement -50,000 units Dividend yield 0%, expected
    volatility 109%, risk -free interest rate 3.06% and an expected life of 24 months. Value
    assigned to 25,000 warrants is $3,436 ($4,325 CDN).

Warrants issued on private placement -1,831,000 units Dividend yield 0%, expected
  volatility 150%, risk -free interest rate 3.02% and an expected life of 24 months. Value
  assigned to 915,500 warrants is $171,279 ($213,311 CDN).

Agent warrants -8,750,000 units Dividend yield 0%, expected volatility 109%, risk -free
  interest rate 3.22% and an expected life of 24 months. Value assigned to 1,353,500 agent
  warrants is $193,580 ($234,155 CDN).

Agent warrants -1,500,000 units Dividend yield 0%, expected volatility 109%, risk -free
  interest rate 3.06% and an expected life of 24 months. Value assigned to 247,500 agent
  warrants is $34,380 ($42,817 CDN).

On April 27, 2006, the Company completed a private placement of 12,975,967 units of the
Company at $1.15 CDN per unit raising gross proceeds of $13,286,762 ($14,922,362 CDN).
Each unit consists of one common share of the Company and one-half of one common share
purchase warrant. Each common share purchase warrant is exercisable at $1.75 CDN into one
common share of the Company until April 26, 2008.

The fair value of the common share purchase warrants was estimated, on the date of
closing, using the Black-Scholes option pricing model, with the following assumptions:
dividend yield 0%, expected volatility of 98%, risk-free interest rate of 4.13% and an
expected life of 24 months. The value assigned to the warrants is $2,847,058 ($3,198,582
CDN).

18

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
2005

9. Warrants

The following table reflects the fair value of share purchase warrants and broker's
warrants currently outstanding:

|Expiry                                                                      | Price ($) CDN                | Number                                         | Value ($)                                  
|--------------------------------------------------------------------------- | ---------------------------- | ---------------------------------------------- | -------------------------------------------
|March 31, 2007 April 26, 2007
    April 29, 2007 May 5, 2007 April 26, 2008 | 0.50 0.50 0.50 0.50
    1.75 | 4,084,287
    136,500 25,000 485,500 6,487,996 | $ 584,714 20,896
    3,436 90,831 2,847,058
|                                                                            |                              | 11,219,283                                     | $ 3,546,935                                

10. Stock Options

Under the Company's stock option plan (the "Option
Plan"), the directors of the Company can grant options to acquire common shares of
the Company to directors, employees and others who provide ongoing services to the
Company. Exercise prices cannot be less than the closing price of the Company's shares on
the trading day preceding the date and the maximum term of any option cannot exceed ten
years.

The number of common shares under option at any time under the Option
Plan or otherwise cannot exceed 5% of the then outstanding common shares of the Company
for any optionee. In addition, options granted to insiders of the Company cannot exceed
more than 10% of the then outstanding common shares of the Company. The options vest when
granted.

The following table reflects the continuity of stock options:

Number of Weighted Average Stock Options Exercise Price CDN ($)

2007 2006 2005 2007 2006 2005

Outstanding at beginning of year 5,670,000 4,185,000 3,410,000 $ 0.33 $ 0.28 $ 0.26 Granted during year 3,423,500 2,380,000
775,000 1.41 0.49 0.36 Exercised during year (1,250,000) (200,000) -(0.49) (0.38) Cancelled or expired during year (17,000) (695,000) -(1.44) (0.24)

Outstanding at end of year 7,826,500 5,670,000 4,185,000 $ 0.79 $ 0.33 $ 0.28

19

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
2005

10. Stock Options (continued)

The following table reflects the stock options outstanding and exercisable as at
January 31, 2007:

|Expiry Date                                                                                                                                 | Exercise Price CDN ($)                           | Options Outstanding                                                             | Black-Scholes Value
|------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------ | ------------------------------------------------------------------------------- | -------------------
|April 25, 2007 May 13, 2007
    December 12, 2008 May 4, 2009 April 13, 2010 May 16, 2010 January 20, 2011 May 2, 2011
    October 13, 2011 | 0.26 0.40 0.27 0.36 0.39 0.29
    0.87 1.44 0.75 | 960,000 555,000 220,000 675,000 800,000 1,080,000 130,000 3,123,000
    283,500 | $                  
|                                                                                                                                            |                                                  | 7,826,500                                                                       | $ 4,699,250        

On May 4, 2004, 775,000 stock options were granted to employees and
directors of the Company. These stock options were fully vested on the date of grant and
the fair value was charged to the statements of operations and deficit. The fair value of
the stock options was estimated on the date of grant using the Black-Scholes option
pricing model. Accordingly, $150,606 ($206,150 CDN) was recorded as stock option
compensation and contributed surplus. The following assumptions were made in estimating
the fair value of the stock options: dividend yield, 0%; risk-free interest rate, 4.5%;
estimated life, 5 years and volatility, 55%.

On April 13, 2005, 1,000,000 stock options were granted to employees
and directors of the Company. These stock options were fully vested on the date of grant
and the fair value was charged to the statements of operations and deficit. The fair value
of the stock options was estimated on the date of grant using the Black-Scholes option
pricing model. Accordingly, $297,528 ($368,000 CDN) was recorded as stock option
compensation and contributed surplus. The following assumptions were made in estimating
the fair value of the stock options: dividend yield, 0%; risk-free interest rate, 3.70%;
estimated life, 5 years and volatility, 166.65%.

On May 16, 2005, 1,080,000 stock options were granted to employees and
directors of the Company. These stock options were fully vested on the date of grant and
the fair value was charged to the statements of operations and deficit. The fair value of
the stock options was estimated on the date of grant using the Black-Scholes option
pricing model. Accordingly, $232,098 ($294,840 CDN) was recorded as stock option
compensation and contributed surplus. The following assumptions were made in estimating
the fair value of the stock options: dividend yield, 0%; risk-free interest rate, 3.56%;
estimated life, 5 years and volatility, 166.63%.

On January 20, 2006, 300,000 stock options were granted to directors of
the Company. These stock options were fully vested on the date of grant and the fair value
was charged to the statements of operations and deficit. The fair value of the stock
options was estimated on the date of grant using the Black-Scholes option pricing model.
Accordingly, $209,380 ($241,500 CDN) was recorded as stock option compensation and
contributed surplus. The following assumptions were made in estimating the fair value of
the stock options: dividend yield, 0%; risk-free interest rate, 3.89%; estimated life, 5
years and volatility, 155.46%.

20

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
2005

10. Stock Options (Continued)

On May 2, 2006 the Company granted 3,140,000 stock options to certain directors and
a consultant. The options are exercisable at $1.44 CDN within a period of 5 years. These
stock options were fully vested on the date of grant and the fair value was charged to the
statements of operations and deficit. The fair value of the options was estimated using
the Black-Scholes option pricing model, with the following assumptions: dividend yield 0%,
expected volatility of 145%, risk-free interest rate of 4.36% and an expected life of 5
years. The value assigned to the options is $3,699,045 ($4,094,560 CDN).

On October 13, 2006, the Company granted options to purchase 283,500 common shares of
the Company to directors and a consultant. The options are exercisable at $0.75 CDN and
expire within a period of 5 years. These stock options were fully vested on the date of
grant and the fair value was charged to the statements of operations and deficit. The fair
value of the options was estimated using the Black-Scholes option pricing model, with the
following assumptions: dividend yield 0%, expected volatility of 129%, risk-free interest
rate of 4.00% and an expected life of 5 years. The value assigned to the options is
$162,005 ($183,992 CDN).

For fiscal 2007, the weighted-average grant date fair value of these options was
$3,861,050 (fiscal 2006 $739,006; fiscal 2005 -$110,438) or $1.25 (fiscal 2006 -$0.31;
fiscal 2005 -$0.14) per share.

The following table reflects the continuity of contributed surplus:

Amount

|Balance, January 31, 2004
    Options granted                                     | $ | 1,477,780 150,606                     
|--------------------------------------------------------------------------------- | - | --------------------------------------
|Balance, January 31, 2005 Expired
    warrants Options granted Options exercised  |   | 1,628,386 16,907 739,006 (19,433)     
|Balance, January 31, 2006 Options
    granted Options exercised Options cancelled |   | 2,364,866 3,861,050 (178,155) (22,124)
|Balance, January 31, 2007                                                         | $ | 6,025,637                             

21

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
2005

11. Basic and Diluted Loss Per Share

The following table sets forth the computation of basic and diluted loss per share:

2007 2006

2005

Numerator: Loss for the year $ (5,431,480) $ (1,611,057) $
(475,409)

Denominator: Weighted average number of common share outstanding for basic and diluted
loss per share 73,771,233 53,907,094 41,090,912

Basic and diluted loss per share $ (0.07) $ (0.03) $ (0.01)

The stock options and common share purchase warrants were not included in the
computation of diluted loss per share on January 31, 2007, 2006 and 2005 as their
inclusion would be anti-dilutive.

12. Income Taxes

The following table reconciles the expected income tax expense (recovery) at the
Canadian statutory income tax rate to the amounts recognized in the consolidated
statements of operations:

2007 2006 2005

Net loss before income taxes reflected in consolidated statements of operations $ (5,431,480) $ (1,611,057) $ (475,409)

|Expected income tax (recovery) $                            | (1,961,850) | $ | (581,914) | $ | (174,095)
|----------------------------------------------------------- | ----------- | - | --------- | - | ---------
|Write-off of mineral properties                             | -           |   | 132,729   |   | 12,596   
|Deductible share issue costs                                | (147,480)   |   | (81,049)  |   | (40,612) 
|Stock option compensation expense                           | 1,386,620   |   | 266,929   |   | 54,399   
|Amortization                                                | 195,153     |   | 69,306    |   | 5,464    
|Unrealised foreign exchange loss
    (gain)                 | 137,627     |   | (90,121)  |   | (48,084) 
|Subsidiary losses capitalized for
    consolidation purpose | (477,262)   |   | -         |   | (32,835) 
|Difference between Canadian and
    foreign tax rates       | 6,343       |   | 2,404     |   | 1,730    
|Taxable benefits not recognized                             | 860,849     |   | 281,716   |   | 221,437  

Income tax (recovery) expense $ -$ -$

22

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
2005

12. Income Taxes (Continued)

The following table reflects future tax assets at January 31, 2007, 2006 and 2005:

|                                         
|-----------------------------------------
|$ 2,045,208 7,991 276,422 551,169 418,785
|3,299,575 (3,299,575) $ -                

At January 31, 2007, the Company had unclaimed Canadian and foreign
resource pools of $9,647,100 (CDN $11,376,300) consisting of Canadian Exploration
Expenditure of $1,053,200 (CDN $1,242,000), Canadian Development Expenses of $254,400 (CDN
$300,000), Foreign Resource Expenses of $8,339,500 (CDN $9,834,300), unclaimed share issue
costs of $1,159,400 (CDN $1,367,300) and unclaimed non-capital losses carried forward of
$5,726,400 (CDN $6,720,600), which will expire as follows:

|2008 2009 2010 2011 2015 2026 2027 | $ | 210,100 285,100
    551,200 601,700 692,300 943,000 2,443,000
|---------------------------------- | - | -------------------------------------------------------------
|                                   | $ | 5,726,400                                                    

23

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
2005

13. Related Party Transactions

2007 2006

Due from related parties: The President and Director of the Company (i) $ 17,402 $
18,049 $ 11,095 Sharpe Resources Corporation (ii) 104,984 108,293
51,142

$ 122,386 $ 126,342 $ 62,237

This advance is unsecured, non-interest bearing and has no set terms of repayment.

Sharpe is related to the Company because of common management. This advance is
  unsecured, non-interest bearing and has no set terms of repayment.

Consulting fees include a bonus of $170,000 (2006 -$nil; 2005 -$nil)
and salary of $252,621 (2006 $96,192; 2005 -$nil)) paid to the President of the Company.

Consulting fees include salary of $48,923 (2006 -$nil; 2005 -$nil) paid
to an employee who is also a family member of the President and Director of the Company.

Compensation of $12,155 (2006 -$nil; 2005 -$nil) was paid to the CFO of
the Company.

These transactions were in the normal course of operations and were
measured at the exchange value which represented the amount of consideration established
and agreed to by the related parties.

14. Contingencies

On October 11, 2006 the Company received a document purporting to
constitute a requisition from a group of shareholder of the Company ("the Dissident
Group") alleging that they hold more than 10% of the Company's shares. The documents
received requested that a shareholders meeting be called to consider the removal and
replacement of the existing board of directors of the Company.

The board of directors of the Company has reviewed these documents with
the benefit of outside advice and has serious concerns with respect to whether such
documents constitute a valid requisition under the New Brunswick Corporations Act.

While reserving all of its rights in this regard, the board of
directors of the Company has called a meeting of shareholders in response to the purported
requisition received from the Dissident Group at which the constitution of the Company's
board of directors will be considered.

On October 28, 2006 the Company filed an action in the United States
District Court for the Central District of California against the persons and entities who
have identified themselves as belonging the Dissident Group. The Company alleges that the
defendants violated section 13(d) of the Securities Exchange Act of 1934, 15

U.S.C.  78m(d), by failing to file a Schedule 13-D. On May 17,
2007, the Court ordered the striking of the defendants' answer and the Clerk of the Court
entered defendants' default. A hearing on the Company's motion for entry of judgment is
scheduled to be held by the Court on June 18, 2007.

24

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
2005

14. Contingencies (Continued)

There is pending action against Messrs. Luke Norman and Timothy
Master, two former employees of the Company. The September 25, 2006 complaint alleges that
while employed by the Company and thereafter, contrary to their duties to the Company,
Norman and Master participated in a pattern of behavior which included the dissemination
of misleading or incorrect information, interference with corporate operations,
communications with shareholders without proper authority, soliciting votes from
shareholders contrary to securities law, conspiring against management in an attempt to
impair the business of the Company. In November 2006 Mr. Norman filed a counter complaint
against the Company without specifying damages. In the opinion of the management this
complaint is without merit.

The Company is seeking injunctive relief restraining Norman and Master
from further communicating the alleged slander and misinformation regarding the Company.
In addition to the injunctive relief, the Company seeks to recover damages for conspiracy
to injure, defamation, slander, and special damages for breach of fiduciary duty.

15. Commitments

On January 1, 2006, the Company entered into a management employment agreement with the
  President of the Company for management and consulting services for $250,000 per annum
  which expires in January 1, 2011. On January 1, 2007 and on each January 1 during the term
  of the agreement, the compensation may be increased by 10% per annum. This agreement can
  be renewed for an additional five year.

On October 23, 2006, the Company entered into an agreement with a company for
  investors' relation services for $7,500 per month which expires in October 31, 2007.

(iii) On October 25, 2006 (amended to be effective November 1, 2006),
the Company entered into an employment agreement with the CFO for $5,000 per month which
expires October 31, 2007. In addition, the Company is committed to issue options to
purchase 100,000 shares of the Company as per the employment agreement. The options are
exercisable at $0.60 until November 1, 2011. The fair value of the stock options is
estimated to be $33,300 using the Black-Scholes option pricing model. The following
assumptions were made in estimating the fair value of the stock options: dividend yield,
0%; risk-free interest rate, 3.91%; estimated life, 2.5 years and volatility, 92%.

The Company is obligated to incur an additional $45,000 in option costs before the end
  of fiscal 2009 pursuant to the agreement of the Como Project.

The Company is obligated to incur an additional $144,000 in option costs before July 1,
  2009 pursuant to the agreement of the Gold Wedge Project.

The Company is obligated to incur an additional $120,000 in option costs before the end
  of fiscal 2010 pursuant to the agreement of the Railroad Project.

(vii) The Company is obligated to incur an additional $80,000 in
exploration expenditures before June 30, 2010 pursuant to the agreement of the Mustang
Canyon Project.

(viii) The Company is obligated to incur an additional $260,000 in
exploration expenditures and $38,320 in option costs before July 31, 2011 pursuant to the
agreement of the Darkstar gold property.

(ix) The Company is obligated to incur an additional $175,000 in option
costs before the end of fiscal 2012 pursuant to the agreement of the Fondaway Project.

25

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
2005

16. Office and General

2007 2006 2005

Advertising and promotion $ 155,775 $ 110,236 $ 2,400 Bad debts
--38,610 Corporate development 85,380 27,762 24,243 Insurance 37,758
31,108 13,425 Office and general 67,652 40,582 67,319 Professional fees
268,156 46,887 26,924 Travel 4,241 9,930 20,366

$ 618,962 $ 266,505 $ 193,287

26

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
2005

17. Differences between Canadian GAAP and US GAAP

The Company's consolidated financial statements have been prepared in accordance
with Canadian GAAP. These principles, as they pertain to the Company's consolidated
financial statements differ from US GAAP as follows:

Under Canadian GAAP, the Company accounts for its exploration costs as described in
Note 2(d), whereas under US GAAP, exploration costs cannot be capitalized and are expensed
as incurred. Had the Company's consolidated balance sheets as at January 31, 2007 and 2006
been prepared using US GAAP, such balance sheets would be presented as follows:

2007 2006

|AssetsCurrent Cash and cash
    equivalents Short-term investments Available for sale securities Sundry receivables and
    prepaids Due from related parties                                                                                              | $ | 9,654,288 433,699
    118,720 141,827 122,386                   | $ | 795,095 436,378
    226,537 1,261 126,342                            
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | --------------------------------------------------------------- | - | ---------------------------------------------------------------------
|                                                                                                                                                                                                                                                           |   | 10,470,920                                                      |   | 1,585,613                                                            
|Reclamation bond                                                                                                                                                                                                                                           |   | 181,767                                                         |   | 131,767                                                              
|Equipment, net Mineral properties
    -acquisition costs Mine development                                                                                                                                                                                  |   | 2,056,392 468,107 739,048                                       |   | 1,258,994 187,415 445,529                                            
|                                                                                                                                                                                                                                                           | $ | 13,916,234                                                      | $ | 3,609,318                                                            
|LiabilitiesCurrent Payables
    and accruals Asset retirement obligation                                                                                                                                                                                   | $ | 202,157 181,767                                                 | $ | 221,733 131,767                                                      
|                                                                                                                                                                                                                                                           |   | 383,924                                                         |   | 353,500                                                              
|Shareholders' EquityCapital
    stock Shares to be issued Warrants Additional paid-in capital Cumulative foreign currency
    translation adjustments Cumulative adjustments to marketable securities Deficit
    accumulated during the exploration stage |   | 24,822,439 -3,546,935 5,879,511 (84,632) (374,510) (20,257,433) |   | 11,251,645 119,325 1,440,009 2,218,739 296,398 (266,692) (11,803,606)
|                                                                                                                                                                                                                                                           |   | 13,532,310                                                      |   | 3,255,818                                                            
|                                                                                                                                                                                                                                                           | $ | 13,916,234                                                      | $ | 3,609,318                                                            

27

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
2005

17. Differences between Canadian GAAP and US GAAP (Continued)

US GAAP requires the presentation of a statement of comprehensive income, which
includes in addition to revenue and expenses, those comprehensive income items recorded
directly in equity on the balance sheet.

The cumulative-from-inception statements of operations and comprehensive income (loss),
cash flows and changes in shareholder's equity under US GAAP are as follows:

Statements of Operations and Comprehensive Income (Loss):

|Cumulative  
|------------
|2007        
|            
|$ 2,499,742 
|1,513,777   
|4,768,878   
|11,084,177  
|770,794     
|20,637,368  
|(20,637,368)
|            
|(75,506)    
|            
|47,988      
|410,034     
|(67,117)    
|            
|78,124      
|(20,243,845)
|-           
|(20,243,845)
|            
|            
|(84,632)    
|            
|            
|$           
|            
|$           
|            
|$           

28

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
2005

17. Differences between Canadian GAAP and US GAAP (Continued)

Statements of Changes in Shareholders' Equity: The changes in common stock since
the commencement of the Company's exploration stage as required by US GAAP are as follows:

|Shares                            |   | Amount Under US GAAP            
|--------------------------------- | - | --------------------------------
|8,154,614 488,041                 | $ | 1,318,566 467,467               
|8,642,655                         |   | 1,786,033                       
|1,400,000 200,000 580,577 500,000 |   | 667,204 126,465 361,823 329,936 
|11,323,232                        |   | 3,271,461                       
|200,000 300,000 7,228,066 70,000  |   | 134,250 216,763 2,129,061 58,125
|19,121,298                        |   | 5,809,660                       
|-                                 |   | (5,919)                         
|19,121,298                        |   | 5,803,741                       
|951,494                           |   | 61,578                          
|20,072,792                        |   | 5,865,319                       
|3,043,667                         |   | 377,614                         
|23,116,459                        |   | 6,242,933                       
|951,494 (4,836,615)               |   | 123,052 (1,279,287)             
|19,231,338                        |   | 5,086,698                       
|7,000,000 910,000 1,000,000       |   | 600,427 88,290 171,125          
|28,141,338                        |   | 5,946,540                       

29

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
2005

17. Differences between Canadian GAAP and US GAAP (Continued)

Statements of Changes in Shareholders' Equity (Continued):

|Shares                                                |   | Amount Under US GAAP                                                           
|----------------------------------------------------- | - | -------------------------------------------------------------------------------
|28,141,338                                            |   | 5,946,540                                                                      
|6,000,000 -                                           |   | 845,292 (151,276)                                                              
|34,141,338                                            |   | 6,640,556                                                                      
|7,395,000 -349,680 1,257,500 -                        |   | 1,486,784 (428,918)
    91,117 318,352 90,345                                  
|43,143,518                                            |   | 8,198,236                                                                      
|12,131,000 -127,000 2,221,060 -200,000 -              |   | 3,117,705 (1,132,581)
    35,553 692,984 255,491 64,824 19,433                 
|57,822,578 100,000 12,975,967 -6,126,730 -1,250,000 - |   | 11,251,645 119,325
    12,407,590 (2,847,058) 2,639,865 740,133 332,784 178,155
|78,275,275                                            | $ | 24,822,439                                                                     

30

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
2005

17. Differences between Canadian GAAP and US GAAP (Continued)

Other changes in shareholders' equity are presented as follows:

|Cumulative |                                    | Deficit                                     
|---------- | ---------------------------------- | --------------------------------------------
|           | Additional paid in
    capital     | foreign
    currency translation adjustments
|$          | 151,276                            | $                                           
|           | (55,200) 579,065 (90,345) ---      |                                             
|           | 584,796                            |                                             
|           | (255,941) 1,132,581 (21,427) ----- |                                             
|           | 1,440,009                          |                                             
|           | (740,132) 2,847,058 ----           |                                             
|$          | 3,546,935                          | $                                           

31

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
2005

17. Differences between Canadian GAAP and US GAAP (Continued)

Statement of Cash Flows:

|Cumulative                                                     
|---------------------------------------------------------------
|
|                                                               
|$ (20,243,845)
    770,794 4,768,878 184,610 2,199,799 (47,988)
|554,846 (141,827) (677,231) 202,157                            
|(12,429,807)                                                   
|27,003,885
    181,767                                         
|27,185,652                                                     

32

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
2005

17. Differences between Canadian GAAP and US GAAP (Continued)

Statement of Cash Flows (Continued):

|Cumulative from
    Inception                                            |   | 2007                                               |   | 2006                                               |   | 2005                               
|------------------------------------------------------------------------ | - | -------------------------------------------------- | - | -------------------------------------------------- | - | -----------------------------------
|(433,699) -(2,827,187) (468,107) (739,048) (1,057,976) (181,767) 690,859 |   | 2,679 -(1,337,687) (280,692) (293,519) -(50,000) - |   | (436,378) -(1,413,136)
    (187,415) (445,529) --- |   | -75,000 ---(78,124)
    (131,767) -
|(5,016,925) (84,632)                                                     |   | (1,959,219) (381,030)                              |   | (2,482,458) 249,505                                |   | (134,891) 131,306                  
|9,654,288 -                                                              |   | 8,859,193 795,095                                  |   | 402,398 392,697                                    |   | 202,965 189,732                    
|$ 9,654,288                                                              | $ | 9,654,288                                          | $ | 795,095                                            | $ | 392,697                            

33

Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
Company)

Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
2005

17. Differences between Canadian GAAP and US GAAP (Continued)

Recent US GAAP accounting pronouncements

In March 2004, the FASB ratified a consensus reached by the Emerging
Issues Task Force ("EITF") on Issue No. 4-2 entitled "Whether Mineral
Rights are Tangible or Intangible Assets." This consensus requires that costs to
acquire mineral rights (defined as the legal right to explore, extract and retain at least
a portion of the benefits from mineral deposits) as tangible assets. This consensus was
effective for years beginning after March 2004 and has been applied in the January 31,
2006 balance sheet. Prior to the adoption of this consensus, the Company accounted for
mineral rights costs with exploration costs as expense when incurred.

In March 2005, the FASB ratified a consensus reached by the EITF on
Issue No. 4-6 entitled "Accounting for Stripping Costs Incurred during Production in
the Mining Industry." This consensus affects the accounting for costs of removing
overburden and waste materials during the production phase of a mine. The consensus
requires that stripping costs are to be accounted for as variable production costs and
charged to operations during the period that the stripping costs are incurred. This
consensus is required to be adopted in the fiscal year ending January 31, 2007. This
consensus has had no effect in the current fiscal year since the Company is not yet in the
production phase.

In May 2005, the FASB issued SFAS 154 Accounting Changes and Error
Corrections, effective for accounting changes and error corrections made in fiscal years
beginning after December 15, 2005, has been introduced and requires, unless impracticable,
retroactive application as the required method for reporting changes in accounting
principles in the absence of transitional provisions specific to the newly adopted
accounting principle. The adoption of this accounting principle had no effect on the
financial statements.

In July 2006, the FASB issued FASB Interpretation No.48,
"Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 prescribes a
recognition threshold and measurement attribute for the financial statement recognition
and measurement of a tax position taken or expected to be taken in a tax return. The
Interpretation also provides guidance on derecognition, classification, interest and
penalties, accounting in interim periods, disclosure, and transition. FIN 48 is effective
in fiscal years beginning after December 15, 2006. The provisions of FIN 48 are to be
applied to all tax positions upon initial adoption, with the cumulative effect adjustment
reported as an adjustment to the opening balance of retained earnings. The Company does
not expect a material effect on the financial statements from the adoption of this
standard.

In September 2006, the FASB issued Statement 157 "Fair Value
Measurements". Statement 157 will become effective for financial statements issued
for fiscal years beginning after November 15, 2007, and interim periods within those
fiscal years. This statement defines fair value, establishes a framework for measuring
fair value in generally accepted accounting principles and expands disclosures about fair
value measurements. The Company is currently evaluating the potential impact, if any, that
the adoption of Statement 157 "Fair Value Measurements" will have on the
financial statements.

In Febrary 2007, the FASB issued Statement 159 "Fair Value
Option". Statement 159 will become effective for financial statements issued for
fiscal years beginning November 15, 2007, and interim periods within those fiscal years.
This statement permits entities to choose to measure many financial instruments and
certain other items at fair value. The objective is to improve financial reporting by
providing entities with the opportunity to mitigate volatility in reported earnings caused
by measuring related assets and liabilities differently without having to apply complex
hedge accounting provisions. This statement is expected to expand the use of fair value
measurment for accounting for financial instruments. The Company is currently evaluating
potential impact, if any, that the adoption of statement 159 "Fair Value Option"
will have on the statements.

18. Comparative Figures

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

34

## Management's Discussion and Analysis of Financial
Condition and Results of Operations

The following discussion (the "MD&A") of the
financial condition and results of operations of Royal Standard Minerals Inc.
("RSM", "Corporation" or "Company") constitutes management's
review of the factors that affected the Corporation's financial and operating performance
for the year ended January 31, 2007. The MD&A was prepared as of May 23, 2007 and
should be read in conjunction with the audited annual financial statements for the year
ended January 31, 2007 of the corporation, including the notes thereto. Unless otherwise
stated, all amounts discussed herein are denominated in United States dollars.

#### Overview

The Corporation is currently active in the State of Nevada, with
projects in Nye, Elko, Churchill and Lyon Counties, Nevada. The Corporation's common
shares are listed on the TSX Venture Exchange symbol RSM and on the US OTC:BB symbol
RYSMF.

The Gold Wedge project is considered to be an advanced exploration
development project that is fully permitted by the Nevada Department of Environmental
Protection (NDEP) for a mine and mill. This project was the major focus of the Company in
fiscal 2007 and will continue to be its focus in fiscal 2008.

The Corporation has been evaluating other investment opportunities in
Nevada as part of an effort to improve upon the Corporation's production capacity. Capital
for the development of the current controlled projects and any future acquisitions are
envisioned to come from equity and debt financing.

#### Results of Operations

The net loss for the year ending January 31, 2007 was $5,431,480 as
compared to the net loss of $1,611,057 for the year ending January 31, 2006. The
difference of $3,820,423 is principally the result of compensation expense resulting from
stock options granted to officers, directors and a consultant during the current year in
the amount of $3,838,926 versus $739,006 in the prior year for an increase of $3,099,920.

General and Administrative expenses increased from $266,505 for the
year ended January 31, 2006 to $618,962 for the year ended January 31, 2007. The increase
of $352,457 is mainly the result of Professional Fees which increased by $221,269,
Corporate Development Expense which increased by $57,618 and Advertising Expense which
increased by $45,539. Amortization increased from $191,877 in 2006 to $540,289 in 2007,
for an increase of $348,412, and consulting fees which increased from $295,707 for the
year ended January 31, 2006 to $443,693 for the year ending January 31, 2007, for an
increase of $147,986. All increases are a direct result of increased activity on the
Company's mineral projects.

Offsetting the aforementioned increases in expenses is interest income
of $391,420 for the year ended January 31, 2007 versus none for the same period in 2006.
In addition, the Company wrote off exploration properties amounting to $367,467 during the
year ending January 31, 2006 versus none for the year ending January 31, 2007.

The Company owns a 100% interest in eight (8) projects in four (4)
gold-silver districts in Nevada. These projects include the Goldwedge project in Nye
County, the Pinon, Railroad, Mustang Canyon, and Dark Star projects in Elko County, the
Fondaway Canyon, Dixie, and Comstock projects in Churchill County and the Como project in
Lyon County, Nevada.

Gold Wedge Project

The Gold Wedge project represents the most advanced project located in
the Manhattan district about eight (8) miles south of the Round Mountain mine and has been
issued a mine and mill permit by the Nevada Department of Environmental Protection (NDEP).
RSM has commenced the underground development program which includes the exploration of
defined mineralized zones concurrently with the second phase of decline development. The
program has concentrated on the development of a spiral decline as a means to better
explore the deposit at depth. As part of the program a series of crosscuts are constructed
at specific intervals to effectively assess the potential mineralized zones. All material
is sampled daily for potential gold mineralization. The bulk sampling program is well
underway and includes several month of stockpiled material on the surface. During the
period from November to April a regrinding circuit was installed to improve upon gold
recoveries. Currently surface infrastructure at Goldwedge includes primary and secondary
crushing facilities that feed a gravity recovery system. In addition, a heap leach pad,
silt and fresh water ponds have been completed.

On June 29, 2005 the Company entered into a 5-year Purchase Option
Agreement with a private individual for all of his patented and unpatented mining claims
in the Manhattan Mining District located in Nye County, Nevada. The land package totals
approximately 1600 acres (4 patented, 70 unpatented claims). This property position
adjoins the Company's Goldwedge Mine. The land package includes a number of exploration
targets which are of interest to the Company. In addition, the Company's option includes
the Dixie Comstock claim group located in Churchill County, Nevada. The Dixie Comstock is
a 1500 acre property containing an epithermal gold system that has been explored by a
number of major mining companies over the past 20 years. It is considered to be an
attractive advanced exploration project. The Company is currently engaged in the
completion of a 43-101 property report. The Company has agreed to pay $35,000 upon the
execution of the Agreement. Annual option payments of $48,000 are to be applied to a total
purchase price of $600,000 – there are no royalties.

Pinon-Railroad Project

The Company has also developed the necessary construction plans for the
Pinon-Railroad project including surface, heap leach facilities design and open pit
modeling of the deposits. All of this work was completed in preparation for the filing of
a mining permit application with the US Bureau of Mines (BLM) by fiscal year-end 2007. A
second objective is to complete feasibility studies for the Pinon/Railroad near surface
oxide deposits.

Other Projects

The Company signed an Exploration and Option Agreement with Metallic
Ventures ("Metallic") to explore the Mustang Canyon Project in Esmeralda County,
Nevada. The agreement gives the Company the exclusive option to acquire 50% interest in
the Mustang Canyon Project by spending $20,000 per year in exploration expenditures with
the objective to identify a measured resource by June 30, 2010. Upon identification of a
measured resource and completion of a 43101 report, the Company will earn a 50% interest
in the project. The Company may terminate the Agreement at any time after spending the
initial $20,000 by providing 30 days written notice to Metallic. When the Company has
exercised its option to acquire a 50% interest in the project, Metallic and the Company
will establish a Joint Venture in respect to the project, on a 50/50 basis. Further
expenditures on the Mustang Canyon Project will then be made by the Joint Venture. The
Company will be the operator of the joint venture as long as it has at least a 50%
interest in the joint venture.

#### Liquidity and Capital Resources

The Company's cash and cash equivalents balance as of January 31,
2007 was $9,654,288 compared to $795,095 at January 31, 2006, an increase of $8,859,193.
The increase is attributable to the private placement offerings completed during the first
quarter of 2006. The Company also had $433,699 in short term investments at January 31,
2007, compared to $436,378 in 2006.

On April 27, 2006, the Company completed a private placement of
12,975,967 units of the Company at $1.15 CDN per unit raising gross proceeds of
$13,286,762 ($14,922,362 CDN). Each unit consists of one common share of the Company and
one-half of one common share purchase warrant. Each whole common share purchase warrant is
exercisable at $1.75 CDN into one common share of the Company until April 26, 2008. The
fair value of the common share purchase warrants was estimated, on the date of closing,
using the Black-Scholes option pricing model, with the following assumptions: dividend
yield 0%, expected volatility of 98%, risk-free interest rate of 4.13% and an expected
life of 24 months. The value assigned to the warrants is $2,847,058 ($3,198,582 CDN).

On March 31, 2005 the Company completed the first round of a private
placement by issuing 8,750,000 units at a price of $0.35 CDN for gross proceeds of
$2,531,829 ($3,062,500 CDN). Each unit consisted of one common share and one-half common
share purchase warrant. Each whole warrant entitles the holder to subscribe for one
additional share of common stock at a price of $0.50 CDN until March 31, 2007.

In addition, the agent for the offering, as partial compensation for
their services, received 82,000 common shares and 1,353,500 warrants. Each warrant
entitles the agent to acquire one additional share of common stock of the Company at an
exercise price of $0.50 CDN until March 31, 2007.

A second round of the financing was completed on April 26, 2005,
whereby 1,500,000 units were issued at a price of $0.35 CDN for gross proceeds of $426,615
($525,000 CDN). Each unit consists of one common share and one-half common share purchase
warrant. Each whole warrant entitles the holder to subscribe for one share of the
Company's common stock at a price of $0.50 CDN per share until April 26, 2007.

As partial compensation for their services, the agents for this
financing received 45,000 common shares and 247,500 warrants, each warrant entitles the
Agents to acquire one additional common share of the Company at an exercise price of $0.50
CDN until April 26, 2007.

On April 29, 2005, the Company issued 50,000 units at a price of $0.35
CDN per unit for gross proceeds of $14,296 ($17,500 CDN). Each unit consists of one common
share and one-half common share purchase warrant. Each whole warrant entitles the holder
to subscribe for one additional share at a price of $0.50 CDN per share until April 29,
2007.

On May 5, 2005, the Company completed the third and final round of
private placements by issuing 1,831,000 units at a price of $0.35 CDN for gross proceeds
of $495,808 ($640,850 CDN). Each unit consists of one common share and one-half common
share purchase warrant. Each whole warrant entitles the holder to subscribe for one share
of common stock at a price of $0.50 CDN per share until May 5, 2007.

Current assets as at January 31, 2007 were $10,438,324 as compared to
$1,445,200 at January 31, 2006. Exploration properties at January 31, 2007 were $7,788,107
compared to $3,810,519 at January 31, 2006 and represent an increase of $3,977,588.
Equipment increased from $1,258,994 at January 31, 2006 to $2,056,392 at January 31, 2007
resulting in an increase of $797,398, net of amortization. Both increases are the result
of continued construction at the Gold Wedge Project. Total assets as at January 31, 2007
were $20,464,590 as compared to $6,646,480 at January 31, 2006. This represents an
increase of $13,818,110 and is due primarily to cash remaining from the aforementioned
private placement offerings and continued operations on the Gold Wedge project.

Current liabilities as at January 31, 2007 were $202,157 compared to
$221,733 at January 31, 2006, and represent current trade payables.

Management believes that, subject to the achievement of significant
revenue producing operations, equity and debt financings will remain the single major
source of cash flow for the Corporation. However, there is no assurance that the Company
can successfully obtain such financings in future periods.

The Corporation is authorized to issue an unlimited number of Common
Shares of which 78,275,275 are outstanding as at January 31, 2007. As at January 31, 2007
the Corporation had outstanding options to purchase 7,826,500 common shares with exercise
prices from $0.26-1.44 CDN per share and expiration dates ranging from April 2007 to
October 2011. The Corporation also had 11,219,283 Warrants outstanding as of January 31,
2007. The exercise prices of the Warrants range from $0.50 CDN to $1.75 CDN and, if not
exercised, expire from March 2007 through April 2008. (See notes 8-10 of the Company's
January 31, 2007 audited financial statements for more details about the Company's stock,
stock options and warrants.)

#### Selected Annual Financial Information

The following selected financial information is derived from the
annual financial statements of the Corporation and should be read in conjunction with such
statements, including the notes thereto:

|             |             | January 31  |              | Cumulative from date of
    inception 6/26/1996
|------------ | ----------- | ----------- | ------------ | -----------------------------------------------
|2007         | 2006        | 2005        |             
|             |             |             |             
|0            | 0           | 0           | $0          
|391,420      | 0           | 0           | 410,034     
|5,441,870    | 1,493,095   | 572,318     | 9,705,242   
|(5,431,480)  | (1,611,057) | (475,409)   | 14,154,630  
|(9,463,890)  | (7,852,833) | (7,377,424) | (740,740)   
|(14,895,370) | (9,463,890) | (7,852,833) | (14,895,370)
|(0.07)       | (0.03)      | (0.01)      |             
|2007         | 2006        |             |             
|10,438,324   | 1,445,200   |             |             
|7,788,107    | 3,810,519   |             |             
|2,056,392    | 1,258,994   |             |             
|(202,157)    | (221,733)   |             |             

#### Selected Quarterly Financial Information

The following is a summary of selected financial information of the
Corporation for the quarterly periods indicated:

|         | 3 Mos Ended January 31, 2007 | 3 Mos Ended October 31, 2006 | 3 Mos Ended July 31, 2006 | 3 Mos Ended April 30, 2006 | 3 Mos Ended January 31, 2006 | 3 Mos Ended October 31, 2005 | 3 Mos Ended July 31, 2005 | 3 Mos Ended April 30, 2005
|-------- | ---------------------------- | ---------------------------- | ------------------------- | -------------------------- | ---------------------------- | ---------------------------- | ------------------------- | --------------------------
|$0.00    | $0.00                        | $0.00                        | $0.00                     | $0.00                      | $0.00                        | $0.00                        | $0.00                    
|$686,309 | ($743,184)                   | ($4,967,218)                 | ($417,777)                | ($669,034)                 | ($170,726)                   | ($314,585)                   | ($338,750)               

|Other Income (Losses), net 2 | (356,661)  | 283,730      | 529,013    | (445,692)  | 67,142     | (197,916)  | 16,328     | (3,516)
|---------------------------- | ---------- | ------------ | ---------- | ---------- | ---------- | ---------- | ---------- | -------
|329,648                      | ($459,454) | ($4,438,205) | ($863,469) | ($601,892) | ($368,642) | ($298,257) | ($342,266)
|(0.00)                       | (0.00)     | (0.06)       | (0.01)     | (0.00)     | (0.01)     | (0.01)     | (0.01)    

1 Expenses in the 3 months ended January 31, 2007 reflect an adjustment of $1,749,130
for payroll and related expenses which were capitalized to the Gold Wedge Project in
Mineral Properties. 2 Other Income (Losses) consists of interest income, write-off of
mineral properties and foreign exchange gains and losses, shown net.

#### Exploration Properties

The following table reflects the exploration properties and expenditures during the
year ending January 31, 2007. For more information refer to Note 5 of the January 31, 2007
audited financial statements.

|Additions                                                                          
|-----------------------------------------------------------------------------------
|Gold Wedge Project Pinon Project
    Railroad Project Fondaway Project Como Project

$3,810,519 $3,977,588 $7,788,107

|Detail of Mineral
    Properties
|--------------------------------
|
|
|
|
|2007                            
|                                
|$2,636,862                      
|171,376                         
|77,737                          
|293,519                         
|53,185                          
|5,023                           
|0                               
|1,377,706                       
|335,767                         
|30,063                          
|                                
|1,171,969                       
|3,516,345                       
|$6,153,207                      
|                                
|$762,285                        
|34,047                          
|0                               
|8,333                           
|0                               
|0                               
|15,296                          
|0                               
|151,133                         
|167,785                         
|9,380                           
|                                
|0                               
|385,974                         
|$1,148,259                      

|Cumulative
|----------
|
|
|
|2007      
|          
|$175,670  
|40,143    
|40,143    
|$215,813  
|          
|$127,652  
|35,126    
|0         
|35,126    
|$162,778  
|          
|$108,050  
|0         
|0         
|0         
|0         
|0         
|0         
|0         
|0         
|$108,050  

|Cumulative
|----------
|
|
|
|2007      
|          
|$0        
|0         
|0         
|0         
|0         
|0         
|0         
|0         
|$0        
|          
|$0        
|          
|          
|0         
|          
|0         
|0         
|0         
|$0        
|$7,788,107

#### Transactions with Related Parties

|2007            
|----------------
|$17,.402 104,984
|$122,386        

This advance is unsecured, non-interest bearing and has no set terms of repayment.

Sharpe is related to the Company because of common management. This advance is
  unsecured, non-interest bearing and has no set terms of repayment.

Consulting fees include a bonus of $170,000 (2006 - $nil; 2005 - $nil)
and salary of $252,621 (2006 - $96,192; 2005 - $nil) paid to the President of the Company.

Consulting fees include salary of $48,923 (2006 - $nil; 2005 $nil) paid
to an employee who is also a family member of the President and Director of the Company.

Consulting fees include compensation of $12,155 (2006 - $nil; 2005 -
$nil) paid to the CFO of the Company.

These transactions were in the normal course of operations and were
measured at the exchange value which represented the amount of consideration established
and agreed to by the related parties.

#### Lawsuit

On October 11, 2006 the Company received a document purporting to
constitute a requisition from a group of shareholder of the Company ("the Dissident
Group") alleging that they hold more than 10% of the Company's shares. The documents
received requested that a shareholders meeting be called to consider the removal and
replacement of the existing board of directors of the Company.

The board of directors of the Company has reviewed these documents with
the benefit of outside advice and has serious concerns with respect to whether such
documents constitute a valid requisition under the New Brunswick Corporations Act.

While reserving all of its rights in this regard, the board of
directors of the Company has called a meeting of shareholders in response to the purported
requisition received from the Dissident Group at which the constitution of the Company's
board of directors will be considered.

On October 28, 2006, the Company filed an action in the United States
District Court for the Central District of California against the persons and entities who
have identified themselves as belonging to the Dissident Group. The Company alleges that
the defendants violated section 13(d) of the Securities Exchange Act of 1934, 15 U.S.C.
78m(d), by failing to file a Schedule 13-D. On May 17, 2007, the Court ordered the
striking of the defendants' answer and the Clerk of the Court entered defendants' default.
A hearing on the Company's motion for entry of judgment is scheduled to be held by the
Court on June 18, 2007.

There is a pending action against Messrs. Luke Norman and Timothy
Master, two former employees of the Company. The September 25, 2006 complaint alleges that
while employed by Royal Standard and thereafter, contrary to their duties to Royal
Standard, Norman and Master participated in a pattern of behavior which included the
dissemination of misleading or incorrect information, interference with corporate
operations, communications with shareholders without proper authority, soliciting votes
from shareholders contrary to securities law, conspiring against management in an attempt
to impair the business of Royal Standard. In November 2006 Mr. Norman filed a counter
complaint against Royal Standard Minerals Inc. without specifying damages. In the opinion
of management this complaint is without merit.

The Company is seeking injunctive relief restraining Norman and Master
from further communicating the alleged slander and misinformation regarding the Company.
In addition to the injunctive relief, the Company seeks to recover damages for conspiracy
to injure, defamation, slander, and special damages for breach of fiduciary duty.

#### Changes in Accounting Policies

The Accounting Standard Board issued new accounting standards,
effective for financial statements relating to fiscal years beginning on or after October
1, 2006, dealing with the recognition, measurement and disclosure of financial
instruments, hedges and comprehensive income. Consistent with US and international
reporting requirements, these standards require that certain gains and losses be recorded
in a separate statement as comprehensive income. Fair value is considered the most
relevant measure for financial instruments, which are any contracts that give rise to a
financial asset of one party and a financial liability or equity instrument of another
party. The company intends to adopt these policies effective February 1, 2007 and will
report comprehensive income, equity and financial instruments in accordance with the
relevant sections of the CICA Handbook (sections 1530, 3251, and 3855, respectively).

In addition to disclosing a new comprehensive income statement, the
primary effect on the Company will be that all financial instruments will be measured at
fair value. The Company will be required to separately disclose available-for-sale
financial assets, which are those non-derivative financial assets that are designated as
available for sale, or that are not classified as loans and receivables, held-to maturity
investments, or held for trading.

Any gains and losses arising from a change in the fair value of a
financial asset or financial liability that is classified as held for trading (including
assets previously disclosed as marketable securities, but excluding hedges) will be
recognized in net income in the periods in which they arise. Certain gains and losses on
financial assets classified as available for sale will be recognized in other
comprehensive income until the financial asset is no longer recognized or becomes
impaired.

#### Disclosure Controls and Procedures

RSM's President and Chief Financial Officer ("CFO") are responsible for
establishing and maintaining the Company's disclosure controls and procedures. Access to
material information is facilitated by the small size of RSM's management team. The
President and the CFO, after evaluating the effectiveness of the RSM disclosure controls
and procedures as of January 31, 2007, have concluded that the Company's disclosure
controls and procedures were adequate and effective to ensure that material information
relating to RSM and its subsidiaries would have been known to them.

The President and CFO have designed internal controls over financial
reporting to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with
Canadian GAAP.

#### Risk and Uncertainties

At the present time, the Corporation's viability and potential
success lie in its ability to develop, exploit and generate revenue out of its current and
future precious metal properties. The Corporation's ability to acquire and develop it
current precious metal properties and any new properties is a function of its ability to
raise the necessary capital to pursue the efforts successfully.

The Corporation has limited financial resources and there is no
assurance that additional capital will be available to it for further acquisitions,
exploration and development of new or existing projects. Although the Corporation has been
successful in the past in obtaining financing there is no guarantee that it will be
successful 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 the property interests of the Corporation with the
possible dilution or loss of such interests.

#### Forward Looking Statements

This MD&A includes certain "forward-looking
statements" within the meaning of applicable Canadian securities legislation. All
statements, other than statements of historical facts, included in this MD&A that
address activities, events or developments that the Corporation expects or anticipates
will or may occur in the future, including such things as future business strategy,
competitive strengths, goals, expansion and growth of the Corporation's businesses,
operations, plans and other such matters are forward-looking statements. When used in this
MD&A, the words "estimate", "plan", "anticipate",
"expect", "intend", "believe" and similar expressions are
intended to identify forward-looking statements. These statements involve known and
unknown risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the Corporation to be materially different from any future
results, performance or achievements expressed or implied by such forward-looking
statements. Such factors include, among others, risks related to joint venture operations,
actual results of current exploration activities, changes in project parameters as plans
continue to be refined unavailability of financing, fluctuations in the precious metal
prices and other factors. Although the Corporation has attempted to identify important
factors that could cause actual results to differ materially, there may be other factors
that cause results not to be anticipated, estimated or intended. There can be no assurance
that such statements will prove to be accurate as actual results and future events could
differ materially from those anticipated in such statements. Accordingly, readers should
not place undue reliance on forward-looking statements.

#### Additional Information

Additional information relating to the Corporation, including the
annual information form of the Corporation, can be found on SEDAR at www.sedar.comand on the Corporation's website at www.royalstandardminerals.com.

\s\ Roland M. Larsen

Roland M. Larsen President

Heathsville, VA June 11, 2007

Item 18. Financial Statements.

Not applicable.

Item 19. Exhibits.

None

### 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.

ROYAL STANDARD MINERALS INC.(Registant) /s/ Roland M.
Larsen Roland M. Larsen, President & CEO

Date: January 16, 2008

Risks Associated with Forward Looking Statements.This
Form 20-F contains certain forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended (the "Securities Act"), and Section 21e
of the securities Exchange Act of 1934, as amended (the "Exchange Act"), which
are intended to be covered by the safe harbors created thereby. Investors and shareholders
are cautioned that all forward-looking statements involve risks and uncertainty, including
without limitation, the ability of the Company to continue its mineral exploration
strategy, complete recommended work programs, the success of the Company in locating
mineral bodies in commercially recoverable quantities, the ability of the Company to
develop the mineral bodies either on its own or in partnership with third parties, the
ability of the Company to acquire interests in mineral exploration properties or mining
claims, as well as market prices for mineral resources, competition and general market
conditions. Although the Company believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of the assumptions could
be inaccurate, and therefore, there can be no assurance that the forward-looking
statements included in this Form 20-F will prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking statements included herein, the
inclusion of such information should not be regarded as a representation by the Company or
any other person that the objectives and plans of the Company will be achieved.

##### CERTIFICATIONS

I, Roland M. Larsen, certify that:

1. I have reviewed this annual report on Form 20-F of Royal Standard Minerals Inc.;
2. Based on my knowledge, this annual report does not contain any untrue statement of a
    material fact or omit to state a material fact necessary to make the statements made, in
    light of the circumstances under which such statements were made, not misleading with
    respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information
    included in this annual report, fairly present in all material respects the financial
    condition, results of operations and cash flows of the registrant as of, and for, the
    periods presented in this report;
4. The company's other certifying officers and I are responsible for establishing and
      maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
      and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
      Rules 13a-15(f) and 15d-15(f)) for the company and have:
5. Designed such disclosure controls and procedures, or caused such disclosure controls and
        procedures to be designed under our supervision, to ensure that material information
        relating to the company, including its consolidated subsidiaries, is made known to us by
        others within those entities, particularly during the period in which this report is being
        prepared:
6. Designed such internal control over financial reporting, or caused such internal control
        over financial reporting to be designed under our supervision, to provide reasonable
        assurance regarding the reliability of financial reporting and the preparation of
        financial statements for external purposes in accordance with generally accepted
        accounting principles;
7. Evaluated the effectiveness of the company's disclosure controls and procedures and
        presented in this report our conclusions about the effectiveness of the disclosure
        controls and procedures, as of the end of the period covered by this report based on such
        evaluation; and
8. Disclosed in this report any change in the company's internal control over financial
        reporting that occurred during the period covered by the annual report that has materially
        affected, or is reasonably likely to materially affect, the company's internal control
        over financial reporting; and
9. The company's other certifying officers and I have disclosed, based on our most recent
      evaluation of internal controls over financial reporting, to the company's auditors and
      the audit committee of company's board of directors (or persons performing the equivalent
      function):
10. All significant deficiencies and material weaknesses in the design or operation of
        internal control over financial reporting which are reasonably likely to adversely affect
        the company's ability to record, process, summarize and report financial information; and
11. Any fraud, whether or not material, that involves management or other employees who have
        a significant role in the company's internal control over financial reporting.

Date: January 16, 2008

\s\ Roland M. Larsen Roland M. Larsen President & CEO

##### CERTIFICATIONS

I, Samuel Gulko, certify that:

1. I have reviewed this annual report on Form 20-F of Royal Standard Minerals Inc.;
2. Based on my knowledge, this annual report does not contain any untrue statement of a
    material fact or omit to state a material fact necessary to make the statements made, in
    light of the circumstances under which such statements were made, not misleading with
    respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information
    included in this annual report, fairly present in all material respects the financial
    condition, results of operations and cash flows of the registrant as of, and for, the
    periods presented in this report;
4. The company's other certifying officers and I are responsible for establishing and
      maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
      and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
      Rules 13a-15(f) and 15d-15(f)) for the company and have:
5. Designed such disclosure controls and procedures, or caused such disclosure controls and
        procedures to be designed under our supervision, to ensure that material information
        relating to the company, including its consolidated subsidiaries, is made known to us by
        others within those entities, particularly during the period in which this report is being
        prepared:
6. Designed such internal control over financial reporting, or caused such internal control
        over financial reporting to be designed under our supervision, to provide reasonable
        assurance regarding the reliability of financial reporting and the preparation of
        financial statements for external purposes in accordance with generally accepted
        accounting principles;
7. Evaluated the effectiveness of the company's disclosure controls and procedures and
        presented in this report our conclusions about the effectiveness of the disclosure
        controls and procedures, as of the end of the period covered by this report based on such
        evaluation; and
8. Disclosed in this report any change in the company's internal control over financial
        reporting that occurred during the period covered by the annual report that has materially
        affected, or is reasonably likely to materially affect, the company's internal control
        over financial reporting; and
9. The company's other certifying officers and I have disclosed, based on our most recent
      evaluation of internal controls over financial reporting, to the company's auditors and
      the audit committee of company's board of directors (or persons performing the equivalent
      function):
10. All significant deficiencies and material weaknesses in the design or operation of
        internal control over financial reporting which are reasonably likely to adversely affect
        the company's ability to record, process, summarize and report financial information; and
11. Any fraud, whether or not material, that involves management or other employees who have
        a significant role in the company's internal control over financial reporting.

Date: July 27, 2007

\s\ Samuel Gulko Samuel Gulko Chief Financial Officer

Royal Standard Minerals Inc.

### Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, Roland M. Larsen, Chief Executive Officer of Royal Standard Minerals Inc.
("the Company"), certify that:

1. the annual report on Form 20F of the Company for the fiscal year ending January 31, 2007
    as filed with the Securities and Exchange Commission on the date hereof (the
    "report") fully complies with the requirements of Section 13(a) or 15(d) of the
    Securities and Exchange Act of 1934; and
2. the information contained in the Report fairly presents, in all material respects, the
    financial condition and results of operations of the Company.

/s/ Roland M. LarsenRoland M. Larsen Chief Executive Officer January 16, 2008

Royal Standard Minerals Inc.

### Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

I, Samuel Gulko, Director of Royal Standard Minerals Inc. ("the
Company"), certify that:

1. the annual report on Form 20F of the Company for the fiscal year ending January 31, 2007
    as filed with the Securities and Exchange Commission on the date hereof (the
    "report") fully complies with the requirements of Section 13(a) or 15(d) of the
    Securities and Exchange Act of 1934; and
2. the information contained in the Report fairly presents, in all material respects, the
    financial condition and results of operations of the Company.

/s/ Samuel GulkoSamuel Gulko Chief Financial Officer July 27, 2007