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|OMB Number:
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|UNITED STATES                      | Expires: September 30, 2007
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|Washington, D.C. 20549             | Hours per response: 2631.00
|FORM 20-F                          |                            
|                                   |                            

REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
EXCHANGE ACT OF 1934 OR

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE X__ ACT OF 1934 For the fiscal year ended January 31,
2007 OR


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 IITEM 1
    IDENTITY OF DIRECTORS, SENIOR
    MANAGEMENT AND ADVISERS
    5ITEM 2
    OFFER STATISTICS AND EXPECTED
    TIMETABLE
    5ITEM 3
    KEY INFORMATION
    5A.
    Selected financial data
    5B.
    Capitalization and indebtedness
    6C.
    Reasons for the offer and use of
    proceeds
    6D.
    Risk factors
    6ITEM 4
    INFORMATION ON THE COMPANY
    9A.
    History and development of the
    company
    9B.
    Business overview
    9C.
    Organizational structure
    16D.
    Property, plants and equipment
    16ITEM 5
    OPERATING AND FINANCIAL REVIEW AND
    PROSPECTS
    16A.
    Operating results
    16B.
    Liquidity and capital resources
    21C.
    Research and development, patents
    and licenses, etc.
    24D.
    Trend information
    24E.
    Off balance sheet arrangements
    25F.
    Tabular disclosures of
    contractual obligations
    25G.
    Safe harbor
    25ITEM 6
    DIRECTORS, SENIOR MANAGEMENT AND
    EMPLOYEES
    25A.
    Directors and senior management
    25B.
    Compensation
    28C.
    Board practices
    31D.
    Employees
    36E.
    Share ownership
    36ITEM 7
    MAJOR SHAREHOLDERS AND RELATED PARTY
    TRANSACTIONS
    36A.
    Major shareholders
    36B.
    Related party transactions
    37C.
    Interests of experts and counsel
    37ITEM 8
    FINANCIAL INFORMATION
    37A.
    Consolidated statements and other
    financial information
    37B.
    Significant changes
    37ITEM 9
    THE OFFER AND LISTING
    38A.
    Offer and listing details
    38B.
    Plan of distribution
    40C.
    Markets
    40D.
    Selling shareholders
    41E.
    Dilution
    41F.
    Expenses of the issue
    41ITEM 10
    ADDITIONAL INFORMATION
    41A.
    Share capital
    41B.
    Memorandum and articles of
    association
    41C.
    Material contracts
    41D.
    Exchange controls
    42E.
    Taxation
    44F.
    Dividends and paying agents
    45G.
    Statement by experts
    45H.
    Documents on display
    45I.
    Subsidiary information
    45ITEM 11
    QUANTITATIVE AND QUALITATIVE
    DISCLOSURES ABOUT MARKET RISK
    46 ITEM 12
    DESCRIPTION OF SECURITIES OTHER THAN
    EQUITY SECURITIES
    46PART IIITEM 13
    DEFAULTS, DIVIDEND ARREARAGES AND
    DELINQUENCIES
    46ITEM 14
    MATERIAL MODIFICATIONS TO THE RIGHTS
    OF SECURITY HOLDERS AND USE OF PROCEEDS
    46ITEM 15
    CONTROLS AND PROCEDURES
    46ITEM 16
    [RESERVED]
    47ITEM 16A
    AUDIT COMMITTEE FINANCIAL REPORT
    47ITEM 16B
    CODE OF ETHICS
    47ITEM 16C
    PRINCIPAL ACCOUNTANT FEES AND
    SERVICES
    47ITEM 16D
    EXEMPTIONS FROM THE LISTING
    STANDARDS FOR AUDIT COMMITTEES
    47ITEM 16E
    PURCHASES OF EQUITY SECURITIES BY
    THE ISSUER AND AFFILIATED PURCHASERS
    48PART IIIITEM 17
    FINANCIAL STATEMENTS
    48MANAGEMENT’S DISCUSSION
    & ANALYSIS
    86ITEM 18
    FINANCIAL STATEMENTS
    99ITEM 19
    EXHIBITS
    99SIGNATURES
    99CERTIFICATIONS
    100CERTIFICATIONS PURSUANT TO SECTION
    906
    102


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
    2006
    2005
    2004
    2003Statement of
    OperationsRevenue
    $0
    $0
    $0
    $0
    $0Interest Income
    $391,420
    $0
    $0
    $0
    $0Expenses
    ($5,441,870)
    ($1,493,095)
    ($572,318)
    ($565,907)
    ($330,598)Net loss for the year
    ($5,431,480)
    ($1,611,057)
    ($475,409)
    ($554,626)
    ($416,803)Deficit, beginning of year
    ($9,463,890)
    ($7,852,833)
    ($7,377,424)
    ($6,822,798)
    ($6,405,995)Deficit, end of year
    ($14,895,370)
    ($9,463,890)
    ($7,852,833)
    ($7,377,424)
    ($6,822,798)Loss per common share:Basic
    ($0.07)
    ($0.03)
    ($0.01)
    ($0.02)
    ($0.02)Diluted
    ($0.07)
    ($0.03)
    ($0.01)
    ($0.02)
    ($0.02)Weighted Average Shares
    Outstanding
    73,771,233
    53,907,094
    41,090,912
    31,330,379
    25,537,033Balance Sheet
    
    Year Ended January 312007
    2006
    2005
    2004
    2003Current Assets
    $10,438,324
    $1,445,200
    $541,835
    $273,291
    $377,753Exploration Properties
    $7,788,107
    $3,810,519
    $2,664,127
    $1,253,444
    $781,039Equipment, net
    $2,056,392
    $1,258,994
    $37,735
    $52,656
    $53,688Total Assets
    $20,464,590
    $6,646,480
    $3,237,383
    $1,579,.391
    $1,212,480Current Liabilities
    $202,157
    $221,733
    $104,087
    $106,178
    $82,300Net Assets
    $20,080,666
    $6,292,080
    $3,133,296
    $1,473,213
    $1,130,180Currency 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,

2002 2003 2004 2005 2006 High for the period .8532 .7738 .8493 .8689
..9148

Low for the period .7992 .6329 .7196 .7871 .8475

)

Average rate for the period(1.8308 .7186 .7716 .8253 .8821

Rate at end of period .8358 .7738 .8308 .8577 .8581

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

Not ApplicableC. Reasons for the offer and use of proceeds.

Not ApplicableD. 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

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.
  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.
  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 Over-the-Counter Bulletin Board symbol RYSMF.

The registered office of Royal Standard is located at 56 Temperance
Street, Fourth Floor, Toronto, Ontario M5G 2V5 and the principal office of Royal Standard
is located at 3258 Mob Neck Road, Heathsville, Virginia 22473.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.
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 patented and unpatented
  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.
  Goldwedge Deposit
  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 16,000 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 16,000 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.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 56 Temperance
Street, Fourth Floor, Toronto, Ontario M5G 2V5 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.

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 ProjectsIn 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:

Project
    Required Cash Payments to Optionors
    Royalty(1)
    Exercise of OptionGold Wedge
    Commencing in fiscal 2002.
    3% NSR
    July 2006Nye County
    $5,000 each in first two years;
    
    $200,000$10,000 in third year; $15,000in fourth year and $20,000 infifth and sixth yearsManhattan
    Commencing in fiscal 2002.
    5% NSR
    August 2006Nye County
    $1,000 per month from August
    
    $500,0002001 to August 2002; $2,000per month from September2002 to July, 2006This project was discontinuedduring 2005 and allexploration expenditureswere written-off.Commencing in fiscal 2003.
    3% NSR
    July 2013Fondaway Canyon
    $25,000 in year one, $30,000 in
    
    $600,000Churchill County
    years two and three and$35,000 each of the next sevenyearsComo
    Commencing in fiscal 2003.
    4% NSR
    May 2008Lyon County
    $25,000in years one and two
    
    $1,000,000covering years three and four,$20,000 in year five, $25,000 inyear sixRailroad
    Commencing in fiscal 2003.
    5% NSR
    August 2008Elko County
    $15,000 in the first year and
    
    $2,000,000increases by $5,000 each of thenext six years1. 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. and 5.A. above.D. Trend information.

See Items 4.B. and 5.A. above.E. Off balance sheet arrangements.


NoneF. Tabular disclosures of contractual obligations.


Contractual Obligations
    Total
    Less Than 1 Year
    1-3 Years
    3-5 Years
    More Than 5 YearsAsset 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 EmployeesA. 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 President, Chief Executive May, 1996 June, 2008
Heathsville, VA Officer and Director

Samuel Gulko Chief Financial Officer November, 2006 N/A

Kimberly L. Koerner Director, May, 2001 June, 2008 Brambleton, VA
Secretary/Treasurer

BOARD TERM NAME OFFICE HELD SINCE EXPIRES

MacKenzie I. Watson
    Director
    May, 1996
    June, 2008Monteral, QuebecJames C. Dunlop
    Director, Chairman of
    May, 1996
    June, 2008Toronto, Ontario
    Audit CommitteeJeffrey 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

Name and Principal
    Position
    Year
    Annual Compensation
    Long Term
    Compensation
    
    All Other
    Compensation (US$)Other Annual Salary Bonus Compen-
    (US$) (US$) sation (US$)
    Securities Under Options Granted (#)
    Restricted Shares or Restricted Share
    Units (US$)
    LTIP Payouts (US$)Roland M. Larsen, President and
    CEO
    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 36,000Samuel Gulko,Chief FinancialOfficer (4)
    2007
    $7,155 Nil Nil
    Nil
    Nil
    Nil
    NilNotes:

(1)
  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;
  (2)
  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.
  (3)
  Mr. Larsen was granted 675,000 options on May 4, 2004 having an exercise price of
    Cdn$0.36 and expiring May 4, 2009.
  (4)
  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:

(a)
  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;
  (b)
  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;
  (c)
  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;
  (d)
  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.
  (e)
  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:(i)
  the appointment of auditors at the annual general meeting of shareholders of the
    Corporation;
  (ii)
  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:(i)
  the scope of the audit;
  (ii)
  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:(i)
  the financial statements;
  (ii)
  management's discussion and analysis and related financial disclosure contained in
    continuous disclosure documents;(iii) significant changes, if any, to the initial audit plan;(iv)
  accounting and reporting decisions relating to significant current year events and
    transactions;
  (v)
  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
  (vi)
  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:a.
  the receipt, retention and treatment of complaints received by the issuer regarding
    accounting, internal accounting controls, or auditing matters; and
  b.
  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 Exercised 1Roland M. Larsen
    President, CEO & Director
    2,021,997Samuel Gulko
    Chief Financial Officer
    NilMackenzie I. Watson
    Director
    153,500James C. Dunlop
    Director
    NilKimberly L. Koerner
    Director
    920,350Jeffrey B. Wolin
    Director
    Nil1. 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:(1)
  Based on 83,929,825 Common Shares issued and outstanding as at May 11. 2007.
  (2)
  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.

AverageHigh
    Low
    DailyVolumeJanuary 1, 1998
    to
    March 31, 1998
    $0.80
    $0.27
    10,533April 1, 1998
    to
    June 30, 1998
    $0.45
    $0.15
    14,033July 1, 1998
    to
    September 30, 1998
    $0.40
    $0.10
    23,100October 1, 1998
    to
    December 31, 1998
    $0.20
    $0.05
    22,200January 1, 1999
    to
    March 31, 1999
    $0.25
    $0.10
    32,900April 1, 1999
    to
    June 30, 1999
    $0.13
    $0.05
    14,666July 1, 1999
    to
    September 30, 1999
    $0.19
    $0.05
    43,833October 1, 1999
    to
    December 31, 1999
    $0.12
    $0.03
    21,133January 1, 2000
    to
    March 31, 2000
    $0.17
    $0.03
    42,933April 1, 2000
    to
    June 30, 2000
    $0.39
    $0.13
    57,033July 1, 2000
    to
    September 30, 2000
    $0.28
    $0.11
    10,467October 1, 2000
    to
    December 31, 2000
    $0.27
    $0.11
    25,867January 1, 2001
    to
    March 31, 2001
    $0.30
    $0.11
    11,500April 1, 2001
    to
    June 30, 2001
    $0.18
    $0.06
    7,789July 1, 2001
    to
    September 30, 2001
    $0.13
    $0.06
    7,667October 1, 2001
    to
    December 31, 2001
    $0.09
    $0.04
    9,750January 1, 2002
    to
    March 31, 2002
    $0.34
    $0.07
    52,546April 1, 2002
    to
    June 30, 2002
    $0.48
    $0.20
    76,899July 1, 2002
    to
    September 30, 2002
    $0.35
    $0.17
    51,437October 1, 2002
    to
    December 31, 2002
    $0.36
    $0.20
    31,354January 1, 2003
    to
    March 31, 2003
    $0.00
    $0.00
    0April 1, 2003
    to
    June 30, 2003
    $0.40
    $0.21
    13,728July 1, 2003
    to
    September 30, 2003
    $0.40
    $0.20
    151,583October 1, 2003
    to
    December 31, 2003
    $0.47
    $0.25
    53,416January 1, 2004
    to
    March 31, 2004
    $0.46
    $0.25
    78,814April 1, 2004
    to
    June, 30, 2004
    $0.46
    $0.30
    79,530July 1, 2004
    to
    September 30, 2004
    $0.42
    $0.29
    21,137October 1, 2004
    to
    December 31, 2004
    $0.47
    $0.26
    90,704January 1, 2005
    to
    March 31, 2005
    $0.45
    $0.26
    37,522April 1, 2005
    to
    June 30, 2005
    $0.43
    $0.28
    25,394July 1, 2005
    to
    September 30, 2005
    $0.75
    $0.33
    259,892October 1, 2005
    to
    December 31, 2005
    $1.00
    $0.61
    257,685January 1, 2006
    to
    March 31, 2006
    $1.45
    $0.83
    258,527April 1, 2006
    to
    June 30, 2006
    $1.65
    $0.93
    321,319July 1, 2006
    to
    September 30, 2006
    $1.15
    $0.67
    51,767October 1, 2006
    to
    December 31, 2006
    $0.79
    $0.40
    128,733January 1, 2007
    to
    March 31, 2007
    $0.64
    $0.41
    39,533April 1, 2007
    to
    June 30, 2007
    $0.85
    $0.45
    55,800B. Plan of Distribution

Not ApplicableC. 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 ApplicableE. Dilution.

Not ApplicableF. 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.

(i)
  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.
  (ii)
  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.

(iv)
  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.
  (v)
  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.
  (vi)
  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 Audit Related Fees $0 Tax Fees $2,500 All Other Fees $680 $35,500 $23,500 $0 $0 $2,500 $1,500 $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"Toronto, Canada
    McCarney Greenwood LLPApril
    16, 2007
    Chartered AccountantsLicensed 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 Royal Standard Minerals Inc. (Expressed in United States
Dollars) (An Exploration Stage Company) Consolidated Balance Sheets As at January 31
    
    2007
    
    2006AssetsCurrent assetsCash and cash equivalents (Note
    2(b))
    $
    9,654,288
    $
    795,095Short-term investments, at cost
    which approximates market
    
    433,699
    
    436,378Marketable securities (Note 3)
    
    86,124
    
    86,124Sundry receivables and prepaids
    
    141,827
    
    1,261Due from related parties (Note 13)
    
    122,386
    
    126,34210,438,324
    
    1,445,200Reclamation bond (Note 4)
    
    181,767
    
    131,767Mineral properties (Note 5)
    
    7,788,107
    
    3,810,519Equipment, net (Note 6)
    
    2,056,392
    
    1,258,994$
    20,464,590
    $
    6,646,480LiabilitiesCurrent liabilitiesAccounts payable and accrued
    liabilities
    $
    202,157
    $
    221,733202,157
    
    221,733Asset retirement obligation (Note 7)
    
    181,767
    
    131,767383,924
    
    353,500Shareholders' EquityShare capital (Note 8)
    
    25,403,464
    
    11,832,670Shares to be issued (Note 9)
    
    -
    
    119,325Warrants (Note 9)
    
    3,546,935
    
    1,440,009Contributed surplus (Note 10)
    
    6,025,637
    
    2,364,866Deficit
    
    (14,895,370)
    
    (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 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 Project
  Opening 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 Project
  Opening 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
  The accompanying notes are integral part of these consolidated financial statements.
  Royal Standard Minerals
      Inc.(Expressed in United
      States Dollars)(An Exploration Stage
      Company)Consolidated
      Statements of Mineral PropertiesCumulativefrom date ofinception ofexplorationFor the years ended
      January 31
      2007
      2006
      2005
      phaseRailroad ProjectOpening balance
      $ 175,670
      $ 175,670
      $
      122,732
      $
      -Property acquisition
      costs
      40,143
      -
      
      52,938
      
      215,813Activity during the
      period
      40,143
      -
      
      52,938
      
      215,813Closing balance
      $ 215,813
      $ 175,670
      $
      175,670
      $ 215,813Fondaway ProjectOpening
      balance
      $ 127,652
      $ 96,028
      $
      43,999
      $
      -Property acquisition
      costs
      35,126
      31,624
      
      51,678
      162,427Analysis and assays
      -
      -
      
      351
      351Activity during the
      period
      35,126
      31,624
      
      52,029
      162,778Closing balance
      $ 162,778
      $ 127,652
      $
      96,028
      $ 162,778Como ProjectOpening balance
      $ 108,050
      $ 86,330
      $
      126,124
      $
      -Property acquisition
      costs
      -
      -
      
      -
      
      35,695Travel
      -
      -
      
      -
      
      2,806Geologist
      -
      -
      
      -
      
      5,098Consulting fees and
      payroll
      -
      -
      
      -
      
      41,532Rent
      -
      21,720
      
      -
      
      53,575Analysis and assays
      -
      -
      
      -
      
      9,138Written off
      -
      -
      
      (39,794)
      
      (39,794)Activity during the
      period
      -
      21,720
      
      (39,794)
      
      108,050Closing balance
      $ 108,050
      $ 108,050
      $
      86,330
      $ 108,050The accompanying
      notes are integral part of these consolidated financial statements.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
      Cumulative from date of
      inception of exploration 2006 2005 phaseManhattan Project Opening balance
      $ -
      $ 191,065 $ 172,031 $ -Property acquisition costs -Travel
      -General exploration -Consulting fees and payroll -Analysis and assays -Written off -
      --27,707 --28,253 1,458 19,034
      63,219 --47,743 --25,601 (192,523) -(192,523)Activity during the period -
      (191,065) 19,034 -Closing balance $ -
      $ -$ 191,065 $ -Other ProjectsOpening
      balance $ -
      $ 54,053 $ 13,396 $ -Cumulative expenditures from date
      of inception -Expenditures during the period -Written off -
      --3,410,396 120,891 40,657
      161,548 (174,944) -(3,571,944)Activity during the period
      -Closing balance $ -TOTAL $ 7,788,107
      (54,053) 40,657 -$ -$ 54,053 $ -$
      3,810,519 $ 2,664,127 $ 7,788,107The accompanying notes are integral part of these consolidated financial
  statements.
  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) Consulting fees and payroll Stock-option
  compensation (Note 10) General exploration Amortization
  618,962 266,505 193,287 2,499,742 443,693 295,707 213,504 1,513,777
  3,838,926 739,006 150,606 4,768,878 ---152,051 540,289 191,877 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 Repayment of interest Write-off of advances to related company
  Write-off of mineral properties Gain on disposal of marketable securities Write-down of
  marketable securities Loss on sale in mineral property Foreign exchange (loss) gain
  391,420 --410,034 ---(67,117) ---(75,506) -(367,467) (34,397) (3,798,864)
  ---47,988 ---(407,105) ---(474,187) (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.
  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 $
  Operating items not involving cash: Amortization Stock-option compensation Write-off of
  bad debt Write-off of mineral properties Loss on sale of mineral properties Gain on
  disposal of marketable securities Write-down of advances to related company Write-down of
  marketable securities
  Changes in non-cash working capital: Sundry receivables and prepaids Accounts payable
  and accrued liabilities (5,431,480) $ (1,611,057) $ (475,409) $ (14,154,630)
  540,289 191,877 14,921 770,794
  3,838,926 739,006 150,606 4,768,878 --20,950 20,950 -367,467 34,397 3,798,864
  ---474,187 ---(47,988)
  ---75,506 ---407,105
  (140,566) (484) (69,012) (210,621) (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 Sale (purchase) of short-term investments Additions to mineral
  properties Purchase of equipment Purchase of marketable securities Proceeds on disposal of
  marketable
  securities Proceeds on sale of mineral properties
  --54,050 (20,950)
  2,679 (436,378) -(433,699) (3,977,588) (1,513,859) (1,528,858) (12,726,297) (1,337,687)
  (1,413,136) -(2,827,187)
  ---(1,057,976)
  ---690,859 ---11,747
  Cash (used in) investing activities (5,312,596) (3,363,373) (1,474,808) (16,363,503)
  Change in cash and cash equivalents8,859,193 402,398 202,965 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.
  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.
  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
      
      2006
      
      2005Cash Money Market deposits
      $
      322,693 9,331,595
      $
      186,828 608,267
      $
      392,697 -Cash and cash
      equivalents $
      9,654,288
      $
      795,095
      $
      392,697(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.
  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.
  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-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.
  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
      
      2005Gold 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.
  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.
  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 3% NSR July 2006 -$200,000
  years; $10,000 in third year, $15,000 in the fourth year
  and $20,000 each in the fifth and sixth years.
  Manhattan -Nye County
  Commencing in fiscal 2002, $1,000 per month from 5% NSR August 2006 -$500,000
  August 2001 to August 2002: $2,000 per month from
  September 2002 to July 2006.
  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, 3% NSR July 2013 -$600,000
  $30,000 in years two and three and $35,000 each
  of the next seven years.
  Como -Lyon County
  Commencing in fiscal 2003, $25,000 in years one and 4% NSR May 2008 -$1,000,000
  two covering years three and four, $20,000 in year five,
  $25,000 in year six.
  Railroad -Elko County
  Commencing in fiscal 2003, $15,000 in the first year 5% NSR August 2008 -$2,000,000
  and increases by $5,000 each of the next six years.
  (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.
  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
      
      2005CostExploration equipment
      $ 2,808,573
      $ 1,475,201
      $
      62,065Office equipment
      21,253
      16,936
      
      16,9362,829,826
      1,492,137
      
      79,001Accumulated amortizationExploration equipment
      759,636
      220,669
      
      34,537Office equipment
      13,798
      12,474
      
      6,729773,434
      233,143
      
      41,266Net carrying valueExploration equipment
      2,048,937
      1,254,532
      
      27,528Office equipment
      7,455
      4,462
      
      10,207$ 2,056,392
      $ 1,258,994
      $
      37,735The 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.
  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
      
      AmountBalance at January 31, 2004
      34,141,338
      $
      7,221,581Shares issued for cash, less issue
      costs of $360,964
      7,395,000
      
      1,486,784Warrant valuation
      -
      
      (428,918)Shares issued to broker as
      compensation
      349,680
      
      91,117Shares issued on warrants exercised
      1,257,500
      
      318,352Fair value of warrants exercised
      -
      
      90,345Balance at January 31, 2005
      43,143,518
      
      8,779,261Shares issued for cash, less issue
      costs of $295,750
      12,131,000
      
      3,117,705Warrant valuation
      -
      
      (1,132,581)Shares issued to brokers as
      compensation
      127,000
      
      35,553Shares issued on warrants exercised
      2,221,060
      
      692,984Fair value of warrants exercised
      -
      
      255,491Shares issued on stock options
      exercised
      200,000
      
      64,824Fair value of stock options
      exercised
      -
      
      19,433Balance at January 31, 2006
      57,822,578
      
      11,832,670Shares issued after January 31, 2006
      100,000
      
      119,325Shares issued for cash, less issue
      costs of $879,172
      12,975,967
      
      12,407,590Warrant valuation
      -
      
      (2,847,058)Shares issued on stock options
      exercised
      1,250,000
      
      332,784Fair value of stock options
      exercised
      -
      
      178,155Shares issued on warrants exercised
      6,126,730
      
      2,639,865Fair value of warrants exercised
      -
      
      740,133Balance, January 31, 2007
      78,275,275
      $
      25,403,464On 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.
  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:(i)
    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.
    (ii)
    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:(i)
    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).
    (ii)
    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.
  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:(i)
    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).
    (ii)
    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).(iv)
    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).
    (v)
    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).
    (vi)
    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 ($3,198,582
  CDN).
  Royal Standard Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage
  Company)
  Notes to Consolidated Financial Statements Years ended January 31, 2007, 2006 and
  2005
  9. Warrants
  The following table reflects the fair value of share purchase warrants and broker's
  warrants currently outstanding:
  Expiry
      Price ($) CDN
      Number
      Value ($)March 31, 2007
      0.50
      4,084,287
      $ 584,714April 26, 2007
      0.50
      136,500
      20,896April 29, 2007
      0.50
      25,000
      3,436May 5, 2007
      0.50
      485,500
      90,831April 26, 2008
      1.75
      6,487,996
      2,847,05811,219,283
      $ 3,546,93510. 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
      $
      0.26Granted during year
      3,423,500
      2,380,000
      775,000
      
      1.41
      
      0.49
      
      0.36Exercised 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
      $
      0.28Royal 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:
  Exercise Price Options Black-Scholes Expiry Date CDN ($) Outstanding
  Value
  April 25, 2007
      0.26
      960,000
      $
      -May 13, 2007
      0.40
      555,000
      
      -December 12, 2008
      0.27
      220,000
      
      40,340May 4, 2009
      0.36
      675,000
      
      127,386April 13, 2010
      0.39
      800,000
      
      238,022May 16, 2010
      0.29
      1,080,000
      
      232,098January 20, 2011
      0.87
      130,000
      
      90,731May 2, 2011
      1.44
      3,123,000
      
      3,676,901October 13, 2011
      0.75
      283,500
      
      162,0057,826,500 $ 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%.
  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: Royal Standard
  Minerals Inc. (Expressed in United States Dollars) (An Exploration Stage Company)
  AmountBalance, January 31, 2004
      $
      1,477,780Options granted
      
      150,606Balance, January 31, 2005
      
      1,628,386Expired warrants
      
      16,907Options granted
      
      739,006Options exercised
      
      (19,433)Balance, January 31, 2006
      
      2,364,866Options granted
      
      3,861,050Options exercised
      
      (178,155)Options cancelled
      
      (22,124)Balance, January 31, 2007
      $
      6,025,637Notes 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
      
      12,596Deductible share issue costs
      (147,480)
      
      (81,049)
      
      (40,612)Stock option compensation expense
      1,386,620
      
      266,929
      
      54,399Amortization
      195,153
      
      69,306
      
      5,464Unrealised 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
      
      1,730Taxable benefits not recognized
      860,849
      
      281,716
      
      221,437Income tax (recovery) expense $ -$ -$
  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:
  2007
      
      2006
      
      2005Unclaimed non-capital losses
      
      $
      2,045,208
      $
      1,290,242
      $
      1,011,064Unclaimed capital losses
      
      
      7,991
      
      16,421
      
      15,184Excess of undepreciated capital
      cost allowanceover carrying value of capital
      assets
      
      276,422
      
      118,216
      
      20,712Excess of unclaimed
      resource pools overcarrying value of
      mineral properties
      
      551,169
      
      834,748
      
      453,543Unclaimed share issue
      costs
      
      418,785
      
      261,945
      
      116,3623,299,575
      2,521,572 1,616,865Valuation allowance
      (3,299,575)
      (2,521,572) (1,616,865)Future income tax assets
      $ -
      $ -$ -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
      $
      210,1002009
      
      285,1002010
      
      551,2002011
      
      601,7002015
      
      692,3002026
      
      943,0002027
      
      2,443,000$
      5,726,400Royal 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 2005
  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
  (i)
    This advance is unsecured, non-interest bearing and has no set terms of repayment.
    (ii)
    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.
  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
  (i)
    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.
    (ii)
    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%.
  (iv)
    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.
    (v)
    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.
    (vi)
    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.
  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 $ Bad debts Corporate development Insurance Office and
  general Professional fees Travel
  155,775 $ 110,236 $ 2,400 --38,610 85,380 27,762 24,243 37,758 31,108
  13,425 67,652 40,582 67,319 268,156 46,887 26,924 4,241 9,930 20,366
  $ 618,962 $ 266,505 $ 193,287
  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
  AssetsCurrentCash and cash equivalents
      $
      9,654,288
      $
      795,095Short-term investments
      
      433,699
      
      436,378Available for sale securities
      
      118,720
      
      226,537Sundry receivables and prepaids
      
      141,827
      
      1,261Due from related parties
      
      122,386
      
      126,342Reclamation bond Equipment, net
      Mineral properties -acquisition costs Mine development
      
      10,470,920 181,767 2,056,392
      468,107 739,048
      
      1,585,613 131,767 1,258,994 187,415
      445,529$
      13,916,234
      $
      3,609,318LiabilitiesCurrent Payables
      and accruals Asset retirement obligation
      $
      202,157 181,767
      $
      221,733 131,767383,924
      
      353,500Shareholders' EquityCapital stock
      24,822,439
      11,251,645Shares to be issued
      -
      119,325Warrants
      3,546,935
      1,440,009Additional paidin capital
      5,879,511
      2,218,739Cumulative foreign currency
      translation adjustments
      (84,632)
      296,398Cumulative adjustments to marketable
      securities
      (374,510)
      (266,692)Deficit accumulated during the
      exploration stage
      (20,257,433)
      (11,803,606)13,532,310 3,255,818
  $ 13,916,234 $ 3,609,318
  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): Royal Standard Minerals Inc.
  (Expressed in United States Dollars) (An Exploration Stage Company)
  Cumulativefrom inception
      
      2007
      2006
      2005ExpensesGeneral and
      administrative
      $ 2,499,742
      $
      618,962
      $
      266,505
      $
      193,287Consulting fees and
      payroll
      1,513,777
      
      443,693
      
      295,707
      
      213,504Stock option
      compensation
      4,768,878
      
      3,838,926
      
      739,006
      
      150,606General exploration
      11,084,177
      
      3,403,377
      
      880,915
      
      1,523,204Depreciation
      770,794
      
      540,289
      
      191,877
      
      14,92120,637,368
      
      8,845,247
      
      2,374,010
      
      2,095,522Loss before the
      following
      (20,637,368)
      
      (8,845,247)
      
      (2,374,010)
      
      (2,095,522)Write-down of advances
      torelated company
      (75,506)
      
      -
      -
      -Gain on disposal of
      marketablesecurities
      47,988
      
      -
      -
      -Interest income
      410,034
      
      391,420
      -
      -Repayment of interest
      (67,117)
      
      -
      -
      -Gain on sale of 60%
      interest inmineral property
      78,124
      
      -
      -
      78,124Net loss before
      income taxes
      (20,243,845)
      
      (8,453,827)
      (2,374,010)
      (2,017,398)Income taxes
      -
      
      -
      -
      -Net loss
      (20,243,845)
      
      (8,453,827)
      (2,374,010)
      (2,017,398)Comprehensive income
      items:Foreign currency
      translationgains (losses)
      (84,632)
      
      (381,030)
      249,505
      131,306Recovery of (write-down)
      ofmarketable securities
      (374,510)
      
      (107,817)
      140,412
      -Comprehensive loss
      $ (20,702,987)
      $
      (8,942,674) $
      (1,984,093) $
      (1,886,092)Net loss per common
      shareBasic and diluted
      $
      (0.11) $
      (0.04) $
      (0.05)Comprehensive loss
      per common shareBasic and diluted
      $
      (0.12) $
      (0.04) $
      (0.05)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:
  Amount Under Shares US GAAP
  Issued to former shareholders of
      SRI Held by other shareholders
      8,154,614 488,041
      $ 1,318,566 467,467Outstanding at June 26, 1996
      8,642,655
      1,786,033Shares issued for mineral
      properties
      1,400,000
      667,204Shares issued for services
      200,000
      126,465Shares issued on warrants exercised
      580,577
      361,823Shares issued for cash
      500,000
      329,936Outstanding at January 31, 1997
      11,323,232
      3,271,461Shares issued for mineral
      properties
      200,000
      134,250Flow-through shares issued for cash
      300,000
      216,763Shares issued for cash, less issue
      costs of $481,480
      7,228,066
      2,129,061Shares issued for services
      70,000
      58,125Outstanding at January 31, 1998
      19,121,298
      5,809,660Share issue costs
      -
      (5,919)Outstanding at January 31, 1999
      19,121,298
      5,803,741Shares issued for cash, less issue
      costs of $4,092
      951,494
      61,578Outstanding at January 31, 2000
      20,072,792
      5,865,319Shares issued for cash, less issue
      costs of $54,246
      3,043,667
      377,614Outstanding at January 31, 2001
      23,116,459
      6,242,933Shares issued on warrants
      exercised
      951,494
      123,052Cancellation of shares held in
      escrow
      (4,836,615)
      (1,279,287)Outstanding at January 31, 2002
      19,231,338
      5,086,698Shares issued for cash, less
      issue costs of $55,258
      7,000,000
      600,427Shares issued on stock options
      exercised
      910,000
      88,290Issued in exchange for mineral
      properties
      1,000,000
      171,125Balance at January 31, 2003
      28,141,338
      5,946,540Royal 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):
  Amount Under Shares US GAAP
  Balance at January 31, 2003
      Shares iIssued for cash, less issue costs of $266,372 Warrant valuation
      28,141,338 6,000,000 -
      5,946,540 845,292 (151,276)Balance at January 31, 2004
      34,141,338
      6,640,556Shares issued for cash, less
      issue costs of $360,964
      7,395,000
      1,486,784Warrant valuation
      -
      (428,918)Shares issued to broker as
      compensation
      349,680
      91,117Shares issued on warrants exercised
      1,257,500
      318,352Fair value of warrants exercised
      -
      90,345Balance at January 31, 2005
      43,143,518
      8,198,236Shares issued for cash, less
      issue costs of $295,750
      12,131,000
      3,117,705Warrant valuation
      -
      (1,132,581)Shares issued to broker as
      compensation
      127,000
      35,553Shares issued on warrants exercised
      2,221,060
      692,984Fair value of warrants exercised
      -
      255,491Shares issued on stock options
      exercised
      200,000
      64,824Fair value of stock options
      exercised
      -
      19,433Balance at January 31, 2006
      57,822,578
      11,251,645Shares issued after January 31, 2006
      100,000
      119,325Shares issued for cash, less issue
      costs of $879,172
      12,975,967
      12,407,590Warrant valuation
      -
      (2,847,058)Shares issued on warrants exercised
      6,126,730
      2,639,865Fair value of warrants exercised
      -
      740,133Shares issued on stock options
      exercised
      1,250,000
      332,784Fair value of stock options
      exercised
      -
      178,155Balance at January 31, 2007 78,275,275 $ 24,822,439
  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
      
      Deficitforeign
      Cumulative
      accumulatedAdditional
      currency
      adjustments
      during thepaid in
      translation
      to marketable
      developmentWarrants
      
      capital
      adjustments
      securities
      stageBalance, January 31, 2004
      $
      151,276
      $
      1,331,654
      $ (84,413)
      $ (407,106)
      $ (7,412,198)Warrant exercise, fair value
      
      (55,200)
      
      -
      -
      -
      -Issue of warrants, fair value
      
      579,065
      
      -
      -
      -
      -Warrant call
      
      (90,345)
      
      -
      -
      -
      -Stock options
      
      -
      
      150,606
      -
      -
      -Net (loss) income
      
      -
      
      -
      -
      -
      (2,017,398)Other comprehensiveincome items
      
      -
      
      -
      131,306
      -
      -Balance, January 31, 2005
      584,796
      1,482,260
      46,893
      (407,106)
      (9,429,596)Warrant exercise, fair value
      (255,941)
      -
      -
      -
      -Issue of warrants, fair value
      1,132,581
      -
      -
      -
      -Warrant expiry, fair value
      (21,427)
      -
      -
      -
      -Stock options
      -
      739,006
      -
      -
      -Stock option exercise,fair value
      -
      (19,433)
      -
      -
      -Stock options expired,fair value
      -
      16,907
      -
      -
      -Net (loss) income
      -
      -
      -
      -
      (2,374,010)Other comprehensiveincome items
      -
      -
      249,505
      140,413
      -Balance, January 31, 2006
      
      1,440,009
      
      2,218,740
      
      296,398
      
      (266,693)
      (11,803,606)Warrant exercise, fair value
      
      (740,132)
      
      -
      
      -
      
      -
      -Issue of warrants, fair value
      
      2,847,058
      
      -
      
      -
      
      -
      -Stock options
      
      -
      
      3,838,926
      
      -
      
      -
      -Stock option exercise,fair value
      
      -
      
      (178,155)
      
      -
      
      -
      -Net (loss) income
      
      -
      
      -
      
      -
      
      -
      (8,453,827)Other comprehensiveincome items
      
      -
      
      -
      
      (381,030)
      
      (107,817)
      -Balance, January 31, 2007
      $
      3,546,935
      $
      5,879,511
      $
      (84,632)
      $
      (374,510)
      $ (20,257,433)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: Royal Standard Minerals Inc. (Expressed in United States
  Dollars) (An Exploration Stage Company)
  CumulativefromInception
      
      2007
      
      2006
      
      2005Operating
      activitiesNet loss
      $ (20,243,845)
      $
      (8,453,827)
      $
      (2,374,010)
      $
      (2,017,398)Depreciation
      770,794
      
      540,289
      
      191,877
      
      14,921Stock option compensation
      4,768,878
      
      3,838,926
      
      739,006
      
      150,606Expenses settled by the issueof common shares
      184,610
      
      -
      
      -
      
      -Exploration expenditures settledby the issue of common shares
      2,199,799
      
      -
      
      -
      
      -Gain on disposal of marketablesecurities
      (47,988)
      
      -
      
      -
      
      -Write-down of advances to relatedcompany
      554,846
      
      -
      
      -
      
      -Increase in sundry receivablesand prepaids
      (141,827)
      
      (140,566)
      
      (484)
      
      (62,455)(Increase) decrease in advancesto related company
      (677,231)
      
      3,956
      
      (64,105)
      
      -Increase (decrease) in payablesand accruals
      202,157
      
      (19,576)
      
      117,646
      
      (2,091)(12,429,807)
      
      (4,230,798)
      
      (1,390,070)
      
      (1,916,417)Financing activitiesIssue of common shares, net ofissue costs
      27,003,885
      
      15,380,240
      
      4,025,421
      
      1,991,200Asset retirement obligation
      181,767
      
      50,000
      
      -
      
      131,76727,185,652
      
      15,430,240
      
      4,025,421
      
      2,122,967Notes 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 Inception2007 2006 2005
  Investing activitiesIncrease in short-term investments
      (433,699)
      2,679
      (436,378)
      -Increase in funds held in trust
      -
      -
      -
      75,000Purchase of equipment
      (2,827,187)
      (1,337,687)
      (1,413,136)
      -Acquisition of mineral rights
      (468,107)
      (280,692)
      (187,415)
      -Mine development costs
      (739,048)
      (293,519)
      (445,529)
      -Purchase of marketable securities
      (1,057,976)
      -
      -
      (78,124)Reclamation bond
      (181,767)
      (50,000)
      -
      (131,767)Proceeds on disposal of marketablesecurities
      690,859
      -
      -
      -Foreign currency
      translation adjustments
      (5,016,925) (84,632)
      
      (1,959,219) (381,030)
      
      (2,482,458) 249,505
      
      (134,891) 131,306Cash and cash
      equivalentsNet increase (decrease) Beginning of period
      9,654,288 -
      
      8,859,193 795,095
      
      402,398 392,697
      
      202,965 189,732End of period
      $
      9,654,288
      $
      9,654,288
      $
      795,095
      $
      392,697Royal 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.
 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 6/26/19962007
    2006
    2005Statement of OperationsRevenue
    0
    0
    0
    $0Interest Income
    391,420
    0
    0
    410,034Administrative Expenses
    5,441,870
    1,493,095
    572,318
    9,705,242Net loss for the year
    (5,431,480)
    (1,611,057)
    (475,409)
    14,154,630Deficit, beginning of year
    (9,463,890)
    (7,852,833)
    (7,377,424)
    (740,740)Deficit, end of year
    (14,895,370)
    (9,463,890)
    (7,852,833)
    (14,895,370)Earnings (loss) per common share
    basic and diluted
    (0.07)
    (0.03)
    (0.01)Balance Sheet
    2007
    2006Current Assets
    10,438,324
    1,445,200Interest in Mineral Properties
    and Related Deferred Exploration Costs
    7,788,107
    3,810,519Equipment, Net
    2,056,392
    1,258,994Current Liabilities
    (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, 2005Revenue
    $0.00
    $0.00
    $0.00
    $0.00
    $0.00
    $0.00
    $0.00
    $0.00Expenses 1
    $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)Net Income (Loss)
    329,648
    ($459,454)
    ($4,438,205)
    ($863,469)
    ($601,892)
    ($368,642)
    ($298,257)
    ($342,266)Net Income (Loss) per Common share
    basic and diluted
    (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. AdditionsOpening Balance
    (See details
    Ending BalanceJanuary 31, 2006
    below)
    January 31, 2007Gold Wedge Project
    $2,636,862
    $3,516,345
    $6,153,207Pinon Project
    762,285
    385,974
    1,148,259Railroad Project
    175,670
    40,143
    215,813Fondaway Project
    127,652
    35,126
    162,778Como Project
    108,050
    0
    108,050 $3,810,519 $3,977,588 $7,788,107 Detail of Mineral
    PropertiesCumulativefrom date ofinception ofexplorationFor the years ended January 31
    2007
    2006
    2005
    phase
 Gold Wedge Project Opening balance 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 $2,636,862 $1,460,443 $264,119 $0 171,376 184,892 77,737 70,862 293,519 237,867 53,185 78,790 5,023 38,776 0 33,740 1,377,706 243,297 335,767 79,701 30,063 22,240 111,122 506,39940,770 212,553 207,662 741,133146,441 278,416 8,188 133,35329,513 72,636 619,528 2,324,926 0 415,968 18,222 94,722 1,171,969 186,254 14,878 1,373,101 transportation 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 Project Opening balance Property Acquisition costs Travel Drilling General exploration Professional fees Office
and general Geologist Consulting fees Reclamation costs Analysis and assays Supplies,
Equipment and $762,285 $600,538 $511,043 $0 34,047 40,258 0 801 8,333 72,780 00 00 15,296 2,698 0 25,008 151,133 19,537 167,785 0 9,380 382 42,156 425,5701,201 11,8502,259 130,600 0 7,765 0 66,273 7,983 43,7073,127 32,6536,192 194,902 0 167,785 26,577 66,871 0 283 0 283 transportation 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 Cumulativefrom date ofinception ofexplorationFor the years ended January 31
    2007
    2006
    2005
    phaseRailroad ProjectOpening balance
    $175,670
    $175,670
    $122,732
    $0Property Acquisition costs
    40,143
    0
    52,938
    215,813Activity during the period
    40,143
    0
    52,938
    215,813Closing balance
    $215,813
    $175,670
    $175,670
    $215,813Fondaway ProjectOpening balance
    $127,652
    $96,028
    $43,999
    $0Property Acquisition costs
    35,126
    31,624
    51,678
    162,427Analysis and assays
    0
    0
    351
    351Activity during the period
    35,126
    31,624
    52,029
    162,778Closing balance
    $162,778
    $127,652
    $96,028
    $162,778 Como ProjectOpening balance
    $108,050
    $86,330
    $126,124
    $0Property Acquisition costs
    0
    0
    0
    35,695Travel
    0
    0
    0
    2,806Geologist
    0
    0
    0
    5,098Consulting
    0
    0
    0
    41,532Rent
    0
    21,720
    0
    53,575Analysis and assays
    0
    0
    0
    9,138Written off
    0
    0
    (39,794)
    (39,794) Activity during the period 0 21,720 (39,794) 108,050 Closing balance
$108,050 $108,050 $86,330 $108,050 Cumulative from date of inception of exploration For the years ended
January 31 2007 2006 2005 phase Manhattan ProjectOpening balance
    $0
    $191,065
    $172,031
    $0Property Acquisition costs
    0
    0
    0
    $27,707Travel
    0
    0
    0
    28,253General exploration
    0
    1,458
    19,034
    63,219Consulting
    0
    0
    0
    47,743Analysis and assays
    0
    0
    0
    25,601Written off
    0
    (192,523)
    0
    (192,523) Activity during the period 0 (191,065) 19,034 Closing balance $0 $0 $191,065 $0 Other ProjectsOpening balance
    $0
    $54,053
    $13,396
    $0Cumulative expendituresfrom date ofinception
    0
    0
    0
    3,410,396Expenditures during theperiod
    0
    120,891
    40,657
    161,548Written off
    0
    (174,944)
    0
    (3,571,944) Activity during the period
    0
    (54,053)
    40,657
    0Closing balance
    $0
    $0
    $54,053
    $0TOTAL
    $7,788,107
    $3,810,519
    $2,664,127
    $7,788,107
 Transactions with Related Parties 2007
    2006
    2005Due from (to) related parties The
    President & Director of the Company(1)Sharpe Resources Corporation(2)
    $17,.402 104,984
    $18,049 108,293
    $11,095 51,142$122,386
    $126,342
    $62,237 (1)
  This advance is unsecured, non-interest bearing and has no set terms of repayment.
  (2)
  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.com and 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: July 27, 2007 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: I have reviewed this annual report on Form 20-F of Royal Standard Minerals Inc.;
  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;
  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;
  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:
    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:
      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;
      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
      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 5. 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): a.
  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
  b.
  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\ Roland M. Larsen Roland M. Larsen President & CEO


CERTIFICATIONS I, Samuel Gulko, certify that: I have reviewed this annual report on Form 20-F of Royal Standard Minerals Inc.;
  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;
  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;
  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:
    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:
      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;
      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
      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; andThe 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):
    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
      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: 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
  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 July 27, 2007 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: 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
  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