---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

(Mark One)

[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2010

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________to ________

COMMISSION FILE NUMBER000-50033

IRELAND INC.(Exact name of
registrant as specified in its charter)

|NEVADA                                                               | 91-2147049                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|2441 West Horizon Ridge Parkway, Suite 100                           |                                     
|Henderson, Nevada                                                    | 89052                               
|(Address of principal executive offices)                             | (Zip Code)                          

(702) 932-0353(Registrant's telephone number,
including area code)

Not Applicable(Former name, former address and
former fiscal year, if changed since last report)

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.
[ x ]Yes[ ] No

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (s. 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
[
] Yes [ ] No

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

|Large accelerated filer [ ]                                          | Accelerated filer [ ]         
|-------------------------------------------------------------------- | ------------------------------
|Non-accelerated filer [ ] (Do not check if a smaller
      reporting | Smaller reporting company[ x ]
|company)                                                             |                               

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
[ ] Yes [ x ]No

Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date: As of
May 12, 2010, the Registrant had 121,934,442 shares of common stockoutstanding.

---

PART I - FINANCIAL INFORMATION

|ITEM 1. | FINANCIAL STATEMENTS.
|------- | ---------------------

The accompanying unaudited financial statements have been
prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of
Regulation S-X, and, therefore, do not include all information and footnotes
necessary for a complete presentation of financial position, results of
operations, cash flows, and stockholders' equity in conformity with generally
accepted accounting principles. In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations and
financial position have been included and all such adjustments are of a normal
recurring nature. Operating results for the three months ended March 31, 2010
are not necessarily indicative of the results that can be expected for the year
ending December 31, 2010.

As used in this Quarterly Report, the terms we, us, our,
Ireland, and the Company mean Ireland Inc. and its subsidiaries, unless
otherwise indicated. All dollar amounts in this Quarterly Report are expressed
in U.S. dollars, unless otherwise indicated.

2

---

|IRELAND INC.                     
|---------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)
|CONSOLIDATED BALANCE SHEETS      
|(UNAUDITED)                      

|                                                                                                                                                                                    |   | March 31, 2010 |   |   | December 31, 2009 |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | -------------- | - | - | ----------------- | -
|                                                                                                                                                                                    |   |                |   |   |                   |  
|ASSETS                                                                                                                                                                              |  
|                                                                                                                                                                                    |   |                |   |   |                   |  
|Current assets                                                                                                                                                                      |   |                |   |   |                   |  
|Cash                                                                                                                                                                                | $ | 6,925,844      |   | $ | 3,651,015         |  
|Advances Receivable                                                                                                                                                                 |   | 36,667         |   |   | -                 |  
|Prepaid expenses                                                                                                                                                                    |   | 185,345        |   |   | 90,284            |  
|                                                                                                                                                                                    |   |                |   |   |                   |  
|Total current assets                                                                                                                                                                |   | 7,147,856      |   |   | 3,741,299         |  
|                                                                                                                                                                                    |   |                |   |   |                   |  
|Property and equipment, net                                                                                                                                                         |   | 4,157,015      |   |   | 3,763,118         |  
|Mineral properties                                                                                                                                                                  |   | 31,948,053     |   |   | 31,948,053        |  
|Reclamation bonds                                                                                                                                                                   |   | 908,368        |   |   | 908,368           |  
|Deposits                                                                                                                                                                            |   | 22,200         |   |   | 22,200            |  
|                                                                                                                                                                                    |   |                |   |   |                   |  
|Total
      non-current assets                                                                                                                                                      |   | 37,035,636     |   |   | 36,641,739        |  
|                                                                                                                                                                                    |   |                |   |   |                   |  
|Total assets                                                                                                                                                                        | $ | 44,183,492     |   | $ | 40,383,038        |  
|                                                                                                                                                                                    |   |                |   |   |                   |  
|LIABILITIES AND STOCKHOLDERS'
      EQUITY                                                                                                                                          |  
|                                                                                                                                                                                    |   |                |   |   |                   |  
|Current liabilities                                                                                                                                                                 |   |                |   |   |                   |  
|Accounts payable                                                                                                                                                                    | $ | 127,869        |   | $ | 133,541           |  
|Accounts payable - related
      party                                                                                                                                              |   | 45,448         |   |   | 101,213           |  
|Accrued payroll and related taxes                                                                                                                                                   |   | 29,138         |   |   | 14,799            |  
|Due to related parties                                                                                                                                                              |   | 23,290         |   |   | 23,290            |  
|                                                                                                                                                                                    |   |                |   |   |                   |  
|Total current
      liabilities                                                                                                                                                     |   | 225,745        |   |   | 272,843           |  
|                                                                                                                                                                                    |   |                |   |   |                   |  
|Long-term liabilities                                                                                                                                                               |   |                |   |   |                   |  
|Accrued reclamation and remediation costs                                                                                                                                           |   | 275,338        |   |   | 275,338           |  
|Deferred tax liability                                                                                                                                                              |   | 7,038,129      |   |   | 7,368,534         |  
|                                                                                                                                                                                    |   |                |   |   |                   |  
|Total long-term
      liabilities                                                                                                                                                   |   | 7,313,467      |   |   | 7,643,872         |  
|                                                                                                                                                                                    |   |                |   |   |                   |  
|Total
      liabilities                                                                                                                                                             |   | 7,539,212      |   |   | 7,916,715         |  
|                                                                                                                                                                                    |   |                |   |   |                   |  
|Commitments and contingencies - Note 11                                                                                                                                             |   | -              |   |   | -                 |  
|                                                                                                                                                                                    |   |                |   |   |                   |  
|Stockholders' equity                                                                                                                                                                |   |                |   |   |                   |  
|Common stock, $0.001 par value; 400,000,000
      shares 
            authorized, 121,934,442 and
      110,899,442 shares, 
            respectively,
      issued and outstanding |   | 121,934        |   |   | 110,899           |  
|Additional paid-in capital                                                                                                                                                          |   | 47,336,851     |   |   | 42,099,452        |  
|Common stock subscribed                                                                                                                                                             |   | -              |   |   | 162,000           |  
|Accumulated deficit during
      exploration stage                                                                                                                                  |   | (10,814,505    | ) |   | (9,906,028        | )
|                                                                                                                                                                                    |   |                |   |   |                   |  
|Total
      stockholders' equity                                                                                                                                                    |   | 36,644,280     |   |   | 32,466,323        |  
|                                                                                                                                                                                    |   |                |   |   |                   |  
|Total
      liabilities and stockholders' equity                                                                                                                                    | $ | 44,183,492     |   | $ | 40,383,038        |  

See Accompanying Notes to these Consolidated Financial
  Statements 
  F-1

---

|IRELAND INC.                         
|-------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)    
|CONSOLIDATED STATEMENTS OF OPERATIONS
|(UNAUDITED)                          

|                                                                                |   |                            |   |   |                |   |   | For the period from |  
|------------------------------------------------------------------------------- | - | -------------------------- | - | - | -------------- | - | - | ------------------- | -
|                                                                                |   |                            |   |   |                |   |   | February 20, 2001   |  
|                                                                                |   |                            |   |   |                |   |   | (Date of Inception) |  
|                                                                                |   | For the Three Months Ended |   |   | through        |  
|                                                                                |   | March 31, 2010             |   |   | March 31, 2009 |   |   | March 31, 2010      |  
|                                                                                |   |                            |   |   |                |   |   |                     |  
|                                                                                |   |                            |   |   |                |   |   |                     |  
|Revenue                                                                         | $ | -                          |   | $ | -              |   | $ | -                   |  
|                                                                                |   |                            |   |   |                |   |   |                     |  
|Operating expenses                                                              |   |                            |   |   |                |   |   |                     |  
|Mineral exploration and evaluation expenses                                     |   | 311,889                    |   |   | 587,706        |   |   | 7,046,131           |  
|Mineral exploration and
      evaluation 
            expenses - related party  |   | 124,149                    |   |   | 105,000        |   |   | 2,171,294           |  
|General and administrative                                                      |   | 758,700                    |   |   | 230,221        |   |   | 4,271,316           |  
|General and administrative -
      related party                                |   | 21,066                     |   |   | -              |   |   | 21,066              |  
|Depreciation                                                                    |   | 14,179                     |   |   | 10,834         |   |   | 80,169              |  
|Mineral and property holding
      costs                                        |   | 15,000                     |   |   | 15,000         |   |   | 425,500             |  
|Mineral and property holding costs - 
              reimbursed to related party |   | -                          |   |   | -              |   |   | 295,000             |  
|Write-off of mineral rights                                                     |   | -                          |   |   | -              |   |   | 14,000              |  
|                                                                                |   |                            |   |   |                |   |   |                     |  
|Total operating
      expenses                                                  |   | 1,244,983                  |   |   | 948,761        |   |   | 14,324,476          |  
|                                                                                |   |                            |   |   |                |   |   |                     |  
|Loss from operations                                                            |   | (1,244,983                 | ) |   | (948,761       | ) |   | (14,324,476         | )
|                                                                                |   |                            |   |   |                |   |   |                     |  
|Other income (expense)                                                          |   |                            |   |   |                |   |   |                     |  
|Interest income                                                                 |   | 9,595                      |   |   | 7,743          |   |   | 292,655             |  
|Interest expense                                                                |   | (3,494                     | ) |   | (126           | ) |   | (5,749              | )
|                                                                                |   |                            |   |   |                |   |   |                     |  
|Total other
      income (expense)                                              |   | 6,101                      |   |   | 7,617          |   |   | 286,906             |  
|                                                                                |   |                            |   |   |                |   |   |                     |  
|Loss before income taxes                                                        |   | (1,238,882                 | ) |   | (941,144       | ) |   | (14,037,570         | )
|                                                                                |   |                            |   |   |                |   |   |                     |  
|Income tax benefit                                                              |   | 330,405                    |   |   | 327,477        |   |   | 3,223,065           |  
|                                                                                |   |                            |   |   |                |   |   |                     |  
|Net loss                                                                        | $ | (908,477                   | ) | $ | (613,667       | ) | $ | (10,814,505         | )
|                                                                                |   |                            |   |   |                |   |   |                     |  
|                                                                                |   |                            |   |   |                |   |   |                     |  
|Loss per common share - basic and diluted                                       | $ | (0.01                      | ) | $ | (0.01          | ) |   |                     |  
|                                                                                |   |                            |   |   |                |   |   |                     |  
|Weighted average common shares outstanding - 
         basic and diluted        |   | 120,217,886                |   |   | 97,010,087     |   |   |                     |  

See Accompanying Notes to these Consolidated Financial
  Statements
  F-2

---

|IRELAND INC.                                  
|----------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)             
|CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
|(UNAUDITED)                                   

|                                                                                                                                                 |  |              |  |   |            |  |   |                 |  |   |             |   |   | Accumulated    |   |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------ |  | - | ---------- |  | - | --------------- |  | - | ----------- | - | - | -------------- | - | - | ---------- | -
|                                                                                                                                                 |  |              |  |   |            |  |   |                 |  |   | Common      |   |   | Deficit During |   |   | Total      |  
|                                                                                                                                                 |  | Common Stock |  |   | Additional |  |   | Stock           |  |   | Exploration |   |   | Stockholders'  |  
|                                                                                                                                                 |  | Shares       |  |   | Amount     |  |   | Paid-in Capital |  |   | Subscribed  |   |   | Stage          |   |   | Equity     |  
|                                                                                                                                                 |  |              |  |   |            |  |   |                 |  |   |             |   |   |                |   |   |            |  
|Balance, December 31, 2009                                                                                                                       |  | 110,899,442  |  | $ | 110,899    |  | $ | 42,099,452      |  | $ | 162,000     |   | $ | (9,906,028     | ) | $ | 32,466,323 |  
|                                                                                                                                                 |  |              |  |   |            |  |   |                 |  |   |             |   |   |                |   |   |            |  
|Amortization of stock options and warrants 
         issued to a directors, officers and 
        
      consultants over vesting period         |  | -            |  |   | -          |  |   | 274,912         |  |   | -           |   |   | -              |   |   | 274,912    |  
|                                                                                                                                                 |  |              |  |   |            |  |   |                 |  |   |             |   |   |                |   |   |            |  
|Issuance of stock options for 
         67,197 shares of common stock 
         to an
      officer                                              |  | -            |  |   | -          |  |   | 19,515          |  |   | -           |   |   | -              |   |   | 19,515     |  
|                                                                                                                                                 |  |              |  |   |            |  |   |                 |  |   |             |   |   |                |   |   |            |  
|Issuance of common stock for cash 
         Reg. S - Private Placement, 
         $0.45 per
      share, net of $6,399 
         financing costs |  | 200,000      |  |   | 200        |  |   | 83,401          |  |   | -           |   |   | -              |   |   | 83,601     |  
|                                                                                                                                                 |  |              |  |   |            |  |   |                 |  |   |             |   |   |                |   |   |            |  
|Issuance of common stock for cash 
         Reg. D - Private Placement, 
         $0.45 per
      share, net of $5,344 
         financing costs |  | 10,835,000   |  |   | 10,835     |  |   | 4,859,571       |  |   | (162,000    | ) |   | -              |   |   | 4,708,406  |  
|                                                                                                                                                 |  |              |  |   |            |  |   |                 |  |   |             |   |   |                |   |   |            |  
|                                                                                                                                                 |  |              |  |   |            |  |   |                 |  |   |             |   |   |                |   |   |            |  
|Net loss, March 31, 2010                                                                                                                         |  | -            |  |   | -          |  |   | -               |  |   | -           |   |   | (908,477       | ) |   | (908,477   | )
|                                                                                                                                                 |  |              |  |   |            |  |   |                 |  |   |             |   |   |                |   |   |            |  
|Balance, March 31, 2010                                                                                                                          |  | 121,934,442  |  | $ | 121,934    |  | $ | 47,336,851      |  | $ | -           |   | $ | (10,814,505    | ) | $ | 36,644,280 |  

See Accompanying Notes to these Consolidated Financial
  Statements 
  F-3

---

|IRELAND INC.                         
|-------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)    
|CONSOLIDATED STATEMENTS OF CASH FLOWS
|(UNAUDITED)                          

|                                                                                                               |   |                            |   |   |                |   |   | For the period from |  
|-------------------------------------------------------------------------------------------------------------- | - | -------------------------- | - | - | -------------- | - | - | ------------------- | -
|                                                                                                               |   |                            |   |   |                |   |   | February 20, 2001   |  
|                                                                                                               |   |                            |   |   |                |   |   | (Date of inception) |  
|                                                                                                               |   | For the Three Months Ended |   |   | through        |  
|                                                                                                               |   | March 31, 2010             |   |   | March 31, 2009 |   |   | March 31, 2010      |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                           |   |                            |   |   |                |   |   |                     |  
|Net loss                                                                                                       | $ | (908,477                   | ) | $ | (613,667       | ) | $ | (10,814,505         | )
|Adjustments to reconcile loss from
      operating 
           to net cash used in operating
      activities: |   |                            |   |   |                |   |   |                     |  
|Depreciation                                                                                                   |   | 14,179                     |   |   | 10,834         |   |   | 80,169              |  
|Write-off
      of mineral rights                                                                              |   | -                          |   |   | -              |   |   | 14,000              |  
|Consulting accrual                                                                                             |   | -                          |   |   | -              |   |   | 15,000              |  
|Stock
      based expenses                                                                                     |   | 294,427                    |   |   | 2,568          |   |   | 1,938,825           |  
|Changes in operating assets and liabilities:                                                                   |   |                            |   |   |                |   |   |                     |  
|Advances
      receivable                                                                                      |   | (36,667                    | ) |   | -              |   |   | (9,273              | )
|Prepaid expenses                                                                                               |   | (95,061                    | ) |   | (12,959        | ) |   | (335,420            | )
|Other
      assets                                                                                             |   | -                          |   |   | -              |   |   | (2,200              | )
|Reclamation deposit                                                                                            |   | -                          |   |   | -              |   |   | (925,042            | )
|Mineral
      property acquisition costs                                                                       |   | -                          |   |   | -              |   |   | (1,022,663          | )
|Accounts payable and
      accrued liabilities                                                                 |   | (47,098                    | ) |   | 89,327         |   |   | 98,853              |  
|Deferred
      income taxes                                                                                    |   | (330,405                   | ) |   | (327,477       | ) |   | (3,223,065          | )
|Accrued reclamation and
      remediation costs                                                                |   | -                          |   |   | -              |   |   | 275,338             |  
|                                                                                                               |   |                            |   |   |                |   |   |                     |  
|Net cash used in operating activities                                                                          |   | (1,109,102                 | ) |   | (851,374       | ) |   | (13,909,983         | )
|                                                                                                               |   |                            |   |   |                |   |   |                     |  
|CASH FLOW FROM INVESTING ACTIVITIES                                                                            |   |                            |   |   |                |   |   |                     |  
|Purchase of property and equipment                                                                             |   | (408,076                   | ) |   | (212,374       | ) |   | (3,088,136          | )
|                                                                                                               |   |                            |   |   |                |   |   |                     |  
|Net cash used in investing activities                                                                          |   | (408,076                   | ) |   | (212,374       | ) |   | (3,088,136          | )
|                                                                                                               |   |                            |   |   |                |   |   |                     |  
|CASH FLOW FROM FINANCING ACTIVITIES                                                                            |   |                            |   |   |                |   |   |                     |  
|Proceeds from stock issuance                                                                                   |   | 4,965,750                  |   |   | -              |   |   | 24,455,710          |  
|Proceeds from option issuance                                                                                  |   | -                          |   |   | -              |   |   | 20,000              |  
|Stock issuance costs                                                                                           |   | (11,743                    | ) |   | -              |   |   | (560,037            | )
|Common stock subscribed                                                                                        |   | (162,000                   | ) |   | -              |   |   | -                   |  
|Proceeds from borrowings from related party                                                                    |   | -                          |   |   | -              |   |   | 8,290               |  
|                                                                                                               |   |                            |   |   |                |   |   |                     |  
|Net cash provided by financing activities                                                                      |   | 4,792,007                  |   |   | -              |   |   | 23,923,963          |  
|                                                                                                               |   |                            |   |   |                |   |   |                     |  
|NET CHANGE IN CASH                                                                                             |   | 3,274,829                  |   |   | (1,063,748     | ) |   | 6,925,844           |  
|                                                                                                               |   |                            |   |   |                |   |   |                     |  
|CASH AT BEGINNING OF PERIOD                                                                                    |   | 3,651,015                  |   |   | 2,565,823      |   |   | -                   |  
|                                                                                                               |   |                            |   |   |                |   |   |                     |  
|CASH AT END OF PERIOD                                                                                          | $ | 6,925,844                  |   | $ | 1,502,075      |   | $ | 6,925,844           |  
|                                                                                                               |   |                            |   |   |                |   |   |                     |  
|SUPPLEMENTAL INFORMATION                                                                                       |   |                            |   |   |                |   |   |                     |  
|                                                                                                               |   |                            |   |   |                |   |   |                     |  
|Interest paid                                                                                                  | $ | 3,494                      |   | $ | 126            |   | $ | 5,749               |  
|                                                                                                               |   |                            |   |   |                |   |   |                     |  
|Income taxes paid                                                                                              | $ | -                          |   | $ | -              |   | $ | -                   |  
|                                                                                                               |   |                            |   |   |                |   |   |                     |  
|Non-cash investing and financing activities:                                                                   |   |                            |   |   |                |   |   |                     |  
|                                                                                                               |   |                            |   |   |                |   |   |                     |  
|Assets acquired for common stock and warrants issued 
           for mineral properties                        | $ | -                          |   | $ | -              |   | $ | 21,584,351          |  
|                                                                                                               |   |                            |   |   |                |   |   |                     |  
|Net deferred tax liability assumed                                                                             | $ | -                          |   | $ | -              |   | $ | 10,261,194          |  

See Accompanying Notes to these Consolidated Financial
  Statements 
  F-4

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT
      POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Basis of presentation The accompanying
      unaudited consolidated financial statements have been prepared in accordance
      with Securities and Exchange Commission requirements for interim financial
      statements. Therefore, they do not include all of the information and
      footnotes required by accounting principles generally accepted in the
      United States for complete financial statements. The financial statements
      should be read in conjunction with the Form 10-K for the year ended December
      31, 2009 of Ireland, Inc. (the Company).                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The interim financial statements present the consolidated
      balance sheets, statements of operations, stockholders equity, and
      cash flows of the Company. The financial statements have been prepared
      in accordance with accounting principles generally accepted in the United
      States.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | These consolidated financial statements have been prepared
      by the Company without audit, and include all adjustments (which consist
      solely of normal recurring adjustments) which, in the opinion of management,
      are necessary for a fair presentation of financial position and results
      of operations. Certain information and footnote disclosures normally included
      in financial statements prepared in accordance with generally accepted
      accounting principles have been condensed or omitted, although the Company
      believes that the disclosures are adequate to make the information presented
      not misleading. It is suggested that these consolidated financial statements
      be read in conjunction with the Companys audited consolidated financial
      statements and notes thereto for the year ended December 31, 2009.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Description of business The Company is
      considered an exploration stage company since its formation and the Company
      has not yet realized any revenues from its planned operations. The Company
      is primarily focused on the acquisition and exploration of mining properties.
      Upon identification of commercially minable reserves, the Company expects
      to actively prepare the site for its extraction and enter the development
      stage.                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | History The Company was incorporated on
      February 20, 2001 under the laws of the State of Nevada under the name
      Merritt Ventures Corp. On December 19, 2005, the Company changed its name
      to Ireland Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Going concernThe accompanying financial
      statements have been prepared assuming the Company will continue as a
      going concern.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company incurred cumulative net losses since date
      of inception of $10,814,505 from operations as of March 31, 2010, and
      has no revenue. The future of the Company is dependent upon its ability
      to obtain financing and upon future profitable operations from the development
      of its mineral properties. Management has plans to seek additional capital
      through private placements and public offerings of its common stock. The
      financial statements do not include any adjustments relating to the recoverability
      and classification of recorded assets, or the amounts of and classification
      of liabilities that might be necessary if the Company is unable to continue
      as a going concern.                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Principles of consolidation The consolidated
      financial statements include the accounts of the Company and its wholly-owned
      subsidiaries, Columbus Minerals Inc. (CMI) (including its wholly- owned
      single-member LLC subsidiary Columbus Salt Marsh LLC (CSM)) and Rand Metals
      LLC (Rand). Significant intercompany accounts and transactions have been
      eliminated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

F-5

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT
      POLICIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Exploration costs- Mineral exploration costs
      are expensed as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Mineral rights- The Company capitalizes acquisition
      and option costs of mineral property rights. The amount capitalized represents
      fair value at the time the mineral rights were acquired.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company capitalizes acquisition and option costs
      of mineral rights as tangible assets. Upon commencement of commercial
      production, the mineral rights will be amortized using the unit-of- production
      method over the life of the mineral rights. If the Company does not continue
      with exploration after the completion of the feasibility study, the mineral
      rights will be expensed at that time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Mineral property acquisition costs Costs
      of acquiring mining properties are capitalized upon acquisition. Mine
      development costs incurred to develop new ore deposits, to expand the
      capacity of mines, or to develop mine areas substantially in advance of
      current production are also capitalized once proven and probable reserves
      exist and the property is a commercially mineable property. Costs incurred
      to maintain current production or to maintain assets on a standby basis
      are charged to operations. Costs of abandoned projects are charged to
      operations upon abandonment. The Company evaluates the carrying value
      of capitalized mining costs and related property and equipment costs,
      to determine if these costs are in excess of their recoverable amount
      whenever events or changes in circumstances indicate that their carrying
      amounts may not be recoverable. The periodic evaluation of carrying value
      of capitalized costs and any related property and equipment costs are
      based upon expected future cash flows and/or estimated salvage value in
      accordance with Accounting Standards Codification (ASC) 360-10-35-15, Impairment or Disposal of Long-Lived Assets.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Property and equipment Property and equipment
      are stated at cost less accumulated depreciation. Depreciation is provided
      principally on the straight-line method over the estimated useful lives
      of the assets, which range from 3 to 39 years. The cost of repairs and
      maintenance is charged to expense as incurred. Expenditures for property
      betterments and renewals are capitalized. Upon sale or other disposition
      of a depreciable asset, cost and accumulated depreciation are removed
      from the accounts and any gain or loss is reflected in other income (expense).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company periodically evaluates whether events and
      circumstances have occurred that may warrant revision of the estimated
      useful life of property and equipment or whether the remaining balance
      of property and equipment should be evaluated for possible impairment.
      If events and circumstances warrant evaluation, the Company uses an estimate
      of the related undiscounted cash flows over the remaining life of the
      property and equipment in measuring their recoverability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Impairment of long-lived assets The Company
      reviews and evaluates long-lived assets for impairment when events or
      changes in circumstances indicate that the related carrying amounts may
      not be recoverable. The assets are subject to impairment consideration
      under ASC 360-10-35-17, Measurement of an Impairment Loss, if events
      or circumstances indicate that their carrying amount might not be recoverable.
      As of March 31, 2010 exploration progress is on target with the Companys
      exploration and evaluation plan and no events or circumstances have happened
      to indicate that the related carrying values of the properties may not
      be recoverable. When the Company determines that an impairment analysis
      should be done, the analysis will be performed using the rules of ASC
      930- 360-35, Asset Impairment, and 360-10-15-3 through 15-5, Impairment
        or Disposal of Long-Lived Assets.                                                                                                                                                                                                                                                                                                           

F-6

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT
      POLICIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Various factors could impact the Companys ability
      to achieve forecasted production schedules. Additionally, commodity prices,
      capital expenditure requirements and reclamation costs could differ from
      the assumptions the Company may use in cash flow models used to assess
      impairment. The ability to achieve the estimated quantities of recoverable
      minerals from exploration stage mineral interests involves further risks
      in addition to those factors applicable to mineral interests where proven
      and probable reserves have been identified, due to the lower level of
      confidence that the identified mineralized material can ultimately be
      mined economically.                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Material changes to any of these factors or assumptions
      discussed above could result in future impairment charges to operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Reclamation and remediation costs (asset retirement
      obligation)- The Company accrued costs associated with environmental
      remediation obligations in accordance with ASC 410-20, Asset Retirement
        Obligations. In accordance with ASC 410-20-25, Asset Retirement
          Obligations - Recognition, the Company records a liability for the
      present value of the estimated environmental remediation costs in the
      period in which the liability is incurred and becomes determinable, with
      an offsetting increase in the carrying amount of the associated asset.
      The liability will be accreted and the asset will be depreciated over
      the life of the related assets. Adjustments for changes resulting from
      the passage of time and changes to either the timing or amount of the
      original present value estimate underlying the obligation will be made.
      As reclamation work is performed or liabilities are otherwise settled,
      the recorded amount of the liability will be reduced.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company accrues costs associated with environmental
      remediation obligation when it is probable that such costs will be incurred
      and they are reasonably estimable. Estimates for reclamation and other
      closure costs are prepared in accordance with ASC 450, Contingencies,
      or ASC 410-30-25, Asset Retirement and Environmental Obligations -
        Recognition. Costs of future expenditures for environmental remediation
      are not discounted to their present value unless subject to a contractually
      obligated fixed payment schedule. Such costs are based on managements
      current estimate of amounts to be incurred when the remediation work is
      performed, within current laws and regulations.                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Future reclamation and environmental-related expenditures
      are difficult to estimate, in many circumstances, due to the early stage
      nature of the exploration project, and uncertainties associated with defining
      the nature and extent of environmental disturbance and the application
      of laws and regulations by regulatory authorities and changes in reclamation
      or remediation technology. The Company periodically reviews accrued liabilities
      for such reclamation and remediation costs as evidence becomes available
      indicating that the liabilities have potentially changed. Changes in estimates
      are reflected in the statement of operations in the period an estimate
      is revised.                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Accruals for reclamation and environmental matters totaled
      $275,338 at March 31, 2010 and December 31, 2009. The Company is in the
      exploration stage and is unable to determine the estimated timing of these
      expenditures relating to these accruals at this time. It is reasonably
      possible the ultimate cost of reclamation and remediation could change
      in the future and that changes to these estimates could have a material
      effect on future operating results as new information becomes known. For
      additional information, see Note 12.                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

F-7

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY
      OF SIGNIFICANT POLICIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Revenue recognition- Revenues are
      recognized during the period in which the revenues are earned. Costs and
      expenses are recognized during the period in which they are incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Use of estimates- The preparation
      of financial statements in conformity with generally accepted accounting
      principles requires management to make estimates and assumptions that
      affect the reported amounts of assets and liabilities, and disclosure
      of contingent assets and liabilities at the date of the financial statements,
      and the reported amounts of revenues and expenses for the reporting period.
      Actual results could differ from these estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Earnings (loss) per share- The Company
      follows ASC 260, Earnings Per Share,and ASC 480, Distinguishing
        Liabilities from Equity,which establish standards for the computation,
      presentation and disclosure requirements for basic and diluted earnings
      per share for entities with publicly-held common shares and potential
      common stock issuances. Basic earnings (loss) per share are computed by
      dividing net income by the weighted average number of common shares outstanding.
      In computing diluted earnings per share, the weighted average number of
      shares outstanding is adjusted to reflect the effect of potentially dilutive
      securities, such as stock options and warrants. Common stock equivalent
      shares are excluded from the computation if their effect is antidilutive.
      Weighted average of common stock equivalents, which include stock options
      and warrants to purchase common stock, on March 31, 2010 and 2009 that
      were not included in the computation of diluted EPS, because the effect
      would be antidilutive, were 35,325,684 and 19,335,428, respectively.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Expenses of offering- The Company
      accounts for specific incremental costs directly to a proposed or actual
      offering of securities as a direct charge against the gross proceeds of
      the offering.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Income taxes The Company accounts
      for its income taxes in accordance with ASC 740, Income Taxes,
      which requires recognition of deferred tax assets and liabilities for
      future tax consequences attributable to differences between the financial
      statement carrying amounts of existing assets and liabilities and their
      respective tax bases and tax credit carry-forwards. Deferred tax assets
      and liabilities are measured using enacted tax rates expected to apply
      to taxable income in the years in which those temporary differences are
      expected to be recovered or settled. The effect on deferred tax assets
      and liabilities of a change in tax rates is recognized in income in the
      period that includes the enactment date.                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | For acquired properties that do not constitute
      a business as defined in ASC 805-10-55-4, Definition ofa Business, deferred income tax liability is recorded on GAAP basis
      over income tax basis using statutory federal and state rates. The resulting
      estimated future federal and state income tax liability associated with
      the temporary difference between the acquisition consideration and the
      tax basis is computed in accordance with ASC 740-10-25-51, Acquired
        Temporary Differences in Certain Purchase Transactions that are Not Accounted
        for as Business Combinations, and is reflected as an increase to the
      total purchase price which is then applied to the underlying acquired
      assets in the absence of there being a goodwill component associated with
      the acquisition transactions.                                                                                                                                                                                                                                                                                                     

F-8

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY
      OF SIGNIFICANT POLICIES (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Stock-based compensation- The Company
      accounts for share based payments in accordance with ASC 718, Compensation
         Stock Compensation, which requires all share-based payments
      to employees, including grants of employee stock options, to be recognized
      in the financial statements based on the grant date fair value of the
      award. In accordance with ASC 718-10-30-9, Measurement Objective 
        Fair Value at Grant Date, the Company estimates the fair value of
      the award using a valuation technique. For this purpose, the Company uses
      the Binomial Lattice option pricing model. The Company believes that this
      model provides the best estimate of fair value due to its ability to incorporate
      inputs that change over time, such as volatility and interest rates, and
      to allow for actual exercise behavior of option holders. The compensation
      cost is recognized over the requisite service period which is generally
      equal to the vesting period.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | New accounting pronouncements
      From time to time, new accounting pronouncements are issued by the FASB
      that are adopted by the Company as of the specified effective date. Unless
      otherwise discussed, management believes that the impact of recently issued
      standards did not or will not have a material impact on the Companys
      consolidated financial statements upon adoption.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Effective July 1, 2009, the FASB (Financial
      Accounting Standards Board) Accounting Standards Codification (ASC) (Topic
      105, Generally Accepted Accounting Principles), became the single
      source for authoritative nongovernmental U.S. generally accepted accounting
      principles. Rules and interpretive releases of the SEC under authority
      of federal securities laws are also sources of authoritative U.S. GAAP
      for SEC registrants. The ASC does not change U.S. GAAP, but is intended
      to simplify user access to all authoritative U.S. GAAP by providing all
      the authoritative literature related to a particular topic in one place.
      Effective September 15, 2009, all public filings of the Company will reference
      the ASC as the sole source of authoritative literature.                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In January 2010, the FASB issued ASU 2010-06, Improving Disclosures About Fair Value Measurements, which requires
      reporting entities to make new disclosures about recurring or nonrecurring
      fair-value measurements including significant transfers into and out of
      Level 1 and Level 2 fair-value measurements and information on purchases,
      sales, issuances, and settlements on a gross basis in the reconciliation
      of Level 3 fair value measurements. ASU 2010-6 is effective for annual
      reporting periods beginning after December 15, 2009, except for Level
      3 reconciliation disclosures which are effective for annual periods beginning
      after December 15, 2010. The Company does not have any assets or liabilities
      classified as Level 3. As the update only pertains to disclosures, its
      adoption is not expected to have an impact on the Companys financial
      position, results of operations, or cash flows.                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In February 2010, the FASB issued ASU 2010-09, Subsequent Events (Topic 855), Amendment to Certain Recognition and
      Disclosure Requirements, to remove the requirement for SEC filers
      to disclose the date through which an entity has evaluated subsequent
      events. This change removes potential conflicts with current SEC guidance
      and clarifies the intended scope of the reissuance disclosure provisions.
      The update was effective upon its date of issuance, February 24, 2010,
      and the Company has adopted the amendments accordingly. As the update
      only pertained to disclosures, it had no impact on the Companys
      financial position, results of operations, or cash flows upon adoption.                                                                                                                                                                                                                                                                                               

F-9

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|2. | PREPAID EXPENSES                                                                          
|-- | ------------------------------------------------------------------------------------------
|   |                                                                                           
|   | Prepaid expenses at March 31, 2010 and December 31,
      2009 consisted of the following:

| |                    |   |                |  |   | December 31, | 
| | ------------------ | - | -------------- |  | - | ------------ | 
| |                    |   | March 31, 2010 |  |   | 2009         | 
| |                    |   |                |  |   |              | 
| | Claims maintenance | $ | 19,523         |  | $ | 34,166       | 
| | Insurance policies |   | 143,857        |  |   | 49,973       | 
| | Rent               |   | 5,975          |  |   | --           | 
| | Retainers          |   | 12,000         |  |   | 2,000        | 
| | Other              |   | 3,990          |  |   | 4,145        | 
| |                    |   |                |  |   |              | 
| |                    | $ | 185,345        |  | $ | 90,284       | 

|3. | PROPERTY AND EQUIPMENT                                                                             
|-- | ---------------------------------------------------------------------------------------------------
|   |                                                                                                    
|   | Property and equipment consisted of the following as
      of March 31, 2010 and December 31, 2009:

| |                               |   |                |  |   | December 31, | 
| | ----------------------------- | - | -------------- |  | - | ------------ | 
| |                               |   | March 31, 2010 |  |   | 2009         | 
| |                               |   |                |  |   |              | 
| | Furniture and fixtures        | $ | 8,921          |  | $ | 8,921        | 
| | Computers and equipment       |   | 41,165         |  |   | 39,137       | 
| | Land                          |   | 30,000         |  |   | 30,000       | 
| | Site improvements             |   | 99,949         |  |   | 99,631       | 
| | Site equipment                |   | 231,035        |  |   | 231,035      | 
| | Vehicles                      |   | 23,595         |  |   | 23,595       | 
| | Construction in progress:     |   |                |  |   |              | 
| | Building                      |   | 500,000        |  |   | 500,000      | 
| | Site improvements             |   | 2,613,187      |  |   | 2,325,198    | 
| | Site equipment                |   | 689,332        |  |   | 571,591      | 
| |                               |   |                |  |   |              | 
| |                               |   | 4,237,184      |  |   | 3,829,108    | 
| | Less accumulated depreciation |   | 80,169         |  |   | 65,990       | 
| |                               |   |                |  |   |              | 
| |                               | $ | 4,157,015      |  | $ | 3,763,118    | 

Depreciation expense was $14,179 and
  $10,834 for the three months ended March 31, 2010 and 2009, respectively.

F-10

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|4. | COLUMBUS PROJECT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | As of December 31, 2007, the Company had earned a 15%
      interest in the Columbus Project by satisfying its option agreement requirements
      and had the right to merge with the corporation holding the remaining
      85% interest in the Columbus Project in Esmeralda County, Nevada.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Pursuant to the option assignment agreement dated March
      30, 2007, as amended August 8, 2007, the Company granted a 5% net smelter
      return royalty to Nanominerals Corp (NMC), one of the principal stockholders
      of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On February 20, 2008, the Company, through its wholly-owned
      subsidiary CMI, acquired a 100% interest in the Columbus Project, including
      an option for additional mining claims, by way of merger with the owner
      of the Columbus Project, Columbus Brine Inc. (CBI). Under the terms of
      the Merger Agreement, the Company issued an aggregate of 10,440,087 shares
      of its common stock, and 5,220,059 share purchase warrants to the former
      shareholders of CBI. Each share purchase warrant issued by the Company
      entitles the holder to purchase one additional share of the Companys
      common stock at a price of $2.39 per share for a period of 5 years. This
      acquisition supersedes the option agreement.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company believes that the acquisition of the Columbus
      Project was beneficial because it provides for 100% ownership of the properties
      and fosters greater opportunity to finance and further develop the project.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | This merger was treated as a statutory merger for tax
      purposes whereby, CMI was the surviving merger entity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

F-11

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|4. | COLUMBUS PROJECT(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company applied EITF 98-03 (which has
      been superseded by ASC 805-10-25-1) with regard to the acquisition of
      the Columbus Project. The Company determined that the acquisition of the
      Columbus Project did not constitute an acquisition of a business, as that
      term is defined in ASC 805- 10-55-4, and the Company recorded the acquisition
      as a purchase of assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | As required by ASC 930-805-30, Mining 
      Business Combinations  Initial Recognition, and ASC 740-10-25-49-55, Income Taxes  Overall  Recognition  Acquired Temporary
        Differences in Certain Purchase Transactions that are Not Accounted for
        as Business Combinations, the purchase price of $32 million was allocated
      to the assets acquired and liabilities assumed, based on their respective
      fair values at the date of acquisition. The purchase price allocated to
      the real properties was based on fair market values determined using an
      independent real estate appraisal firm (Arden Salvage Company) and the
      fair value of the remaining assets acquired and liabilities assumed were
      based on managements best estimates taking into account all available
      information at the time.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Pursuant to the terms of the acquisition of
      CBI, the Company issued an aggregate of 10,440,087 shares of common stock
      and 5,220,059 share purchase warrants to the former shareholders of CBI.
      Each share purchase warrant issued by the Company entitles the holder
      to purchase one additional share of the Companys common stock at
      a price of $2.39 per share for a period of 5 years. Each warrant provides
      the holder with a cashless right of exercise. If the holder chooses to
      utilize this cashless exercise right, the total number of shares that
      the holder will be entitled to exercise will be determined by the following
      formula: [( A B) C] ÷ Awhere:                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | A = the average closing price of the Companys
      common stock during the five trading days prior to exercise.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | B = the exercise price of $2.39.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | C = the maximum number of shares of the Companys
      common stock issuable upon exercise of the warrants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | If the holder chooses to utilize the cashless
      exercise right, the holder must do so with respect to all of the unexercised
      warrants held by him.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company will have the right to accelerate
      the expiration date of the warrants at any time after August 19, 2010
      if the average closing price of the Companys common stock over any
      20 consecutive trading days is equal to or greater than 150% of the exercise
      price. If the Company exercises this acceleration right, the expiration
      date for the warrants will be accelerated to 30 days after the Company
      sends out notice that it is exercising the acceleration right.                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The Company estimated the fair value of warrants
      issued in connection with the acquisition of CBI using the Binomial Lattice
      pricing model.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

F-12

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|4. | COLUMBUS PROJECT(continued)                                                                     
|-- | ------------------------------------------------------------------------------------------------
|   |                                                                                                 
|   | The following table reflects the recorded purchase consideration
      for the Columbus Project:

|Purchase price:                           |   |            | 
|----------------------------------------- | - | ---------- | 
|Common stock issued                       | $ | 20,000,000 | 
|Fair value of warrants issued             |   | 1,359,351  | 
|Acquisition costs                         |   | 600,000    | 
|                                          |   |            | 
|Total purchase price                      |   | 21,959,351 | 
|                                          |   |            | 
|Net deferred income tax liability assumed |   | 10,261,194 | 
|                                          |   |            | 
|                                          | $ | 32,220,545 | 

The following table reflects the components
  of the Columbus Project:

|Allocation of acquisition cost:                                                           |   |            |  
|----------------------------------------------------------------------------------------- | - | ---------- | -
|Mineral properties (including deferred tax
      liability 
      assumed of $10,261,194) | $ | 31,948,053 |  
|Property, plant and equipment                                                             |   | 202,430    |  
|Deposits                                                                                  |   | 44,720     |  
|Cash                                                                                      |   | 6,570      |  
|Prepaid expenses                                                                          |   | 24,925     |  
|Accounts payable                                                                          |   | (6,153     | )
|                                                                                          |   |            |  
|Total                                                                                     | $ | 32,220,545 |  

F-13

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|5. | RED MOUNTAIN PROJECT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Red Mountain Project located in San Bernardino,
      California is subject to an underlying option assignment agreement, as
      amended August 8, 2007. Under the terms of this agreement, to earn a 60%
      interest, the Company is required to pay $5,000 per month until December
      31, 2011 and spend an aggregate of $1,200,000 in additional qualifying
      expenditures by December 31, 2011.                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company may at any time during the life of the Red
      Mountain Project, earn a 100% interest, by paying $100,000, issuing shares
      of common stock with an aggregate value of $1,400,000 and issuing share
      purchase warrants to purchase up to an additional 25% of the number of
      shares of common stock to be issued. If the project achieves commercial
      production, the Company will be required to pay an additional $100,000,
      issue shares of common stock with an aggregate value of $2,400,000 and
      issue share purchase warrants to purchase up to an additional 25% of the
      number of shares of common stock to be issued.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Pursuant to the option assignment agreement, as amended
      August 8, 2007, the Company granted a 5% net smelter return royalty to
      NMC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

F-14

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|6. | PRIVATE PLACEMENTS                                                                                      
|-- | --------------------------------------------------------------------------------------------------------
|   |                                                                                                         
|   | For the three months ended March 31, 2010, the Company
      completed the following private placements:

| | a) | On January 14, 2010, the Company completed a private
      placement offering for gross proceeds of $90,000 to non-US persons in
      reliance of Regulation S promulgated under the Securities Act of 1933.
      A total of 200,000 units were issued at a price of $0.45. Each unit sold
      consisted of one share of the Companys common stock and one-half
      of one share purchase warrants. Each whole share purchase warrant entitles
      the holder to purchase one additional share of the Companys common
      stock at a price of $0.75 per share for a period expiring June 30, 2013.
      The Company incurred commissions payable to agents in connection with
      the private placement offering in the amount of $6,300 in cash and issued
      warrants to purchase up to 6,000 shares of common stock. The warrants
      have an expiration date of June 30, 2013 and an exercise price of $0.75
      per share. Financing costs related to this offering were $99.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | b) | On January 14, 2010, the Company completed a private
      placement offering for gross proceeds of $4,875,750 to US accredited investors
      pursuant to Rule 506 of Regulation D promulgated under the Securities
      Act of 1933. A total of 10,835,000 units were issued at a price of $0.45.
      Each unit sold consisted of one share of the Companys common stock
      and one-half of one share purchase warrants. Each whole share purchase
      warrant entitles the holder to purchase one additional share of the Companys
      common stock at a price of $0.75 per share for a period expiring June
      30, 2013. Financing costs related to this offering were $5,344.                                                                                                                                                                                                                                                                                                      

Warrants associated with the 2010 equity
  issuances do not constitute a registration payment arrangement.

A summary of investor warrant activity
  for the three months ended March 31, 2010 is as follows:

| |                                                   |  | Number of  |  |   |                   | 
| | ------------------------------------------------- |  | ---------- |  | - | ----------------- | 
| |                                                   |  | Shares     |  |   | Exercise Price    | 
| |                                                   |  |            |  |   |                   | 
| | Outstanding and exercisable, December 31, 2009    |  | 22,598,357 |  | $ | 0.75 - 2.39       | 
| | Granted                                           |  | 5,523,500  |  |   | 0.75              | 
| | Exercised                                         |  | --         |  |   | --                | 
| | Forfeited/expired                                 |  | --         |  |   | --                | 
| |                                                   |  |            |  |   |                   | 
| | Outstanding and exercisable,
      March 31, 2010 |  | 28,121,857 |  | $ | 0.75
      - 2.39 | 

The table above does not include warrants
  issued to employees, non-employee directors and consultants as they are included
  under Share Based Payments below.

F-15

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|7. | SHARE BASED COMPENSATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | On March 27, 2007, the Board of Directors adopted the
      2007 Stock Incentive Plan (the Plan). Under the terms of the
      Plan, options to purchase up to 6,000,000 shares of the common stock of
      the Company, subject to an increase each quarter equal to 15% of the increase
      in the total number of outstanding shares during the previous quarter,
      may be granted to officers, directors, employees and eligible consultants.                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company utilizes the Binomial Lattice pricing model
      to estimate the fair value of options and warrants granted in exchange
      for services. The Company believes that this model provides the best estimate
      of fair value due to its ability to incorporate inputs that change over
      time, such as volatility and interest rates, and to allow for actual exercise
      behavior of option holders. The Company used the following assumptions
      to estimate the fair value of the options granted as follows:

|                        | 2010             
|----------------------- | -----------------
|                        |                  
|Dividend yield          | --               
|Expected volatility     | 118.68%          
|Risk-free interest rate | 1.88  3.33 %    
|Expected life (years)   | 2.75  4.25 years

The expected life represents the weighted-average
  period the awards are expected to remain outstanding and is a derived output
  of the Binomial Lattice model. The expected life is impacted by all of the underlying
  assumptions and calibration of the Companys model. The Binomial Lattice
  model estimates the probability of exercise as a function of these variables
  based on the entire history of exercises and cancellations on all past grants
  made by the Company.

For grants awarded during 2010 the expected
  volatility is based on the historical volatility levels of the Companys
  common stock. The risk-free interest rate is based on the implied yield available
  on U.S. Treasury zero-coupon issues over equivalent lives of the options.

F-16

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|7. | SHARE BASED COMPENSATION(continued)                                                                                                                                                                                                                                                                      
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                          
|   | Expenses for the three months ended March
      31, 2010 and 2009, related to the granting and vesting of share based
      payments were $294,427 and $2,568, respectively. Such expenses are included
      in general and administrative expense and mineral exploration and evaluation
      expense.
|   |                                                                                                                                                                                                                                                                                                          
|   | During the three months ended March 31, 2010,
      the Company granted stock options and warrants as follows:                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                          
|   | a)                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                          
|   | b)                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                          
|   | c)                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                          
|   | d)                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                          
|   | The following table summarizes the Companys
      stock option and warrant activity for the three months ended March 31,
      2010:                                                                                                                                                                    

| |                               |  |           |  |   | Weighted       | 
| | ----------------------------- |  | --------- |  | - | -------------- | 
| |                               |  | Number of |  |   | Average        | 
| |                               |  | Shares    |  |   | Exercise Price | 
| |                               |  |           |  |   |                | 
| | Balance, December 31, 2009    |  | 4,724,719 |  | $ | 0.23           | 
| |                               |  |           |  |   |                | 
| | Options granted and assumed   |  | 4,067,197 |  |   | 0.75           | 
| | Options expired               |  | --        |  |   | --             | 
| | Options forfeitures           |  | --        |  |   | --             | 
| | Options exercised             |  | --        |  |   | --             | 
| |                               |  |           |  |   |                | 
| | Balance, March 31,
      2010 |  | 8,791,916 |  | $ | 0.47           | 

F-17

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|7. | SHARE BASED COMPENSATION(continued)                                                                                              
|-- | ---------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                  
|   | The following table summarizes information about options
      and warrants granted during the three months ended March 31, 2010:

Exercise PriceEquals, ExceedsNumber of Options
      or
      Weightedand Warrants
      is Less than Mkt.
      Average
      Range of
      WeightedGranted
      Price of Stock
      Exercise
      Exercise
      Average FairDuring 2010
      on Grant Date
      Price
      Price
      Value767,197
      Equals
      $ 0.77
      $0.75 - $0.82
      $ 0.353,300,000
      Exceeds
      $ 0.75
      $ 0.75
      $ 0.42--
      Less Than
      $ --
      $ --
      $ --


The following table summarizes the changes
  of the Companys stock options and warrants issued for stock based compensation
  subject to vesting for the three months ended March 31, 2010:

| |                                |  |           |   |   | Weighted Average | 
| | ------------------------------ |  | --------- | - | - | ---------------- | 
| |                                |  | Number of |   |   | Grant Date       | 
| |                                |  | Shares    |   |   | Fair
      Value | 
| |                                |  |           |   |   |                  | 
| | Unvested, December 31, 2009    |  | 540,000   |   | $ | 0.46             | 
| | Granted                        |  | 4,000,000 |   |   | 0.41             | 
| | Vested                         |  | (210,000  | ) |   | 0.35             | 
| | Forfeited                      |  | --        |   |   | --               | 
| |                                |  |           |   |   |                  | 
| | Unvested, March 31,
      2010 |  | 4,330,000 |   | $ | 0.42             | 

As of March 31, 2010, there was $1,826,496
  of total unrecognized compensation cost related to unvested stock options and
  warrants. This cost is expected to be fully recognized as follows:

|2010  | $ | 982,956   | 
|----- | - | --------- | 
|2011  |   | 843,540   | 
|2012  |   | --        | 
|      |   |           | 
|Total | $ | 1,826,496 | 

The above tables do not include warrants
  issued in private placements which are discussed above in Note 6.

F-18

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|8. | WARRANTS AND OPTIONS                                                                                                                                                                                                                       
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                            
|   | The following table summarizes all of the Companys
      stock option and warrant activity for the three months ended March 31,
      2010, including private placement warrants and share based payment stock
      options and warrants:

| |                             |  |            |  |   | Weighted       | 
| | --------------------------- |  | ---------- |  | - | -------------- | 
| |                             |  | Number of  |  |   | Average        | 
| |                             |  | Shares     |  |   | Exercise Price | 
| |                             |  |            |  |   |                | 
| | Balance, December 31, 2009  |  | 27,323,076 |  | $ | 0.97           | 
| | Options granted and assumed |  | 9,590,697  |  |   | 0.75           | 
| | Options expired             |  | --         |  |   | --             | 
| | Options forfeitures         |  | --         |  |   | --             | 
| | Options exercised           |  | --         |  |   | --             | 
| |                             |  |            |  |   |                | 
| | Balance, March 31, 2010     |  | 36,913,773 |  | $ | 0.92           | 

F-19

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|9. | INCOME TAXES                                                                                                                    
|-- | --------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                 
|   | The Company is a Nevada corporation and is subject to
      federal income taxes. Nevada does not impose a corporate income tax.
|   |                                                                                                                                 
|   | The income tax benefit consisted of the following at
      March 31, 2010 and March 31, 2009:                                   

| |                                                |   | March 31, 2010 |   |   | March 31, 2009 |  
| | ---------------------------------------------- | - | -------------- | - | - | -------------- | -
| |                                                |   |                |   |   |                |  
| | Income tax benefit based on statutory tax rate | $ | (433,609       | ) | $ | (329,400       | )
| | Non-deductible and other                       |   | 172            |   |   | 384            |  
| | Change in valuation allowance                  |   | 103,032        |   |   | 1,539          |  
| |                                                |   |                |   |   |                |  
| | Income tax benefit                             | $ | (330,405       | ) | $ | (327,477       | )

Significant components of the Companys
  net deferred income tax assets and liabilities at March 31, 2010 and December
  31, 2009 were as follows:

| |                                   |   | March 31,  |   |   | December 31, |  
| | --------------------------------- | - | ---------- | - | - | ------------ | -
| |                                   |   | 2010       |   |   | 2009         |  
| | Deferred income tax assets:       |   |            |   |   |              |  
| |                                   |   |            |   |   |              |  
| | Net operating loss carryforward   | $ | 4,029,062  |   | $ | 3,698,657    |  
| | Option compensation               |   | 678,588    |   |   | 575,539      |  
| | Reclamation and remediation costs |   | 96,368     |   |   | 96,368       |  
| |                                   |   |            |   |   |              |  
| | Gross deferred income tax asset   |   | 4,804,018  |   |   | 4,370,564    |  
| | Valuation allowance               |   | (772,622   | ) |   | (669,590     | )
| |                                   |   |            |   |   |              |  
| |                                   |   | 4,031,396  |   |   | 3,700,974    |  
| | Deferred income tax liabilities:  |   |            |   |   |              |  
| |                                   |   |            |   |   |              |  
| | Property, plant & equipment       |   | 2,334      |   |   | 2,317        |  
| | Acquisition related liabilities   |   | 11,067,191 |   |   | 11,067,191   |  
| |                                   |   |            |   |   |              |  
| | Net deferred income tax liability | $ | 7,038,129  |   | $ | 7,368,534    |  

A valuation allowance for deferred tax
  related to option compensation, accrued reclamation and remediation costs was
  established for net deferred tax assets not allocated to offset acquisition
  related deferred tax liabilities due to the uncertainty of realizing these deferred
  tax assets based on conditions existing at March 31, 2010 and December 31, 2009.

Deferred income tax liability was recorded
  on GAAP basis over income tax basis using statutory federal rate with the corresponding
  increase in the purchase price allocation to the assets acquired.

F-20

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|9. | INCOME TAXES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The resulting estimated future federal income tax liability
      associated with the temporary difference between the acquisition consideration
      and the tax basis as computed in accordance with ASC 740 is reflected
      as an increase to the total purchase price which has been applied to the
      underlying mineral and Columbus project assets in the absence of there
      being a goodwill component associated with the acquisition transactions.                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company had cumulative net operating losses of approximately
      $11,511,605 and $10,567,591 as of March 31, 2010 and December 31, 2009,
      respectively for federal income tax purposes. Cumulative net operating
      losses from December 31, 2006 and previous years are effectively nil due
      to the annual limitation imposed by the Internal Revenue Code of 1986
      as a result of the ownership percentage change limitations. The net operating
      loss carryforwards will be expiring between 2027 and 2030.                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company and its subsidiary file income tax returns
      in the United States. These tax returns are subject to examination by
      taxation authorities provided the years remain open under the relevant
      statues of limitations, which may result in the payment of income taxes
      and/or decrease its net operating losses available for carryforwards.
      The Company is no longer subject to income tax examinations by US federal
      tax authorities for years prior to 2006. While the Company believes that
      its tax filings do not include uncertain tax positions, the results of
      potential examinations or the effect of changes in tax law cannot be ascertained
      at this time. The Company currently has no tax years under examination.

F-21

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|10. | PROPERTY RENTAL AGREEMENTS AND LEASES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The Company through its subsidiary CMI has a lease agreement
      for mining claims with DDB Syndicate, an entity owned by related parties,
      including Douglas D.G. Birnie, Chief Executive Officer of the Company;
      Mr. Chizmar, a former director of the Company; three former officers and
      directors of CBI; Geotech Mining Inc., Jack Corp. and Wiser Corp. Geotech
      Mining Inc., Jack Corp. and Wiser Corp. are affiliates of Nanominerals
      Corp.                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The DDB Syndicate has leased the DDB Claims to CSM,
      a wholly owned subsidiary of the Company. The mining lease agreement (the
      DDB Agreement), between the DDB Syndicate and CSM, provide CSM with a
      lease, extending for approximately 5 years, with an option to purchase
      the DDB Claims at any time during the lease period. To maintain the lease
      rights, CSM paid the DDB Syndicate $130,000 by June 30, 2008, with annual
      rental payments thereafter of $30,000 per year, payable on June 30, 2009,
      2010, and 2011 respectively. CSM may exercise its option to purchase the
      DDB Claims by paying a purchase price of $400,000, less any rental payments
      made by CSM prior to exercising the option, or paying the DDB Syndicate
      $10, plus the grant of a 2% royalty of net smelter returns on the DDB
      Claims.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The following table summarizes the rental payments under
      the mining lease agreement:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|June 30, 2010 | $ | 30,000 | 
|------------- | - | ------ | 
|June 30, 2011 |   | 30,000 | 
|              |   |        | 
|              | $ | 60,000 | 

The Company had made $30,000 in rental
  payments during the year ended December 31, 2009, which consists of $3,651 in
  payments to each of the eight owners of DDB Syndicate including reimbursement
  of expenses of $792 to a company controlled by Douglas D.G. Birnie.

|11. | COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                              
|    | Lease obligations The Company rents office
      space in Henderson, Nevada. The lease terms expired on September 1, 2008
      and the Company continues to rent the existing space under month-to-month
      terms for $4,625 per month.                                                                                 
|    |                                                                                                                                                                                                                                                                                                                              
|    | Rental expense, resulting from this operating lease
      agreement, was $13,875 and $13,875 for the three months ended March 31,
      2010 and 2009, respectively.                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                              
|    | Columbus Project- Pursuant to the option assignment
      agreement dated March 30, 2007, as amended August 8, 2007, the Company
      granted a 5% net smelter return royalty to Nanominerals Corp (NMC), one
      of the principal stockholders of the Company. The Columbus Project is
      further discussed in Note 4.
|    |                                                                                                                                                                                                                                                                                                                              
|    | Red Mountain Project- Pursuant to the option
      assignment agreement, as amended August 8, 2007, the Company granted a
      5% net smelter return royalty to Nanominerals Corp (NMC), one of the principal
      stockholders of the Company. The Red Mountain Project is further discussed
      in Note 5.             

F-22

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|12. | ENVIRONMENTAL AND RECLAMATION ACTIVITIES                                                                                         
|--- | ---------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                  
|    | The liabilities accrued for the reclamation and remediation
      costs at March 31, 2010 and December 31, 2009, were as follows:

| |                                              |   |                |  |   | December 31, | 
| | -------------------------------------------- | - | -------------- |  | - | ------------ | 
| |                                              |   | March 31, 2010 |  |   | 2009         | 
| |                                              |   |                |  |   |              | 
| | Exploration properties:                      |   |                |  |   |              | 
| | Columbus                                     | $ | 275,338        |  | $ | 275,338      | 
| |                                              |   |                |  |   |              | 
| | Reclamation and remediation costs, long-term | $ | 275,338        |  | $ | 275,338      | 

The activity in the accrued reclamation
  and remediation cost liability for the three months ended March 31, 2010, was
  as follows:

|Balance, December 31, 2009   | $ | 275,338 | 
|---------------------------- | - | ------- | 
|Accruals for estimated costs |   | --      | 
|                             |   |         | 
|Balance, March 31, 2010      | $ | 275,338 | 

The Company maintains reclamation bonds
  with the Bureau of Land Management in the amount of $908,368 as of March 31,
  2010 and December 31, 2009, respectively.

|13. | CONCENTRATION OF CREDIT RISK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The Company maintains its cash accounts in three financial
      institutions. Cash accounts at these financial institutions are insured
      by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000
      per financial institution. The Company has never experienced a material
      loss or lack of access to its cash accounts; however, no assurance can
      be provided that access to the Companys cash accounts will not be
      impacted by adverse conditions in the financial markets. At March 31,
      2010, the Company had deposits in excess of FDIC insured limits in the
      amount of $6,250,391.

F-23

---

|IRELAND INC.                              
|------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)         
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(UNAUDITED)                               

|14. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                           
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                      
|    | During the three months ended March 31, 2010, the Company
      utilized the services of NMC to provide technical assistance and financing
      related activities. These services related primarily to the Columbus project
      and the Red Mountain project. NMC is the Companys largest shareholder,
      owning approximately 33% of the Companys outstanding common stock.
|    |                                                                                                                                                                                                                                                                                                                                                                                      
|    | In addition to the above services, NMC provided dedicated
      use of its laboratory, instrumentation, milling equipment and research
      facilities. NMC provided invoices for these fees plus expenses.                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                      
|    | For the three months ended March 31, 2010, the Company
      incurred total fees and reimbursements of expenses to NMC of $105,000
      and $19,149, respectively, for a total of $124,149. At March 31, 2010,
      the Company had an outstanding balance due to NMC of $36,448.                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                      
|    | Accounts payable  related party also includes
      $9,000 payable to one of the Companys independent directors for
      director compensation.                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                      
|    | Accounts payable  related party totaled $45,448
      as of March 31, 2010.                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                      
|    | Due to related parties includes amounts due to former
      officers of the Company. At March 31, 2010, the remaining amount of due
      to related parties was $23,290.                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                      
|    | For the three months ended March 31, 2010, the Company
      incurred fees for services performed by one of its independent directors,
      Mark Brennan of $21,066 primarily for executive search assistance.                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                      
|15. | CONCENTRATION OF ACTIVITY                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                      
|    | For the three months ended March 31, 2010, the Company
      purchased services from one major vendor, NMC, which exceeded more than
      10% of total purchases and amounted to $124,149. NMC is a related party
      as further discussed in Note 14.                                                                                                                            

F-24

---

|ITEM 2. | MANAGEMENT'S DISCUSSION AND
      ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
|------- | --------------------------------------------------------------------------------------------

Cautionary Statement Regarding Forward-Looking
Statements

Certain statements contained in this Quarterly Report on Form
10-Q constitute "forward-looking statements. These statements, identified by
words such as plan, "anticipate, "believe, "estimate, "should, "expect"
and similar expressions include our expectations and objectives regarding our
future financial position, operating results and business strategy. These
statements reflect the current views of management with respect to future events
and are subject to risks, uncertainties and other factors that may cause our
actual results, performance or achievements, or industry results, to be
materially different from those described in the forward-looking statements.
Such risks and uncertainties include those set forth under the caption "Part II,
Item 1A. Risk Factors and elsewhere in this Quarterly Report on Form 10-Q. We
advise you to carefully review the reports and documents we file from time to
time with the United States Securities and Exchange Commission (the SEC),
particularly our periodic reports filed with the SEC pursuant to the Securities
Exchange Act of 1934 (the Exchange Act).

OVERVIEW

We are a minerals exploration and development company focused
on the discovery and extraction of precious metals from mineral deposits in the
Southwestern United States.

In February 2008, we acquired our lead project, a prospective
gold, silver and calcium carbonate property located in Esmeralda County, Nevada,
that we call the Columbus Project. The Columbus Project consists of 19,738
acres of placer mineral claims, including a 378 acre Permitted Mine Area
(58-acre mill site and mill facility, and 320-acre mine site). Our current
permits allow us to mine up to 792,000 tons per year to 40 feet in depth for the
purpose of extracting precious metals and calcium carbonate from the Permitted
Mine Area. We also have a mineral lease covering, and the option to acquire, an
additional 23,440 acres of placer mineral claims adjoining the current project
area (the DDB Claims).

In addition to the Columbus Project, we own the right to
acquire a prospective gold, silver and tungsten property located in San
Bernardino County, California, that we call the Red Mountain Project.

The discussion provided in this Quarterly Report should be read
in conjunction with our Annual Report on Form 10-K for the year ended December
31, 2009.

RECENT CORPORATE DEVELOPMENTS

The following significant developments occurred since the
completion of our fiscal year ended December 31, 2009:

Warrants Issued For Consulting Services

| | (a) | On January 7, 2010, we agreed to issue 3,300,000 warrants
      exercisable at a price of $0.75 per share expiring on June 30, 2013 to a
      consultant. The warrants will vest at a rate of 825,000 warrants every six
      months beginning June 30, 2010 and ending December 31, 2011. Any warrants
      that have not yet vested will immediately vest upon any of the following
      events:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                       
| |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                                 

3

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| |     | Upon termination of the services agreement, any warrants
      that have not vested will immediately terminate while any vested warrants
      shall continue to be exercisable as set out above. We may accelerate the
      expiration date of these warrants at any time after June 30, 2010
    if:                                                                                                                                                                                                                                                                                                           
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | This consultant provided representations that he is not a
      U.S. person as that term is defined in Regulation S of the Securities
      Act.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | (b) | On February 19, 2010, we agreed to issue 500,000 warrants
      to a separate consultant exercisable at a price of $0.75 per share and
      expiring on June 30, 2013. 125,000 of the warrants granted vested and
      became exercisable on March 31, 2010. An additional 125,000 warrants will
      vest and become exercisable at the end of each of our fiscal quarters
      beginning with our fiscal quarter ending June 30, 2010 and ending with our
      fiscal quarter ending December 31, 2010. Any warrants that have not yet
      vested will immediately vest upon any of the following events:
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | Upon termination of the services agreement, any warrants
      that have not vested will immediately terminate while any vested warrants
      shall continue to be exercisable as set out above. We may accelerate the
      expiration date of these warrants at any time after June 30, 2010
    if:                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     | The consultant provided representations that he is an
      accredited investor as that term is defined in Regulation D of the
      Securities Act.                                                                                                                                                                                                                                                                                                                                                                                                                                                              

January 2010 US and Foreign Private Placements

In January 2010, we issued an aggregate of 11,035,000 Units at
a price of $0.45 per Unit in separate private placement offerings made to US
accredited and foreign investors for total proceeds of $4,965,750. Each Unit
offered was comprised of one share of our common stock and one-half of one share
purchase warrant, with each full share purchase warrant entitling the holder to
purchase an additional share of our common stock at an exercise price of $0.75
per share, expiring June 30, 2013. We may accelerate the expiration date for the
warrants after June 30, 2010 if the VWAP for the shares on our principal market
exceeds $4.50 per share for twenty consecutive trading days, and the average
daily trading volume for our common stock on our principal market during those
twenty trading days is not less than 0.2% of our free float. We agreed to pay
$6,300 and issue 6,000 share purchase warrants as finders fees for the units
subscribed for by foreign investors.

4

---

Compensation Increases to Executive Officers

On February 23, 2010, our Board of Directors approved an
increase in the compensation payable to Douglas D.G. Birnie, our Chief Executive
Officer, President and Secretary, from $108,000 per year to $225,000 per year,
retroactive to January 1, 2010. The compensation payable to Mr. Birnie is paid
to a limited liability company of which Mr. Birnie is the sole member. We do not
have a written compensation contract with Mr. Birnie or his limited liability
company.

On February 26, 2010, our Board of Directors approved an
increase in the compensation to Robert D. McDougal, our Chief Financial Officer
and Treasurer, from $48,000 per year to $84,000 per year, retroactive to January
1, 2010. We do not have a written compensation contract with Mr. McDougal.

Vice President of Finance and Administration

On March 8, 2010, we appointed David Z. Strickler, Jr. as our
Vice President of Finance and Administration. We have agreed to pay Mr.
Strickler an annual salary of $150,000 per year. In addition, we granted to Mr.
Strickler options to purchase 200,000 shares of our common stock at an exercise
price of $0.82 per share. The options granted to Mr. Strickler vest at a rate of
25,000 options per fiscal quarter, beginning on March 31, 2010, and expire five
years after the particular vesting date.

New Geologic Modeling Completed

On April 13, 2010 we announced our new geologic modeling for
our Columbus Project. The modeling is based upon a full analysis of the
technical data generated from Irelands 2008 and 2009 drill programs and
presents a refinement of the parameters previously used to delineate mineralized
zones at the Columbus Project. The new geologic modeling has outlined seven
mineralized zones containing a total of 343.9 million tons of material in place
with an average grade of 0.040 ounces per ton (opt) gold equivalent (AuE)
(AuE (opt) = Au (opt) +0.013 Ag (opt)) (based on $900/oz Au and $12/oz Ag).

PLAN OF OPERATION

During our 2010 fiscal year, we intend to proceed with our
exploration and development programs for the Columbus Project and the Red
Mountain Project.

The Columbus Project

Our technical program for the Columbus Project has two primary
objectives: (a) to identify the mineral resources/minable reserves, and (b) to
determine the commercial feasibility of mining and extracting precious metals
from the project.

|(a) | Determining Project Mineralization: The goal of
      the drilling program is to determine whether there is sufficient
      mineralization at the Columbus Project for economic viability. Our 2008
      and 2009 drill programs for the Columbus Project were conducted with a
      wide drill hole spacing (~1/4 mile x 1⁄2 mile) in order to determine the
      boundaries of mineralization in the previously identified area of interest
      covering approximately 5,000 acres. Our 2010 drill program is being
      designed to determine the grade and tonnage consistency between the drill
      holes in mineralized zones outlined to date. The goal of this program is
      to upgrade the mineralization estimates for inclusion in the project
      feasibility study.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(b) | Project Feasibility: We currently have a
      production permit for the Columbus Project. The production permit allows
      us to extract precious metals and produce calcium carbonate on the 378
      acre (320 acre mine site and 58 acres of mill sites) Permitted Mine Area
      located at the Columbus Project at a mine rate of up to 792,000 tons per
      year. We have recently installed a precious metals leach extraction
      circuit at our onsite pilot plant. We are currently conducting testing and
      optimization of the leach circuit. Once testing and process optimization
      are completed, we expect to commence continuous operations of the pilot
      plant as part of our technical program goal of establishing economic
      feasibility.    

5

---

If the operation of this pilot
production facility proves to our satisfaction that the Columbus Project is
economically viable, we will seek to expand the production process or construct
additional production circuits within the mill site to increase production
capacity. The production model for the Columbus Project is anticipated to be a
low cost, high volume mining operation.

Readers are cautioned that, although
we believe that the results of our exploration activities to date are
sufficiently positive to proceed with the installation and operation of a pilot
production circuit for the Columbus Project, we have not yet established any
probable or proven reserves. There is no assurance that we will be able to
establish that any commercially extractable ore reserves exist on the Columbus
Project or that we will enter into commercial production.

We anticipate spending approximately $4,650,000 on our
exploration and development program and capital expenditures for the Columbus
Project from April 1, 2010 until March 31, 2011.

The Red Mountain Project

Sampling and Drilling Program: Our exploration and
development program for the Red Mountain Project currently consists of a
Drilling and Sampling program. Currently the Red Mountain Project is not in
active development. We have set a budget of $255,000 for Drilling and Sampling
at Red Mountain for the twelve months ending March 31, 2011; however, this
program is contingent on certain milestones being achieved at our lead project,
the Columbus Project. We have reallocated funds originally budgeted towards the
Red Mountain Project in order to provide us with maximum flexibility in
achieving our technical milestones at our lead project.

Cash Requirements

We have budgeted for the following cash expenditures for the
twelve months ending March 31, 2011:

|Columbus Project                          |  |                                                  |           |  
|----------------------------------------- |  | ------------------------------------------------ | --------- | -
|                                          |  | Property Payments                                |           | $
|                                          |  | Drilling Program
      and Resource Estimates    |           |  
|                                          |  | Pilot Plant / Project Feasibility                |           |  
|                                          |  | Total for Columbus Project                       |           | $
|Red Mountain Project                      |  |                                                  |           |  
|                                          |  | Property
      Acquisition and Maintenance Costs |           | $
|                                          |  | Sampling Exploration Program                     |           |  
|                                          |  | Total for Red Mountain Project                   |           | $
|General and Administration                |  |                                                  |           |  
|                                          |  | Total for General and Administration             |           | $
|Total Expected Expenses                   |  | $                                                | 6,565,000 |  
|Total Expected
      Capital Expenditures |  | $                                                | 300,000   |  
|Total Expected Cash Expenditures          |  | $                                                | 6,865,000 |  

As of March 31, 2010, we had cash in the amount of $6,925,844
and a working capital surplus of $6,922,111. In January 2010, we sold an
aggregate of 11,035,000 Units at a price of $0.45 per Unit under our 2010 US
Offering and our 2010 Foreign Offering for total proceeds of $4,965,750. As a
result, we currently have sufficient capital to pay for the anticipated costs of
our exploration and development programs until March 31, 2011. However, actual
costs could be greater than we have anticipated and we have no additional
financing arrangements in place.

6

---

RESULTS OF OPERATIONS

Three Months Summary

|                   |   | Three Months Ended |   |   | Percentage     |  
|------------------ | - | ------------------ | - | - | -------------- | -
|                   |   | March 31, 2010     |   |   | March 31, 2009 |  
|Revenue            | $ | -                  |   | $ | -              |  
|Operating Expenses |   | (1,244,983         | ) |   | (948,761       | )
|Other Income       |   | 6,101              |   |   | 7,617          |  
|Income Tax Benefit |   | 330,405            |   |   | 327,477        |  
|Net Loss           | $ | (908,477           | ) | $ | (613,667       | )

Revenue

We have not earned any operational revenues since our inception
and we do not anticipate earning revenues until our mineral properties enter
into commercial production, of which there are no assurances. Our pilot
production plant at the Columbus Project is currently being operated for
pre-feasibility testing purposes only. We are currently in the exploration stage
of our business and we can provide no assurances that we will be able to
establish the existence of probable or proved mineral reserves on our
properties, or if such reserves are established, that we will be able to enter
into commercial production.

Operating Expenses

Our operating expenses for the three months ended March 31,
2010 and 2009 consisted of the following:

|                                                                  |   | Three Months Ended |  |   | Percentage     | 
|----------------------------------------------------------------- | - | ------------------ |  | - | -------------- | 
|                                                                  |   | March 31, 2010     |  |   | March 31, 2009 | 
|Mineral exploration and evaluation
      expenses                 | $ | 311,889            |  | $ | 587,706        | 
|Mineral exploration and evaluation expenses  related
      party |   | 124,149            |  |   | 105,000        | 
|General and administrative                                        |   | 758,700            |  |   | 230,221        | 
|General and administrative  related party                        |   | 21,066             |  |   | -              | 
|Depreciation                                                      |   | 14,179             |  |   | 10,834         | 
|Mineral and property holding costs                                |   | 15,000             |  |   | 15,000         | 
|Total Operating Expenses                                          | $ | 1,244,983          |  | $ | 948,761        | 

Operating expenses for our first fiscal quarter ended March 31,
2010 increased as compared with our first fiscal quarter ended March 31, 2009.
The increase in operating expenses was a result of a large increase in general
and administrative expenses during the period.

Mineral exploration and evaluation expenses decreased as there
were no significant drilling or sampling activities during our first fiscal
quarter of 2010. Costs incurred during our first fiscal quarter of 2010
associated with bringing the pilot plant online have been capitalized.

The item Mineral exploration and evaluation expenses  related
party represents amounts paid or reimbursed to Nanominerals Corp. for
exploration work conducted on the Columbus and Red Mountain Projects,
Nanominerals is our largest shareholder, owning approximately 30% of our
outstanding common stock.

During the fiscal quarter ended March 31, 2010, we incurred
fees to Nanominerals of $105,000 for technical and financing related
services relating primarily to the Columbus and Red Mountain Projects. In
addition, we incurred $19,149 in respect to reimbursable expenses paid by
Nanominerals. At March 31, 2010, we were indebted to Nanominerals in the amount
of $36,448 for unpaid fees and reimbursable expenses.

7

---

The increase in general and administrative expenses is
primarily attributable to an increase in stock based compensation of $244,820.
This increase in stock based compensation was attributable to warrants issued
during the period to consultants. In addition, accounting and legal expenses
were greater during the fiscal quarter ended March 31, 2010.

General and administrative expenses to related parties consist
of $21,066 paid to Mark Brennan, a member of our Board of Directors, as
consulting fees related to executive search assistance.

We anticipate that our operating expenses will continue to
increase as we pursue our exploration and development programs for the Columbus
Project and the Red Mountain Project.

LIQUIDITY AND CAPITAL RESOURCES

|Working Capital     |   |                         |   |   |                            |   |  |                       | 
|------------------- | - | ----------------------- | - | - | -------------------------- | - |  | --------------------- | 
|                    |   |                         |   |   |                            |   |  | Percentage            | 
|                    |   | At
      March 31, 2010 |   |   | At
      December 31, 2009 |   |  | Increase / (Decrease) | 
|Current Assets      | $ | 7,147,856               |   | $ | 3,741,299                  |   |  | 91.1%                 | 
|Current Liabilities |   | (225,745                | ) |   | (272,843                   | ) |  | (17.3)%               | 
|Working Capital     | $ | 6,922,111               |   | $ | 3,468,456                  |   |  | 99.6%                 | 

|Cash Flows                                    |   |                    |   |   |                    |  
|--------------------------------------------- | - | ------------------ | - | - | ------------------ | -
|                                              |   | Three Months Ended |   |   | Three Months Ended |  
|                                              |   | March 31, 2010     |   |   | March 31, 2009     |  
|Cash Flows used in Operating Activities       | $ | (1,109,102         | ) | $ | (851,374           | )
|Cash Flows used in Investing Activities       |   | (408,076           | ) |   | (212,374           | )
|Cash Flows from Financing Activities          |   | 4,792,007          |   |   | -                  |  
|Net Increase (Decrease) in Cash During Period | $ | 3,274,829          |   | $ | (1,063,748         | )

At March 31, 2010 we had a working capital surplus of
$6,922,111 as compared with a working capital surplus of $3,468,456 at December
31, 2009. The increase in our working capital surplus is primarily attributable
to the completion of our 2010 US and foreign private placements in January 2010
as described below.

Financing Requirements

We currently have sufficient financial resources to pay for the
expected costs of our exploration and development programs for fiscal 2010 and
the first quarter of fiscal 2011.

In January 2010, we sold an aggregate of 11,035,000 Units at a
price of $0.45 per Unit in separate private placement offerings made to
US accredited and foreign investors (the 2010 US Offering and the 2010 Foreign
Offering respectively) for total proceeds of $4,965,750. Each Unit offered was
comprised of one share of our common stock and one-half of one share purchase
warrant, with each full share purchase warrant entitling the holder to purchase
an additional share of our common stock at an exercise price of $0.75 per share,
expiring June 30, 2013. After June 30, 2010 we will have the right to accelerate
the expiration date of the warrants if:

| | (a) | the VWAP for our shares on the principal market on which
      they trade is above $4.50 per share for twenty consecutive trading days;
      and                                                         
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                           
| | (b) | the average daily trading volume for our shares on the
      principal market on which they trade during those twenty consecutive
      trading days is equal to or greater than 0.2% of our free
  float.

We agreed to pay $6,300 and issue 6,000 share purchase warrants
as finders fees for the units subscribed for by foreign investors.

There is no assurance that the actual costs of our exploration
and development programs will not exceed our estimates. Furthermore, we may need
additional financing to proceed beyond our current exploration and development plans. Our ability to obtain additional financing
will be subject to a number of factors, including the variability of market
prices for gold and silver, investor interest in our mineral projects, and the
performance of equity markets in general. These factors may make the timing,
amount, terms or conditions of additional financing unavailable to us. If we are
not able to obtain financing when needed or in an amount sufficient to enable us
to complete our programs, we may be required to adjust our exploration and
development plans depending upon our existing capital resources.

8

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OFF-BALANCE SHEET ARRANGEMENTS

We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to stockholders.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with
United States generally accepted accounting principles requires our management
to make estimates and assumptions that affect the reported amount of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Our management routinely makes judgments and estimates about the effects of
matters that are inherently uncertain.

We have identified certain accounting policies, described
below, that are most important to the portrayal of our current financial
condition and results of operations. Our significant accounting policies are
also disclosed in the notes to our unaudited consolidated financial statements
for the three months ended March 31, 2010 included in this Quarterly Report on
Form 10-Q.

Mineral Rights

We capitalize acquisition and option costs of mineral property
rights. The amount capitalized represents fair value at the time the mineral
rights are acquired. We capitalize acquisition and option costs of mineral
rights as tangible assets. Upon commencement of commercial production, the
mineral rights will be amortized using the unit-of-production method over the
life of the mineral rights. If we do not continue with exploration after the
completion of a feasibility study, the mineral rights will be expensed at that
time.

Exploration Costs

Mineral exploration costs are expensed as incurred.

Mineral Property Acquisition Costs

Costs of acquiring mining properties are capitalized upon
acquisition. Mine development costs incurred either to develop new ore deposits,
expand the capacity of mines, or to develop mine areas substantially in advance
of current production are also capitalized once proven and probable reserves
exist and the property is a commercially mineable property. Costs incurred to
maintain current production or to maintain assets on a standby basis are charged
to operations. Costs of abandoned projects are charged to operations upon
abandonment. We evaluate the carrying value of capitalized mining costs and
related property and equipment costs, to determine if these costs are in excess
of their recoverable amount whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable. The periodic evaluation of
carrying value of capitalized costs and any related property and equipment costs
are based upon expected future cash flows and/or estimated salvage value in
accordance with Accounting Standards Codification (ASC) 360-10-35-15,
Impairment or Disposal of Long-Lived Assets.

Reclamation and Remediation Costs (Asset Retirement
Obligation)

We accrued costs associated with environmental remediation
obligations in accordance with ASC 410-20, Asset Retirement Obligations.In accordance with ASC 410-20-25, Asset Retirement Obligations -
Recognition, we record a liability for the present value of the estimated
environmental remediation costs in the period in which the liability is incurred
and becomes determinable, with an offsetting increase in the carrying amount of
the associated asset. The liability will be accreted and the asset will be
depreciated over the life of the related assets. Adjustments for changes
resulting from the passage of time and changes to either the timing or amount of
the original present value estimate underlying the obligation will be made. As
reclamation work is performed or liabilities are otherwise settled, the recorded
amount of the liability is reduced.

9

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We accrue costs associated with environmental remediation
obligation when it is probable that such costs will be incurred and they are
reasonably estimable. Estimates for reclamation and other closure costs are
prepared in accordance with ASC 450, Contingencies, or ASC 410-30-25,
Asset Retirement and Environmental Obligations -Recognition. Costs of
future expenditures for environmental remediation are not discounted to their
present value unless subject to a contractually obligated fixed payment
schedule. Such costs are based on managements current estimate of amounts to be
incurred when the remediation work is performed, within current laws and
regulations.

Future reclamation and environmental-related expenditures are
difficult to estimate, in many circumstances, due to the early stage nature of
the exploration project, and uncertainties associated with defining the nature
and extent of environmental disturbance and the application of laws and
regulations by regulatory authorities and changes in reclamation or remediation
technology. We periodically review accrued liabilities for such reclamation and
remediation costs as evidence becomes available indicating that the liabilities
have potentially changed. Changes in estimates are reflected in the statement of
operations in the period an estimate is revised.

Accruals for reclamation and environmental matters totaled
$275,338 at March 31, 2010 and December 31, 2009. We are in the exploration
stage and are unable to determine the estimated timing of these expenditures
relating to these accruals at this time. It is reasonably possible the ultimate
cost of reclamation and remediation could change in the future, and that changes
to these estimates could have a material effect on future operating results as
new information becomes known. For additional information, see Note 12 of the
financial statements included with this Quarterly Report on Form 10-Q.

|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK.
|------- | -----------------------------------------------------------------

Not Applicable.

|ITEM 4. | CONTROLS AND PROCEDURES.
|------- | ------------------------

As of March 31, 2010, an evaluation was performed under the
supervision and with the participation of our management, including our Chief
Executive Officer (CEO) and Chief Financial Officer (CFO), of the
effectiveness of the design and operation of our disclosure controls and
procedures. These controls and procedures are based on the definition of
disclosure controls and procedures in Rule 13a-15(e) and Rule 15d-15(e)
promulgated under the Securities Exchange Act of 1934.

Based on that evaluation as of March 31, 2010, our management,
including the CEO and CFO concluded that our disclosure controls and procedures
were effective to ensure that the information required to be disclosed by us in
the reports that we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in SEC rules and forms.

Management, including our CEO and CFO, have concluded that our
disclosure controls and procedures provide reasonable assurance that the
controls and procedures will meet their desired control objectives. In designing
and evaluating our control system, management recognized that any control
system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance of achieving the desired control objectives. Further,
the design of a control system must reflect the fact that there are resource
constraints, and management necessarily was required to apply its judgment in
evaluating the cost-benefit relationship of possible controls and procedures.
Because of the inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that all control issues and instances of
fraud, if any that may affect our operations have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.

10

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During the quarter ended March 31, 2010, there were no
changes in the Company's internal control over financial reporting that have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.

11

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PART II - OTHER INFORMATION

|ITEM 1. | LEGAL PROCEEDINGS.
|------- | ------------------

None.

|ITEM 1A. | RISK FACTORS.
|-------- | -------------

The following are some of the important factors that could
affect our financial performance or could cause actual results to differ
materially from estimates contained in our forward-looking statements. We may
encounter risks in addition to those described below. Additional risks and
uncertainties not currently known to us, or that we currently deem to be
immaterial, may also impair or adversely affect our business, financial
condition or results of operation.

Although we have installed the leach circuit of the onsite
pilot production module for the Columbus Project, there is no assurance that
this project is commercially feasible.

We have begun testing and optimizing the onsite pilot
production module at the Columbus Project. This pilot production module is part
of our pre-feasibility study for the Columbus Project, and is designed to
evaluate the commercial viability of the Columbus Project. There is no assurance
that the results of our pre-feasibility program will result in a decision to
enter into commercial production.

Additional exploration work is required before proved or
probable reserves can be established.

We intend to report the results of our exploration activities
promptly after those results have been received and analyzed. However, there is
no assurance that the test results reported by us will be indicative of
extraction rates throughout our mineral properties. We have not yet established
proved or probable reserves on the Columbus Project or on our other mineral
properties and additional exploration work will be required before proved or
probable reserves can be established.

We will likely require additional financing to complete our
exploration and development programs for our mineral projects.

We expect to spend approximately $6,865,000 on the exploration
and development of our Columbus and Red Mountain Projects and the general costs
of operating and maintaining our business and mineral properties for the twelve
months ending March 31, 2011. We currently have sufficient capital resources to
pay for the anticipated costs of operating our business and completing our
exploration and development plans until March 31, 2011. However, the actual
costs of completing those programs could be greater than anticipated and we may
need additional financing sooner than anticipated. In addition, based on our
current budget estimates, we expect to need additional financing to proceed with
our exploration and development programs beyond the first quarter of 2011.

Our ability to obtain future financing will be subject to a
number of factors, including the variability of market prices for gold and
silver, investor interest in our mineral projects, and the performance of equity
markets in general. These factors may make the timing, amount, terms or
conditions of additional financing unavailable to us. If we are not able to
obtain financing when needed or in an amount sufficient to enable us to complete
our programs, we may be required to scale back our exploration and development
programs.

If we complete additional financings through the sale of our
common stock, our existing stockholders will experience dilution.

The most likely source of future financing presently available
to us is through the sale of shares of our common stock. The only other
anticipated alternative for the financing of further exploration would be the
offering by us of an interest in our mineral properties to be earned by another
party or parties carrying out further exploration thereof, which is not
presently contemplated. In addition, if our management decides to exercise the
right to acquire a 100% interest in the Red Mountain Project, we will be
required to issue significantly more shares of our common stock. Issuing shares of our common stock, for financing
purposes or otherwise, will dilute the interests of our existing
stockholders.

12

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In order to maintain the rights to our mineral properties,
we will be required to make annual filings with federal and state regulatory
agencies and/or be required to complete assessment work or pay fees in respect
of those properties.

In order to maintain the rights to our mineral projects, we
will be required to make annual filings and pay fees with federal and state
regulatory authorities. On March 1, 2010, Nevadas State Assembly and Senate
passed Assembly Bill No. 6 (AB6). AB6 has installed an additional tiered fee
that is payable in conjunction with the annual filing of an affidavit of the
work performed on or improvements made to a mining claim, or an affidavit of the
intent to hold a mining claim applied to holders of 11 or more claims. The fee
ranges from $70 per claim for holders of 11 to 199 claims up to $195 per mining
claim for holders of 1,300 or more claims as of the date of filing. AB6 was
approved by the Governor of Nevada on March 12, 2010.

In addition to these fees, we may be required by federal and/or
state legislation or regulations to complete minimum annual amounts of mineral
exploration work on our mineral properties. A failure by us to meet the annual
maintenance requirements under federal and state laws could cause our mineral
rights to lapse.

Because we are an exploration stage company, we face a high
risk of business failure.

To date, our primary business activities have involved the
acquisition of mineral claims and the exploration and development on these
claims. We have not earned any revenues as of the date of this report. Potential
investors should be aware of the difficulties normally encountered by
exploration stage companies and the high rate of failure of such enterprises.
The likelihood of success must be considered in light of the problems, expenses,
difficulties, complications and delays encountered in connection with the
exploration of the mineral properties that we plan to undertake. These potential
problems include, but are not limited to, unanticipated problems relating to
exploration, and additional costs and expenses that may exceed current
estimates.

Because we anticipate that our operating expenses will
increase prior to earning revenues, we may never achieve profitability.

Prior to exiting the exploration stage, we anticipate that we
will incur increased operating expenses without realizing any revenues. We
therefore expect to incur significant losses into the foreseeable future. We
recognize that if we are unable to generate significant revenues from the
exploration of our mineral claims and the production of minerals thereon, if
any, we will not be able to earn profits or continue operations. There is no
history upon which to base any assumption as to the likelihood that we will
prove successful, and we may not be able to ever generate any operating revenues
or achieve profitable operations. If we are unsuccessful in addressing these
risks, our business will most likely fail.

Because of the speculative nature of exploration of mining
properties, there is substantial risk that no commercially exploitable minerals
will be found.

The search for valuable minerals as a business is extremely
risky. Although we have been encouraged by the results of the exploration work
conducted by us to date, further exploration work is required before proven or
probable reserves can be established, and there are no assurances that we will
be able to establish any proven or probable reserves. Exploration for minerals
is a speculative venture, necessarily involving substantial risk. The
expenditures to be made by us may not result in the discovery of commercial
quantities of ore. Problems such as unusual or unexpected formations and other
conditions are involved in mineral exploration and often result in unsuccessful
exploration efforts.

Because of the inherent dangers involved in mineral
exploration, there is a risk that we may incur liability or damages if and when
conducting mineral exploration activities.

The search for valuable minerals involves numerous hazards. As
a result, when conducting exploration activities we may become subject to
liability for such hazards, including pollution, cave-ins and other hazards
against which we cannot insure or against which we may elect not to insure. The
payment of such liabilities may have a material adverse effect on our financial
position.

13

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Even if we establish proven or probable reserves on our
mineral claims, we may not be able to successfully reach commercial
production.

We anticipate using a low cost, high volume surface dredge
operation to mine the Columbus Project. Our pre-feasibility program for the
Columbus Project is designed to test and optimize our planned mining process for
the Columbus Project. There is no assurance that this pre-feasibility program
will result in a decision to enter into commercial production. In addition,
expanding our production facilities to accommodate commercial operations is
expected to require substantially more financial resources than what we
currently have available to us.

There is a risk that we will not be able to obtain such
financing if and when needed.

Even if we can successfully reach commercial production, any
change to mining laws or regulations or levy of additional taxes in the future
may make our planned production process nonviable economically.

Several bills have been introduced by the US federal government
that would levy resource taxes on mineral exploration companies. Any levy of
additional taxes would have an adverse effect on our business. In addition, laws
and regulations governing the exploration of mineral properties and the mining
process are subject to change. Changes to mining laws and regulations that would
have the effect of increasing the cost of mineral exploration and mining
activities would adversely impact our business.

We are subject to compliance with government regulations.
The costs of complying with these regulations may change without notice, and may
increase the anticipated cost of our exploration and development
programs.

There are several government regulations that materially
restrict the exploration of minerals. We will be required to obtain work
permits, post bonds and perform remediation work for any physical disturbance to
the land in order to comply with these laws. While our planned exploration
program budgets for regulatory compliance, there is a risk that new regulations
could increase our costs of doing business and prevent us from carrying out our
exploration program.

In addition, if our applications for permits from the relevant
regulatory bodies are denied, we may not be able to proceed with our exploration
and development programs.

If we decide to pursue commercial production, we may be subject
to an environmental review process that may delay or prohibit commercial
production.

Our planned method for mining the Columbus Project is not
expected to generate any significant long term environmental impact. However, we
have not yet had a comprehensive environmental review conducted on our planned
mining operations for the Columbus Project.

Compliance with an environmental review process may be costly
and may delay commercial production. Furthermore, there is the possibility that
we would not be able to proceed with commercial production upon completion of
the environmental review process if government authorities do not approve our
mine or if the costs of compliance with government regulation adversely affected
the commercial viability of the proposed mine.

The market for our common stock is limited and investors may
have difficulty selling their stock.

Our shares are currently traded on the over the counter market,
with quotations entered for our common stock on the OTC Bulletin Board under the
symbol IRLD. However, the volume of trading in our common stock is currently
limited. As a result, holders of our common stock may have difficulty selling
their shares.

Because our common stock is a penny stock, stockholders may
be further limited in their ability to sell their shares.

Our shares constitute a penny stock under the Securities
Exchange Act of 1934 and are expected to remain classified as a penny stock for
the foreseeable future. Classification as a penny stock makes it more difficult
for a broker-dealer to sell the stock into a secondary market, which makes it
more difficult for a purchaser to liquidate his or her investment. Any
broker-dealer engaged by the purchaser for the purpose of selling his or her
shares will be subject to Rules 15g-2 through 15g-9 of the
Exchange Act. Rather than having to comply with these rules, some broker-dealers
will refuse to attempt to sell a penny stock.

14

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No Assurance That Forward Looking Assessments Will Be
Realized.

Our ability to accomplish our objectives and whether or not we
are financially successful is dependent upon numerous factors, each of which
could have a material effect on the results obtained. Some of these factors are
in the discretion and control of management and others are beyond managements
control. The assumptions and hypothesis used in preparing any forward-looking
assessments contained herein are considered reasonable by management. There can
be no assurance, however, that any projections or assessments contained herein
or otherwise made by management will be realized or achieved at any level.

If we are, or were, a U.S. real property holding
corporation, non-U.S. holders of our common stock or other security convertible
into our common stock could be subject to U.S. federal income tax on the gain
from the sale, exchange, or other disposition of such security.

If we are or ever have been a U.S. real property holding
corporation (a USRPHC) under the Foreign Investment Real Property Tax Act of
1980, as amended (FIRPTA) and applicable United States Treasury regulations
(collectively, the FIRPTA Rules), unless an exception described below applies,
certain non-U.S. investors in our common stock (or options or warrants for our
common stock) would be subject to U.S. federal income tax on the gain from the
sale, exchange or other disposition of shares of our common stock (or such
options or warrants), and such non-U.S. investor would be required to file a
United States federal income tax return. In addition, the purchaser of such
common stock, option or warrant would be required to withhold from the purchase
price an amount equal to 10% of the purchase price and remit such amount to the
U.S. Internal Revenue Service.

In general, under the FIRPTA Rules, a company is a USRPHC if
its interests in U.S. real property comprise at least 50% of the fair market
value of its assets. If we are or were a USRPHC, so long as our common stock is
regularly traded on an established securities market (as defined under the
FIRPTA Rules), a non-U.S. holder who, actually or constructively, holds or held
no more than 5% of our common stock is not subject to U.S. federal income tax on
the gain from the sale, exchange, or other disposition of our common stock under
FIRPTA. In addition, other interests in equity of a USRPHC may qualify for this
exception if, on the date such interest was acquired, such interests had a fair
market value no greater than the fair market value on that date of 5% of our
common stock. Any of our common stockholders (or owners of options or warrants
for our common stock) that are non-U.S. persons and own or anticipate owning
more than 5% of our common stock (or, in the case of options or warrants, of a
value greater than the fair market value of 5% of our common stock) should
consult their tax advisors to determine the consequences of investing in our
common stock (or options or warrants). We have not conducted a formal analysis
of whether we are or have ever been a USRPHC. We do not believe that we are or
have ever been a USRPHC. However, if we later determine that we were a USRPHC,
then we believe that we would have ceased to be a USRPHC as of June 1, 2005 and
that non-U.S. holders would not be subject to FIRPTA with respect to a sale,
exchange, or other disposition of shares of our common stock (or options or
warrants) after June 1, 2010.

FOR ALL OF THE AFORESAID REASONS AND OTHERS SET-FORTH AND
NOT SET-FORTH HEREIN, AN INVESTMENT IN OUR SECURITIES INVOLVES A CERTAIN DEGREE
OF RISK. ANY PERSON CONSIDERING TO INVEST IN OUR SECURITIES SHOULD BE AWARE OF
THESE AND OTHER FACTORS SET-FORTH IN THIS REPORT AND IN THE OTHER REPORTS AND
DOCUMENTS THAT WE FILE FROM TIME TO TIME WITH THE SEC AND SHOULD CONSULT WITH
HIS/HER LEGAL, TAX AND FINANCIAL ADVISORS PRIOR TO MAKING AN INVESTMENT IN OUR
SECURITIES. AN INVESTMENT IN OUR SECURITIES SHOULD ONLY BE ACQUIRED BY PERSONS
WHO CAN AFFORD TO LOSE THEIR TOTAL INVESTMENT.

|ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND
      USE OF PROCEEDS.
|------- | ------------------------------------------------------------------

None.

15

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|ITEM 3. | DEFAULTS UPON SENIOR SECURITIES.
|------- | --------------------------------

None.

|ITEM 5. | OTHER INFORMATION.
|------- | ------------------

None.

|ITEM 6. | EXHIBITS.
|------- | ---------

The following exhibits are either provided with this Quarterly
Report or are incorporated herein by reference:

|Exhibit |                                                                                                                                                                                                                                            
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibit                                                                                                                                                                                                                     
|3.1     | Articles of Incorporation.
        (1)                                                                                                                                                                                                     
|3.2     | Certificate of Amendment to Articles
        - Name Change from Merritt Ventures Corp. to Ireland Inc.(2)                                                                                                                                  
|3.3     | Certificate of
        Change  4-for-1 Stock Split.(3)                                                                                                                                                                                    
|3.4     | Bylaws.(1)                                                                                                                                                                                                                                 
|10.1    | 2007 Stock Incentive
        Plan.(4)                                                                                                                                                                                                      
|10.2    | Assignment Agreement dated for
        reference as of March 29, 2007, among Nanominerals Corp., the Company
        and Lorrie Archibald. (4)                                                                                             
|10.3    | Letter Agreement
        dated July 22, 2006 among Columbus Brine Inc., Columbus S.M. LLC and Nanominerals
        Corp., assigned to the Company by Nanominerals Corp.(11)                                                                
|10.4    | Letter Agreement dated March
        15, 2007 between Red Mountain Mining and Nanominerals Corp., assigned
        to the Company by Nanominerals Corp. (11)                                                                               
|10.5    | Agency Agreement
        dated effective as of June 19, 2007 between the Company and S & P
        Investors, Inc. (5)                                                                                                                     
|10.6    | Amendment Agreement to Assignment
        Agreement among the Company, Nanominerals Corp. and Lorrie Archibald,
        dated for reference as of August 8, 2007.(6)                                                                       
|10.7    | Consulting Agreement
        between the Company and RJ Falkner & Company, Inc., dated for reference
        as of November 5, 2007.(7)                                                                                                    
|10.8    | Consultant Non-Qualified Stock
        Option Agreement between the Company and R. Jerry Falkner, dated effective
        as of November 5, 2007.(7)                                                                                       
|10.9    | Agreement and
        Plan of Merger dated December 14, 2007 among the Company, Columbus Brine
        Inc., John T. Arkoosh, William Maghan and Lawrence E. Chizmar, Jr.(8)                                                               
|10.10   | Amendment Agreement to Agreement
        and Plan of Merger entered into on January 31, 2008 among the Company,
        CBI Acquisition, Inc., Columbus Brine Inc., John T. Arkoosh, William Maghan
        and Lawrence E. Chizmar, Jr.(9)
|10.11   | Mining Lease
        Agreement dated November 30, 2007 between DDB Syndicate and Columbus S.M.,
        LLC.(12)                                                                                                                           
|14.1    | Code of Ethics. (10)                                                                                                                                                                                                                       
|21.1    | List of Subsidiaries.(13)                                                                                                                                                                                                                  
|31.1    | Certification
        of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002.                                                                                                                    
|31.2    | Certification
        of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002.                                                                                                                    
|32.1    | Certification
        of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                     
|32.2    | Certification
        of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                     

16

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|(1)  | Filed as an exhibit to our Registration Statement on Form
      SB-2 originally filed on April 18, 2002, as amended.              
|---- | ----------------------------------------------------------------------------------------------------------------------------------
|(2)  | Filed as an exhibit to our Annual Report on Form 10-KSB
      for the year ended December 31, 2005 filed on April 12, 2006.       
|(3)  | Filed as an exhibit to our Current Report on Form 8-K
      filed on April 30, 2007.                                              
|(4)  | Filed as an exhibit to our Annual Report on Form 10-KSB
      for the year ended December 31, 2006 filed on April 5, 2007.        
|(5)  | Filed as an exhibit to our Current Report on Form 8-K
      filed on June 21, 2007.                                               
|(6)  | Filed as an exhibit to our Current Report on Form 8-K
      filed on August 14, 2007.                                             
|(7)  | Filed as an exhibit to our Current Report on Form 8-K
      filed on November 9, 2007.                                            
|(8)  | Filed as an exhibit to our Current Report on Form 8-K
      filed on December 20, 2007.                                           
|(9)  | Filed as an exhibit to our Current Report on Form 8-K
      filed on February 6, 2008.                                            
|(10) | Filed as an exhibit to our Annual Report on Form 10-KSB
      for the year ended December 31, 2003, filed on September 28,
  2004.
|(11) | Filed as a Schedule to Exhibit 10.2.                                                                                              
|(12) | Filed as an exhibit to our Annual Report on Form 10-K for
      the year ended December 31, 2007 filed on March 31, 2008.         
|(13) | Filed as an exhibit to our Annual Report on Form 10-K for
      the year ended December 31, 2009 filed on April 15,
2010.         

17

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.

|      |              |  |     | IRELAND INC.                                          
|----- | ------------ |  | --- | ------------------------------------------------------
|      |              |  |     |                                                       
|      |              |  |     |                                                       
|      |              |  |     |                                                       
|Date: | May 14, 2010 |  | By: | /s/ Douglas D.G. Birnie                               
|      |              |  |     | DOUGLAS D.G. BIRNIE                                   
|      |              |  |     | Chief Executive Officer, President and
      Secretary
|      |              |  |     | (Principal Executive Officer)                         
|      |              |  |     |                                                       
|      |              |  |     |                                                       
|      |              |  |     |                                                       
|      |              |  |     |                                                       
|Date: | May 14, 2010 |  | By: | /s/ Robert D. McDougal                                
|      |              |  |     | ROBERT D. MCDOUGAL                                    
|      |              |  |     | Chief Financial Officer and Treasurer                 
|      |              |  |     | (Principal Financial Officer)                         

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