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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 June 30, 2008

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
  SECURITIES EXCHANGEACT 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. Yes [X]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 company) | **Smaller reporting
        company [ X ]**

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

Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date: As of
August 12, 2008, the Registrant had 97,010,087 shares of common stockoutstanding.

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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 six months ended June 30, 2008 are
not necessarily indicative of the results that can be expected for the year
ending December 31, 2008.

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.

1

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

|                                                         |   | June
      30, 2008 |   |   | December 31, 2007 |  
|-------------------------------------------------------- | - | ------------------- | - | - | ----------------- | -
|                                                         |   |                     |   |   |                   |  
|ASSETS                                                   |  
|                                                         |   |                     |   |   |                   |  
|Current assets                                           |   |                     |   |   |                   |  
|Cash                                                     | $ | 6,000,696           |   | $ | 8,759,605         |  
|Prepaid expenses                                         |   | 242,941             |   |   | 150,023           |  
|                                                         |   |                     |   |   |                   |  
|Total current assets                                     |   | 6,243,637           |   |   | 8,909,628         |  
|                                                         |   |                     |   |   |                   |  
|Property and equipment, net                              |   | 2,148,416           |   |   | 290,718           |  
|Mineral properties                                       |   | 31,948,053          |   |   | -                 |  
|Mineral property acquisition costs                       |   | -                   |   |   | 1,058,872         |  
|Reclamation bonds                                        |   | 860,482             |   |   | 807,000           |  
|Deposits                                                 |   | 22,200              |   |   | 2,200             |  
|                                                         |   |                     |   |   |                   |  
|Total non-current
      assets                           |   | 34,979,151          |   |   | 2,158,790         |  
|                                                         |   |                     |   |   |                   |  
|Total assets                                             | $ | 41,222,788          |   | $ | 11,068,418        |  
|                                                         |   |                     |   |   |                   |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                     |  
|                                                         |   |                     |   |   |                   |  
|Current liabilities                                      |   |                     |   |   |                   |  
|Accounts payable                                         | $ | 470,267             |   | $ | 144,280           |  
|Accounts payable - related party                         |   | 36,350              |   |   | 82,128            |  
|Accrued payroll and related taxes                        |   | 5,333               |   |   | 38,754            |  
|Due to related party                                     |   | 23,290              |   |   | 23,290            |  
|                                                         |   |                     |   |   |                   |  
|Total current liabilities                                |   | 535,240             |   |   | 288,452           |  
|                                                         |   |                     |   |   |                   |  
|Long-term liabilities                                    |   |                     |   |   |                   |  
|Deferred tax liability                                   |   | 9,712,022           |   |   | -                 |  
|                                                         |   |                     |   |   |                   |  
|Total liabilities                                        |   | 10,247,262          |   |   | 288,452           |  
|                                                         |   |                     |   |   |                   |  
|Stockholders' equity                                     |   |                     |   |   |                   |  
|Common stock, $0.001 par value;
      400,000,000 shares |   |                     |   |   |                   |  
|authorized, 97,010,087 and 86,550,000
      shares,      |   |                     |   |   |                   |  
|respectively, issued
      and outstanding               |   | 97,010              |   |   | 86,550            |  
|Additional paid-in capital                               |   | 34,644,101          |   |   | 13,234,865        |  
|Accumulated deficit during exploration
      stage       |   | (3,765,585          | ) |   | (2,541,449        | )
|                                                         |   |                     |   |   |                   |  
|Total stockholders'
      equity                         |   | 30,975,526          |   |   | 10,779,966        |  
|                                                         |   |                     |   |   |                   |  
|Total liabilities and stockholders' equity               | $ | 41,222,788          |   | $ | 11,068,418        |  

See Accompanying Notes to these Consolidated Financial Statements
  
  2

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

For the period fromFebruary 20, 2001(Date of Inception)For
        the three months ended
      
      
      For
        the six months ended
      
      
      ThroughJune
        30, 2008
      
      
      June
        30, 2007
      
      
      June
        30, 2008
      
      
      June
        30, 2007
      
      
      June
        30, 2008Revenue
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -Operating expensesMineral exploration and evaluation expenses
      
      643,569
      
      
      46,000
      
      
      841,189
      
      
      46,000
      
      
      1,188,087Mineral exploration and evaluationexpenses - related party
      
      235,000
      
      
      -
      
      
      340,000
      
      
      -
      
      
      1,316,314General and administrative
      
      323,230
      
      
      48,853
      
      
      639,700
      
      
      67,040
      
      
      1,398,954Depreciation
      
      2,806
      
      
      -
      
      
      5,445
      
      
      -
      
      
      6,117Mineral and property holding costs
      
      15,000
      
      
      -
      
      
      51,000
      
      
      -
      
      
      320,500Mineral and property holding costs -reimbursed to related
        party
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      295,000Write-off of mineral rights
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      14,000Total operating expenses
      
      1,219,605
      
      
      94,853
      
      
      1,877,334
      
      
      113,040
      
      
      4,538,972Loss from operations
      
      (1,219,605
      )
      
      (94,853
      )
      
      (1,877,334
      )
      
      (113,040
      )
      
      (4,538,972
      )Other income:Interest income
      
      30,820
      
      
      -
      
      
      104,026
      
      
      -
      
      
      224,215Total other income
      
      30,820
      
      
      -
      
      
      104,026
      
      
      -
      
      
      224,215Loss before income taxes
      
      (1,188,785
      )
      
      (94,853
      )
      
      (1,773,308
      )
      
      (113,040
      )
      
      (4,314,757
      )Income tax benefit
      
      405,187
      
      
      -
      
      
      549,172
      
      
      -
      
      
      549,172Net loss
      $
      (783,598
      )
      $
      (94,853
      )
      $
      (1,224,136
      )
      $
      (113,040
      )
      $
      (3,765,585
      )Loss per common share - basic and diluted
      $
      (0.01
      )
      $
      (0.00
      )
      $
      (0.01
      )
      $
      (0.00
      )Weighted average common shares outstanding -Basic and diluted
      
      97,010,087
      
      
      37,018,792
      
      
      94,081,491
      
      
      36,785,690


See Accompanying Notes to these Consolidated Financial Statements
  
  3

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

AccumulatedDeficit During
      
      
      TotalCommon
        Stock
      
      
      Additional
      
      
      Exploration
      
      
      Stockholders'Shares
      
      
      Amount
      
      
      Paid-in Capital
      
      
      Stage
      
      
      EquityBalance, December 31, 2007
      
      86,550,000
      
      $
      86,550
      
      $
      13,234,865
      
      $
      (2,541,449
      )
      $
      10,779,966Issuance of common stockfor cash, $0.05 per sharefrom exercise of options
      
      20,000
      
      
      20
      
      
      980
      
      
      -
      
      
      1,000Issuance of common stock inconnection with the acquisitionto the former shareholders
        of CBI,$1.92 per share
      
      10,440,087
      
      
      10,440
      
      
      19,989,560
      
      
      -
      
      
      20,000,000Fair value of share purchase warrantsissued in connection with theacquisition of CBI
      
      -
      
      
      -
      
      
      1,359,351
      
      
      -
      
      
      1,359,351Amortization of stock optionsissued to employee overvesting period
      
      -
      
      
      -
      
      
      39,410
      
      
      -
      
      
      39,410Effect of modification of stockoptions issued to the formershareholder of CBI
      
      -
      
      
      -
      
      
      19,935
      
      
      -
      
      
      19,935Net loss, June 30, 2008
      
      -
      
      
      -
      
      
      -
      
      
      (1,224,136
      )
      
      (1,224,136
      )97,010,087
      
      $
      97,010
      
      $
      34,644,101
      
      $
      (3,765,585
      )
      $
      30,975,526


See Accompanying Notes to these Consolidated Financial Statements
  
  4

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

|                                                                     |   |                                |   |   |                     |   |   | For the period from |  
|-------------------------------------------------------------------- | - | ------------------------------ | - | - | ------------------- | - | - | ------------------- | -
|                                                                     |   |                                |   |   |                     |   |   | February 20, 2001   |  
|                                                                     |   |                                |   |   |                     |   |   | (Date of inception) |  
|                                                                     |   | For
      the six months ended |   |   | through             |  
|                                                                     |   | June
      30, 2008            |   |   | June
      30, 2007 |   |   | June
      30, 2008 |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                 |   |                                |   |   |                     |   |   |                     |  
|Net loss                                                             | $ | (1,224,136                     | ) | $ | (113,040            | ) | $ | (3,765,585          | )
|Adjustments to reconcile loss
      from operating                   |   |                                |   |   |                     |   |   |                     |  
|to net cash used in operating
      activities:                      |   |                                |   |   |                     |   |   |                     |  
|Depreciation                                                         |   | 5,445                          |   |   | -                   |   |   | 6,117               |  
|Write-off of mineral
      rights                                    |   | -                              |   |   | -                   |   |   | 14,000              |  
|Consulting
      accrual                                             |   | -                              |   |   | -                   |   |   | 15,000              |  
|Stock based expenses                                                 |   | 39,410                         |   |   | 6,817               |   |   | 140,727             |  
|Changes in operating assets and
      liabilities:                   |   |                                |   |   |                     |   |   |                     |  
|Prepaid expenses                                                     |   | (242,993                       | ) |   | (950                | ) |   | (393,016            | )
|Other
      assets                                                   |   | -                              |   |   | -                   |   |   | (2,200              | )
|Reclamation deposit                                                  |   | (28,762                        | ) |   | (807,000            | ) |   | (849,762            | )
|Mineral
      property acquisition costs                             |   | (188,791                       | ) |   | -                   |   |   | (1,022,663          | )
|Accounts payable and
      accrued liabilities                       |   | 214,803                        |   |   | (27,724             | ) |   | 408,348             |  
|Deferred
      income taxes                                          |   | (549,172                       | ) |   | -                   |   |   | (549,172            | )
|                                                                     |   |                                |   |   |                     |   |   |                     |  
|Net cash used in operating activities                                |   | (1,974,196                     | ) |   | (941,897            | ) |   | (5,998,206          | )
|                                                                     |   |                                |   |   |                     |   |   |                     |  
|CASH FLOW FROM INVESTING ACTIVITIES                                  |   |                                |   |   |                     |   |   |                     |  
|Purchase of property and equipment                                   |   | (785,713                       | ) |   | -                   |   |   | (1,005,485          | )
|                                                                     |   |                                |   |   |                     |   |   |                     |  
|Net cash used in investing activities                                |   | (785,713                       | ) |   | -                   |   |   | (1,005,485          | )
|                                                                     |   |                                |   |   |                     |   |   |                     |  
|CASH FLOW FROM FINANCING ACTIVITIES                                  |   |                                |   |   |                     |   |   |                     |  
|Proceeds from stock issuance                                         |   | 1,000                          |   |   | 4,872,979           |   |   | 13,239,750          |  
|Stock issuance costs                                                 |   | -                              |   |   | -                   |   |   | (243,653            | )
|Proceeds from borrowings from
      related party                    |   | -                              |   |   | 1,500               |   |   | 8,290               |  
|                                                                     |   |                                |   |   |                     |   |   |                     |  
|Net cash provided by financing
      activities                      |   | 1,000                          |   |   | 4,874,479           |   |   | 13,004,387          |  
|                                                                     |   |                                |   |   |                     |   |   |                     |  
|NET CHANGE IN CASH                                                   |   | (2,758,909                     | ) |   | 3,932,582           |   |   | 6,000,696           |  
|                                                                     |   |                                |   |   |                     |   |   |                     |  
|CASH AT BEGINNING OF PERIOD                                          |   | 8,759,605                      |   |   | 11,633              |   |   | -                   |  
|                                                                     |   |                                |   |   |                     |   |   |                     |  
|CASH AT END OF PERIOD                                                | $ | 6,000,696                      |   | $ | 3,944,215           |   | $ | 6,000,696           |  
|                                                                     |   |                                |   |   |                     |   |   |                     |  
|                                                                     |   |                                |   |   |                     |   |   |                     |  
|                                                                     |   |                                |   |   |                     |   |   |                     |  
|SUPPLEMENTAL INFORMATION                                             |   |                                |   |   |                     |   |   |                     |  
|                                                                     |   |                                |   |   |                     |   |   |                     |  
|Interest Paid                                                        | $ | -                              |   | $ | -                   |   | $ | -                   |  
|                                                                     |   |                                |   |   |                     |   |   |                     |  
|Income Taxes Paid                                                    | $ | -                              |   | $ | -                   |   | $ | -                   |  
|                                                                     |   |                                |   |   |                     |   |   |                     |  
|Non-cash investing and financing activities:                         |   |                                |   |   |                     |   |   |                     |  
|                                                                     |   |                                |   |   |                     |   |   |                     |  
|Assets acquired for common stock
      issued for mineral properties | $ | 21,359,351                     |   | $ | -                   |   | $ | 21,359,351          |  
|                                                                     |   |                                |   |   |                     |   |   |                     |  
|Net deferred tax liability assumed                                   | $ | 10,261,194                     |   | $ | -                   |   | $ | 10,261,194          |  

See Accompanying Notes to these Consolidated Financial Statements
  
  5

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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 financial statements have been prepared in accordance with Securities
        and Exchange Commission requirements for interim financial statements.
        Therefore, they do not include all of 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, 2007 of Ireland Inc.
        (the Company).                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The interim financial statements present the balance
        sheets, statements of operations and cash flows of the Company. The financial
        statements have been prepared in accordance with accounting principles
        generally accepted in the United States.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | These 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 footnotes disclosure 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 financial statements be read
        in conjunction with the Companys audited financial statements and
        the notes thereto for the year ended December 31, 2007.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | 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 location of a commercial minable reserve, the Company expects to
        actively prepare the site for its extraction and enter a 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 of $3,765,585
        from operations as of June 30, 2008, 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 in the event the Company cannot continue in existence.                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Principles of consolidation The consolidated
        financial statements include the accounts of the Company and its wholly-owned
        subsidiary incorporated for the sole purpose of completing an acquisition,
        CBI Acquisition, Inc. (CBIA). CBIA was formed on December 19, 2007. CBIA
        has a wholly-owned single-member LLC subsidiary Columbus Salt Marsh LLC
        (CSM). Rand Metals LLC (Rand) was formed by the Company on May 1, 2008
        for purposes of potential future acquisitions and has not had any activity.                                                                                                                                                                                                                                                                                                                 

6

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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 in accordance with Emerging Issues
        Task Force abstract 04-02 (EITF 04-02), Whether Mineral
        Rights are Tangible or Intangible Assets and Related Issues. Upon
        commencement of production, the claims will be amortized using the unit-of-production
        method over the life of the claim. If the Company does not continue with
        exploration after the completion of the feasibility study, the claims
        will be expensed at that time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | 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 probably 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 Statement of Financial Accounting Standards (SFAS) No.
        144, Accounting for Impairment of Disposal of Long-Lived Assets.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Property and equipment Property and equipment
        is stated at cost less accumulated depreciation. Depreciation is provided
        principally on the straight-line or unit-of-production methods, as applicable,
        over the estimated useful lives of the assets, which are generally 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 the related carrying amounts may not
        be recoverable. The assets are subject to impairment consideration under
        SFAS No, 144, Accounting for Impairment or Disposal of Long-lived
        Assets, if events or circumstances indicate that their carrying
        amount might not be recoverable. As of June 30, 2008 exploration progress
        on these properties is on target with the Companys exploration and
        evaluation plan and no events or circumstances have happened to indicate
        the related carrying values of the properties may not be recoverable.
        When the Company determines a SFAS 144 impairment analysis should be done,
        the analysis will be using the rules of EITF 04-03, Mining Assets:
        Impairment and Business Combinations.                                                                                                                                                                                                                                                                                                                                                                        

7

---

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

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT
        POLICIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Asset retirement obligation- The Company has
        adopted Statement of Financial Accounting Standards No. 143 (SFAS
        143), Accounting for Asset Retirement Obligations, which
        requires that an asset retirement obligation (ARO) associated
        with the retirement of a tangible long-lived asset be recognized as a
        liability in the period in which it is incurred and becomes determinable,
        with an offsetting increase in the carrying amount of the associated asset.
        The cost of the tangible asset, including the initially recognized ARO,
        is depleted, such that the cost of the ARO is recognized over the useful
        life of the asset. The ARO is recorded at fair value, and accretion expense
        is recognized over time as the discounted liability is accreted to its
        expected settlement value. The fair value of the ARO is measured using
        expected future cash flow, discounted at the Companys credit-adjusted
        risk- free interest rate. To date, no significant asset retirement obligation
        exists due to the early stage of exploration. Accordingly, no liability
        has been recorded.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Environmental protection and reclamation costs-
        The operations of the Company have been, and may in the future be affected
        from time to time in varying degrees by changes in environmental regulations,
        including those for future removal and site restoration costs. Both the
        likelihood of new regulations and their overall effect upon the Company
        may vary from region to region and are not predictable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Environmental expenditures that relate to ongoing environmental
        and reclamation programs are charged against statements of operations
        as incurred or capitalized and amortized depending upon their future economic
        benefits. The Company does not currently anticipate any material capital
        expenditures for environmental control facilities because its property
        holding is at an early stage of exploration.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Fair value of financial instruments Financial
        accounting standards Statement No. 107, Disclosure About Fair Value
        of Financial Instruments, requires the Company to disclose, when
        reasonably attainable, the fair market values of its assets and liabilities
        which are deemed to be financial instruments. The carrying amounts and
        estimated fair values of the Companys financial instruments approximates
        their fair value due to the short-term nature.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

8

---

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

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT
        POLICIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | Earnings (loss) per share- The Company follows
        SFAS No. 128, Earnings Per Share and SFAS No. 150, Accounting
        for Certain Financial Instruments with Characteristics of Both Liabilities
        and 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 June 30, 2008 and December 31, 2007 that
        were not included in the computation of diluted EPS because the effect
        would be antidilutive were 17,835,798 and 6,694,521, 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
        income taxes under SFAS No. 109, Accounting for Income Taxes
        using the liability method, recognizing certain temporary differences
        between the financial reporting basis of the Companys liabilities
        and assets and the related income tax basis for such liabilities and assets.
        This method generates either a net deferred income tax liability or asset
        for the Company, as measured by the statutory tax rates in effect. The
        Company derives its deferred income tax provision or benefit by recording
        the change in either the net deferred income tax liability or asset balance
        for the year. The Company records a valuation allowance against any portion
        of those deferred income tax assets when it believes, based on the weight
        of available evidence, it is more likely than not that some portion or
        all of the deferred income tax will not be realized.                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On July 13, 2006, the FASB issued interpretation No.
        48, Accounting for Uncertainty in Income Taxes  An Interpretation
        of FASB Statement No. 109 (FIN 48). FIN 48 clarifies
        the accounting for uncertainty in income taxes recognized in an entitys
        financial statements in accordance with SFAS No. 109, and prescribes a
        recognition threshold and measurement attributes for financial statement
        disclosure of tax positions taken or expected to be taken on a tax return.
        Under FIN 48, the impact of an uncertain income tax position on the income
        tax return must be recognized at the largest amount that is more-likely-than-not
        to be sustained upon audit by the relevant taxing authority. An uncertain
        income tax position will not be recognized if it has less than 50% likelihood
        of being sustained. Additionally, FIN 48 provides guidance on de-recognition,
        classification, interest and penalties, accounting in interim periods,
        and disclosure and transition. The Company adopted the provision of FIN
        48 on January 1, 2007, which did not have any impact on the consolidated
        financial statements.                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | For acquired properties, that do not constitute a business
        as defined in EITF 98-03 Determining Whether a Nonmonetary Transaction
        Involves Receipt of Productive Assets or of a 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 EITF 98-11 and SFAS 109, 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 in accordance with EITF 98-11 and SFAS 109.                                                                                                                                                                                                                                                                                                                                                                                                  

9

---

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- On December 16, 2004,
        the FASB issued SFAS No. 123R, Share- Based Payment, which
        replaces SFAS No. 123, Accounting for Stock-Based Compensation
        and supersedes APB Opinion No. 25, Accounting for Stock Issued to
        Employees. SFAS No. 123R 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. SFAS No. 123R
        was to be effective for interim or annual reporting periods beginning
        on or after June 15, 2005, but in April 2005 the SEC issued a rule that
        permits most registrants to implement SFAS No. 123R at the beginning of
        their next fiscal year, instead of the next reporting period as required
        by SFAS No. 123R. The pro forma disclosures previously permitted under
        SFAS No. 123 no longer will be an alternative to financial statement recognition.
        Under SFAS No. 123R, the Company must determine the appropriate fair value
        model to be used for valuing share-based payments, the amortization method
        for compensation cost and the transition method to be used at date of
        adoption. The transition methods include prospective and retroactive adoption
        option. Under the retroactive option, prior periods may be restated either
        as of the beginning of the year of adoption or for all periods presented.
        The prospective method requires that compensation expense be recorded
        for all unvested stock options and restricted stock at the beginning of
        the first quarter of adoption of SFAS No. 123R, while the retroactive
        methods would record compensation expense for all unvested stock options
        and restricted stock beginning with the first period restated. The Company
        has adopted the requirements of SFAS No. 123R for the fiscal year beginning
        after December 31, 2004.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | New accounting pronouncements In May 2008,
        the FASB issued SFAS No. 162, Hierarchy of Generally Accepted Accounting
        Principles. This statement is intended to improve financial reporting
        by identifying a consistent framework, or hierarchy, for selecting accounting
        principles to be used in preparing financial statements of nongovernmental
        entities that are presented in conformity with GAAP. This statement will
        be effective 60 days following the U.S. Securities and Exchange Commissions
        approval of the Public Company Accounting Oversight Board amendment to
        AU Section 411, The Meaning of Present Fairly in Conformity with
        Generally Accepted Accounting Principles. The Company is currently
        evaluating the potential impact, if any, of the adoption of SFAS 162 on
        its consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On March 19, 2008, the FASB issued SFAS No. 161, Disclosures
        About Derivative Instruments and Hedging Activities. This statement
        is intended to improve financial reporting about derivative instruments
        and hedging activities by requiring enhanced disclosures. This statement
        is effective for financial statements issued for fiscal years and interim
        periods beginning after November 15, 2008, with early application encouraged.
        The Company is currently evaluating the impact that SFAS 161 will have
        on the consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | In December 2007, the FASB issued SFAS No. 141(R), Business
        Combinations, which amends SFAS No. 141, and provides revised guidance
        for recognizing and measuring identifiable assets and goodwill acquired,
        liabilities assumed, and any noncontrolling interest in the acquiree.
        It also provides disclosure requirements to enable users of the financial
        statements to evaluate the nature and financial effects of the business
        combination. SFAS No. 141(R) is effective for the Companys fiscal
        year beginning January 1, 2009 and is to be applied prospectively. The
        Company is currently evaluating the potential impact of adopting this
        statement on the Companys consolidated financial position, results
        of operations or cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

10

---

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

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT
        POLICIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | In December 2007, the FASB issued SFAS No. 160, Noncontrolling
        Interests in Consolidated Financial Statements - an amendment of ARB No.
        51 which establishes accounting and reporting standards pertaining
        to ownership interests in subsidiaries held by parties other than the
        parent, the amount of net income attributable to the parent and to the
        noncontrolling interest, changes in a parents ownership interest,
        and the valuation of any retained noncontrolling equity investment when
        a subsidiary is deconsolidated. SFAS No. 160 also establishes disclosure
        requirements that clearly identify and distinguish between the interests
        of the parent and the interests of the noncontrolling owners. SFAS No.
        160 is effective for the Companys fiscal year beginning January
        1, 2009. The Company is currently evaluating the potential impact of adopting
        this statement on the Companys consolidated financial position,
        results of operations or cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | In September 2007, the FASB published Proposed FSP No.
        APB 14-a, Accounting for Convertible Debt Instruments That May Be
        Settled in Cash upon Conversion. The proposed FSP applies to convertible
        debt instruments that, by their stated terms, may be settled in cash (or
        other assets) upon conversion, including partial cash settlement, unless
        the embedded conversion option is required to be separately accounted
        for as a derivative under SFAS 133. Convertible debt instruments within
        the scope of the proposed FSP are not addressed by the existing APB 14.
        The proposed FSP would require that the liability and equity components
        of convertible debt instruments within the scope of the proposed FSP shall
        be separately accounted for in a manner that reflects the entitys
        nonconvertible debt borrowing rate. This will require an allocation of
        the convertible debt proceeds between the liability component and the
        embedded conversion option (i.e., the equity component). The difference
        between the principal amount of the debt and the amount of the proceeds
        allocated to the liability component would be reported as a debt discount
        and subsequently amortized to earnings over the instruments expected
        life using the effective interest method. The Company is currently evaluating
        the impact that FSP may have on the financial position, results of operations
        and cash flows of the Company.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | In February 2007, the Financial Accounting Standards
        Board (FASB) issued SFAS No. 159, The Fair Value Option
        For Financial Assets And Financial Liabilities  Including An Amendment
        Of FASB Statement No. 115. This pronouncement permits entities to
        use the fair value method to measure certain financial assets and liabilities
        by electing an irrevocable option to use the fair value method at specified
        election dates. After election of the option, subsequent changes in fair
        value would result in the recognition of unrealized gains or losses as
        period costs during the period the change occurred. SFAS No. 159 becomes
        effective as of the beginning of the first fiscal year that begins after
        November 15, 2007, with early adoption permitted. However, entities may
        not retroactively apply the provisions of SFAS No. 159 to fiscal years
        preceding the date of adoption. The Company has determined that the adoption
        of this statement will have little or no effect on the Companys
        consolidated financial position, results of operations, and disclosures.                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

11

---

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

|2. | PROPERTY AND EQUIPMENT                                                                              
|-- | ----------------------------------------------------------------------------------------------------
|   |                                                                                                     
|   | Property and equipment consisted of the following as
        of June 30, 2008 and December 31, 2007:

| |                               |   | June 30,  |  |   | December 31, | 
| | ----------------------------- | - | --------- |  | - | ------------ | 
| |                               |   | 2008      |  |   | 2007         | 
| |                               |   |           |  |   |              | 
| | Furniture and fixtures        | $ | 7,521     |  | $ | 2,698        | 
| | Computers and equipment       |   | 32,274    |  |   | 21,178       | 
| | Land                          |   | 30,000    |  |   | --           | 
| | Site equipment                |   | 7,500     |  |   | 7,500        | 
| | Construction in progress:     |   |           |  |   |              | 
| | Building                      |   | 500,000   |  |   | --           | 
| | Site improvements             |   | 1,039,756 |  |   | 260,014      | 
| | Site equipment                |   | 537,482   |  |   | --           | 
| |                               |   |           |  |   |              | 
| |                               |   | 2,154,533 |  |   | 291,390      | 
| | Less accumulated depreciation |   | 6,117     |  |   | 672          | 
| |                               |   |           |  |   |              | 
| |                               | $ | 2,148,416 |  | $ | 290,718      | 

|   | Depreciation expense was $5,445 and $0 for the six months
        ended June 30, 2008 and 2007, respectively.
|-- | -------------------------------------------------------------------------------------------------------------
|   |                                                                                                              
|3. | RECLAMATION BONDS                                                                                            
|   |                                                                                                              
|   | Reclamation bonds consisted of the following as of June
        30, 2008 and December 31, 2007:              

| |                   |   | June 30, |  |   | December 31, | 
| | ----------------- | - | -------- |  | - | ------------ | 
| |                   |   | 2008     |  |   | 2007         | 
| |                   |   |          |  |   |              | 
| | Reclamation bonds | $ | 860,482  |  | $ | 807,000      | 

|   | During the six months ended June 30, 2008, the Company
        acquired a reclamation bond of $24,720 in connection with the acquisition
        of CBI and $28,762 for financial guarantee.                                                                                                                                                                                                                                                                                                                    
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|4. | MINERAL EXPLORATION PROPERTIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Ireland claim- On November 30, 2004, the Company
        entered into a mineral property purchase agreement to acquire a 100% undivided
        interest in one mineral claim located in the Yellow Pine Mining District
        in Clark County, Nevada, known as the Ireland Claim, for a total consideration
        of $6,000.                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company has not determined whether the mineral claim
        contains mineralized material and has consequently written off all mineral
        rights acquisition costs to operations during the previous financial periods.                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Columbus and Red Mountain projects- On March
        30, 2007, as amended August 8, 2007, the Company entered into an Assignment
        Agreement with Nanominerals Corp. (NMC) a Nevada corporation, to acquire
        two mineral property option interests, the first located in Esmeralda
        County, Nevada (the Columbus project) and the second located
        in San Bernardino County, California (the Red Mountain project).
        The assignments were completed on August 14, 2007.

12

---

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

|4. | MINERAL EXPLORATION PROPERTIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Pursuant to the above assignment agreement, the Company
        issued 30,000,000 common shares to NMC and, in return, received a deed
        of assignment to the option interests in the Columbus Project and to the
        Red Mountain Project. The Company granted a 5% net smelter return royalty
        and has reimbursed $1,162,125 in documented fees and expenses to NMC.                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Upon assignment of the option rights, the Company assumed
        the terms of the underlying agreements to earn the respective interests
        in both properties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The mineral property options have been capitalized as
        tangible assets in accordance with Emerging Issues Task Force abstract
        04-02 and allocated in accordance with EITF 98-11. Valuation of $225,000
        is based on issuance of 30,000,000 shares at $0.0075 which was the share
        price at the time of the option assignment agreement.                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | At such time either or both of the option transactions
        are completed the option cost will continue to be included in the overall
        acquisition cost of the underlying mineral properties. If the Company
        does not complete the option transactions or the underlying mineral properties
        are considered impaired the acquisition cost will be either written down
        or expensed at that time.                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|5. | COLUMBUS PROJECT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On June 26, 2007, the Company paid $807,000 to the Bureau
        of Land Management as a bond for future reclamation work on the proposed
        Columbus Project. This payment was made pursuant to the underlying option
        agreement in anticipation of the completion of the transaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Columbus project was subject to an underlying option
        agreement dated July 22, 2006. Under the terms of this agreement, to earn
        a 15% interest, the Company was required to pay $24,000 per month until
        December 31, 2007 and spend $3,000,000 on qualifying expenses by December
        31, 2007. These expenditures were satisfied as of December 31, 2007.                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | As of December 31, 2007, the Company had earned a 15%
        operating interest in the Columbus project by satisfying the above terms
        of the agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | To earn a 100% interest in the Columbus project, the
        Company, after earning 15%, had the right to merge with the corporation
        holding the remaining 85% interest. To exercise the merger right, the
        Company issued shares of common stock with an aggregate value of $20,000,000
        and issued share purchase warrants to purchase up to a further 50% of
        the number of shares of common stock to be issued.                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On February 20, 2008, the Company, through its wholly-owned
        subsidiary CBIA, 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.

13

---

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

|5. | COLUMBUS PROJECT(continued)                                                                       
|-- | --------------------------------------------------------------------------------------------------
|   |                                                                                                   
|   | The following table reflects the recorded purchase consideration
        for the Columbus Project:

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


In accordance with EITF 98-11 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 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.

The following table reflects the components
  of the Columbus Project:

Allocation of acquisition cost:Mineral properties (including deferred tax liabilityassumed of $10,261,194)
      $
      31,639,422Property, plant and equipment
      
      511,061Deposits
      
      44,720Cash
      
      6,570Prepaid expenses
      
      24,925Accounts payable
      
      (6,153
      )Net assets acquired
      $
      32,220,545


14

---

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

|5. | COLUMBUS PROJECT(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 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 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 Binomial lattice pricing
        model as further discussed in Note 7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company believes 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, CBIA was the surviving merger entity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|6. | RED MOUNTAIN PROJECT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The Red Mountain project is subject to an underlying
        option agreement dated March 15, 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.                                        

15

---

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

|7. | STOCKHOLDERS EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | During the six months ended June 30, 2008,
        the Companys stockholders activities consisted of the following:                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Warrants associated with the 2008 equity issuances
        do not constitute a registration payment arrangement.                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The value of the warrants issued connection
        with the CBI acquisition option contain a cashless exercise provision
        and are callable by the Company based upon certain conditions which are
        defined in Note 4 related to the acquisition. The fair market valuation
        of the warrants was computed using the binomial lattice method and were
        allocated to the acquisition cost of the project. The fair market value
        of the warrants was computed based on the following assumptions:

Dividend yield
      --Expected volatility
      54.61%Risk-free interest rate
      3.02%Suboptimal exercise factor (call price)
      1.5 timesImputed life (years)
      4.88


|8. | OPTION PLAN                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | 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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | During the six months ended June 30, 2008,
        the Company granted stock options as follows:                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | Expenses for the six months ended June 30,
        2008 and 2007 related to granting and vesting of stock options were $39,410
        and $0, respectively and are included in general and administrative expense.                                                                                                                                                                                                                                                         

Stock options  During the
  six months ended June 30, 2008, the Company granted stock options to a director
  totaling 100,000 with a weighted average exercise price of $1.60 per share.
  As of June 30, 2008 stock options outstanding totaled 4,054,719 with a weighted
  average exercise price of $0.19 per share.

16

---

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

|8. | OPTION PLAN(continued)
|-- | ----------------------

On June 27, 2008, the Company extended
  the term of stock options previously issued to a former shareholder of CBI for
  79,719 shares of common stock for an additional 2 years. The Company accounted
  for the impact of the amended stock option grant as a stock option modification
  under SFAS 123R. As a result of modification, the Company recognized $19,935
  of additional acquisition cost of CBI due to the increase in the fair market
  value of this stock option grant that was recorded as a reduction of accrued
  acquisition costs.

The following table summarizes the Companys
  stock option activity for the six months ended June 30, 2008:

| |                             |  | Number of  |   |   | Weighted       | 
| | --------------------------- |  | ---------- | - | - | -------------- | 
| |                             |  | Shares     |   |   | Average        | 
| |                             |  |            |   |   | Exercise Price | 
| | Balance, December 31, 2007  |  | 5,399,778  |   | $ | 2.36           | 
| | Options granted and assumed |  | 179,719    |   |   | 1.49           | 
| | Options expired             |  | --         |   |   | --             | 
| | Options cancelled           |  | --         |   |   | --             | 
| | Options exercised           |  | (20,000    | ) |   | 0.05           | 
| |                             |  |            |   |   |                | 
| | Balance, June 30, 2008      |  | 19,435,428 |   | $ | 1.20           | 

The Company estimated the fair value
  of options granted prior to March 31, 2007 using the Black-Scholes option pricing
  model. The Company now utilizes the Binomial lattice pricing model to estimate
  the fair value of options granted. The Company believes 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 has used the same assumptions
  within each of the pricing models utilized to estimated the fair value of the
  options granted as follows:

| |                         | 2008           | 2007             
| | ----------------------- | -------------- | -----------------
| |                         |                |                  
| | Dividend yield          | --             | --               
| | Expected volatility     | 56.13%         | 56.13% to 120.24%
| | Risk-free interest rate | 2.65% to 2.95% | 3.62% to 4.05%   
| | Expected life (years)   | 2 to 6 years   | 2 to 10          

The Company estimates expected volatility
  using representative peer group average, because of limited historical equity
  transactions of the Company. 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.

Accordingly, the Company valued the services
  under SFAS No. 123R relating to non-statutory stock options upon grant in 2008
  for $39,410 as of June 30, 2008.

17

---

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

|8. | OPTION PLAN(continued)                                                                                                                                               
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                      
|   | The following table summarizes the status of the Companys
        unvested shares as of June 30, 2008 and changes during the six months
        ended June 30, 2008:

| |                               |  | Number of |  |   | Weighted Average | 
| | ----------------------------- |  | --------- |  | - | ---------------- | 
| |                               |  | Shares    |  |   | Grant Date       | 
| |                               |  |           |  |   | Fair
      Value | 
| | Unvested, January 1, 2008     |  | 75,000    |  | $ | 0.53             | 
| | Options granted               |  | 75,000    |  |   | 0.56             | 
| | Options vested                |  | --        |  |   | --               | 
| | Options cancelled             |  | --        |  |   | --               | 
| |                               |  |           |  |   |                  | 
| | Unvested, June 30,
      2008 |  | 150,000   |  | $ | 0.55             | 

As of June 30, 2008, there was $46,743
  of total unrecognized compensation cost related to unvested stock options. This
  cost is expected to be recognized as follows: 2008  $29,381 and 2009 -
  $17,362.

The following table summarizes information
  about options granted during the six months ended June 30, 2008:

Number of Options 
        Granted 
        During 2008
      Exercise Price 
        Equals, Exceeds 
        Or 
        Is Less than Mkt. 
        Price of Stock 
        On Grant Date
      Weighted 
        Average 
        Exercise 
        Price
      Range of 
        Exercise 
        Price
      Weighted 
        Average Fair 
        Value--
      Equals
      $     
        --
      $    --
         to  $    --
      $     --179,719
      Exceeds
      $  1.49
      $ 1.36 to $1.60
      $ 0.31--
      Less Than
      $      --
      $   --  to   $   --
      $     --179,719
      Equals
      $  1.49
      $1.36 to $1.60
      $ 0.31


Stock options/warrants 
  During the six months ended June 30, 2008 the Company granted stock warrants
  related to common stock issued in connection with the CBI acquisition totaling
  5,220,059 with an exercise price of $2.39 per share for a period of 5 years.
  These share purchase warrants also contain additional material terms, as described
  in Note 5.

18

---

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

|8. | OPTION PLAN(continued)                                                                                                      
|-- | ----------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                             
|   | The following table summarizes information about options/warrants
        granted during the six months ended June 30, 2008:

| |                                      |  | Number of  |   |   | Weighted       | 
| | ------------------------------------ |  | ---------- | - | - | -------------- | 
| |                                      |  | Shares     |   |   | Average        | 
| |                                      |  |            |   |   | Exercise Price | 
| | Balance, December 31, 2007           |  | 14,055,650 |   | $ | 0.76           | 
| | Options/warrants granted and assumed |  | 5,399,778  |   |   | 2.36           | 
| | Options/warrants expired             |  | --         |   |   | --             | 
| | Options/warrants cancelled           |  | --         |   |   | --             | 
| | Options/warrants exercised           |  | (20,000    | ) |   | 0.05           | 
| |                                      |  |            |   |   |                | 
| | Balance, June 30, 2008               |  | 19,435,428 |   | $ | 1.20           | 

The Company estimated the fair value
  of warrants issued in connection with the acquisition of CBI using Binomial
  lattice pricing model. The following assumptions were used to value these warrants:

Dividend yield
      --Expected volatility
      54.61%Risk-free interest rate
      3.02%Expected life (years)
      5Suboptimal exercise factor
      1.5


The Company estimates expected volatility
  using representative peer group average, because of limited historical equity
  transactions of the Company. 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.

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
        June 30, 2008 and 2007,                                              

| |                                                       |   | June
      30, 2008 |   |   | June
      30, 2007 |  
| | ----------------------------------------------------- | - | ------------------- | - | - | ------------------- | -
| |                                                       |   |                     |   |   |                     |  
| | Income tax benefit per financial statements           | $ | (621,196            | ) | $ | (38,434             | )
| | Non-deductible and other                              |   | 3,017               |   |   | --                  |  
| | Change in valuation allowance                         |   | (714,571            | ) |   | 38,434              |  
| | Rate change                                           |   | (22,419             | ) |   | --                  |  
| | Release of valuation allowance related to acquisition |   | 805,997             |   |   | --                  |  
| |                                                       |   |                     |   |   |                     |  
| | Income tax benefit                                    | $ | (549,172            | ) | $ | --                  |  

Significant components of the Companys
  net deferred income tax assets and liabilities at June 30, 2008 and December
  31, 2007 were as follows:

| |                                   |   | June 30,   |   |   | December 31, |  
| | --------------------------------- | - | ---------- | - | - | ------------ | -
| |                                   |   | 2008       |   |   | 2007         |  
| | Deferred income tax assets:       |   |            |   |   |              |  
| |                                   |   |            |   |   |              |  
| | Net operating loss carryforward   | $ | 1,355,169  |   | $ | 727,864      |  
| | Option compensation               |   | 49,255     |   |   | 34,448       |  
| |                                   |   |            |   |   |              |  
| | Gross deferred income tax asset   |   | 1,404,424  |   |   | 762,312      |  
| | Valuation allowance               |   | (47,669    | ) |   | (762,240     | )
| |                                   |   |            |   |   |              |  
| |                                   |   | 1,356,755  |   |   | 72           |  
| | Deferred income tax liabilities:  |   |            |   |   |              |  
| |                                   |   |            |   |   |              |  
| | Property, plant & equipment       |   | 1,586      |   |   | 72           |  
| | Acquisition related liabilities   |   | 11,067,191 |   |   | --           |  
| |                                   |   |            |   |   |              |  
| | Net deferred income tax liability | $ | 9,712,022  |   | $ | --           |  

A valuation allowance for deferred tax
  related to option compensation 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 June 30, 2008 and December 31, 2007.

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.

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 EITF 98-11 and
  SFAS 109, 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
  in accordance with EITF 98-11 and SFAS 109.

20

---

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

|9.  | INCOME TAXES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Company had cumulative net operating losses of approximately
        $3,871,911 and $2,140,776 as of June 30, 2008 and December 31, 2007, 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 2028.                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | As of January 1, 2007, the Company did not have any
        unrecognized tax benefits. The adoption of FIN 48 did not result in any
        cumulative effect adjustment to the January 1, 2007 balance of the Companys
        accumulated deficit. Upon adoption of FIN 48, the Company did not accrue
        for interest and penalties as there were no unrecognized tax benefits.
        If interest and penalties were to be assessed, we would charge interest
        to interest expense, and penalties to general and administrative expense.
        It is not anticipated that unrecognized tax benefits would significantly
        increase or decrease within 12 months of the reporting date.                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | 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.
        While the Company believes 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.                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|10. | PROPERTY RENTAL AGREEMENTS AND LEASES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Company through its subsidiary CBIA has a lease
        agreement for mining claims with DDB Syndicate, an entity owned by related
        parties, including Douglas D.G. Birnie, Mr. Chizmar, 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 must pay 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, 2009
      $
      30,000June 30, 2010
      
      30,000June 30, 2011
      
      30,000$
      90,000


The Company has made $130,000 in rental
  payments during the six months ended June 30, 2008, which consists of $13,416
  in payments to each of the eight owners of DDB Syndicate including reimbursement
  of expenses of $22,670 to a company controlled by Douglas D.G. Birnie.

21

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

|11. | COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                
|    | Lease obligations The Company rents office
        space in Henderson, Nevada under a one year lease term effective September
        1, 2007 for $2,200 per month. On April 1, 2008, rent amount increased
        to $4,325 per month for additional office space.                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                
|    | Rental expense, resulting from this operating lease
        agreement, approximates $19,575 and $0 for the six months ended June 30,
        2008 and 2007, respectively.                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                
|12. | CONCENTRATION OF CREDIT RISK                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                
|    | Financial instruments that potentially subject the Company
        to concentration of credit risk consist of cash investments. The Company
        places its temporary cash investments with two financial institutions.
        Cash accounts at these financial institutions are insured by the Federal
        Deposit Insurance Corporation for up to $100,000 per financial institution.
|    |                                                                                                                                                                                                                                                                                                                                                                                                
|13. | CONCENTRATION OF ACTIVITY                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                
|    | For the six months ended June 30, 2008, the Company
        purchased services from two major vendors Arrakis, Inc. and Boart Longyear
        that exceeded more than 10% of total purchases and amounted to approximately
        $621,303 and $308,219, respectively.                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                
|14. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                
|    | During the six months ended June 30, 2008, the Company
        utilized the services of NMC to provide technical and financing related
        activities. These services related primarily to the Columbus project and
        the Red Mountain project.                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                
|    | In addition to the above fees, NMC provided dedicated
        use of its laboratory, instrumentation, milling equipment and research
        facilities. NMC provided invoices for these fees plus expenses.                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                
|    | For the six months ended June 30, 2008, the Company
        incurred total fees and reimbursements of expenses to NMC of $210,000
        and $13,723, respectively, for a total of $223,723. At June 30, 2008,
        the Company had an outstanding balance due to NMC of $36,350.                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                
|    | The company has the mining claim lease for the DDB Claims
        as further discussed in Note 10.                                                                                                                                                                                                                                                                                             

22

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|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 an exploration stage company engaged in the acquisition
and exploration of mineral properties.

On February 20, 2008, we completed the acquisition of Columbus
Brine Inc. (CBI). A detailed description of our acquisition of CBI is provided
in our Annual Report on Form 10-K for the year ended December 31, 2007.

As a result of our acquisition of CBI, we now own 100% of a
mineral project located in Esmeralda County, Nevada that we call the Columbus
Project. As part of the acquisition of CBI, we also acquired CBIs rights under
a mining lease agreement covering an additional 23,500 acres located in the same
area as the Columbus Project that we call the DDB Claims. The mining lease
agreement for the DDB Claims includes an option to acquire a 100% interest in
the DDB Claims. Title to the DDB Claims is held by a mining syndicate known as
the DDB Syndicate. Each of Douglas D.G. Birnie, our President, Chief Executive
Officer and a member of our Board of Directors, and Lawrence E. Chizmar Jr., a
member of our Board of Directors (and a former director of CBI), is the owner of
a 1/8 interest in the DDB Syndicate. The remaining 6/8 interests in the DDB
Syndicate are owned by former officers, directors and affiliates of CBI, and
certain affiliates of Nanominerals Corp. (Nanominerals). Nanominerals is our
principal shareholder.

In addition to the Columbus Project, we have an interest in a
mineral project located in San Bernardino County and Kern County, California
that we refer to as the Red Mountain Project. In addition, we own a 100%
interest in a mineral claim located in Clark County, Nevada that we refer to as
the Ireland Claim.

RECENT CORPORATE DEVELOPMENTS

The following significant developments have occurred since the
end of our last fiscal quarter ended March 31, 2008:

|1. | On April 21, 2008, we granted to Lawrence E. Chizmar,
      Jr., one of our directors, options to purchase 100,000 shares of our
      common stock pursuant to the 2007 Stock Incentive Plan (the "Non-Qualified
      Options"), 25,000 of which will vest on June 30, 2008, expiring June 29,
      2013,
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23

---

|   | and 75,000 of which will vest on March 19, 2009, expiring
      March 18, 2014. The Non-Qualified Options will only vest and become
      exercisable subject to our Compensation Committee (or if there are no
      active members of the Compensation Committee, a majority of our Board of
      Directors not including Mr. Chizmar) determining that Mr. Chizmar has,
      from the grant date to the respective vesting dates, reasonably fulfilled
      his duties and obligations as a director of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|2. | In April 2008, we received approval from the Bureau of
      Land Management (the BLM) to conduct a 28-hole drill program on the
      Columbus Project. The drill program will consist of a series of 28 holes
      drilled to depths ranging from 150 feet to 400 feet in depth. In July
      2008, we received approval from the BLM to increase the drill program by
      an additional 11 holes, bringing the total number of holes to be drilled
      to 39. The objective of the program is to determine the three dimensional
      extent and economic potential of the gold mineralization within the 5,000
      acre area of interest previously discovered by our surface sampling
      program. Drilling has been completed on 23 of the total 39 holes to be
      drilled. We expect to receive the results from initial sample analysis
      before the end of our September 30, 2008 fiscal quarter. Once this drill
      program is completed, we expect to have a significantly clearer picture of
      the potential mineralization of the area of interest that we have
      identified on the Columbus Project.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|3. | In July 2008, the Nevada Department of Environmental
      Protection (the NDEP) approved our application to amend our Water
      Control Permit for the Columbus Project. The amended permit allows us to
      mine up to 792,000 tons of raw material per year, a ten-fold increase over
      the originally permitted tonnage, and increases the depth to which we can
      mine to 40 feet, up 60% from the original permitted depth of 25 feet.
      Based on calculations made by SRK Consulting, an international independent
      consulting and engineering firm hired by the previous claim holders to the
      Columbus Project, assuming that the mineable material is consistent from
      the surface to the maximum mineable depth of 40 feet, if the 320 acre area
      covered by the permit is mined at the maximum allowable rate under the
      amended permit, we believe that there are sufficient raw materials within
      the permitted area to allow the mine to be operated continuously for at
      least 17 years.                                                                                    

PLAN OF OPERATION

During our 2008 fiscal year, we intend to proceed with our
exploration and development programs for the Columbus Project and the Red
Mountain Project. Although we currently intend to retain the Ireland Claim, our
management has deprioritized our exploration program for the Ireland Claim based
on the progress and potential of the Columbus and Red Mountain Projects. As a
result, our exploration program for the Ireland Claim is expected to be delayed,
and may be delayed indefinitely.

The Columbus Project

Our exploration and development program for the Columbus
Project currently consists of the following:

|1. | Pilot Production Module: We plan to implement a
      pilot production module on the Columbus Project in order to evaluate the
      economic feasibility of the project. The pilot production module will
      consist of a full scale production and processing cycle that we will use
      to test the commercial viability of the project. If the operation of this
      pilot production module proves to our satisfaction that the Columbus
      Project is economically viable, we will seek to expand the pilot
      production module or construct additional production modules within the
      mill site. The production model for the Columbus Project is anticipated to
      be a low cost, high volume mining operation.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

24

---

|   | We currently have a production permit from the Bureau of
      Land Management (the BLM) for the Columbus Project. The production
      permit allows us to produce calcium carbonate and extract precious
      minerals on the 320 acre mine site and 60 acre mill sites located at the
      Columbus Project at a mine rate of up to 792,000 tons per year. The mine
      site and mill sites are located on the northern edge of the 5,000 acre
      area of interest identified by our surface sampling program.                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | We plan to use a dredge mining method to extract minerals
      from the Columbus Project. The material will be mined and slurried to the
      project facility. Once the material has been slurried, we will use a
      gravity concentration process to filter the minerals from the material.
      The final extraction method will involve acid leaching to recover the
      minerals from the materials.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Once we commence production, we anticipate that we will
      continue our production with the pilot production module as long as the
      Columbus Project produces commercial minerals.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Readers are cautioned that, although we believe that
      the results of our exploration activities to date are sufficiently
      positive to proceed with the installation of a pilot production module 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2. | Drilling Exploration Program: We have commenced a
      drilling program on the Columbus Project in order to determine whether
      there are sufficient reserves on the Columbus Project for economic
      viability. In April 2008, we received approval from the BLM to conduct a
      28-hole drill program on the Columbus Project. In July 2008, the BLM
      approved our application to increase the drill program to 39 holes. The
      holes will be drilled to depths ranging from 150 feet to 400 feet in
      depth. The objective of the program is to determine the three dimensional
      extent and economic potential of the gold mineralization within the 5,000
      acre area of interest previously discovered by our surface sampling
      program. We have completed drilling on 23 holes and expect to receive the
      results of initial sample analyses from independent laboratories before
      the end of our September 30, 2008 fiscal quarter.

We anticipate spending approximately $4,176,975 on the above
exploration and development program for the Columbus Project in 2008.

The Red Mountain Project

Our exploration and development program for the Red Mountain
Project currently consists of the following:

|1. | Comprehensive Project Report: A comprehensive
      project report on the Red Mountain Project has been prepared for us by an
      independent geological consultant. This report includes a review, summary
      and analysis of the mining history of the area and previous exploration
      work done on the project area. Based on the previous exploration work done
      on the region and on the specific project area, the consulting geologist
      recommended that additional exploration work be conducted on the Red
      Mountain Project. We expect the project report to be updated once our
      sampling and drilling program has been completed and the results of that
      program have been analyzed.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2. | Sampling and Drilling Program: We have initiated a
      surface sampling program on the Red Mountain Project and we are planning
      to initiate a drilling program on the Red Mountain Project before the end
      of our 2008 fiscal year. We hope to submit our initial drill permit
      application in                                                                                                                                                                                                                                                                                                                                                                                                                   

25

---

2008. The drill locations will be determined by further
  analysis of the project data, which is currently underway.

We anticipate that we will spend approximately $1,645,600 on
our exploration program for the Red Mountain Project in 2008.

Cash Requirements

Our estimated expenses for 2008 are as follows:

Columbus Project- Property
      Acquisition and Maintenance Costs
    $
    210,000- Drilling Exploration Program and Obtaining
      Reserve Estimates
    
    626,000- Plant
      Facility Upgrades
    
    2,379,250- Plant Operation
    
    402,000- Permits
    
    180,0003,797,250Contingency (@ 10%)
    
    379,725Total for Columbus Project
    $
    4,176,975Red Mountain
      Project- Property Acquisition and Maintenance Costs
    $
    60,000- Permitting
      Costs
    
    350,000- Drilling/Sampling Exploration Program
    
    720,000- Operations
    
    366,0001,496,000- Contingency (@
      10%)
    
    149,600Total for Red Mountain Project
    $
    1,645,600General and
      Administration- General and Administration
    
    1,316,400- Contingency
      (@ 10%)
    
    131,640Total for General and Administration
    $
    1,448,040TOTAL
    $
    7,270,615


As of June 30, 2008, we had cash in the amount of $6,000,696
and a working capital surplus of $5,708,397. Although this amount is sufficient
to meet the anticipated costs for our exploration and development programs for
the remainder of our 2008 fiscal year, the actual costs of completing those
programs may be greater than anticipated. If the actual costs are significantly
greater than anticipated or if we proceed with our exploration and development
programs beyond what we currently have planned for the next twelve months, we
will need to obtain additional financing. There are no assurances that we will
be able to obtain additional financing in an amount sufficient to meet our needs
or on terms that are acceptable to us.

26

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RESULTS OF OPERATIONS

Three Months and Six Months Summary

|                          |   |                            |   |   |            |   |  |                          |  |   |            |  
|------------------------- | - | -------------------------- | - | - | ---------- | - |  | ------------------------ |  | - | ---------- | -
|                          |   | Three Months Ended June 30 |   |   | Percentage |   |  | Six Months Ended June 30 |  |   | Percentage |  
|                          |   |                            |   |   |            |   |  | Increase /               |  |   |            |  
|                          |   | 2008                       |   |   | 2007       |   |  | (Decrease)               |  |   | 2008       |  
|Revenue                   | $ | -                          |   | $ | -          |   |  | n/a                      |  | $ | -          |  
|Operating 
      Expenses | $ | (1,219,605                 | ) | $ | (94,853    | ) |  | 1,185.8%                 |  | $ | (1,877,334 | )
|                         
|Interest 
      Income    | $ | 30,820                     |   | $ | -          |   |  | n/a                      |  | $ | 104,026    |  
|Income Tax 
      Benefit | $ | 405,187                    |   | $ | -          |   |  | n/a                      |  | $ | 549,172    |  
|Net Loss                  | $ | (783,598                   | ) | $ | (94,853    | ) |  | 726.1%                   |  | $ | (1,224,136 | )

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. We are currently
in the exploration stage of our business and we can provide no assurances that
we will discover commercially exploitable levels of mineral resources on our
properties, or if such resources are discovered, that we will be able to enter
into commercial production with respect to these mineral properties.

Operating Expenses

The major components of our operating expenses for the three
and six months ended June 30, 2008 and 2007 consisted of the following:

|                                                                                 |   |                            |  |   |            |  |  |                          |  |   |            | 
|-------------------------------------------------------------------------------- | - | -------------------------- |  | - | ---------- |  |  | ------------------------ |  | - | ---------- | 
|                                                                                 |   | Three Months Ended June 30 |  |   | Percentage |  |  | Six Months Ended June 30 |  |   | Percentage | 
|                                                                                 |   |                            |  |   |            |  |  | Increase /               |  |   |            | 
|                                                                                 |   | 2008                       |  |   | 2007       |  |  | (Decrease)               |  |   | 2008       | 
|Mineral exploration 
      and evaluation 
      expenses                        | $ | 643,569                    |  | $ | 46,000     |  |  | 1,299.1%                 |  | $ | 841,189    | 
|Mineral exploration 
      and evaluation 
      expenses  related 
      party | $ | 235,000                    |  | $ | -          |  |  | n/a                      |  | $ | 340,000    | 
|General and 
      administrative                                                | $ | 323,230                    |  | $ | 48,853     |  |  | 561.6%                   |  | $ | 639,700    | 
|Depreciation                                                                     | $ | 2,806                      |  | $ | -          |  |  | n/a                      |  | $ | 5,445      | 
|Mineral and 
      property holding 
      costs                                 | $ | 15,000                     |  | $ | -          |  |  | n/a                      |  | $ | 51,000     | 
|Total Expenses                                                                   | $ | 1,219,605                  |  | $ | 94,853     |  |  | 1,185.8%                 |  | $ | 1,877,334  | 

Our operating expenses for the second quarter ended June 30,
2008 increased greatly as compared to the same period during our 2007 fiscal
year. The additional operating expenses for our second fiscal quarter of 2008
are primarily expenses related to the exploration and development of the
Columbus Project and the exploration of the Red Mountain Project.

27

---

The item Mineral exploration and evaluation expenses  related
party represents (a) amounts paid or reimbursed to Nanominerals for exploration
work conducted on the Columbus and Red Mountain Projects; and (b) amounts paid
in respect of the DDB Claims to the DDB Syndicate, an entity owned by related
parties. During the six months ended June 30, 2008, we incurred fees payable to
Nanominerals of $210,000 for technical services and financing related services
relating primarily to the Columbus and Red Mountain Projects. In addition, we
accrued $13,723 in respect of reimbursable expenses paid for by Nanominerals. As
at June 30, 2008, we were indebted to Nanominerals in the amount of $36,350 for
unpaid fees and reimbursable expenses. We made $130,000 in rental payments to
the DDB Syndicate under the terms of our lease agreement for the DDB Claims. The
DDB Syndicate is a mining syndicate made up of Douglas D.G. Birnie (our
President and Chief Executive Officer and a member of our Board of Directors),
Lawrence E. Chizmar (a member of our Board of Directors and a former director of
CBI), three former officers, directors and affiliates of CBI, and three
companies affiliated with Nanominerals. The $130,000 in rental payments made to
the DDB Syndicate consisted of $13,416 paid to each member of the DDB Syndicate,
including $22,670 paid to a company controlled by Mr. Birnie for the
reimbursement of legal and government filing fees  related to  DDB Claims.

The increase in general and administrative expenses is
primarily attributable to: (i) increases in the amounts paid as executive
compensation; and (ii) an increase in legal expenses incurred by us.

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

LIQUIDITY AND CAPITAL RESOURCES

|Working Capital     |   |                        |   |   |                            |   |  |                       |  
|------------------- | - | ---------------------- | - | - | -------------------------- | - |  | --------------------- | -
|                    |   |                        |   |   |                            |   |  | Percentage            |  
|                    |   | At
      June 30, 2008 |   |   | At
      December 31, 2007 |   |  | Increase / (Decrease) |  
|Current Assets      | $ | 6,243,637              |   | $ | 8,909,628                  |   |  | (29.9%                | )
|Current Liabilities | $ | (535,240               | ) | $ | (288,452                   | ) |  | 85.6%                 |  
|Working Capital     | $ | 5,708,397              |   | $ | 8,621,176                  |   |  | (33.8%                | )

Cash Flows

|                                              |   |                     |   |   |                     |  
|--------------------------------------------- | - | ------------------- | - | - | ------------------- | -
|                                              |   | Six Months Ended    |   |   | Six Months Ended    |  
|                                              |   | June
      30, 2008 |   |   | June
      30, 2007 |  
|Cash Flows used in Operating Activities       | $ | (1,974,196          | ) | $ | (941,897            | )
|Cash Flows used in Investing Activities       | $ | (785,713            | ) | $ | -                   |  
|Cash Flows from Financing Activities          | $ | 1,000               |   | $ | 4,874,479           |  
|Net (Decrease) Increase in Cash During Period | $ | (2,758,909          | ) | $ | 3,932,582           |  

As at June 30, 2008 we had a working capital surplus of
$5,708,397 as compared to a working capital surplus of $8,621,176 as at December
31, 2007. The decrease in our working capital surplus is primarily attributable
to the fact that: (i) we had no sources of revenue and only nominal financing
during the period; and (ii) we incurred substantial expenses in the acquisition,
exploration and development of the Columbus Project and the exploration of the
Red Mountain Project.

The increase in cash flows used for investing activities is due
to the fact that we purchased our pilot production plant during the six months
ended June 30, 2008.

28

---

As at June 30, 2008, we were indebted to Nanominerals, our
principal shareholder, for $36,350 on account of unpaid mineral exploration and
evaluation fees and reimbursable expenses.

Financing Requirements

Although the amounts raised by us through our private placement
offerings completed in 2007 is sufficient to meet our anticipated costs for our
exploration and development programs for 2008, the actual costs of completing
those programs may be greater than anticipated. If the actual costs are
significantly greater than anticipated or if we proceed with our exploration and
development programs beyond what we currently have planned for the next twelve
months, we will need to obtain additional financing. We do not currently have
any additional financing arrangements in place, and there are no assurances that
we will be able to obtain additional financing in an amount sufficient to meet
our needs or on terms that are acceptable to us. There are no assurances that we
will able to obtain financing from alternative sources on terms acceptable to
us. If we are not able to obtain additional financing when needed, we will be
unable to complete our current plan of operation.

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 audited financial statements for the year
ended December 31, 2007 included in our Annual Report on Form 10-K filed with
the SEC on March 31, 2008.

Mineral Rights

We capitalize acquisition and option costs of mineral property
rights. The amount capitalized represents fair value at the time the mineral
rights were acquired. We capitalize acquisition and option costs of mineral
rights as tangible assets in accordance with Emerging Issues Task Force abstract
04-02 (EITF 04-02), Whether Mineral Rights are Tangible or Intangible Assets
and Related Issues. Upon commencement of production, the claims will be
amortized using the unit-of-production method over the life of the claim. If we
do not continue with exploration after the completion of a feasibility study,
the claims will be expensed at that time.

Exploration Costs

Mineral exploration costs are expensed as incurred.

29

---

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 Statement of Financial Accounting Standards (SFAS) No. 144,
Accounting for Impairment of Disposal of Long-Lived Assets.

Environmental Protection and Reclamation Costs

Our operations have been, and may in the future, be affected
from time to time in varying degrees by changes in environmental regulations,
including those for future removal and site restoration costs. Both the
likelihood of new regulations and their overall effect upon us may vary from
region to region and are not predictable.

Environmental expenditures that relate to ongoing environmental
and reclamation programs are charged against statements of operations as
incurred or capitalized and amortized depending upon their future economic
benefits. We do not currently anticipate any material capital expenditures for
environmental control facilities because our property holding is at an early
stage of exploration.

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

Not Applicable.

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

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of our
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) as of June 30, 2008 (the Evaluation Date). This evaluation was
carried out under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer. Based upon that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were effective as of the Evaluation Date.

Disclosure controls and procedures are those controls and
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Exchange Act are recorded,
processed, summarized and reported within the time periods specified in the
SEC's rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed in our reports filed under the Exchange Act is accumulated and
communicated to management, including our Chief Executive Officer and Chief
Financial Officer, to allow timely decisions regarding required disclosure.

30

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Changes in Internal Control Over Financial Reporting

As of the Evaluation Date, there were no changes in our
internal control over financial reporting that occurred during the fiscal
quarter ended June 30, 2008 that have materially affected, or that are
reasonably likely to materially affect, our internal control over financial
reporting.

31

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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 operations.

Although we intend to implement a pilot production module
for the Columbus Project, there is no assurance that this project is
commercially feasible.

We intend to begin our pilot production operations on the
Columbus Project by the end of our 2008 fiscal year. This pilot production
module is designed to evaluate the economic feasibility of the Columbus Project.
However, we have not yet established any probable or proven reserves and our
activities continue to be exploratory in nature. We can not provide any
assurances that the Columbus Project will turn out to be commercially viable.

If we do not obtain additional financing, we may not be able
to complete our exploration and development programs for our mineral projects.

Although we have obtained sufficient proceeds from our private
placements offerings completed in 2007 to meet the anticipated costs of our
exploration and development programs for 2008, the actual costs of completing
those programs may be greater than anticipated. If the actual costs are
significantly greater than anticipated or if we proceed with our exploration and
development programs beyond what we currently have planned for the next twelve
months, we will need to obtain additional financing. There are no assurances
that we will be able to obtain additional financing in an amount sufficient to
meet our needs or on terms that are acceptable to us.

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

The most likely source of future financing presently available
to us is through the issuance 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 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.

32

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In order to maintain our rights to the Columbus Project, Red
Mountain Project and Ireland Claim, we will be required to make annual filings
with federal and state regulatory agencies and/or be required to complete
assessment work on those properties.

In order to maintain our rights to the Columbus Project, Red
Mountain Project and Ireland Claim, we will be required to make annual filings
with federal and state regulatory authorities. Currently the amount of these
fees is nominal; however, these maintenance fees are subject to adjustment. In
addition, we may be required by federal and/or state legislation or regulations
to complete minimum annual amounts of mineral exploration work on the Columbus
Project, Red Mountain Project and Ireland Claim. A failure by us to meet the
annual maintenance requirements under federal and state laws could cause our
rights to the Columbus Project, Red Mountain Project and Ireland Claim 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 Quarterly 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 our operating expenses will increase
prior to our earning revenues, we may never achieve profitability.

Prior to completion of our 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 and our business will fail.

The search for valuable minerals as a business is extremely
risky. We may not find commercially exploitable reserves of gold or silver on
our mineral claims. Exploration for minerals is a speculative venture,
necessarily involving substantial risk. The expenditures to be made by us in the
upcoming exploration of our mineral projects 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. In such a case, we would be unable to complete
our business plan.

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

The search for valuable minerals involves numerous hazards. As
a result, if and when we conduct exploration activities we may become subject to
liability for such hazards, including pollution, cave-ins

33

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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.

Even if we discover commercial reserves of precious metals
on our optioned mineral claims, we may not be able to successfully reach
commercial production.

Our optioned mineral claims do not contain any known bodies of
ore. If our exploration programs are successful in discovering ore of commercial
tonnage and grade, we will require additional funds in order to place those
mineral claims into commercial production. At this time, there is a risk that we
will not be able to obtain such financing as 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.

If we are unable to hire and retain key personnel, we may
not be able to implement our business plan and our business will fail.

Our success will largely depend on our ability to hire highly
qualified personnel with experience in geological exploration. These individuals
may be in high demand and we may not be able to attract the staff we need. In
addition, we may not be able to afford the high salaries and fees demanded by
qualified personnel, or may lose such employees after they are hired. Currently,
we have not hired any key personnel. An inability to hire key personnel when
needed could have a significant negative effect on our business.

Because our executive officers do not have formal training
specific to the technicalities of mineral exploration, there is a higher risk
our business will fail.

Our executive officers and directors do not have formal
training as geologists or in the technical aspects of management of a mineral
exploration company. Accordingly, we will have to rely on the technical services
of others trained in appropriate areas. If we are unable to contract for the
services of such individuals, it will make it difficult and maybe impossible to
pursue our business plan.

As we undertake exploration of our optioned mineral claims,
we will be subject to compliance with government regulation that may increase
the anticipated cost of our exploration program.

There are several government regulations that materially
restrict the exploration of minerals. We may 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.

Certain work to be performed on our mineral projects may
require us to apply for permits from federal, state or local regulatory bodies.

34

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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 as disclosed above, which could have a negative affect on
our business.

If we receive positive results from our exploration program
and we decide to pursue commercial production, we may be subject to an
environmental review process that may delay or prohibit commercial
production.

If the results of our geological exploration program indicate
commercially exploitable reserves, and we decide to pursue commercial production
of our mineral claims, we may be subject to an environmental review process
under environmental assessment legislation. 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 did 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 Bulleting Board under
the symbol IRLD. However, the volume of trading in our common stock is
currently very 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 Exchange Act 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.

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.

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 QUARTERLY REPORT ON FORM 10-Q 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

35

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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.

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

None.

|ITEM 4. | SUBMISSION OF MATTERS TO A
      VOTE OF SECURITY HOLDERS.
|------- | ----------------------------------------------------------

None.

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

None.

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

|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.(4)                                                                                                                         
|3.4     | Bylaws.(1)                                                                                                                                                                    
|10.1    | 2007 Stock
      Incentive Plan.(3)                                                                                                                                           
|10.2    | Assignment Agreement dated for
      reference as of March 29, 2007, among Nano Minerals Corp., the Company and
      Lorrie Archibald.(3)                                    
|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)

36

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|Exhibit |                                                                                                                                                                                                                                      
|------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description of Exhibit                                                                                                                                                                                                               
|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.(13)                                                                                                                               
|14.1    | Code of Ethics.(10)                                                                                                                                                                                                                  
|16.1    | Letter of Telford Sadovnick, PLLC.(12)                                                                                                                                                                                               
|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.                                                                   

|(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 Annual Report on Form 10-KSB
      for the year ended December 31, 2006 filed on April 5, 2007.        
|(4)  | Filed as an exhibit to our Current Report on Form 8-K
      filed on April 30, 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 10.3.                                                                                              
|(12) | Filed as an exhibit to our Current Report on Form 8-K
      filed on October 12, 2007.                                            
|(13) | Filed as an exhibit to our Annual Report on Form 10-K for
      the year ended December 31, 2007, filed on March 31,
  2008.      

37

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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:
      August 14, 2008 | By: | /s/
      Douglas D.G. Birnie                         
|                            |     | DOUGLAS D.G. BIRNIE                                   
|                            |     | Chief Executive Officer, President and
      Secretary
|                            |     | (Principal Executive Officer)                         
|                            |     |                                                       
|                            |     |                                                       
|                            |     |                                                       
|                            |     |                                                       
|Date:
      August 14, 2008 | By: | /s/
      Robert D. McDougal                          
|                            |     | ROBERT D. MCDOUGAL                                    
|                            |     | Chief Financial Officer and Treasurer                 
|                            |     | (Principal Financial Officer)                         

---