---

UNITED STATESSECURITIES AND EXCHANGE COMMISSION Washington, D.C.
20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2011

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

For the transition period from ________to ________

COMMISSION FILE NUMBER000-50033

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

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

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

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

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.[X] Yes[ ] No

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

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

|Large accelerated filer [ ]                                                   | Accelerated filer [ ]       
|----------------------------------------------------------------------------- | ----------------------------
|Non-accelerated filer [ ] (Do not check if a smaller
      reporting 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     [X] No

Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date: As of
May 20, 2011, the Registrant had 124,918,996 shares of common stock
outstanding.

---

PART I - FINANCIAL INFORMATION

ITEM 1.      FINANCIAL
STATEMENTS.

The accompanying unaudited financial statements have been
prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of
Regulation S-X, and, therefore, do not include all information and footnotes
necessary for a complete presentation of financial position, results of
operations, cash flows, and stockholders' equity in conformity with generally
accepted accounting principles. In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations and
financial position have been included and all such adjustments are of a normal
recurring nature. Operating results for the three months ended March 31, 2011
are not necessarily indicative of the results that can be expected for the year
ending December 31, 2011.

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

2

---

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

|                                                                                                                                                             |   | (Unaudited)    |   |   |                   |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------ | - | -------------- | - | - | ----------------- | -
|                                                                                                                                                             |   | March 31, 2011 |   |   | December 31, 2010 |  
|                                                                                                                                                             |   |                |   |   |                   |  
|ASSETS                                                                                                                                                       |  
|                                                                                                                                                             |   |                |   |   |                   |  
|Current assets                                                                                                                                               |   |                |   |   |                   |  
|Cash                                                                                                                                                         | $ | 1,398,247      |   | $ | 1,602,179         |  
|Short-term investments                                                                                                                                       |   | -              |   |   | 878,608           |  
|Other receivables                                                                                                                                            |   | 20,000         |   |   | 30,000            |  
|Prepaid expenses                                                                                                                                             |   | 162,285        |   |   | 258,095           |  
|                                                                                                                                                             |   |                |   |   |                   |  
|Total current
      assets                                                                                                                                   |   | 1,580,532      |   |   | 2,768,882         |  
|                                                                                                                                                             |   |                |   |   |                   |  
|Property and equipment, net                                                                                                                                  |   | 3,859,385      |   |   | 4,081,820         |  
|Mineral properties                                                                                                                                           |   | 31,948,053     |   |   | 31,948,053        |  
|Restricted investments held for reclamation
      bond                                                                                                       |   | 878,608        |   |   | -                 |  
|Reclamation bonds                                                                                                                                            |   | 133,368        |   |   | 908,368           |  
|Deposits                                                                                                                                                     |   | 22,200         |   |   | 22,200            |  
|                                                                                                                                                             |   |                |   |   |                   |  
|Total
      non-current assets                                                                                                                               |   | 36,841,614     |   |   | 36,960,441        |  
|                                                                                                                                                             |   |                |   |   |                   |  
|Total assets                                                                                                                                                 | $ | 38,422,146     |   | $ | 39,729,323        |  
|                                                                                                                                                             |   |                |   |   |                   |  
|LIABILITIES AND STOCKHOLDERS'
      EQUITY                                                                                                                   |  
|                                                                                                                                                             |   |                |   |   |                   |  
|Current liabilities                                                                                                                                          |   |                |   |   |                   |  
|Accounts payable                                                                                                                                             | $ | 103,164        |   | $ | 90,783            |  
|Accounts payable - related
      party                                                                                                                       |   | 48,839         |   |   | 67,190            |  
|Accrued payroll and related taxes                                                                                                                            |   | 59,457         |   |   | 45,875            |  
|Due to related party                                                                                                                                         |   | 23,290         |   |   | 23,290            |  
|                                                                                                                                                             |   |                |   |   |                   |  
|Total current
      liabilities                                                                                                                              |   | 234,750        |   |   | 227,138           |  
|                                                                                                                                                             |   |                |   |   |                   |  
|Long-term liabilities                                                                                                                                        |   |                |   |   |                   |  
|Accrued reclamation and remediation costs                                                                                                                    |   | 275,338        |   |   | 275,338           |  
|Deferred income taxes                                                                                                                                        |   | 4,943,188      |   |   | 5,402,258         |  
|                                                                                                                                                             |   |                |   |   |                   |  
|Total long-term
      liabilities                                                                                                                            |   | 5,218,526      |   |   | 5,677,596         |  
|                                                                                                                                                             |   |                |   |   |                   |  
|Total
      liabilities                                                                                                                                      |   | 5,453,276      |   |   | 5,904,734         |  
|                                                                                                                                                             |   |                |   |   |                   |  
|Commitments and contingencies - Note 13                                                                                                                      |   | -              |   |   | -                 |  
|                                                                                                                                                             |   |                |   |   |                   |  
|Stockholders' equity                                                                                                                                         |   |                |   |   |                   |  
|Common stock, $0.001 par value;
      400,000,000 shares 
                authorized,
      122,434,442 
                shares
      issued and outstanding |   | 122,434        |   |   | 122,434           |  
|Additional paid-in capital                                                                                                                                   |   | 48,553,490     |   |   | 48,299,851        |  
|Accumulated other comprehensive loss                                                                                                                         |   | (614           | ) |   | (614              | )
|Accumulated deficit during
      exploration stage                                                                                                           |   | (15,706,440    | ) |   | (14,597,082       | )
|                                                                                                                                                             |   |                |   |   |                   |  
|Total
      stockholders' equity                                                                                                                             |   | 32,968,870     |   |   | 33,824,589        |  
|                                                                                                                                                             |   |                |   |   |                   |  
|Total
      liabilities and stockholders' equity                                                                                                             | $ | 38,422,146     |   | $ | 39,729,323        |  

See Accompanying Notes to these Consolidated Financial
  Statements

F-1

---

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

|                                                                     |   |                            |   |   |                |   |   | For the period from |  
|-------------------------------------------------------------------- | - | -------------------------- | - | - | -------------- | - | - | ------------------- | -
|                                                                     |   |                            |   |   |                |   |   | February 20, 2001   |  
|                                                                     |   |                            |   |   |                |   |   | (date of inception) |  
|                                                                     |   | For the Three Months Ended |   |   | through        |  
|                                                                     |   | March 31, 2011             |   |   | March 31, 2010 |   |   | March 31, 2011      |  
|                                                                     |   |                            |   |   |                |   |   |                     |  
|                                                                     |   |                            |   |   |                |   |   |                     |  
|Revenue                                                              | $ | -                          |   | $ | -              |   | $ | -                   |  
|                                                                     |   |                            |   |   |                |   |   |                     |  
|Operating expenses                                                   |   |                            |   |   |                |   |   |                     |  
|Mineral exploration and evaluation expenses                          |   | 602,657                    |   |   | 311,889        |   |   | 9,929,809           |  
|Mineral exploration and
      evaluation expenses - related party    |   | 137,708                    |   |   | 124,149        |   |   | 2,720,827           |  
|General and administrative                                           |   | 617,883                    |   |   | 758,700        |   |   | 7,055,857           |  
|General and administrative -
      related party                     |   | 2,000                      |   |   | 21,066         |   |   | 23,066              |  
|Depreciation                                                         |   | 203,056                    |   |   | 14,179         |   |   | 822,839             |  
|Mineral and property holding
      costs                             |   | 15,000                     |   |   | 15,000         |   |   | 485,500             |  
|Mineral and property holding costs -                                 |   |                            |   |   |                |   |   |                     |  
|reimbursed to
      related party                                    |   | -                          |   |   | -              |   |   | 295,000             |  
|Write-off of mineral rights                                          |   | -                          |   |   | -              |   |   | 14,000              |  
|                                                                     |   |                            |   |   |                |   |   |                     |  
|Total operating expenses                                             |   | 1,578,304                  |   |   | 1,244,983      |   |   | 21,346,898          |  
|                                                                     |   |                            |   |   |                |   |   |                     |  
|Loss from operations                                                 |   | (1,578,304                 | ) |   | (1,244,983     | ) |   | (21,346,898         | )
|                                                                     |   |                            |   |   |                |   |   |                     |  
|Other income (expense)                                               |   |                            |   |   |                |   |   |                     |  
|Interest income                                                      |   | 9,876                      |   |   | 9,595          |   |   | 328,766             |  
|Interest expense                                                     |   | -                          |   |   | (3,494         | ) |   | (5,983              | )
|                                                                     |   |                            |   |   |                |   |   |                     |  
|Total other income (expense)                                         |   | 9,876                      |   |   | 6,101          |   |   | 322,783             |  
|                                                                     |   |                            |   |   |                |   |   |                     |  
|Loss before income taxes                                             |   | (1,568,428                 | ) |   | (1,238,882     | ) |   | (21,024,115         | )
|                                                                     |   |                            |   |   |                |   |   |                     |  
|Income tax benefit                                                   |   | 459,070                    |   |   | 330,405        |   |   | 5,317,675           |  
|                                                                     |   |                            |   |   |                |   |   |                     |  
|Net loss                                                             | $ | (1,109,358                 | ) | $ | (908,477       | ) | $ | (15,706,440         | )
|                                                                     |   |                            |   |   |                |   |   |                     |  
|Loss per common share - basic and diluted                            | $ | (0.01                      | ) | $ | (0.01          | ) |   |                     |  
|                                                                     |   |                            |   |   |                |   |   |                     |  
|Weighted average common shares outstanding - basic and
      diluted |   | 122,434,442                |   |   | 120,217,886    |   |   |                     |  

See Accompanying Notes to these Consolidated Financial
  Statements

F-2

---

|IRELAND INC.                                   
|-----------------------------------------------
|(AN EXPLORATION STAGE ENTERPRISE)              
|CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
|AND COMPREHENSIVE INCOME                       
|(UNAUDITED)                                    

|                                                                                                                                              |  |              |  |   |            |  |   |                 |  |   |               |   |   | Accumulated |   |   | Accumulated    |   |   |            |  
|--------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ |  | - | ---------- |  | - | --------------- |  | - | ------------- | - | - | ----------- | - | - | -------------- | - | - | ---------- | -
|                                                                                                                                              |  |              |  |   |            |  |   |                 |  |   | Common        |   |   | Other       |   |   | Deficit During |   |   | Total      |  
|                                                                                                                                              |  | Common Stock |  |   | Additional |  |   | Stock           |  |   | Comprehensive |   |   | Exploration |   |   | Stockholders'  |  
|                                                                                                                                              |  | Shares       |  |   | Amount     |  |   | Paid-in Capital |  |   | Subscribed    |   |   | Loss        |   |   | Stage          |   |   | Equity     |  
|                                                                                                                                              |  |              |  |   |            |  |   |                 |  |   |               |   |   |             |   |   |                |   |   |            |  
|Balance, December 31, 2009                                                                                                                    |  | 110,899,442  |  | $ | 110,899    |  | $ | 42,099,452      |  | $ | 162,000       |   | $ | -           |   | $ | (9,906,028     | ) | $ | 32,466,323 |  
|                                                                                                                                              |  |              |  |   |            |  |   |                 |  |   |               |   |   |             |   |   |                |   |   |            |  
|Amortization of stock options and warrants
         issued to directors, officer
         s and consultants over vesting periods              |  | -            |  |   | -          |  |   | 274,912         |  |   | -             |   |   | -           |   |   | -              |   |   | 274,912    |  
|                                                                                                                                              |  |              |  |   |            |  |   |                 |  |   |               |   |   |             |   |   |                |   |   |            |  
|Issuance of stock options to an officer                                                                                                       |  | -            |  |   | -          |  |   | 19,515          |  |   | -             |   |   | -           |   |   | -              |   |   | 19,515     |  
|                                                                                                                                              |  |              |  |   |            |  |   |                 |  |   |               |   |   |             |   |   |                |   |   |            |  
|Issuance of common stock for cash
         Reg. S -
      Private Placement,
         $0.45 per share, net of $6,399
         financing costs |  | 200,000      |  |   | 200        |  |   | 83,401          |  |   | -             |   |   | -           |   |   | -              |   |   | 83,601     |  
|                                                                                                                                              |  |              |  |   |            |  |   |                 |  |   |               |   |   |             |   |   |                |   |   |            |  
|Issuance of common stock for cash
         Reg. D -
      Private Placement,
         $0.45 per share, net of $5,344
         financing costs |  | 10,835,000   |  |   | 10,835     |  |   | 4,859,571       |  |   | (162,000      | ) |   | -           |   |   | -              |   |   | 4,708,406  |  
|                                                                                                                                              |  |              |  |   |            |  |   |                 |  |   |               |   |   |             |   |   |                |   |   |            |  
|Net loss, March 31, 2010                                                                                                                      |  | -            |  |   | -          |  |   | -               |  |   | -             |   |   | -           |   |   | (908,477       | ) |   | (908,477   | )
|                                                                                                                                              |  |              |  |   |            |  |   |                 |  |   |               |   |   |             |   |   |                |   |   |            |  
|Balance, March 31, 2010                                                                                                                       |  | 121,934,442  |  | $ | 121,934    |  | $ | 47,336,851      |  | $ | -             |   | $ | -           |   | $ | (10,814,505    | ) | $ | 36,644,280 |  
|                                                                                                                                              |  |              |  |   |            |  |   |                 |  |   |               |   |   |             |   |   |                |   |   |            |  
|Balance, December 31, 2010                                                                                                                    |  | 122,434,442  |  | $ | 122,434    |  | $ | 48,299,851      |  | $ | -             |   | $ | (614        | ) | $ | (14,597,082    | ) | $ | 33,824,589 |  
|                                                                                                                                              |  |              |  |   |            |  |   |                 |  |   |               |   |   |             |   |   |                |   |   |            |  
|Amortization of stock options and warrants
         issued to directors, officers and
         consultants over vesting periods               |  | -            |  |   | -          |  |   | 243,349         |  |   | -             |   |   | -           |   |   | -              |   |   | 243,349    |  
|                                                                                                                                              |  |              |  |   |            |  |   |                 |  |   |               |   |   |             |   |   |                |   |   |            |  
|Issuance of stock options to a consultant                                                                                                     |  | -            |  |   | -          |  |   | 10,290          |  |   | -             |   |   | -           |   |   | -              |   |   | 10,290     |  
|                                                                                                                                              |  |              |  |   |            |  |   |                 |  |   |               |   |   |             |   |   |                |   |   |            |  
|Net loss, March 31, 2011                                                                                                                      |  | -            |  |   | -          |  |   | -               |  |   | -             |   |   | -           |   |   | (1,109,358     | ) |   | (1,109,358 | )
|                                                                                                                                              |  |              |  |   |            |  |   |                 |  |   |               |   |   |             |   |   |                |   |   |            |  
|Balance, March 31, 2011                                                                                                                       |  | 122,434,442  |  | $ | 122,434    |  | $ | 48,553,490      |  | $ | -             |   | $ | (614        | ) | $ | (15,706,440    | ) | $ | 32,968,870 |  

See Accompanying Notes to these Consolidated Financial
  Statements

F-3

---

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

|                                                                                                              |   |                            |   |   |                |   |   | For the period from |  
|------------------------------------------------------------------------------------------------------------- | - | -------------------------- | - | - | -------------- | - | - | ------------------- | -
|                                                                                                              |   |                            |   |   |                |   |   | February 20, 2001   |  
|                                                                                                              |   |                            |   |   |                |   |   | (date of inception) |  
|                                                                                                              |   | For the Three Months Ended |   |   | through        |  
|                                                                                                              |   | March 31, 2011             |   |   | March 31, 2010 |   |   | March 31, 2011      |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                          |   |                            |   |   |                |   |   |                     |  
|Net loss                                                                                                      | $ | (1,109,358                 | ) | $ | (908,477       | ) | $ | (15,706,440         | )
|Adjustments to reconcile loss
      from operating 
                to net cash used in operating activities: |   |                            |   |   |                |   |   |                     |  
|Depreciation                                                                                                  |   | 203,056                    |   |   | 14,179         |   |   | 822,839             |  
|Write-off of mineral rights                                                                                   |   | -                          |   |   | -              |   |   | 14,000              |  
|Consulting accrual                                                                                            |   | -                          |   |   | -              |   |   | 15,000              |  
|Stock-based expenses                                                                                          |   | 253,639                    |   |   | 294,427        |   |   | 3,130,962           |  
|                                                                                                              |   |                            |   |   |                |   |   |                     |  
|Changes in operating assets
      and liabilities:                                                            |   |                            |   |   |                |   |   |                     |  
|Other receivables                                                                                             |   | 10,000                     |   |   | (36,667        | ) |   | (20,000             | )
|Prepaid expenses                                                                                              |   | 95,810                     |   |   | (95,061        | ) |   | (312,360            | )
|Other assets                                                                                                  |   | -                          |   |   | -              |   |   | (2,200              | )
|Reclamation bonds                                                                                             |   | 775,000                    |   |   | -              |   |   | (122,108            | )
|Mineral property
      acquisition costs                                                                      |   | -                          |   |   | -              |   |   | (1,022,663          | )
|Accounts payable and accrued liabilities                                                                      |   | 7,612                      |   |   | (47,098        | ) |   | 107,858             |  
|Deferred income
      taxes                                                                                   |   | (459,070                   | ) |   | (330,405       | ) |   | (5,317,675          | )
|Accrued reclamation and remediation costs                                                                     |   | -                          |   |   | -              |   |   | 275,338             |  
|                                                                                                              |   |                            |   |   |                |   |   |                     |  
|Net cash used in operating activities                                                                         |   | (223,311                   | ) |   | (1,109,102     | ) |   | (18,137,449         | )
|                                                                                                              |   |                            |   |   |                |   |   |                     |  
|CASH FLOW FROM INVESTING ACTIVITIES                                                                           |   |                            |   |   |                |   |   |                     |  
|Purchase of property and equipment                                                                            |   | (5,621                     | ) |   | (408,076       | ) |   | (3,558,714          | )
|Purchase price adjustment of
      property and equipment                                                     |   | 25,000                     |   |   | -              |   |   | 25,000              |  
|Purchase of investments                                                                                       |   | -                          |   |   | -              |   |   | (879,553            | )
|                                                                                                              |   |                            |   |   |                |   |   |                     |  
|Net cash provided (used) in investing
      activities                                                        |   | 19,379                     |   |   | (408,076       | ) |   | (4,413,267          | )
|                                                                                                              |   |                            |   |   |                |   |   |                     |  
|CASH FLOW FROM FINANCING ACTIVITIES                                                                           |   |                            |   |   |                |   |   |                     |  
|Proceeds from stock issuance                                                                                  |   | -                          |   |   | 4,965,750      |   |   | 24,480,710          |  
|Proceeds from option issuance                                                                                 |   | -                          |   |   | -              |   |   | 20,000              |  
|Stock issuance costs                                                                                          |   | -                          |   |   | (11,743        | ) |   | (560,037            | )
|Common stock subscribed                                                                                       |   | -                          |   |   | (162,000       | ) |   | -                   |  
|Proceeds from borrowings -
      related party                                                                |   | -                          |   |   | -              |   |   | 8,290               |  
|                                                                                                              |   |                            |   |   |                |   |   |                     |  
|Net cash provided by financing
      activities                                                               |   | -                          |   |   | 4,792,007      |   |   | 23,948,963          |  
|                                                                                                              |   |                            |   |   |                |   |   |                     |  
|NET CHANGE IN CASH                                                                                            |   | (203,932                   | ) |   | 3,274,829      |   |   | 1,398,247           |  
|                                                                                                              |   |                            |   |   |                |   |   |                     |  
|CASH AT BEGINNING OF PERIOD                                                                                   |   | 1,602,179                  |   |   | 3,651,015      |   |   | -                   |  
|                                                                                                              |   |                            |   |   |                |   |   |                     |  
|CASH AT END OF PERIOD                                                                                         | $ | 1,398,247                  |   | $ | 6,925,844      |   | $ | 1,398,247           |  
|                                                                                                              |   |                            |   |   |                |   |   |                     |  
|                                                                                                              |   |                            |   |   |                |   |   |                     |  
|                                                                                                              |   |                            |   |   |                |   |   |                     |  
|SUPPLEMENTAL INFORMATION                                                                                      |   |                            |   |   |                |   |   |                     |  
|                                                                                                              |   |                            |   |   |                |   |   |                     |  
|Interest paid                                                                                                 | $ | -                          |   | $ | 3,494          |   | $ | 5,983               |  
|                                                                                                              |   |                            |   |   |                |   |   |                     |  
|Income taxes paid                                                                                             | $ | -                          |   | $ | -              |   | $ | -                   |  
|                                                                                                              |   |                            |   |   |                |   |   |                     |  
|Non-cash investing and financing
      activities:                                                            |   |                            |   |   |                |   |   |                     |  
|                                                                                                              |   |                            |   |   |                |   |   |                     |  
|Assets acquired for common stock and
      warrants issued
               for mineral properties              | $ | -                          |   | $ | -              |   | $ | 21,584,351          |  
|                                                                                                              |   |                            |   |   |                |   |   |                     |  
|Net deferred tax liability
      assumed                                                                      | $ | -                          |   | $ | -              |   | $ | 10,261,194          |  

See Accompanying Notes to these Consolidated Financial
  Statements

F-4

---

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

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT
      POLICIES
|-- | --------------------------------------------------------------------------

Description of business- Ireland
  Inc. (the Company) is considered an exploration stage company since
  its formation and the Company has not yet realized any revenues from its planned
  operations. The Company is primarily focused on the acquisition and exploration
  of mining properties. Upon identification of commercially minable reserves,
  the Company expects to actively prepare the site for its extraction and enter
  the development stage.

History- The Company was incorporated
  on February 20, 2001 under the laws of the State of Nevada under the name Merritt
  Ventures Corp. On December 19, 2005, the Company changed its name to Ireland
  Inc.

Basis of presentation- The interim
  financial statements present the consolidated balance sheets, statements of
  operations, stockholders equity and comprehensive income, and cash flows
  of the Company. These consolidated financial statements have been prepared in
  accordance with United States Generally Accepted Accounting Principles (GAAP).

These consolidated financial statements
  have been prepared without audit in accordance with the rules and regulations
  of the Securities and Exchange Commission (SEC). In the opinion
  of management, all adjustments and disclosures necessary for the fair presentation
  of these interim statements have been included. All such adjustments are, in
  the opinion of management, of a normal recurring nature. The results reported
  in these interim consolidated financial statements are not necessarily indicative
  of the results that may be reported for the entire year. These interim consolidated
  financial statements should be read in conjunction with the consolidated financial
  statements included in our Annual Report on Form 10-K for the year ended December
  31, 2010, filed with the SEC on March 30, 2011.

Going concern- The accompanying
  financial statements have been prepared assuming the Company will continue as
  a going concern.

Since its formation, the Company has
  incurred comprehensive cumulative net losses of $15,707,054 as of March 31,
  2011. This amount is comprised of net loss from operations of $15,706,440 and
  other comprehensive loss of $614. The Company has not commenced its commercial
  mining and mineral processing operations; rather, it is still in the exploration
  stage, raising substantial doubt about the Companys ability to continue
  as a going concern. The Company will seek additional sources of capital through
  the issuance of debt or equity financing, but there can be no assurance the
  Company will be successful in accomplishing its objectives.

The ability of the Company to continue
  as a going concern is dependent on additional sources of capital and the success
  of the Companys plan. The financial statements do not include any adjustments
  that might be necessary if the Company is unable to continue as a going concern.

Principles of consolidation-
  The consolidated financial statements include the accounts of the Company and
  its wholly-owned subsidiaries, Columbus Minerals Inc. (CMI) (including
  its wholly-owned single-member LLC subsidiary Columbus Salt Marsh LLC (CSM))
  and Rand Metals LLC (Rand). Intercompany accounts and transactions
  have been eliminated.

F-5

---

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

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT
      POLICIES(continued)
|-- | -------------------------------------------------------------------------------------

Use of estimates- The preparation
  of financial statements in conformity with GAAP 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 revenue and expenses during the reporting
  period. By their nature, these estimates are subject to measurement uncertainty
  and the effect on the financial statements of changes in such estimates in future
  periods could be significant. Significant areas requiring managements
  estimates and assumptions include the valuation of stock-based compensation,
  impairment analysis of long-lived assets, accrued reclamation and remediation
  costs and the valuation allowance on deferred tax assets. Actual results could
  differ from those estimates.

Fair value of financial instruments- Fair value accounting establishes a fair value hierarchy that prioritizes
  the inputs of valuation techniques used to measure fair value. The hierarchy
  gives the highest priority to unadjusted quoted prices in active markets for
  identical assets or liabilities (Level 1 measurements) and the lowest priority
  to unobservable inputs (Level 3 measurements). The three levels of the fair
  value hierarchy are described below:

| | Level 1 | Unadjusted quoted prices in active
      markets that are accessible at the measurement date for identical, unrestricted
      assets or liabilities;                                 
| | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Level 2 | Quoted prices in markets that
      are not active, or inputs that are observable, either directly or indirectly,
      for substantially the full term of the asset or liability; and
| | Level 3 | Prices or valuation techniques
      that require inputs that are both significant to the fair value measurement
      and unobservable (supported by little or no market activity).  

The Companys financial instruments
  consist of investments in U.S. Treasury Notes. These investments are classified
  within Level 1 of the fair value hierarchy as their fair value is determined
  using quoted prices in active markets.

Restricted investments held for reclamation
  bond- Restricted investments serve as collateral for one of the Companys
  reclamation bonds. The investments are classified as available for sale and
  are recorded at fair value based on quoted market prices with the unrealized
  gains and losses reflected in accumulated other comprehensive income until realized.
  Realized gains and losses are determined on a specific identification method
  and are recognized in the consolidated statement of operations.

The Company evaluates unrealized losses,
  if any, in its investment securities for other-than temporary impairment using
  both qualitative and quantitative criteria. In the event that an investment
  is determined to be other-than-temporarily impaired, the Company recognizes
  the loss in the consolidated statement of operations. The Company generally
  only invests in debt securities.

F-6

---

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

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT
      POLICIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Mineral properties- Costs of acquiring mineral
      properties are capitalized upon acquisition. Exploration costs and costs
      to maintain mineral properties are expensed as incurred while the project
      is in the exploration stage. Development costs and costs to maintain mineral
      properties are capitalized as incurred while the property is in the development
      stage. When a property reaches the production stage, the related capitalized
      costs are amortized using the units-of-production basis over the proven
      and probable reserves. Mineral properties are assessed for impairment
      when circumstances indicate that the carrying amount may not be recoverable.
      Impairment losses are charged to operations at the time of impairment.
      When a property is sold or abandoned, a gain or loss is recognized and
      included in the consolidated statement of operations.                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Mineral exploration and development costs- Exploration
      expenditures incurred prior to entering the development stage are expensed
      and included in Mineral exploration and evaluation expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Property and equipment- Property and equipment
      are stated at cost less accumulated depreciation. Depreciation is provided
      principally on the straight-line method over the estimated useful lives
      of the assets, which range from 3 to 39 years. The cost of repairs and
      maintenance is charged to expense as incurred. Expenditures for property
      betterments and renewals are capitalized. Upon sale or other disposition
      of a depreciable asset, cost and accumulated depreciation are removed
      from the accounts and any gain or loss is reflected in other income (expense).                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | 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. If the sum of the estimated future net cash flows
      on an undiscounted basis is less than the carrying amount of the related
      asset, impairment is considered to exist. Future cash flows are estimated
      based on quantities of recoverable minerals, expected commodity prices,
      production levels, operating costs, capital requirements and reclamation
      costs. The Company also considers its continued right to explore the property,
      exploration reports, drill results, technical reports and continued plans
      to fund exploration programs on the property. Any impairment loss is measured
      by comparing estimated future net cash flows on a discounted basis to
      the carrying amount of the asset. To date, no such impairments have been
      identified.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The Companys estimates of future cash flows are
      based on numerous assumptions and it is possible that actual future cash
      flows will be significantly different from the estimates, as actual future
      quantities of recoverable minerals, commodity prices, and production levels
      and costs are each subject to significant risks and uncertainties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

F-7

---

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

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT
      POLICIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Reclamation and remediation costs (asset retirement
      obligation)- The Company records a liability for the present value
      of the estimated costs associated with environmental remediation obligations
      in the period in which the liability is incurred and becomes determinable,
      with an offsetting increase in the carrying amount of the associated asset.
      The liability will be accreted, and the asset will be depreciated over
      their expected useful lives. As reclamation work is performed or liabilities
      are otherwise settled, the recorded amount of the liability will be reduced.                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Future reclamation and environmental-related expenditures
      are difficult to estimate in many circumstances due to the early stage
      nature of the exploration project, the uncertainties associated with defining
      the nature and extent of environmental disturbance, the application of
      laws and regulations by regulatory authorities and changes in reclamation
      or remediation technology. The Company periodically reviews accrued liabilities
      for such reclamation and remediation costs as evidence indicating that
      the liabilities have potentially changed becomes available. Changes in
      estimates are reflected in the consolidated statement of operations in
      the period an estimate is revised.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Accruals for reclamation and environmental matters totaled
      $275,338 at March 31, 2011 and December 31, 2010. The Company is in the
      exploration stage and is unable to determine the estimated timing of expenditures
      relating to these accruals at this time. It is reasonably possible that
      the ultimate cost of reclamation and remediation could change in the future
      and that changes to these estimates could have a material effect on future
      operating results as new information becomes known. For additional information,
      see Note 14.                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Per share amounts- Basic earnings (loss) per
      share is computed by dividing net income (loss) 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. In these financial statements, stock options and warrants
      are not considered in the computation of diluted earnings per share as
      their inclusion would be anti-dilutive for the periods presented. Excluded
      stock options and warrants amounted to 37,411,832 and 35,325,684 as of
      March 31, 2011 and 2010, respectively.               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Stock-based compensation- Stock-based compensation
      awards are recognized in the financial statements based on the grant date
      fair value of the award which is estimated using the Binomial Lattice
      option pricing model. The Company believes that this model provides the
      best estimate of fair value due to its ability to incorporate inputs that
      change over time, such as volatility and interest rates, and to allow
      for the actual exercise behavior of option holders. The compensation cost
      is recognized over the requisite service period which is generally equal
      to the vesting period. Upon exercise, shares issued will be newly issued
      shares from authorized common stock.            

F-8

---

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

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT
      POLICIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The fair value of performance-based stock option grants
      is determined on their grant date through use of the Binomial Lattice
      option pricing model. The total value of the award is recognized over
      the requisite service period only if management has determined that achievement
      of the performance condition is probable. The requisite service period
      is based on managements estimate of when the performance condition
      will be met. Changes in the requisite service period or the estimated
      probability of achievement can materially affect the amount of stock-based
      compensation recognized in the financial statements.                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The fair value of market-based stock option grants is
      determined on their grant date through use of an option pricing model
      which uses a combination of Monte Carlo simulation and a Trinomial Lattice
      function. The requisite service period for market-based awards is derived
      from the model. Achievement of the market condition earlier than estimated
      can materially affect the amount of stock- based compensation recognized
      in the financial statements.                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Income taxes- The Company follows the liability
      method of accounting for income taxes. This method recognizes certain
      temporary differences between the financial reporting basis of 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
      as measured by the statutory tax rates in effect. The effect of a change
      in tax rates is recognized in operations in the period that includes the
      enactment date. 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 asset will not be realized.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | For acquired properties that do not constitute a business,
      a deferred income tax liability is recorded on GAAP basis over income
      tax basis using statutory federal and state rates. The resulting estimated
      future income tax liability associated with the temporary difference between
      the acquisition consideration and the tax basis is computed in accordance
      with Accounting Standards Codification (ASC) 740-10-25-51, Acquired Temporary Differences in Certain Purchase Transactions that
        Are Not Accounted for as Business Combinations, and is reflected as
      an increase in 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.                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Recent accounting standards- From time to time,
      new accounting pronouncements are issued by the Financial Accounting Standards
      Board (FASB) that are adopted by the Company as of the specified
      effective date. The Company has evaluated all the recent accounting pronouncements
      and believes that none of them will have a material effect on the financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                     

F-9

---

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

|2. | PREPAID EXPENSES                                                                          
|-- | ------------------------------------------------------------------------------------------
|   |                                                                                           
|   | Prepaid expenses at March 31, 2011 and December 31,
      2010 consisted of the following:

| |                        |   | March 31, |  |   | December 31, | 
| | ---------------------- | - | --------- |  | - | ------------ | 
| |                        |   | 2011      |  |   | 2010         | 
| |                        |   |           |  |   |              | 
| | Claims maintenance     | $ | 26,473    |  | $ | 46,327       | 
| | Insurance policies     |   | 95,337    |  |   | 145,292      | 
| | Retainers and services |   | 33,500    |  |   | 52,645       | 
| | Other                  |   | 6,975     |  |   | 13,831       | 
| |                        |   |           |  |   |              | 
| |                        | $ | 162,285   |  | $ | 258,095      | 

|3. | PROPERTY AND EQUIPMENT                            
|-- | --------------------------------------------------
|   |                                                   
|   | Property and equipment consisted of the following:

| |                         |   | March 31, 2011 |  |   | December 31, 2010 |  
| | ----------------------- | - | -------------- |  | - | ----------------- | -
| |                         |   |                |  |   | Accumulated       |  
| |                         |   | Cost           |  |   | Depreciation      |  
| |                         |   |                |  |   |                   |  
| | Furniture and fixtures  | $ | 20,854         |  | $ | (5,122            | )
| | Computers and equipment |   | 43,155         |  |   | (30,417           | )
| | Land                    |   | 30,000         |  |   | -                 |  
| | Site improvements       |   | 2,913,042      |  |   | (501,911          | )
| | Site equipment          |   | 1,151,578      |  |   | (226,578          | )
| | Vehicles                |   | 23,595         |  |   | (12,977           | )
| | Building                |   | 500,000        |  |   | (45,834           | )
| |                         |   |                |  |   |                   |  
| |                         | $ | 4,682,224      |  | $ | (822,839          | )

Depreciation expense was $203,056 and
  $14,179 for the three month periods ended March 31, 2011 and 2010, respectively.

F-10

---

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

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

F-11

---

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

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

F-12

---

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

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

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


The following table reflects the components
  of the Columbus Project:

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


F-13

---

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

|5. | RED MOUNTAIN PROJECT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Red Mountain Project, located in San Bernardino,
      California, is subject to an underlying option assignment agreement, as
      amended August 8, 2007. Under the terms of this agreement, to earn a 60%
      interest, the Company is required to pay $5,000 per month until December
      31, 2011 and spend an aggregate of $1,200,000 in additional qualifying
      expenditures by December 31, 2011.                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company may at any time during the life of the Red
      Mountain Project earn a 100% interest by paying $100,000, issuing shares
      of common stock with an aggregate value of $1,400,000 and issuing share
      purchase warrants to purchase up to an additional 25% of the number of
      shares of common stock to be issued. If the project achieves commercial
      production, the Company will be required to pay an additional $100,000,
      issue shares of common stock with an aggregate value of $2,400,000 and
      issue share purchase warrants to purchase up to an additional 25% of the
      number of shares of common stock to be issued.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Pursuant to the option assignment agreement, as amended
      August 8, 2007, the Company granted a 5% net smelter return royalty to
      NMC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|6. | RESTRICTED INVESTMENTS HELD FOR RECLAMATION BOND                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | During the first quarter of 2011, the Bureau of Land
      Management (BLM) recognized receipt of $875,000 face value
      treasury security as replacement for $775,000 of cash collateral on one
      of the Companys reclamation bonds. At that time, the short term
      investments were reclassified to restricted investments held for reclamation
      bonds.                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The restricted investments are classified as available
      for sale and consist of U.S. Treasury Notes which are publicly traded
      and valued. All investments are measured at fair value on a recurring
      basis based on quoted market prices. Therefore, all investments are considered
      to be within Level 1 of the fair value hierarchy. Changes in the market
      value during the first quarter of 2011 were immaterial. As of March 31,
      2011 and December 31, 2010, the Companys investments were as follows:                                                                                                                                 

| |                     |   |                  |  |   | Unrealized    |  |   | Unrealized    |   |   |          | 
| | ------------------- | - | ---------------- |  | - | ------------- |  | - | ------------- | - | - | -------- | 
| |                     |   |                  |  |   | Gains in      |  |   | Losses in     |   |   |          | 
| |                     |   |                  |  |   | Accumulated   |  |   | Accumulated   |   |   |          | 
| |                     |   |                  |  |   | Other         |  |   | Other         |   |   |          | 
| |                     |   |                  |  |   | Comprehensive |  |   | Comprehensive |   |   | Recorded | 
| |                     |   | Cost
      Basis |  |   | Income        |  |   | Loss          |   |   | Basis    | 
| |                     |   |                  |  |   |               |  |   |               |   |   |          | 
| | Available for sale  |   |                  |  |   |               |  |   |               |   |   |          | 
| | U.S. Treasury Notes | $ | 879,553          |  | $ | -             |  | $ | (945          | ) | $ | 878,608  | 
| |                     |   |                  |  |   |               |  |   |               |   |   |          | 
| |                     | $ | 879,553          |  | $ | -             |  | $ | (945          | ) | $ | 878,608  | 

All available for sale investments mature
  in July 2015.

F-14

---

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

|7. | ISSUANCES OF COMMON STOCK                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------
|   |                                                                                                            
|   | During the three month period ended March 31, 2011,
      the Company did not issue any common stock.      
|   |                                                                                                            
|8. | PRIVATE PLACEMENT WARRANTS                                                                                 
|   |                                                                                                            
|   | A summary of investor warrant activity for the three
      month period ended March 31, 2011 is as follows:

| |                                                |  |            |  |   |                   |  |  | Weighted    | 
| | ---------------------------------------------- |  | ---------- |  | - | ----------------- |  |  | ----------- | 
| |                                                |  |            |  |   |                   |  |  | Average     | 
| |                                                |  |            |  |   |                   |  |  | Remaining   | 
| |                                                |  |            |  |   |                   |  |  | Contractual | 
| |                                                |  | Number of  |  |   | Exercise          |  |  | Life        | 
| |                                                |  | Shares     |  |   | Price             |  |  | (Years)     | 
| |                                                |  |            |  |   |                   |  |  |             | 
| |                                                |  |            |  |   |                   |  |  |             | 
| | Outstanding and exercisable, December 31, 2010 |  | 28,121,857 |  | $ | 0.75 - 2.39       |  |  | 2.43        | 
| |                                                |  |            |  |   |                   |  |  |             | 
| | Granted                                        |  | -          |  |   | -                 |  |  | -           | 
| | Forfeited/expired                              |  | -          |  |   | -                 |  |  | -           | 
| |                                                |  |            |  |   |                   |  |  |             | 
| | Outstanding and exercisable, March 31, 2011    |  | 28,121,857 |  | $ | 0.75
      - 2.39 |  |  | 2.19        | 

The table above does not include warrants
  issued to employees, non-employee directors and consultants as they are included
  under Stock-Based Compensation in Note 9.

F-15

---

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

|9. | STOCK-BASED COMPENSATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Stock-based compensation includes grants of stock options
      and purchase warrants to eligible directors, employees and consultants
      as determined by the Board of Directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Stock option plans- 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. As of March 31, 2011, the Company had granted
      5,791,916 options under the Plan with a weighted average exercise price
      of $0.29 per share. As of March 31, 2011, 5,012,197 of the options granted
      were outstanding.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Stock warrants From time to time the Company
      grants stock warrants to consultants for services performed. These grants
      are on an individual transaction basis and issued upon approval of the
      Board of Directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Valuation of awards- At March 31, 2011, the
      Company had options outstanding that vest on three different types of
      vesting schedules:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| | 1. | Service-based;        
| | -- | ----------------------
| |    |                       
| | 2. | Performance-based; and
| |    |                       
| | 3. | Market-based.         

For service-based and performance-based
  stock option grants the Company utilizes the Binomial Lattice pricing model
  to estimate the fair values of options and warrants granted in exchange for
  services. The Company used the following assumptions to estimate the fair value
  of the options granted:

2011Dividend yield
      
      -Expected volatility
      
      69.4%Risk-free interest rate
      
      2.04%Expected life (years)
      
      2.75


For market-based stock option grants
  the Company utilizes a combination of a Monte Carlo simulation and a Trinomial
  Lattice function to estimate the fair values of options in exchange for services.
  No market-based stock options were granted during the three month period ended
  March 31, 2011.

The expected life represents the weighted-average
  period the awards are expected to remain outstanding and is a derived output
  of the option pricing models. The expected life is impacted by all of the underlying
  assumptions and calibration of the Companys models. The models estimate
  the probability of exercise as a function of these variables based on the history
  of exercises and cancellations on past grants made by the Company. The requisite
  service period for market-based stock option awards is a derived output of the
  hybrid Monte Carlo-Trinomial Lattice model.

F-16

---

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

|9. | STOCK-BASED COMPENSATION(continued)
|-- | -----------------------------------

For grants awarded during 2011 the expected
  volatility is based on the average historical volatility levels of a representative
  peer group. The risk-free interest rate is based on the implied yield available
  on U.S. Treasury zero-coupon issues over the equivalent contractual lives of
  the options.

Stock-based compensation activity- During the three month period ended March 31, 2011, the Company granted
  stock-based awards as follows:

On March 21, 2011, the Company granted
  nonqualified stock options under the Plan for the purchase of 100,000 shares
  of common stock at $0.23 per share. The options were granted to a consultant
  of the Company, are fully vested and expire on March 20, 2016. The exercise
  price of the stock options was less than the closing price of the Companys
  common stock which was $0.26 on the grant date.

Total expense for the three month periods
  ended March 31, 2011 and 2010 related to the granting and vesting of all share
  based payments was $253,639 and $294,427, respectively. Such expenses are included
  in general and administrative expense and mineral exploration and evaluation
  expense.

The following table summarizes the Companys
  stock-based compensation activity for the three month period ended March 31,
  2011:

| |                            |  |           |   |   |                |  |  | Weighted         | 
| | -------------------------- |  | --------- | - | - | -------------- |  |  | ---------------- | 
| |                            |  |           |   |   |                |  |  | Average          | 
| |                            |  |           |   |   | Weighted       |  |  | Remaining        | 
| |                            |  | Number of |   |   | Average        |  |  | Contractual Life | 
| |                            |  | Shares    |   |   | Exercise Price |  |  | (Years)          | 
| |                            |  |           |   |   |                |  |  |                  | 
| | Balance, December 31, 2010 |  | 9,412,197 |   | $ | 0.50           |  |  | 2.79             | 
| | Options/warrants granted   |  | 100,000   |   |   | 0.23           |  |  | 4.98             | 
| | Options/warrants exercised |  | -         |   |   | -              |  |  | -                | 
| | Options/warrants expired   |  | -         |   |   | -              |  |  | -                | 
| | Options/warrants cancelled |  | (200,000  | ) |   | 0.53           |  |  | -                | 
| |                            |  |           |   |   |                |  |  |                  | 
| | Balance, March 31, 2011    |  | 9,312,197 |   | $ | 0.50           |  |  | 2.53             | 

F-17

---

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

|9. | STOCK-BASED COMPENSATION(continued)                                                                                                                                         
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                             
|   | The following table summarizes the changes of the Companys
      stock-based compensation awards subject to vesting for the three months
      period ended March 31, 2011:

| |                             |  |           |   |   | Weighted Average | 
| | --------------------------- |  | --------- | - | - | ---------------- | 
| |                             |  | Number of |   |   | Grant Date       | 
| |                             |  | Shares    |   |   | Fair
      Value | 
| |                             |  |           |   |   |                  | 
| | Unvested, December 31, 2010 |  | 3,411,666 |   | $ | 0.40             | 
| | Granted                     |  | -         |   |   | -                | 
| | Vested                      |  | (255,000  | ) |   | 0.25             | 
| | Forfeited                   |  | -         |   |   | -                | 
| |                             |  |           |   |   |                  | 
| | Unvested, March 31, 2011    |  | 3,156,666 |   | $ | 0.41             | 

As of March 31, 2011, there was $711,979
  of total unrecognized compensation cost related to unvested stock options and
  warrants. This cost is expected to be fully recognized as follows:

2011
      $
      666,7182012
      
      45,261Total
      $
      711,979


|10. | WARRANTS AND OPTIONS                                                                                                                                                                                                                                  
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                       
|    | The following table summarizes all of the Companys
      stock option and warrant activity for the three month period ended March
      31, 2011, including private placement warrants and stock options and warrants
      granted for compensation:

| |                                    |  |            |   |   |                |  |  | Weighted    | 
| | ---------------------------------- |  | ---------- | - | - | -------------- |  |  | ----------- | 
| |                                    |  |            |   |   |                |  |  | Average     | 
| |                                    |  |            |   |   |                |  |  | Remaining   | 
| |                                    |  |            |   |   | Weighted       |  |  | Contractual | 
| |                                    |  | Number of  |   |   | Average        |  |  | Life        | 
| |                                    |  | Shares     |   |   | Exercise Price |  |  | (Years)     | 
| |                                    |  |            |   |   |                |  |  |             | 
| | Balance, December 31, 2010         |  | 37,534,054 |   | $ | 0.92           |  |  | 2.52        | 
| | Options/warrants granted           |  | 100,000    |   |   | 0.23           |  |  | 4.98        | 
| | Options/warrants exercised         |  | -          |   |   | -              |  |  | -           | 
| | Options/warrants expired/cancelled |  | (200,000   | ) |   | 0.53           |  |  | -           | 
| |                                    |  |            |   |   |                |  |  |             | 
| | Balance, March 31, 2011            |  | 37,434,054 |   | $ | 0.92           |  |  | 2.27        | 

F-18

---

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

|11. | INCOME TAXES                                                                                                                                               
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                            
|    | The Company is a Nevada corporation and is subject to
      federal income taxes. Nevada does not impose a corporate income tax.                           
|    |                                                                                                                                                            
|    | Significant components of the Companys net deferred
      income tax assets and liabilities at March 31, 2011 and December 31, 2010
      were as follows:

| |                                     |   | March 31,  |   |   | December 31, |  
| | ----------------------------------- | - | ---------- | - | - | ------------ | -
| |                                     |   | 2011       |   |   | 2010         |  
| | Deferred income tax assets:         |   |            |   |   |              |  
| |                                     |   |            |   |   |              |  
| | Net operating loss carryforward     | $ | 5,954,481  |   | $ | 5,541,704    |  
| | Option compensation                 |   | 1,028,793  |   |   | 940,019      |  
| | Property, plant & equipment         |   | 169,191    |   |   | 122,898      |  
| | Unrealized losses on investments    |   | 331        |   |   | 331          |  
| | Reclamation and remediation costs   |   | 96,368     |   |   | 96,368       |  
| |                                     |   |            |   |   |              |  
| | Gross deferred income tax assets    |   | 7,249,164  |   |   | 6,701,320    |  
| | Less: valuation allowance           |   | (1,125,161 | ) |   | (1,036,387   | )
| |                                     |   |            |   |   |              |  
| | Net deferred income tax assets      |   | 6,124,003  |   |   | 5,664,933    |  
| |                                     |   |            |   |   |              |  
| | Deferred income tax liabilities:    |   |            |   |   |              |  
| |                                     |   |            |   |   |              |  
| | Acquisition related liabilities     |   | 11,067,191 |   |   | 11,067,191   |  
| |                                     |   |            |   |   |              |  
| | Net deferred income tax liabilities | $ | 4,943,188  |   | $ | 5,402,258    |  

A valuation allowance was established
  for deferred tax assets related to option compensation and accrued reclamation
  and remediation costs due to the uncertainty of realizing these deferred tax
  assets based on conditions existing at March 31, 2011 and December 31, 2010.

The acquisition related liabilities are
  a result of the estimated future federal income tax liability associated with
  the temporary difference between the acquisition consideration and the tax basis.
  The deferred tax liabilities were 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.

F-19

---

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

|11. | INCOME TAXES(continued)                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                
|    | A reconciliation of the tax benefit for the three month
      periods ended March 31, 2011 and 2010 at US federal tax rates to the actual
      tax provision recorded in the financial statements consisted of the following
      components:

| |                                                |   | March 31, |   |   | March 31, |  
| | ---------------------------------------------- | - | --------- | - | - | --------- | -
| |                                                |   | 2011      |   |   | 2010      |  
| |                                                |   |           |   |   |           |  
| | Income tax benefit based on statutory tax rate | $ | 548,950   |   | $ | 433,609   |  
| |                                                |   |           |   |   |           |  
| | Reconciling items:                             |   |           |   |   |           |  
| | Non-deductible items                           |   | (1,106    | ) |   | (172      | )
| | Change in valuation allowance                  |   | (88,774   | ) |   | (103,032  | )
| |                                                |   |           |   |   |           |  
| | Income tax benefit                             | $ | 459,070   |   | $ | 330,405   |  

The Company had cumulative net operating
  losses of approximately $17,012,802 and $15,833,440 as of March 31, 2011 and
  December 31, 2010, 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 expire between 2027 and 2031.

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 a decrease
  in the net operating losses available for carryforwards. The Company is no longer
  subject to income tax examinations by US federal tax authorities for years prior
  to 2006. While the Company believes that its tax filings do not include uncertain
  tax positions, the results of potential examinations or the effect of changes
  in tax law cannot be ascertained at this time. The Company currently has no
  tax years under examination.

F-20

---

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

|12. | PROPERTY RENTAL AGREEMENTS AND LEASES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The Company, through its subsidiary CMI, has a lease
      agreement for mining claims with DDB Syndicate, an entity owned by related
      parties, including Douglas D.G. Birnie, Chief Executive Officer of the
      Company; Mr. Chizmar, a former director of the Company; three former officers
      and directors of CBI; Geotech Mining Inc., Jack Corp. and Wiser Corp.
      Geotech Mining Inc., Jack Corp. and Wiser Corp. are affiliates of Nanominerals
      Corp.                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The DDB Syndicate has leased the DDB Claims to CSM,
      a wholly owned subsidiary of the Company. The mining lease agreement (the
      DDB Agreement), between the DDB Syndicate and CSM, provides
      CSM with a lease, extending for approximately 5 years, with an option
      to purchase the DDB Claims at any time during the lease period. To maintain
      the lease rights, CSM paid the DDB Syndicate $130,000 by June 30, 2008,
      with annual rental payments thereafter of $30,000 per year, payable on
      June 30, 2009, 2010, and 2011, respectively. CSM may exercise its option
      to purchase the DDB Claims by paying a purchase price of $400,000, less
      any rental payments made by CSM prior to exercising the option, or paying
      the DDB Syndicate $10, plus the grant of a 2% royalty of net smelter returns
      on the DDB Claims.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The annual rental payment consists of $3,651 in payments
      to each of the eight owners of DDB Syndicate and reimbursement of expenses
      of $792 to a company controlled by Douglas D.G. Birnie.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|13. | COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Lease obligations The Company rents office
      space in Henderson, Nevada. The lease terms expired on September 1, 2008
      and the Company continues to rent the existing space under month-to-month
      terms.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Rental expense resulting from this operating lease agreement
      was $17,925 and $13,875 for the three month periods ended March 31, 2011
      and 2010, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Columbus Project Pursuant to the option
      assignment agreement dated March 30, 2007, as amended August 8, 2007,
      the Company granted a 5% net smelter return royalty to NMC, one of the
      principal stockholders of the Company. The Columbus Project is further
      discussed in Note 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Red Mountain Project Pursuant to the option
      assignment agreement, as amended August 8, 2007, the Company granted a
      5% net smelter return royalty to NMC, one of the principal stockholders
      of the Company. The Red Mountain Project is further discussed in Note
      5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F-21

---

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

|14. | ENVIRONMENTAL AND RECLAMATION ACTIVITIES                                                                                         
|--- | ---------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                  
|    | The liabilities accrued for the reclamation and remediation
      costs at March 31, 2011 and December 31, 2010, were as follows:

| |                                              |   | March 31, |  |   | December 31, | 
| | -------------------------------------------- | - | --------- |  | - | ------------ | 
| |                                              |   | 2011      |  |   | 2010         | 
| |                                              |   |           |  |   |              | 
| | Exploration properties:                      |   |           |  |   |              | 
| | Columbus                                     | $ | 275,338   |  | $ | 275,338      | 
| |                                              |   |           |  |   |              | 
| | Reclamation and remediation costs, long-term | $ | 275,338   |  | $ | 275,338      | 

|    | The Company maintains reclamation bonds with the BLM
      which amounted to $1,011,976 and $908,368 as of March 31, 2011 and December
      31, 2010, respectively. At March 31, 2011, the bonds consisted of $133,368
      in cash bonding held with the BLM and $878,608 of investments in U.S.
      Treasury Notes held by the Company. At March 31, 2011, the investments
      exceeded bonding requirements by $103,608. The Company anticipates using
      the remaining value of the treasury security for future collateral requirements.                                                                                                                                                                               
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|15. | CONCENTRATION OF CREDIT RISK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The Company maintains its cash accounts in financial
      institutions. Cash accounts are insured by the Federal Deposit Insurance
      Corporation (FDIC) for up to $250,000 per financial institution.
      Additionally, all non-interest bearing transactional accounts are fully
      insured by the FDIC through December 31, 2012. The Company has never experienced
      a material loss or lack of access to its cash accounts; however, no assurance
      can be provided that access to the Companys cash accounts will not
      be impacted by adverse conditions in the financial markets. At March 31,
      2011, the Company had deposits in excess of FDIC insured limits in the
      amount of $525,821.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|16. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | Pursuant to option assignment agreements related to
      both the Columbus and Red Mountain projects, the Company granted a 5%
      net smelter return royalty to NMC. NMC is the Companys largest shareholder,
      owning approximately 33% of the Companys outstanding common stock.
      The Columbus Project is further discussed in Note 4. The Red Mountain
      Project is further discussed in Note 5.                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | During the three month period ended March 31, 2011,
      the Company utilized the services of NMC to provide technical assistance
      and financing related activities. These services related primarily to
      the Columbus Project and the Red Mountain Project. In addition to the
      above services, NMC provided dedicated use of its laboratory, instrumentation,
      milling equipment and research facilities. NMC provided invoices for these
      fees plus expenses.                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | For the three month period ended March 31, 2011, the
      Company incurred total fees and reimbursements of expenses to NMC of $105,000
      and $32,708, respectively, for a total of $137,708. At March 31, 2011,
      the Company had an outstanding balance due to NMC of $48,839.                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | Due to related parties includes amounts due to former
      officers of the Company. At March 31, 2011, the remaining amount of due
      to related parties was $23,290.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | For the three month period ended March 31, 2011, the
      Company incurred fees of $2,000 for services performed by one of its independent
      directors, Mark Brennan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

F-22

---

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

|17. | CONCENTRATION OF ACTIVITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | For the three month period ended March 31, 2011, services
      purchased from NMC amounted to $137,708, which exceeded 10% of total purchases.
      NMC is a related party as further discussed in Note 16. In addition, services
      purchased from Western Analytical Consultants LLC amounted to $144,091
      which exceeded 10% of total purchases.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|18. | SUBSEQUENT EVENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | As of May 20, 2011, the Company had received gross proceeds of $1,366,505 under a private placement offering. A total of 2,484,554 units were issued at a price of $0.55. Each unit sold consisted of one share of the Company’s common stock and one-half of one share purchase warrant.  Each whole share purchase warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.80 per share for a period expiring June 30, 2014.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | After November 30, 2011, the Company may accelerate the expiration date for the Warrants if the VWAP for its common stock on the principal trading market exceeds $2.80 per share for 20 consecutive trading days, and the average trading volume on that market during that 20 day period is not less than 0.2% of our free float.  The Company also agreed that, if during the remainder of 2011, it approves another offering of our securities (a “Subsequent 2011 Offering”), the subscribers of the May 2011 Private Placement shall have the right to (a) surrender their unexercised Warrants in exchange for any warrants that the subscriber would have been entitled to receive had they subscribed under the Subsequent 2011 Offering instead of the May 2011 Private Placement (at the same aggregate subscription amount); and (b) receive any additional shares of our common stock that the subscriber would have been entitled to had they subscribed under the Subsequent 2011 Offering instead of the May 2011 Private Placement.  The May 2011 Private Placement was completed pursuant to the provisions of Rule 506 of Regulation D promulgated under the Securities Act of 1933 (the “Securities Act”). Each of the subscribers to the May 2011 Private Placement represented and warranted to the Company that they were accredited investors as that term is defined in Regulation D.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | As of May 20, 2011, the private placement offering remains open and the Board of Directors has authorized total units of up to 5,500,000 units for approximate total funding of $3,025,000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

F-23

---

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 were incorporated on February 20, 2001 under the laws of the
State of Nevada. We are a minerals exploration and development company focused
on the discovery and extraction of precious metals from mineral deposits in the
Southwestern United States.

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

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

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

The discussion provided in this Quarterly Report should be read
in conjunction with our Annual Report on Form 10-K for the year ended December
31, 2010 filed with the United States Securities and Exchange Commission (the
SEC) on March 30, 2011.

RECENT CORPORATE DEVELOPMENTS

The following significant developments occurred since our
fiscal year ended December 31, 2010:

|1. | On March 31, 2011, our sole independent director
      determined that the Company had made adequate and sufficient progress on
      its technical and feasibility programs for the Columbus Project such that
      the following options granted to our executive officers on July 22, 2010
      should be deemed to have vested on that date:
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3

---

|Optionee            | Number of Options | Exercise Price Per Share | Vesting Date   | Expiration Date
|------------------- | ----------------- | ------------------------ | -------------- | ---------------
|Douglas D.G. Birnie | 150,000           | $0.53                    | March 31, 2011 | March 30, 2016 
|Robert D. McDougal  | 50,000            | $0.53                    | March 31, 2011 | March 30, 2016 

|2. | On April 8, 2011, our Board of Directors fixed the
      compensation for its independent directors for the year ending December
      31, 2011. Retroactive to January 1, 2011, each of our independent
      directors is entitled to receive cash compensation in the amount of $3,000
      for each month during which he or she acts in that capacity.           
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                        
|3. | Also on April 8, 2011, Mark H. Brennan, our sole
      independent director, was granted non-qualified stock options pursuant to
      our 2007 Stock Incentive Plan to purchase an aggregate of 200,000 shares
      of our common stock, vesting on the dates and in the amounts, exercisable
      at the price, and expiring on the dates, each as set out
  below:

| | Number of Options to Vest | Exercise Price Per Share | Vesting Date       | Expiration Date   
| | ------------------------- | ------------------------ | ------------------ | ------------------
| | 50,000                    | $0.36                    | Immediately        | March 30, 2016    
| | 50,000                    | $0.36                    | June 30, 2011      | June 29, 2016     
| | 50,000                    | $0.36                    | September 30, 2011 | September 29, 2016
| | 50,000                    | $0.36                    | December 31, 2011  | December 30, 2016 

|   | Under the terms of the option agreement between the
      Company and Mr. Brennan with respect to the above grants, each of the
      options granted to Mr. Brennan will automatically vest and become
      exercisable upon the occurrence of a change in control of the
    Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|4. | On May 17, 2011, our Board of Directors unanimously
      resolved to amend the terms of the outstanding option grants (the
      Outstanding Options) under our 2007 Stock Incentive Plan (the 2007
      Plan) to provide that the optionees shall be permitted to exercise their
      respective Outstanding Options for a period of 6 months after the date
      that the particular optionee ceases to act as an officer, director,
      employee or eligible consultant of the Company, as the case may be. The
      previous terms of the Outstanding Options provided that they were to
      expire and cease to be exercisable 30 days after the particular optionee
      ceased to act for the Company. If the optionee ceases to act for the
      company due to a termination for cause or death or disability, the
      existing terms of the Outstanding Options will control. Included in the
      Outstanding Options are outstanding options granted to our executive
      officers and directors as disclosed in our Annual Report on Form 10-K for
      the year ended December 31, 2010, and as updated above. Expressly excluded
      from these amendments were options granted to two consultants of the
      Company whose options provide that they are to expire on the particular
      expiration date specified therein, regardless of whether those particular
      consultants cease to act for the Company prior to such expiration
    date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|5. | On May 20, 2011, our Board of Directors approved a
      private placement offering (the May 2011 Private Placement) of up to
      5,500,000 Units at a price of $0.55 per Unit. Each Unit consists of one
      share of our common stock and one-half of one share purchase warrant. Each
      whole share purchase warrant (a Warrant) entitles the holder to purchase
      one additional share of our common stock at a price of $0.80 per share for
      a period expiring June 30, 2014. After November 30, 2011, we may
      accelerate the expiration date for the Warrants if the VWAP for our common
      stock on our principal trading market exceeds $2.80 per share for 20
      consecutive trading days, and the average trading volume on that market
      during that 20 day period is not less than 0.2% of our free float. We also
      agreed that, if during the remainder of 2011, we approve another offering
      of our securities (a Subsequent 2011 Offering), the subscribers of the
      May 2011 Private Placement shall have the right to (a) surrender their
      unexercised Warrants in exchange for any warrants that the subscriber
      would have been entitled to receive had they subscribed under the
      Subsequent 2011 Offering instead of the May 2011 Private Placement (at the
      same aggregate subscription amount); and (b) receive any additional shares
      of our common stock that the subscriber would have been entitled to had
      they subscribed under the Subsequent 2011 Offering instead of the May 2011
      Private Placement. The May 2011 Private Placement is being conducted
      pursuant to the provisions of Rule 506 of Regulation D promulgated under
      the Securities Act of 1933 (the Securities Act). On May 20, 2011, we
      closed the first tranche of the May 2011 Private
  Placement, selling a total of 2,484,554 Units for gross proceeds of
$1,366,505. Each of the subscribers represented and warranted to the Company
that they were accredited investors as that term is defined in Regulation D.
There is no assurance that we will be able to sell the remaining Units offered
under our 2011 Private Placement.

4

---

PLAN OF OPERATIONS

During the next nine months, we intend to proceed with our
exploration and development program for the Columbus Project, while the Red
Mountain Project remains not in active development.

The Columbus Project

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

|(a) | Mineral Resources/Reserves: Exploration and
      development work to date has identified three different host materials
      (sand, clay, brine) each of which could potentially contain commercial
      quantities of gold and silver mineralization within the project area. The
      sand zones outcrop on the western side of the Columbus basin and dip
      gently eastward. The clay zones also outcrop and overlay the sand zones.
      The brine zone occurs as an aquifer at some 400 feet depth underlying the
      sand/clay zones. The Companys exploration efforts have focused on
      drilling both the sand and clay zones within the approximately 5,000 acre
      Columbus Project Area of Interest outlined by previous geochemical
      exploration work.                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The 2008 and 2009 drilling program identified some 343
      million tons of mineralized sand and/or clay material, including over 110
      million inferred tons of sand material within Zone S North and Zone S
      South, grading 0.040 opt gold equivalent from the surface to 100 feet
      depth. (AuE opt = Au opt + 0.013 Ag opt)(based on $900/oz Au and $12/oz
      Ag). The boundaries of these mineralized zones were identified at a wide
      drill hole spacing (about 1⁄4 mile X 1⁄2 mile). The 2010 drill program was
      designed to both infill drill and to extend these previously drilled
      mineralized zones. All drill programs have been conducted by independent
      and qualified third parties under strict Chain-of-Custody, Quality
      Assurance and Quality Control standards. Samples will continue to be
      assayed using caustic fusion and metal extraction methods.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The first phase of the 2010 drill program consisted of
      147 holes drilled to a depth of 40 feet (permitted production mining
      depth) within the permitted 320-acre mine site area. The goal of this
      drilling was to further define the mineralogy and grades within these
      mineralized clays. The second phase of the 2010 drill program consisted of
      28 holes to a depth of 200 feet within the clay and sand zones located in
      the northwest sector of the property. These holes were designed to both
      infill and extend the mineral resources in this area. The 2010 drill
      program was completed in October 2010, ahead of schedule and under budget.
      Results will be reported as received.                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(b) | Feasibility Study: The Company currently has a
      production permit for the Columbus Project. The production permit allows
      for the extraction of precious metals and the production of calcium
      carbonate on the 378 acre site (320 acre mine site and 58-acre mill site)
      at a mine rate of up to 792,000 tons per year. During the period 2008-2010
      the Company developed a dredge mine, constructed a Pilot Plant and began
      operations to develop and prove the extractive metallurgy for the Columbus
      Project. Initial metallurgical testing was primarily focused on extracting
      gold and silver from the clay material. As previously reported, problems
      with organic material interfered with the extraction of precious metals
      from the clays, and this has led Ireland to focus on extraction of
      precious metals from the sands.                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | The company recently completed two bulk scale tests on
      sand material from the Columbus Basin. Bulk sand samples were taken from
      Zone S North and delivered to AuRIC Metallurgical Laboratories, in Salt
      Lake City, Utah, for gravity concentration and leach testing. The head
      grade of the samples were determined by caustic fusion assay. The sand
      material was then processed through a gravity concentration system and
      produced a concentrate. The grade of the concentrates was determined by
      caustic fusion assay and confirmed by fire assay. The concentrate was then
      leached by both cyanide and thiosulphate. The average net recovery of
      precious metals from head ore to leach in the two tests approximated
      86%.                                                                                                                            

5

---

The 86% net recovery rate was
significant, not only because it exceeded our 75% goal, but also that the
extraction rates were consistent when processing both a high grade (0.082 opt
Au) and average grade (0.049 opt Au) head ore sample. We have found the average
head grade within Zone S North and Zone S South to be 0.040 opt AuE.

As earlier reported, a 100-foot
composite drill-hole sample (5 lbs) of these sands was previously thiosulphate
leached. The head grade of that composite material was 0.038 opt Au and 0.202
opt Ag. After a six-hour thiosulphate leach, it was determined that 90.7% of the
gold and 95.4% of the silver were recovered into solution.

We are conducting additional bulk scale
and onsite pilot tests to confirm and optimize the extraction of both gold and
silver from the sand material and will report results in a timely manner as the
test data is received.

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

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

We anticipate spending approximately $2,445,000 on our
exploration and development program and $250,000 on our capital expenditures for
the Columbus Project from April 1, 2011 until March 31, 2012.

The Red Mountain Project

Sampling and Drilling Program: Our exploration and
development program for the Red Mountain Project currently consists of a
Drilling and Sampling program. Currently the Red Mountain Project is not in
active development. We have set a budget of $90,000 for property payments and
maintenance costs for the Red Mountain Project for the year ending March 31,
2012. We have reallocated funds originally budgeted towards the Red Mountain
Project in order to provide us with maximum flexibility in achieving our
technical milestones at our lead project.

Cash Requirements

We have budgeted for the following cash expenditures for the
period from April 1, 2011 until March 31, 2012:

|Columbus Project                          |                                                     |          
|----------------------------------------- | --------------------------------------------------- | ---------
|                                         | Property Payments                                   | $        
|                                         | Drilling Program and
      Mineralization Estimates |          
|                                         | Pilot Plant / Project Feasibility                   |          
|                                          | Total for Columbus Project                          | $        
|Red
      Mountain Project                |                                                     |          
|                                         | Property Acquisition and
      Maintenance Costs    | $        
|                                         | Sampling Exploration Program                        |          
|                                          | Total for Red Mountain Project                      | $        
|General
      and Administration          |                                                     |          
|                                          | Total for General and Administration                | $        
|Total
      Expected Expenses             | $                                                   | 4,310,000
|Total Expected Capital
      Expenditures | $                                                   | 250,000  
|Total Expected Cash Expenditures          | $                                                   | 4,560,000

6

---

As of March 31, 2011, we had cash in the amount of $1,398,247
and a working capital surplus of $1,345,782. On May 20, 2011, we closed on the
first tranche of our May 2011 Private Placement, receiving gross proceeds of
$1,366,505. We do not currently have sufficient financial resources to pay for
our anticipated cash expenditures for the period from April 1, 2011 until March
31, 2012. We anticipate that our existing financial resources are sufficient
only to pay for the anticipated costs of our exploration and development
programs until September 30, 2011. Even if we are able to complete the sale of
the remaining Units offered under our May 2011 Private Placement, of which there
is no assurance, we anticipate that we will require additional financing to
complete our planned exploration and development plans. If we are unable to
obtain sufficient financing to complete our planned exploration and development
plans, we will scale back our plans depending upon our existing financial
resources. Other than the May 2011 Private Placement, we do not currently have
any financing arrangements in place.

RESULTS OF OPERATIONS

Three Months Summary

|                   |   | Three Months Ended |   |   | Percentage     |  
|------------------ | - | ------------------ | - | - | -------------- | -
|                   |   | March 31, 2011     |   |   | March 31, 2010 |  
|Revenue            | $ | -                  |   | $ | -              |  
|Operating Expenses |   | (1,578,304         | ) |   | (1,244,983     | )
|Other Income       |   | 9,876              |   |   | 6,101          |  
|Income Tax Benefit |   | 459,070            |   |   | 330,405        |  
|Net Loss           | $ | (1,109,358         | ) | $ | (908,477       | )

Revenue

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

Operating Expenses

Our operating expenses for the three months ended March 31,
2011 and 2010 consisted of the following:

|                                                            |   | Three Months Ended |  |   | Percentage     | 
|----------------------------------------------------------- | - | ------------------ |  | - | -------------- | 
|                                                            |   | March 31, 2011     |  |   | March 31, 2010 | 
|Mineral exploration and evaluation expenses                 | $ | 602,657            |  | $ | 311,889        | 
|Mineral exploration and evaluation expenses  related party |   | 137,708            |  |   | 124,149        | 
|General and administrative                                  |   | 617,883            |  |   | 758,700        | 
|General and administrative  related party                  |   | 2,000              |  |   | 21,066         | 
|Depreciation                                                |   | 203,056            |  |   | 14,179         | 
|Mineral and property holding costs                          |   | 15,000             |  |   | 15,000         | 
|Total Operating Expenses                                    | $ | 1,578,304          |  | $ | 1,244,983      | 

Our operating expenses for the quarter ended March 31, 2011
increased as compared with our quarter ended March 31, 2010. The increase in
operating expenses was due to increases in mineral exploration and evaluation
expenses.

7

---

The item Mineral exploration and evaluation expenses  related
party represents amounts paid or reimbursed to Nanominerals for exploration
work conducted on the Columbus and Red Mountain Projects.

During our quarter ended March 31, 2011, we incurred fees
payable to Nanominerals of $105,000 for technical and financing related services
relating primarily to the Columbus and Red Mountain Projects. In addition, we
incurred $32,708 in respect to reimbursable expenses paid for by Nanominerals.
At March 31, 2011, we were indebted to Nanominerals in the amount of $48,839 for
unpaid fees and reimbursable expenses.

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

LIQUIDITY AND CAPITAL RESOURCES

Working Capital

|                          |   |                   |   |   |                      |   |  | Percentage            | 
|------------------------- | - | ----------------- | - | - | -------------------- | - |  | --------------------- | 
|                          |   | At March 31, 2011 |   |   | At December 31, 2010 |   |  | Increase / (Decrease) | 
|Current Assets            | $ | 1,580,532         |   | $ | 2,768,882            |   |  | (42.9)%               | 
|Current
      Liabilities |   | (234,750          | ) |   | (227,138             | ) |  | 3.4%                  | 
|Working Capital Surplus   | $ | 1,345,782         |   | $ | 2,541,774            |   |  | (47.1)%               | 

Cash Flows

|                                                   |   | Three Months Ended |   |   | Three Months Ended |  
|-------------------------------------------------- | - | ------------------ | - | - | ------------------ | -
|                                                   |   | March 31, 2011     |   |   | March 31, 2010     |  
|Cash Flows used in Operating Activities            | $ | (223,311           | ) | $ | (1,109,102         | )
|Cash Flows provided (used) in Investing Activities |   | 19,379             |   |   | (408,076           | )
|Cash Flows from Financing Activities               |   | 0                  |   |   | 4,792,007          |  
|Net Change in Cash During Period                   | $ | (203,932           | ) | $ | 3,274,829          |  

At March 31, 2011, we had a working capital surplus of $1,345,782
as compared with a working capital surplus of $2,541,774 at December 31, 2010.
The decrease in our working capital surplus is primarily attributable to
decreases in cash from operating expenses, and purchases of property and
equipment.

Financing Requirements

On May 20, 2011, we completed the first tranche of our May 2011
Private Placement, receiving gross proceeds of $1,366,505. A summary of the May
2011 Private Placement is provided under Recent Corporate Developments.

We do not currently have sufficient financial resources to pay
for our anticipated cash expenditures for the period from April 1, 2011 until
March 31, 2012. We anticipate that our existing financial resources are
sufficient only to pay for the anticipated costs of our exploration and
development programs until September 30, 2011. Even if we are able to complete
the sale of the remaining Units offered under our May 2011 Private Placement, of
which there is no assurance, we anticipate that we will require additional
financing to complete our planned exploration and development plans. If we are
unable to obtain sufficient financing to complete our planned exploration and
development plans, we will scale back our plans depending upon our existing
financial resources. Other than the May 2011 Private Placement, we do not
currently have any financing arrangements in place.

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

8

---

For these reasons, our financial statements filed herewith
include a statement that these factors raise substantial doubt about our ability
to continue as a going concern. Our ability to continue as a going concern will
be dependent on our raising additional capital and the success of our business
plan.

OFF-BALANCE SHEET ARRANGEMENTS

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

CRITICAL ACCOUNTING POLICIES

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

We have identified certain accounting policies, described
below, that are most important to the portrayal of our current financial
condition and results of operations. Our significant accounting policies are
also disclosed in the notes to our unaudited consolidated financial statements
for the period ended March 31, 2011 included in this Quarterly Report on Form
10-Q.

Mineral properties

Costs of acquiring mineral properties
are capitalized upon acquisition. Exploration costs and costs to maintain
mineral properties are expensed as incurred while the project is in the
exploration stage. Development costs and costs to maintain mineral properties
are capitalized as incurred while the property is in the development stage. When
a property reaches the production stage, the related capitalized costs are
amortized using the units-of-production basis over the proven and probable
reserves. Mineral properties are assessed for impairment when circumstances
indicate that the carrying amount may not be recoverable. Impairment losses are
charged to operations at the time of impairment. When a property is sold or
abandoned, a gain or loss is recognized and included in the consolidated
statement of operations.

Mineral exploration and development
costs

Exploration expenditures incurred prior
to entering the development stage are expensed and included in Mineral
exploration and evaluation expenses.

Property and equipment

Property and equipment are stated at
cost less accumulated depreciation. Depreciation is provided principally on the
straight-line method over the estimated useful lives of the assets, which range
from 3 to 39 years. The cost of repairs and maintenance is charged to expense as
incurred. Expenditures for property betterments and renewals are capitalized.
Upon sale or other disposition of a depreciable asset, cost and accumulated
depreciation are removed from the accounts and any gain or loss is reflected in
other income (expense).

Impairment of long-lived
assets

We review and evaluate long-lived
assets for impairment when events or changes in circumstances indicate the
related carrying amounts may not be recoverable. If the sum of the estimated
future net cash flows on an undiscounted basis is less than the
carrying amount of the related asset, impairment is considered to exist. Future
cash flows are estimated based on quantities of recoverable minerals, expected
commodity prices, production levels, operating costs, capital requirements and
reclamation costs. We also consider our continued right to explore the property,
exploration reports, drill results, technical reports and continued plans to
fund exploration programs on the property. Any impairment loss is measured by
comparing estimated future net cash flows on a discounted basis to the carrying
amount of the asset. To date, no such impairments have been identified.

9

---

Our estimates of future cash flows are
based on numerous assumptions and it is possible that actual future cash flows
will be significantly different from the estimates, as actual future quantities
of recoverable minerals, commodity prices, and production levels and costs are
each subject to significant risks and uncertainties.

Reclamation and remediation costs
(asset retirement obligation)

We record a liability for the present
value of the estimated costs associated with environmental remediation
obligations in the period in which the liability is incurred and becomes
determinable, with an offsetting increase in the carrying amount of the
associated asset. The liability will be accreted, and the asset will be
depreciated over their expected useful lives. As reclamation work is performed
or liabilities are otherwise settled, the recorded amount of the liability will
be reduced.

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

Accruals for reclamation and
environmental matters totaled $275,338 at March 31, 2011 and December 31, 2010.
We are in the exploration stage and are unable to determine the estimated timing
of expenditures relating to these accruals at this time. It is reasonably
possible that the ultimate cost of reclamation and remediation could change in
the future and that changes to these estimates could have a material effect on
future operating results as new information becomes known. For additional
information, see Note 14 of the financial statements included with this
Quarterly Report on Form 10-Q.

ITEM 3.      QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 4.      CONTROLS AND
PROCEDURES.

As of March 31, 2011, an evaluation was performed under the
supervision and with the participation of our management, including our Chief
Executive Officer (CEO) and Chief Financial Officer (CFO), of the
effectiveness of the design and operation of our disclosure controls and
procedures. These controls and procedures are based on the definition of
disclosure controls and procedures in Rule 13a-15(e) and Rule 15d-15(e)
promulgated under the Securities Exchange Act of 1934.

Based on that evaluation as of March 31, 2011, our management,
including the CEO and CFO, concluded that our disclosure controls and procedures
were effective to ensure that the information required to be disclosed by us in
the reports that we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in SEC rules and forms.

10

---

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

During the fiscal quarter ended March 31, 2011, there were no
changes in our internal control over financial reporting that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

11

---

PART II - OTHER INFORMATION

ITEM 1.      LEGAL
PROCEEDINGS.

None.

ITEM 1A.    RISK FACTORS.

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

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

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

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

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

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

We expect to spend approximately $4,560,000 on the exploration
and development of our Columbus and Red Mountain Projects and the general costs
of operating and maintaining our business and mineral properties for the twelve
months ending March 31, 2012. We do not currently have sufficient financial
resources to pay for our anticipated expenditures for that period. We anticipate
that our existing financial resources are sufficient only to pay for the
anticipated costs of our exploration and development programs until September
30, 2011. Even if we are able to complete the sale of the remaining Units
offered under our May 2011 Private Placement, of which there is no assurance, we
anticipate that we will require additional financing to complete our planned
exploration and development plans. In addition, actual costs of completing our
exploration and development plans could be greater than anticipated and we may
need additional financing sooner than anticipated. If we are unable to obtain
sufficient financing to complete our planned exploration and development plans,
we will scale back our plans depending upon our existing financial resources.
Other than the May 2011 Private Placement, we do not currently have any
financing arrangements in place.

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

12

---

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

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

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

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

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

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

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

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

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

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

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

13

---

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

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

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

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

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

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

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

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

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

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

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

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

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

14

---

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

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

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

Our shares constitute a penny stock under the Securities
Exchange Act of 1934, as amended (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.

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

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

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

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

15

---

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

On May 20, 2011, we completed the first tranche of our May 2011
Private Placement for gross proceeds of $1,366,505. A summary of the May 2011
Private Placement is provided in Part 1, Item 2 of this Quarterly Report under
Recent Corporate Developments.

ITEM 3.      DEFAULTS UPON SENIOR
SECURITIES.

None.

ITEM 5.      OTHER
INFORMATION.

None.

ITEM 6.      EXHIBITS.

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

|Exhibit |  |                                                                                                                                                                                                                                      
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |  | Description of Exhibit                                                                                                                                                                                                               
|3.1     |  | Articles of
      Incorporation.(1)                                                                                                                                                                                                  
|3.2     |  | Certificate of Amendment to
      Articles - Name Change from Merritt Ventures Corp. to Ireland
      Inc.(2)                                                                                                                        
|3.3     |  | Certificate of
      Change  4-for-1 Stock Split.(3)                                                                                                                                                                                
|3.4     |  | Bylaws.(1)                                                                                                                                                                                                                           
|10.1    |  | 2007 Stock
      Incentive Plan.(4)                                                                                                                                                                                                  
|10.2    |  | Assignment Agreement dated for
      reference as of March 29, 2007, among Nanominerals Corp., the Company and
      Lorrie Archibald.(4)                                                                                            
|10.3    |  | Letter Agreement
      dated July 22, 2006 among Columbus Brine Inc., Columbus S.M. LLC and
      Nanominerals Corp., assigned to the Company by Nanominerals
      Corp.(11)                                                        
|10.4    |  | Letter Agreement dated March 15,
      2007 between Red Mountain Mining and Nanominerals Corp., assigned to the
      Company by Nanominerals Corp.(11)                                                                              
|10.5    |  | Agency Agreement
      dated effective as of June 19, 2007 between the Company and S & P
      Investors, Inc.(5)                                                                                                                    
|10.6    |  | Amendment Agreement to Assignment
      Agreement among the Company, Nanominerals Corp. and Lorrie Archibald,
      dated for reference as of August 8, 2007.(6)                                                                     
|10.7    |  | Consulting
      Agreement between the Company and RJ Falkner & Company, Inc., dated
      for reference as of November 5, 2007.(7)                                                                                                  
|10.8    |  | Consultant Non-Qualified Stock
      Option Agreement between the Company and R. Jerry Falkner, dated effective
      as of November 5, 2007.(7)                                                                                     
|10.9    |  | Agreement and
      Plan of Merger dated December 14, 2007 among the Company, Columbus Brine
      Inc., John T. Arkoosh, William Maghan and Lawrence E. Chizmar,
      Jr.(8)                                                       
|10.10   |  | Amendment Agreement to Agreement
      and Plan of Merger entered into on January 31, 2008 among the Company, CBI
      Acquisition, Inc., Columbus Brine Inc., John T. Arkoosh, William Maghan
      and Lawrence E. Chizmar, Jr.(9)

16

---

|Exhibit |  |                                                                                                                                                                   
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |  | Description of Exhibit                                                                                                                                            
|10.11   |  | Mining Lease Agreement dated
      November 30, 2007 between DDB Syndicate and Columbus S.M.,
      LLC.(12)                                                      
|10.12   |  | Non-Qualified Stock Option Agreement for
      Douglas D.G. Birnie.(14)                                                                                           
|10.13   |  | Non-Qualified Stock Option
      Agreement for Robert D. McDougal.(14)                                                                                            
|10.14   |  | Non-Qualified Stock Option Agreement for
      Michael A. Steele. (14)                                                                                            
|10.15   |  | Non-Qualified Stock Option
      Agreement for Mark H. Brennan.(14)                                                                                               
|10.16   |  | Non-Qualified Stock Option Agreement for David
      Z. Strickler, Jr.(15)                                                                                        
|10.17   |  | Non-Qualified Stock Option
      Agreement dated April 8, 2011 for Mark H. Brennan.(16)                                                                           
|14.1    |  | Code of Ethics.(10)                                                                                                                                               
|21.1    |  | List of
      Subsidiaries.(15)                                                                                                                                   
|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 Current Report on Form 8-K
      filed on April 30, 2007.                                              
|(4)  | Filed as an exhibit to our Annual Report on Form 10-KSB
      for the year ended December 31, 2006 filed on April 5, 2007.        
|(5)  | Filed as an exhibit to our Current Report on Form 8-K
      filed on June 21, 2007.                                               
|(6)  | Filed as an exhibit to our Current Report on Form 8-K
      filed on August 14, 2007.                                             
|(7)  | Filed as an exhibit to our Current Report on Form 8-K
      filed on November 9, 2007.                                            
|(8)  | Filed as an exhibit to our Current Report on Form 8-K
      filed on December 20, 2007.                                           
|(9)  | Filed as an exhibit to our Current Report on Form 8-K
      filed on February 6, 2008.                                            
|(10) | Filed as an exhibit to our Annual Report on Form 10-KSB
      for the year ended December 31, 2003, filed on September 28,
  2004.
|(11) | Filed as a Schedule to Exhibit 10.2.                                                                                              
|(12) | Filed as an exhibit to our Annual Report on Form 10-K for
      the year ended December 31, 2007 filed on March 31, 2008.         
|(13) | Filed as an exhibit to our Annual Report on Form 10-K for
      the year ended December 31, 2009 filed on April 15, 2010.         
|(14) | Filed as an exhibit to our Current Report on Form 8-K
      filed on July 28, 2010.                                               
|(15) | Filed as an exhibit to our Annual Report on Form 10-K for
      the year ended December 31, 2010 filed on March 30, 2011.         
|(16) | Filed as an exhibit to our Current Report on Form 8-K
      filed on April 13, 2011.                                              

17

---

SIGNATURES

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

|      |              |  |     | IRELAND INC.                                          
|----- | ------------ |  | --- | ------------------------------------------------------
|      |              |  |     |                                                       
|      |              |  |     |                                                       
|      |              |  |     |                                                       
|Date: | May 20, 2011 |  | By: | /s/
      Douglas D.G. Birnie                         
|      |              |  |     | DOUGLAS D.G. BIRNIE                                   
|      |              |  |     | Chief Executive Officer, President and
      Secretary
|      |              |  |     | (Principal Executive Officer)                         
|      |              |  |     |                                                       
|      |              |  |     |                                                       
|      |              |  |     |                                                       
|      |              |  |     |                                                       
|Date: | May 20, 2011 |  | By: | /s/
      Robert D. McDougal                          
|      |              |  |     | ROBERT D. MCDOUGAL                                    
|      |              |  |     | Chief Financial Officer and Treasurer                 
|      |              |  |     | (Principal Financial Officer)                         

---