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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 20-F

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

OR

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

FOR THE FISCAL YEAR ENDED MARCH 31, 2008

OR

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

OR

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

For the transition period from _______________ to
_______________

Commission File Number:**000-50953**

EVOLVING GOLD CORP.(Exact
name of Registrant as specified in its charter)

CANADA(Jurisdiction of incorporation or
organization)

725  666 Burrard StreetVancouver, British
Columbia, Canada V6C 2X8(Address of principal executive offices)

Securities registered or to be registered pursuant to Section
12(b) of the Act: NONE

Securities registered or to be registered pursuant to Section
12(g) of the Act:

COMMON SHARES WITHOUT PAR VALUE(Title of
Class)

Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act: NONE

Indicate the number of outstanding shares of each of the
issuers classes of capital or common stock as of the close of the period
covered by the annual report:

77,082,448 common shares as of March 31, 2008

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Indicate by check mark if the Registrant is a well known
seasoned issuer as defined in Rule 405 of the Securities Act. YES [ 
 ]    NO [X]

If this report is an annual or transition report, indicate by
check mark if the Registran is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934. YES
[   ]    NO [X]

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 Registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.YES [X]  
 NO [   ]

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

Large accelerated filer [ 
 ]           Accelerated
filer [  
]           Non-accelerated
filer [X]

Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements in this filing:

U.S. GAAP [   ]
      International Financial Reporting Standards
        [   ]
      Other [X]by the International Accounting Standards
        Board


If other has been checked in response to the previous
question, indicate by check mark which financial statement item the
registrant has elected to follow:Item 17 [X]    Item 18
[   ]

If this is an annual report, indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). YES [   ]    NO [X]

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EVOLVING GOLD CORP.

FORM 20-F ANNUAL REPORT

TABLE OF CONTENTS

|Page                                                                                         
|---------------------------------------------------------------------------------------------
|                                                                                             
|GLOSSARY                                                                                     
|                                                                                             
|PART I                                                                                       
|                                                                                             
|ITEM 1. Identity of Directors, Senior Management and Advisors                                
|ITEM 2. Offer Statistics and Expected Timetable                                              
|ITEM 3. KEY INFORMATION.                                                                     
|ITEM 4. INFORMATION ON THE COMPANY                                                           
|ITEM 4A. UNRESOLVED STAFF COMMENTS                                                           
|ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                         
|ITEM 6. DIRECTORS, SENIOR MANAGEMENT, AND EMPLOYEES                                          
|ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                                    
|ITEM 8. FINANCIAL INFORMATION                                                                
|ITEM 9. THE OFFER AND LISTING                                                                
|ITEM 10. ADDITIONAL INFORMATION                                                              
|ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
      MARKET RISK                    
|ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                              
|                                                                                             
|PART II                                                                                      
|                                                                                             
|ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                                     
|ITEM 14. MATERIAL MODIFICATIONS
      TO THE RIGHTS OF SECURITY HOLDERS AND USE OF   PROCEEDS
|ITEM 15. CONTROLS AND PROCEDURES                                                             
|ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT                                                   
|ITEM 16B. CODE OF ETHICS                                                                     
|ITEM 16C. PRINCIPAL ACCOUNTING FEES AND SERVICES                                             
|ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
      COMMITTEES                   
|ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER/AFFILIATED
      PURCHASERS           
|                                                                                             
|PART III                                                                                     
|                                                                                             
|ITEM 17. FINANCIAL STATEMENTS                                                                
|ITEM 18. FINANCIAL STATEMENTS                                                                
|ITEM 19. EXHIBITS                                                                            

- 3 -

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GLOSSARY

Certain terms used herein are defined as follows:

|Term                     | Definition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|2004 Plan                | Stock option plan of the Company dated September 28, 2004                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|2007 Plan                | Stock option plan of the Company dated March 14, 2007,
      presented to and approved by the shareholders at the September 21, 2007
      shareholders meeting                                                                                                                                                                                                                                                                                                                                                                                                              
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|adularia                 | A mineral, potassium feldspar                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Ag                       | Silver                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|AHL                      | AHL Holdings Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Alpha Butte Property     | 279 staked claims covering 2,200 hectares located 30 km
      southwest of the town of Winnemucca, Nevada                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|arsenopyrite             | A mineral composed of arsenic, iron and sulphur                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|As                       | Arsenic                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Au                       | Gold                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Bald Mountain            | Bald Mountain Mining Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Battle Mountain Property | Approximately 1,959 claims covering 38,000 acres located
      near the Carlin and Getchell trends in north central Nevada                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Bi                       | Bismuth                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|BLM                      | Bureau of Land Management, US Department of the Interior                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|breccia                  | A coarse-grained clastic rock, composed of angular broken
      rock fragments held together by a mineral cement or in a fine-grained
      matrix                                                                                                                                                                                                                                                                                                                                                                                                                            
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Carlin Agreement         | The exploration lease and sublease agreement among the
      company, the U.S. Sub, Newmont USA Limited, Newmont, Newmont Capital
      Limited and Elko Land and Livestock Company, dated November 28, 2007,
      pursuant to which Newmont leased to the Company its interest in certain
      unpatented mining claims and owned fee interests, and subleased to the
      Company its interest in certain leased lands and leased unpatented claims
      in five separate Project Areas  Carlin, Cottonwood Creek, Susie Creek,
      Boulder Valley and Sheep Creeks
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|CBCA                     | Canada Business Corporations Act                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|chalcopyrite             | A mineral composed of copper, iron and sulphur                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|clastic                  | Consisting of fragments of minerals, rocks, or organic
      structures that have been moved individually from their places of origin                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|CNQ                      | Canadian Quotation and Trading System                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

- 4 -

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|Term                      | Definition                                                                                                                                                                                                                                                                               
|------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                          |                                                                                                                                                                                                                                                                                          
|Code                      | Internal Revenue Code of 1986, as amended                                                                                                                                                                                                                                                
|                          |                                                                                                                                                                                                                                                                                          
|Company                   | Evolving Gold Corp.                                                                                                                                                                                                                                                                      
|                          |                                                                                                                                                                                                                                                                                          
|Cu                        | Copper                                                                                                                                                                                                                                                                                   
|                          |                                                                                                                                                                                                                                                                                          
|Diatreme                  | A breccia-filled volcanic pipe that was formed by a
      gaseous explosion                                                                                                                                                                                                              
|                          |                                                                                                                                                                                                                                                                                          
|EM                        | Electromagnetic                                                                                                                                                                                                                                                                          
|                          |                                                                                                                                                                                                                                                                                          
|Evolving Gold             | Evolving Gold Corp.                                                                                                                                                                                                                                                                      
|                          |                                                                                                                                                                                                                                                                                          
|                          |                                                                                                                                                                                                                                                                                          
|felsic                    | A mnemonic adjective derived from (fe) for feldspar, (l)
      for lenad or feldspathoid, and (s) for silica, and applied to
      light-colored rocks containing an abundance of one or all of these
      constituents.                                                                
|                          |                                                                                                                                                                                                                                                                                          
|Fisher Canyon Property    | 179 unpatented lode claims covering 1,100 hectares
      located in the Humboldt Range in north central Nevada                                                                                                                                                                           
|                          |                                                                                                                                                                                                                                                                                          
|Geocore                   | Geocore Exploration Inc.                                                                                                                                                                                                                                                                 
|                          |                                                                                                                                                                                                                                                                                          
|Golden Arc                | Golden Arc Mining & Refining Inc., a Nevada
      Corporation                                                                                                                                                                                                                            
|                          |                                                                                                                                                                                                                                                                                          
|Golden Arc Claims         | The unpatented mining claims under option from Golden Arc                                                                                                                                                                                                                                
|                          |                                                                                                                                                                                                                                                                                          
|Golden Predator           | Golden Predator (US) Mines Inc.                                                                                                                                                                                                                                                          
|                          |                                                                                                                                                                                                                                                                                          
|Golden Sands              | Golden Sands Exploration Inc.                                                                                                                                                                                                                                                            
|                          |                                                                                                                                                                                                                                                                                          
|GOR                       | Gross overriding royalty                                                                                                                                                                                                                                                                 
|                          |                                                                                                                                                                                                                                                                                          
|gpt                       | Grams per tonne                                                                                                                                                                                                                                                                          
|                          |                                                                                                                                                                                                                                                                                          
|Hg                        | Mercury                                                                                                                                                                                                                                                                                  
|                          |                                                                                                                                                                                                                                                                                          
|induced polarization      | A geophysical method used in mineral exploration                                                                                                                                                                                                                                         
|                          |                                                                                                                                                                                                                                                                                          
|intrusion                 | A mass of igneous rock that, while molten, was forced
      into or between other rocks                                                                                                                                                                                                  
|                          |                                                                                                                                                                                                                                                                                          
|IRS                       | Internal Revenue Service                                                                                                                                                                                                                                                                 
|                          |                                                                                                                                                                                                                                                                                          
|Malone Property Agreement | The quitclaim deed and royalty agreement between the
      Company and Newmont North America Exploration Limited, dated April 17,
      2006, pursuant to which the Company was granted all rights, title, estate
      and interest in the Malone Property, subject to a 2% NSR royalty.
|                          |                                                                                                                                                                                                                                                                                          
|Malone Property           | 80 unpatented mineral claims covering approximately 667
      hectares located in Grant County in southwest New Mexico                                                                                                                                                                   

- 5 -

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|Term             | Definition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|---------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Mineral Reserve  | The SEC Industry Guide 7  Description of Property by
      Issuers Engaged or to be Engaged in Significant Mining
      Operations defines a reserve as that part of a mineral deposit
      which could be economically and legally extracted or produced at the time
      of the reserve determination. Reserves consist of:                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                 | (1) Proven (Measured) Reserves. Reserves for
      which: (a) quantity is computed from dimensions revealed in outcrops,
      trenches, workings or drill holes; grade and/or quality are computed from
      the results of detailed sampling; and (b) the sites for inspection,
      sampling and measurement are spaced so closely and the geologic character
      is so well defined that size, shape, depth and mineral content of reserves
      are well-established                                                                                                                                                                                                                                                                                       
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                 | (2) Probable (Indicated) Reserves. Reserves for
      which quantity and grade and/or quality are computed from information
      similar to that used for proven (measured) reserves, but the sites for
      inspection, sampling and measurement are farther apart or are otherwise
      less adequately spaced. The degree of assurance, although lower than that
      for proven (measured) reserves, is high enough to assume continuity
      between points of observation.                                                                                                                                                                                                                                                                                
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Mineral Resource | National Instrument 43-101 of the Canadian Securities
      Administrators, Standards of Disclosure for Mineral
      Projects, defines a mineral resource as a concentration or
      occurrence of natural, solid, inorganic or fossilized organic material in
      or on the Earths crust in such form and quantity and of such a grade or
      quality that it has reasonable prospects for economic extraction. The
      location, quantity, grade, geological characteristics and continuity of a
      mineral resource are known, estimated or interpreted from specific
      geological evidence and knowledge.                                                                                                                                    
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                 | Mineral Resources are sub-divided, in order of increasing
      geological confidence, into Inferred, Indicated and Measured categories.
      An Inferred Resource has a lower level of confidence than that applied to
      an Indicated Resource. An Indicated Resource has a higher level of
      confidence than an Inferred Resource but has a lower level of confidence
      than a Measured Resource.                                                                                                                                                                                                                                                                                                                                                     
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                 | (1) Inferred Mineral Resource. An Inferred
      Mineral Resource is that part of the Mineral Resource for which quantity
      and grade or quality can be estimated on the basis of geological evidence
      and limited sampling and reasonably assumed, but not verified, geological
      and grade continuity. The estimate is based on limited information and
      sampling gathered through appropriate techniques from locations such as
      outcrops, trenches, pits, workings and drill holes.                                                                                                                                                                                                                                                     
|                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                 | (2) Indicated Mineral Resource. An Indicated
      Mineral Resources is that part of the Mineral Resource for which
      quantity, grade or quality, densities, shape and physical characteristics
      can be estimated with a level of confidence sufficient to allow the
      appropriate application of technical and economic parameters, to support
      mine planning and evaluation of the economic viability of the deposit. The
      estimate is based on detailed and reliable exploration and testing
      information gathered through appropriate techniques from locations such as
      outcrops, trenches, pits, workings and drill holes that are spaced closely
      enough for geological and grade continuity to be reasonably assumed.

- 6 -

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|Term                               | Definition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|---------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                   | (3) Measured Mineral Resource. A Measured Mineral
      Resource is that part of a Mineral Resource for which quantity, grade or
      quality, densities, shape, physical characteristics are so well
      established that they can be estimated with confidence sufficient to allow
      the appropriate application of technical and economic parameters, to
      support production planning and evaluation of the economic viability of
      the deposit. The estimate is based on detailed and reliable exploration,
      sampling and testing information gathered through appropriate techniques
      from locations such as outcrops, trenches, pits, workings and drill holes
      that are spaced closely enough to confirm both geological and grade
      continuity.
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                   | The SEC Industry Guide 7  Description of Property by
      Issuers Engaged or to be Engaged in Significant Mining
      Operations does not define or recognize resources. As used in this
      Annual Report, resources are as defined in National Instrument 43- 101.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Murray Property                    | One mineral claim totalling 2,965 acres located northeast
      of Yellowknife, Northwest Territories                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Murray Property Agreement          | The agreement dated June 10, 2003 made between Zimtu and
      Jody Dahrouge, an unrelated individual, pursuant to which Mr. Dahrouge
      retained a 1% NSR royalty on minerals other than diamonds and 1% GOR on
      diamonds from the Murray Property.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Newmont                            | Newmont Mining Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|NI 43-101 Report                   | A technical report prepared in accordance with National
      Instrument 43-101 of the Canadian Securities Administrators, Standards
      of Disclosure for Mineral Projects                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|NSR                                | Net smelter returns                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Optionee                           | Any individual that is eligible to be granted stock
      options under the 2007 Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|ore                                | The naturally occurring material from which a mineral or
      minerals of economic value can be extracted profitably                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|OTCBB                              | Over-The-Counter Bulletin Board Quotation System                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Pb                                 | Lead                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|PFIC                               | Passive foreign investment company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|pyrite, pyrrhotite                 | A mineral composed of iron and sulphur                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|QEF                                | Qualified electing fund                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|quartz                             | A mineral composed of silica and oxygen                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Rattlesnake Hills Letter Agreement | The binding letter agreement between the Company and Bald
      Mountain, dated January 15, 2008, pursuant to which Bald Mountain assigned
      to the Company its rights under the option agreement, dated December 11,
      2007, between Golden Predator and Bald Mountain, which underlies the
      Rattlesnake Hills Option Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                               

- 7 -

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|Term                               | Definition                                                                                                                                                                                                                               
|---------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                   |                                                                                                                                                                                                                                          
|Rattlesnake Hills Option           | The exclusive option, to earn up to a 100% interest in
      the Rattlesnake Hills Property located in Natrona County, Wyoming, granted
      by Golden Predator to the U.S. Sub pursuant to the Rattlesnake Hills
      Option Agreement
|                                   |                                                                                                                                                                                                                                          
|Rattlesnake Hills Option Agreement | The property option between the Company, the U.S. Sub and
      Golden Predator, dated January 16, 2008, pursuant to which the Company was
      granted the Rattlesnake Hills Option                                                    
|                                   |                                                                                                                                                                                                                                          
|Rattlesnake Hills Property         | 127 unpatented lode claims and approximately 276 hectares
      of Wyoming State lease lands located in Natrona County, Wyoming                                                                                                          
|                                   |                                                                                                                                                                                                                                          
|Rights Plan                        | The shareholder rights plan of the Company, which was
      adopted by the board of directors on January 23, 2008 and was approved by
      shareholder of the Company at a Special Meeting on March 20, 2008                            
|                                   |                                                                                                                                                                                                                                          
|Sb                                 | Antimony                                                                                                                                                                                                                                 
|                                   |                                                                                                                                                                                                                                          
|SEC                                | The U.S. Securities and Exchange Commission                                                                                                                                                                                              
|                                   |                                                                                                                                                                                                                                          
|SEDAR                              | The electronic filing system for the disclosure of
      documents of public companies and mutual funds in Canada                                                                                                                        
|                                   |                                                                                                                                                                                                                                          
|Shares                             | Common shares in the capital of the Company                                                                                                                                                                                              
|                                   |                                                                                                                                                                                                                                          
|Siesta Property                    | 638 claims situated in the Slumbering Hills area of
      Humboldt County, Nevada                                                                                                                                                        
|                                   |                                                                                                                                                                                                                                          
|silica                             | A element, occasionally used to refer to the mineral,
      quartz                                                                                                                                                                       
|                                   |                                                                                                                                                                                                                                          
|silicification                     | The introduction of, or replacement by, silica, generally
      resulting in the formation of fine-grained quartz, chalcedony, or opal,
      which may fill pores and replace existing minerals                                         
|                                   |                                                                                                                                                                                                                                          
|stockworks                         | A pattern of closely spaced fractures in rock, commonly
      filled with minerals                                                                                                                                                       
|                                   |                                                                                                                                                                                                                                          
|stratigraphic                      | Pertaining to the composition, sequence, and correlation
      of stratified rocks (rocks formed, arranged, or laid down in layers or
      strata)                                                                                      
|                                   |                                                                                                                                                                                                                                          
|Tax Act                            | Income Tax Act(Canada)                                                                                                                                                                                                                   
|                                   |                                                                                                                                                                                                                                          
|Treaty                             | The Canada-U.S. Income Tax Convention (1980) as amended
      by the Protocols signed on June 14, 1983, March 28, 1984, March 17, 1995
      and July 29, 1997                                                                           
|                                   |                                                                                                                                                                                                                                          
|TSX-V                              | TSX Venture Exchange                                                                                                                                                                                                                     
|                                   |                                                                                                                                                                                                                                          
|U.S. Holder                        | A holder of common shares of the Company resident in the
      United States of America                                                                                                                                                  
|                                   |                                                                                                                                                                                                                                          
|U.S. Sub                           | Evolving Gold Corp., which was incorporated pursuant to
      the laws of the State of Nevada and is a wholly-owned subsidiary of the
      Company                                                                                      
|                                   |                                                                                                                                                                                                                                          
|U.S. Taxpayer                      | An individual who is a citizen or resident of the United
      States of America or a domestic corporation in the United States                                                                                                          

- 8 -

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|Term                        | Definition                                                                                                                                                                                                                                                                                                                                                                                                                     
|--------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                
|Underlying Option Agreement | The option and royalty agreement dated March 22, 2004,
      made between AHL and Golden Arc                                                                                                                                                                                                                                                                                                                                   
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                
|Veining                     | A fracture filled with mineral matter                                                                                                                                                                                                                                                                                                                                                                                          
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                
|VLF-EM survey               | Very low frequency electromagnetic survey                                                                                                                                                                                                                                                                                                                                                                                      
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                
|Winnemucca Agreement        | The agreement dated December 3, 2004 made among the
      Company, Golden and AHL, as amended on January 7, 2005, February 25, 2005,
      April 21, 2005, January 26, 2006, April 27, 2006, June 16, 2006 and as
      amended and restated on July 7, 2006 and April 11, 2007 pursuant to which
      the Company was granted an option to acquire a 100% interest in the
      Winnemucca Property subject to 2% NSR royalty
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                
|Winnemucca Property         | A property consisting of 266 mining claims located in
      Humboldt County, Nevada                                                                                                                                                                                                                                                                                                                                            
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                
|Winnemucca Option           | The option granted to the Company with respect to the
      Winnemucca Mountain Property under the Winnemucca Option and Royalty
      Agreement                                                                                                                                                                                                                                                                               
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                
|Zimtu                       | International Zimtu Technologies Inc., a related public
      company                                                                                                                                                                                                                                                                                                                                                          
|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                
|Zn                          | Zinc                                                                                                                                                                                                                                                                                                                                                                                                                           

- 9 -

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CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF
INFERRED RESOURCES AND INDICATED MINERAL RESOURCES

The SEC permits U.S. mining companies, in their filings with
the SEC, to disclose only those mineral deposits that a company can economically
and legally extract or produce. We use certain terms in this Annual Report, such
as inferred resources, indicated resources and measured resources that the
SEC guidelines strictly prohibit U.S. registered companies from including in
their filings with the SEC.

This Annual Report uses the term inferred resources. We
advise U.S. investors that while this term is recognized and required by
Canadian regulations, the SEC does not recognize it. Inferred resources have a
great amount of uncertainty as to their economic and legal feasibility. It
cannot be assumed that all or any part of an inferred resource will ever be
upgraded to a higher category. Under Canadian rules, estimates of inferred
resources may not form the basis of feasibility or pre-feasibility studies,
except in rare cases. U.S. investors are cautioned not to assume that part or
all of an inferred resource exists, or is economically or legally mineable.

This Annual Report also uses the term indicated mineral
resources. We advise U.S. investors that while this term is recognized and
required by Canadian regulations, the SEC does not recognize it. U.S.
investors are cautioned not to assume that any part or all of the mineral
deposits in this category will ever be converted into reserves.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains forward-looking statements within
the meaning of federal securities laws. You can identify these statements by
forward-looking words such an anticipate, believe, could, estimate,
expect, intend, may, plan, potential, should, will, and would or
similar words. Forward-looking statements are not guarantees of future
performance and involve substantial risks and uncertainties. You should read
statements that contain these words carefully because they discuss our future
expectations, contain projections of our future results of operations or of our
financial position, or state other forward-looking information. We believe that
it is important to communicate our future expectations to our shareholders.
However, there may be events in the future that we are not able to predict
accurately or control. Therefore, these statements should not be regarded as a
representation by us that any of our objectives or plans will be achieved or
that any of our operating expectations will be realized. Our revenues and
results of operations are difficult to forecast and could differ materially from
those projected in the forward-looking statements contained in this Annual
Report.

The factors listed below in the section captioned Risk
Factors, as well as any cautionary language in this Annual Report, provide
examples of risks, uncertainties, and events that may cause our actual results
to differ materially from the expectations we describe in our forward-looking
statements. You should be aware that the occurrence of the events described in
these risk factors and elsewhere in this Annual Report could have a material
adverse effect on our business, results of operations and financial position. We
undertake no obligation to release publicly the results of any future revisions
we may make to forward-looking statements to reflect events after the date
hereof, or to reflect the occurrence of unanticipated events.

__________________________________

Unless the context otherwise requires in this Annual Report,
all references to Evolving Gold, the Company, we, us, and our refer to
Evolving Gold Corp. and its subsidiaries. All dollar amounts set forth in this
Annual Report are in Canadian dollars, except where otherwise indicated.

- 10 -

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PART I

ITEM 1. Identity of Directors, Senior Management and
Advisors

Not applicable.

ITEM 2. Offer Statistics and Expected Timetable.

Not applicable.

ITEM 3. KEY INFORMATION.

3.A. Selected Financial Data

The following selected financial data is derived from the
audited financial statements of the Company for the last five fiscal years ended
March 31, 2008 and should be read together with the sections of this Annual
Report entitled, Information on the Company and Operating and Financial
Review and Prospects. The financial statements are presented in Canadian
dollars and have been prepared in accordance with CDN GAAP. Note 13 to the
financial statements provides a summary of the material differences between
Canadian GAAP and US GAAP

Table No. 1 Selected Financial Data (CDN$ in 000,
except per share data)

Year Ended March 312008
      
      
      2007
      
      
      2006
      
      
      2005
      
      
      2004CANADIAN GAAPRevenue
      
      Nil
      
      
      Nil
      
      
      Nil
      
      
      Nil
      
      
      NilNet Loss for the Year
      $
      (8,742
      )
      $
      (831
      )
      $
      (591
      )
      $
      (402
      )
      $
      (152
      )Basic and Diluted Loss Per Share
      $
      (0.21
      )
      $
      (0.07
      )
      $
      (0.07
      )
      $
      0.07
      
      
      N/ADividends Per Share
      
      Nil
      
      
      Nil
      
      
      Nil
      
      
      Nil
      
      
      NilWeighted Avg. Shares (000)
      
      41,403
      
      
      11,582
      
      
      8,505
      
      
      5,601
      
      
      0.1Period-end Shares (000)
      
      77,082
      
      
      12,530
      
      
      10,269
      
      
      7,350
      
      
      0.1Working Capital
      $
      24,391
      
      
      ($177
      )
      $
      121
      
      $
      (144
      )
      $
      127Mineral Properties
      $
      8,824
      
      $
      1,114
      
      $
      737
      
      $
      216
      
      $
      27Long-Term Debt
      
      Nil
      
      
      Nil
      
      
      Nil
      
      
      Nil
      
      
      NilCapital Stock
      $
      35,502
      
      $
      2,408
      
      $
      1,714
      
      $
      499
      
      $
      0.1Shareholders Equity (Deficit)
      $
      33,396
      
      $
      959
      
      $
      859
      
      $
      72
      
      $
      154Total Assets
      $
      34,217
      
      $
      1,248
      
      $
      966
      
      $
      223
      
      $
      170US GAAPNet Loss
      $
      (16,453
      )
      $
      (1,376
      )
      $
      (1,112
      )
      $
      (591
      )
      $
      (179
      )Loss Per Share (basic and diluted)
      $
      (0.40
      )
      $
      (0.12
      )
      $
      (0.13
      )
      $
      (0.11
      )
      
      N/AMineral Properties
      
      Nil
      
      $
      11
      
      
      Nil
      
      
      Nil
      
      
      NilShareholders Equity
      $
      24,571
      
      $
      (155
      )
      $
      122
      
      $
      (144
      )
      $
      127Total Assets
      $
      25,392
      
      $
      134
      
      $
      229
      
      $
      7
      
      $
      143


|(1) | Cumulative Net Loss since incorporation through March 31,
      2008 under US GAAP was $19,542,999.                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                          
|(2) | Under US GAAP, options granted to non-employees as
      compensation for services provided are fair valued as an expense
      recorded.

- 11 -

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|(3) | Under US GAAP, all costs related to exploration stage
      properties are expensed in the period incurred, except for mineral
      property acquisition costs which are considered tangible assets and must
      be initially capitalized and then evaluated periodically for
      impairment.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

During the year ended March 31, 2007 Management began to
aggressively focus on the acquisition and development of prospective mineral
properties and, in accordance with this objective, in the fiscal 2008 year,
acquired seven new mineral properties. In order to fund exploration on these
properties the Company also successfully raised funds from several private
placements during the 2008 year. Commensurate with this increase in mineral
properties and the increase in working capital, the Net Loss for 2008 fiscal
year also reflected a significant increase due to general and administrative
expenses.. In addition Net Loss also includes write-downs of previously deferred
exploration expenditures for fiscal 2008, 2007 and 2006 and stock-based
compensation charges also primarily incurred in these years.

Total assets as at March 31, 2008 dramatically increased
commensurate with cash and shares issued for the acquisition of, and deferred
exploration costs incurred for, the various mineral property interests. In
addition, capital derived from several private placements of shares, the
exercise of options and conversion of warrants has increased the balance of
assets, offset by amounts required for administrative purposes.

Exchange Rates

The exchange rate between the Canadian dollar and the U.S.
dollar was CDN$1.0114 per US$1.00 as of July 24, 2008. The following tables set
forth: (i) the average exchange rate for the financial years-ended March 31,
2008, 2007, 2006, 2005 and 2004, calculated by using the average of the exchange
rates on the last day of each month during the period; and (ii) the high and low
for each month during the previous six months, each based on the noon rate of
exchange for conversion of Canadian dollars into U.S. dollars, as certified for
customs purposes by the Federal Reserve Bank of New York.

Table No. 2 Exchange Rates

March 31,
      2008
    
    March 31, 2007
    
    March 31, 2006
    
    March 31, 2005
    
    March 31, 20041.025425
    
    1.35167
    
    1.189167
    
    1.273533
    
    1.34915


June
    
    May
    
    April
    
    March
    
    February
    
    January2008
    
    2008
    
    2008
    
    2008
    
    2008
    
    2008High
    1.0282
    
    1.0187
    
    1.0268
    
    1.0275
    
    1.0188
    
    1.0294Low
    1.0011
    
    0.9840
    
    1.0021
    
    0.9841
    
    0.9717
    
    0.9905


3.B. Capitalization and Indebtedness

Not applicable.

3.C. Reasons For The Offer and Use Of Proceeds

Not applicable

3.D. Risk Factors

Before making an investment decision, you should carefully
consider the risks and uncertainties described below as well as the other
information contained and incorporated by reference in this Annual Report. These
risks and uncertainties are not the only ones facing us. Additional risks and
uncertainties not presently known to us or that we currently consider immaterial
may also impair our business operations. If any of such

- 12 -

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risks actually occur, our business, prospects, financial
condition, cash flows and operating results could be materially harmed.

Risks Related to the Company

Cumulative unsuccessful exploration efforts by Company
personnel could result in the company having to cease operations.

The expenditures to be made by the Company in the exploration
of its properties as described herein may not result in discoveries of
mineralized material in commercial quantities. Most exploration projects do not
result in the discovery of commercially mineable ore deposits and this
occurrence could ultimately result in the Company having to cease operations.

The Company has no reserves on the properties in which it
has an interest and if reserves are not defined the company would have to cease
operations.

The properties in which the Company has an interest or the
concessions in which the Company has the right to earn an interest are in the
exploratory stage only and are without a known body of ore. There can be no
assurance that any minerals will be found on any of the Companys properties. If
the Company does not ultimately find a body of ore, it would have to cease
operations.

Even if the Company identifies mineral deposits, a
substantial amount of capital will have to be spent before management will know
if the Company has a commercially viable mineral deposit on each of its
properties.

Even if the Company completes its exploration programs on its
properties and is successful in identifying mineral deposits, a substantial
amount of capital will still have to be spent over the next 2 years on each
deposit on further drilling and engineering studies before management will know
if the Company has a commercially viable mineral deposit on each of the
properties. No assurance can be provided that commercially viable mineral
deposits will be located on any of the Companys properties.

The Company has minimal positive cash flow and no recent
history of significant earnings and is dependent upon public and private
distributions of equity to obtain capital in order to sustain operations. Public
distributions of equity result in dilution to existing shareholders.

None of the Companys properties have advanced to the
commercial production stage and the Company has no history of earnings or
positive cash flow from operations. The cumulative net loss since the Companys
inception under US GAAP is $19,542,999. The Company does not know if it will
ever generate material revenue from mining operations or if it will ever achieve
self-sustaining commercial mining operations. The Company will require
significant additional financing to pursue its business plans. Historically, the
only source of funds available to the Company has been through the sale of its
common shares. Any future additional equity financing would cause dilution to
current stockholders. Management has no current plans to enter into any debt
obligations and plans to meet all capital requirements through the issuance of
the Companys capital stock. However, there can be no assurance that it will
obtain any such financing.

The Company currently has 7,208,500 share purchase options
outstanding and 30,040,819 share purchase warrants outstanding. If all of the
share purchase options and share purchase warrants were exercised, the number of
common shares issued and outstanding would increase from 78,590,217 to
115,839,536.

The risks associated with penny stock classification could
affect the marketability of the common stock of the Company and shareholders
could find it difficult to sell their stock.

The Companys stock is subject to penny stock rules as
defined in 1934 Securities and Exchange Act rule 3a51-1. The SEC has adopted
rules that regulate broker-dealer practices in connection with transactions in
penny stocks. The Companys common shares are subject to these penny stock
rules. Transaction costs associated with purchases and sales of penny stocks are
likely to be higher than those for other securities. Penny stocks generally are
equity

- 13 -

---

securities with a price of less than U.S. $5.00 (other than
securities registered on certain national securities exchanges or quoted on the
NASDAQ system, provided that current price and volume information with respect
to transactions in such securities is provided by the exchange or system).

The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document that provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction, and monthly account statements showing the
market value of each penny stock held in the customers account. The bid and
offer quotations, and the broker-dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customers confirmation.

In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from such rules; the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the
Companys common shares in the United States and shareholders may find it more
difficult to sell their shares.

The Company is dependent on key personnel and the absence of
any of these individuals could result in the Company having to cease operations.

While engaged in the business of exploiting mineral properties,
the nature of the Companys business, its ability to continue its exploration of
potential exploration projects, and to build a competitive edge in the
marketplace, depends, in large part, on its ability to attract and maintain
qualified key management personnel. Competition for such personnel is intense
and the Company may not be able to attract and retain such personnel. The
Companys growth will depend, on the efforts of its Senior Management,
particularly its Chief Executive Officer, Robert Bick, its Chief Financial
Officer, Vitaly Melnikov and its President, Dr. Quinton Hennigh. We do not carry
key person insurance on senior management and other personnel.

The Companys directors may have a conflict of interest with
the Company as such directors or senior management also serve on boards of
companies in the same industry as the Company.

Directors of the Company also serve as directors of other
similar companies involved in natural resource development. Accordingly, it may
occur that properties will be offered to both the Company and such other
companies. Furthermore, those other companies may participate in the same
properties as those in which the Company has an interest. As a result, there may
be situations which involve a conflict of interest. In that event, the directors
would not be entitled to vote at meetings of directors which evoke any such
conflict. The directors will attempt to avoid dealing with such other companies
in situations where conflicts might arise and will at all times use their best
efforts to act in the best interests of the Company. If the directors fail to do
so, however, there could be material adverse consequences to the Company, its
business and results of operations.

Dilution through employee/director/consultant options could
adversely affect the Companys stockholders.

Because the success of the Company is highly dependent upon its
respective employees, the Company has granted to some or all of its key
employees, directors and consultants options to purchase common shares as
non-cash incentives. To the extent that significant numbers of such options may
be granted and exercised, the interests of the other stockholders of the Company
may be diluted. As of July 24, 2008, there are 7,208,500share purchase
options outstanding, which, if exercised, would result in an additional
7,208,500Shares being issued and outstanding. (For a breakdown of
dilution, refer to the risk factor entitled: The Company Has Minimal Positive
Cash Flow and No Recent History of Significant Earnings and Is Dependent upon
Public and Private Distributions of Equity to Obtain Capital in Order to Sustain
Operations. Public distributions of capital result in dilution to existing
shareholders.)

- 14 -

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U.S. Investors may not be able to enforce their civil
liabilities against us or our directors, controlling persons and officers.

It may be difficult to bring and enforce suits against the
Company. The Company is a corporation incorporated in Canada under the CBCA. A
majority of the Companys directors must be residents of Canada, and all or
substantial portions of their assets are located outside of the United States,
predominately in Canada. As a result, it may be difficult for U.S. holders of
our common shares to affect service of process on these persons within the
United States or to realize in the United States upon judgments rendered against
them. In addition, a shareholder should not assume that the courts of Canada (i)
would enforce judgments of U.S. courts obtained in actions against us or such
persons predicated upon the civil liability provisions of the U.S. federal
securities laws or other laws of the United States, or (ii) would enforce, in
original actions, liabilities against us or such persons predicated upon the
U.S. federal securities laws or other laws of the United States.

However, U.S. laws would generally be enforced by a Canadian
court provided that those laws are not contrary to Canadian public policy, are
not foreign penal laws or laws that deal with taxation or the taking of property
by a foreign government and provided that they are in compliance with applicable
Canadian legislation regarding the limitation of actions. Also, a Canadian court
would generally recognize a judgment obtained in a U.S. Court except, for
example:

a)          
where the U.S. court where the judgment was rendered had no jurisdiction
according to applicable Canadian law;

b)           the
judgment was subject to ordinary remedy (appeal, judicial review and any other
judicial proceeding which renders the judgment not final, conclusive or
enforceable under the laws of the applicable state) or not final, conclusive or
enforceable under the laws of the applicable state;

c)           the
judgment was obtained by fraud or in any manner contrary to natural justice or
rendered in contravention of fundamental principles of procedure;

d)          a dispute
between the same parties, based on the same subject matter has given rise to a
judgment rendered in a Canadian court or has been decided in a third country and
the judgment meets the necessary conditions for recognition in a Canadian court;

e)           the
outcome of the judgment of the U.S. court was inconsistent with Canadian public
policy;

f)           the
judgment enforces obligations arising from foreign penal laws or laws that deal
with taxation or the taking of property by a foreign government; or

g)          
there has not been compliance with applicable Canadian law dealing with the
limitation of actions.

As a foreign private issuer, the Company is exempt from
the Section 14 proxy rules and Section 16 of the 1934 Securities Act may result
in shareholders having less complete and timely data.

The submission of proxy and annual meeting of shareholder
information (prepared to Canadian standards) on Form 6-K may result in
shareholders having less complete and timely data. The exemption from Section 16
rules regarding sales of common shares by insiders may result in shareholders
having less data. This data includes:

1.          
Insider trading data disclosed on Canadian regulatory websites is different.
2.           U.S.
companies have specified content and filing requirements regarding disclosures
to shareholders for the annual meeting and Canadian regulations specify a
modestly different content.
3.           Canadian
interim financial statements are not necessarily prepared according to U.S.
GAAP. 4.           The
filing deadlines for foreign private issuers are different than for U.S.
issuers.

- 15 -

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The Companys possible foreign investment company status has
consequences for U.S. Investors.

Potential investors who are U.S. taxpayers should be aware that
the Company could be considered a PFIC for U.S. tax purposes for the fiscal year
ended March 31, 2008. If the Company is a PFIC for any year during a U.S.
taxpayers holding period, then such U.S. taxpayer generally will be required to
treat any so-called excess distribution received on its common shares, or any
gain realized upon a disposition of common shares, as ordinary income and to pay
an interest charge on a portion of such distribution or gain, unless the
taxpayer makes a QEF election or a mark-to-market election with respect to the
shares of the Company. In certain circumstances, the sum of the tax and the
interest charge may exceed the amount of the excess distribution received, or
the amount of proceeds of disposition realized, by the taxpayer. A U.S. taxpayer
who makes a QEF election generally must report on a current basis its share of
the Companys net capital gain and ordinary earnings for any year in which the
Company is a PFIC, whether or not the Company distributes any amounts to its
shareholders. A U.S. taxpayer who makes the mark-to-market election generally
must include as ordinary income each year the excess of the fair market value of
the common shares over the taxpayers tax basis therein. See also Item 10E
Taxation  United States Federal Income Tax Consequences.

Risks Related to the Industry

Operating hazards and risks associated with the mining
industry could result in the Company having to cease operations.

Resource exploration activities generally involve a high degree
of risk. Hazards such as unusual or unexpected formations and other conditions
are involved. Operations in which the Company has a direct or indirect interest
will be subject to all the hazards and risks normally incidental to exploration
for precious and base metals, any of which could result in work stoppages,
damage to or destruction of exploration facilities, damage to life and property,
environmental damage and legal liability for any or all damage. The Company may
become subject to liability for cave-ins and other hazards for which it cannot
insure or against which it may elect not to insure where premium costs are
disproportionate to the Companys perception of the relevant risks. The payment
of such insurance premiums and of such liabilities would reduce the funds
available for exploration activities and could force the Company to cease
operations.

The amount of capital necessary to meet all environmental
regulations associated with the exploration programs of the Company could be in
an amount great enough to force the Company to cease operations.

The current and anticipated future operations of the Company,
including further exploration activities require permits from various Federal
and Provincial governmental authorities in Canada and the United States. (The
Company has the required permissions to enable it to engage in exploration work
consisting of rock sampling and geophysical mapping.) Such operations are
subject to various laws governing land use, the protection of the environment,
production, exports, taxes, labour standards, occupational health, waste
disposal, toxic substances, mine safety and other matters. Unfavourable
amendments to current laws, regulations and permits governing operations and
activities of resource exploration companies, or more stringent implementation
thereof, could have a materially adverse impact on the Company and cause
increases in capital expenditures which could result in a cessation of
operations by the Company.

Failure to comply with applicable laws, regulations and
permitting requirements may result in enforcement actions there under, including
orders issued by regulatory or judicial authorities causing operations to cease
or be curtailed, and may include corrective measures requiring capital
expenditures, installation of additional equipment or remedial actions. Parties
engaged in resource exploration may be required to compensate those suffering
loss or damage by reason of the mining activities and may have civil or criminal
fines or penalties imposed for violation of applicable laws or regulations.

Large increases in capital expenditures resulting from any of
the above factors could force the Company to cease operations.

- 16 -

---

Mineral prices may not support corporate profit for the
Company.

The resource exploration industry is intensely competitive and
even if commercial quantities of mineral resources are found (which is not
guaranteed), a profitable market may not exist for the sale. If a profitable
market does not exist, the Company may have to cease operations.

ITEM 4. INFORMATION ON THE COMPANY

4.A. History and Development of the Company

General

The Company was incorporated under the CBCA on June 19, 2003 as
6109527 Canada Ltd. On September 30, 2003, the Company changed its name to
Evolving Gold Corp. The Companys registered office is located at 1500  1055
West Georgia Street, PO Box 11117, Vancouver, British Columbia, Canada, V6E 4N7.
The Companys principal place of business is located at 725 - 666 Burrard
Street, Vancouver, British Columbia, V6C 2X8, its telephone number is (604)
685-6375 and its facsimile number is (604) 909-1163. The Companys website
address is www.evolvinggold.com and its e-mail
address is info@evolvinggold.com. The Company
became a reporting issuer in the Provinces of Alberta, British Columbia and
Ontario on May 14, 2004. On June 14, 2004, the Company officially began trading
on the CNQ under stock symbol GOLD. On July 28, 2005, the Company began
trading on the OTCBB exchange in the United States under the stock symbol
EVOGF. On June 13, 2007, the Company began trading on the TSX-V under the
stock symbol EVG. The Company continues to be listed for trading on the OTCBB
exchange, but ceased to be listed for trading on the CNQ on June 13, 2007 when
the Company graduated to the TSX-V. Effective August 13, 2007 the Company became
listed on the Frankfurt Stock Exchange under the stock symbol EV7.

On January 24, 2008, the Company announced a proposed
dividend-in-kind transaction involving the transfer of the Carlin Properties,
discussed in more detail below, into a new company, subject to the Carlin
Agreement. The Company is currently evaluating its options with respect to this
transaction. For more information about the proposed transaction please refer to
the news release dated January 24, 2008 that is attached as Exhibit 99.15 to the
Companys Form 6-K for July 2008, which was filed with the SEC and can be viewed
at www.sec.gov.

The Company is a Canadian-based precious mineral exploration
company engaged in the acquisition and exploration of natural resource
properties. Currently its focus is on projects in the Southwestern United
States, particularly Nevada, with additional properties in New Mexico and
Wyoming. The Company continues to emphasize the exploration of properties where
management believes there is potential for the discovery of high grade
deposits.

Even if the Company completes its exploration programs on its
properties and is successful in identifying mineral deposits, a substantial
amount of capital will still have to be spent over the next 2 years on each
deposit on further drilling and engineering studies before management will know
if the Company has a commercially viable mineral deposit on each of the
properties. No assurance can be provided that commercially viable mineral
deposits will be located on any of the Companys properties.

Past Property Interests

Murray Property

On July 22, 2003, the Company entered into the Murray Property
Agreement with Zimtu, pursuant to which the Company was granted an option to
acquire a 70% undivided interest in the Murray Property. At the date of the
Murray Property Agreement, the Company was a wholly owned subsidiary of Zimtu.
Currently Zimtu owns less than 3% of the outstanding shares of the Company. The
Murray Property consists of one mineral claim totaling 2,965 acres and is
located 78 kilometres northeast of Yellowknife, Northwest Territories.

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The Company terminated its option on the Murray Property in
2007 and accordingly wrote-off $11,825 in expenditures related to this property.

Voisey Bay Labrador Property

On May 4, 2005 the Company entered into an option agreement
with Geocore, whereby the Company was granted an option to earn up to an 80%
interest in two blocks, comprising 192 claims, in Geocores Voisey Bay area
property in Labrador. A first option, for the purchase of a 60% interest, was
exercised in exchange for $35,000, and the obligation to incur $200,000 in
exploration expenditures by October 31, 2006 with cumulative exploration costs
of $500,000 incurred by October 31, 2007.

During the 2007 fiscal year the Company terminated this option
agreement and accordingly wrote-off $80,170 in expenditures related to this
property.

Winnemucca Property

Effective December 3, 2004, the Company entered into an option
agreement with Golden Sands and Golden Sands subsidiary company, AHL, to
acquire unpatented mineral claims located in Humboldt County, Nevada. A finders
fee of 100,000 Shares was issued in connection with the acquisition of the
Winnemucca Property in December 2004. The December 3, 2004 option agreement was
subsequently amended on January 7, 2005, February 25, 2005, April 21, 2005,
January 26, 2006, April 27, 2006 and June 16, 2006, and further amended and
restated July 7, 2006, and subsequently amended April 11, 2007 and October 17,
2007 (the Winnemucca Agreement). Under the Winnemucca Agreement, any
unpatented or patented mining claims located within three miles of the subject
claims acquired or located would, at the option of the other parties, form part
of the subject claims. Since December 3, 2004, when there were 62 unpatented
mineral claims the subject of the Winnemucca Agreement, 204 additional claims
were staked by AHL and the Company, resulting in a total of 266 unpatented
claims the subject of the Winnemucca Agreement.

In order to exercise the Winnemucca Option, the Company was
required to make aggregate cash payments to Golden Sands of US$80,000 (paid),
issue and deliver 1,800,000 shares (issued) in the capital of the Company
(Shares), incur exploration expenditures of US$4,000,000, pay various
costs related to amending the Winnemucca Agreement, and prepare a NI 43-101
Report, which was prepared and dated October 29, 2006.

The Winnemucca Property was subject to a 2% royalty and advance royalty payments, of which US$20,000 was paid.

In September, 2005 the Company signed a letter of intent with
Meridian Gold Inc. regarding an option by Meridian Gold Inc. to acquire,
directly or indirectly, an undivided 70% interest in the Winnemucca Option. An
earn-in agreement was subsequently signed on July 31, 2006 to formalize this
arrangement under which Meridian Gold Inc. assigned their interest to Meridian
Minerals Corp. Under the terms of the agreement, Meridian Minerals Corp. could
earn a 70% interest in the Winnemucca Property by making a total contribution of
US$500,000 in staged cash payments to the Company by December 31, 2008
(US$160,000 was received as of December 31, 2007), and incurring total
exploration expenditures of US$4,000,000 by December 31, 2008.

In December 2007, Meridian Gold Inc. terminated the earn-in
agreement and, in February 2008, the Company decided to terminate the Winnemucca
Agreement and wrote off CDN$1,235,889 in deferred expenditures relating to the
Winnemucca Property.

Rye Patch Property

During the year ended March 31, 2008 the Company acquired, by
staking, an interest in this Nevada property but after reviewing the results
from a sampling program, subsequently decided not to pursue development.
Accordingly CDN$49,199 of costs incurred to date on this property were written
down to nil.

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Current Property Interests

Malone Property

On April 17, 2006, the Company entered into a quitclaim deed
and royalty agreement with Newmont North America Exploration Limited (the
Malone Agreement), pursuant to which the Company was granted all
rights, title, estate and interest in 80 unpatented mineral claims covering 665
hectares located in Grant County in southwest New Mexico in exchange for payment
of US$10,000 (paid) and an additional US$10,000 payable in one year (paid). The
agreement is subject to a 2% NSR royalty

Siesta Property

The Companys interest in the Siesta group is comprised of 702
unpatented mining claims covering approximately 5,870 hectares situated in the
Slumbering Hills area of Humboldt County, Nevada.

Alpha Butte Property

With respect to its interest in Alpha Butte, the Company has
staked and retained 62 claims covering approximately 550 hectares located 30
kilometres southwest of the town of Winnemucca in Nevada

Fisher Canyon Property

The Companys interest in the Fisher Canyon property presently
consists of 79 unpatented lode mining claims staked by the company covering
approximately 670 hectares of property located near the Relief Canyon and
Florida Canyon areas in Nevada

In February 2008, the Company signed a Letter of Intent with an
individual to acquire an undivided 100% interest in and to 12 unpatented mining
claims near the Fisher Canyon Property in exchange for US$8,000 on March 7, 2008
(paid), US$12,000 on March 7, 2009 and US$20,000 on March 7, 2010. The Company
will also pay an NSR on production of 3% to the individual and has the exclusive
right and option to purchase 50% of the royalty for US$150,000 within three
years of the Letter of Intent.

Rattlesnake Hills Property

In January 2008, the Company and the U.S. Sub entered into a
property option agreement (the Rattlesnake Hills Option Agreement) with
Golden Predator (US) Mines Inc. (Golden Predator) and a binding letter
agreement (the Rattlesnake Hills Letter Agreement) with Bald Mountain
Mining Company (Bald Mountain).

Pursuant to the Rattlesnake Hills Option Agreement, the U.S.
Sub was granted an exclusive option (the Rattlesnake Hills Option) to
earn up to a 100% interest in the Rattlesnake Hills Property located in Natrona
County, Wyoming. In order to exercise the Rattlesnake Hills Option, the Company
must issue 3,000,000 Shares to Golden Predator (1,000,000 Shares have been
issued as of the date of this Annual Report) over two years, and the Company
must incur exploration expenditures totalling US$5,000,000 in stages on or
before August 14, 2010 (CDN$58,450 has been incurred as of March 31, 2008).
Golden Predator retained a 0.5% NSR royalty in respect of the Rattlesnake Hills
Property and the Company retained the right to buy back 0.25% of that NSR
royalty for US$375,000. The Rattlesnake Hills Property is subject to a 4% NSR
royalty payable to the underlying owners. In addition, Golden Predator retained
the right to purchase up to 10% of any Shares offered by the Company during the
term of the Rattlesnake Hills Option Agreement, with Golden Predators purchase
subject to the same terms and conditions as other purchaser participating in the
offering.

Pursuant to the Rattlesnake Hills Letter Agreement, Bald
Mountain assigned to the Company its rights under the option agreement, dated
December 11, 2007, between Golden Predator and Bald Mountain, which underlies
the Rattlesnake Hills Option Agreement. In consideration for this assignment,
the Company paid Bald Mountain US$200,000 and issued 400,000 Shares to Bald
Mountain.

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A finders fee, by way of 75,000 Shares, was paid in connection
with the Companys acquisition of its interest in the Rattlesnake Hills
Property.

Subsequent to entering into the Rattlesnake Hills Option
Agreement and the Rattlesnake Hills Letter Agreement, the Company acquired,
through staking and filing 35 unpatented claims, resulting in an additional 283
hectares (700 acres), thereby increasing its total Rattlesnake Hills Property
land position to approximately 1,618 hectares (4,000 acres).

North Carlin District

On November 28, 2007, the Company entered into an exploration
lease and sublease agreement (the Carlin Agreement) with Newmont USA
Limited, Newmont Mining Corporation (Newmont),Newmont Capital
Limited, Elko Land and Livestock Company and the U.S. Sub. Pursuant to the
Carlin Agreement, Newmont leased to the Company its interest in certain
unpatented mining claims and owned fee interests and subleased to the Company
its interest in certain leased lands and leased unpatented claims, subject to a
back-in right. The Carlin Agreement covers five separate Project Areas 
Carlin, Cottonwood Creek, Susie Creek, Boulder Valley and Sheep Creeks. The
Sheep Creeks Project Area includes approximately 38,000 acres (1,959 claims)
that was staked by the Company (the Battle Mountain Property) and
approximately 10,500 acres of Newmont-held surface and minerals fee land. The
Boulder Valley Project Area includes approximately 1,846 acres (94 claims) that
was staked by Newmont and approximately 11,000 acres of Newmont-held surface and
minerals fee land. The Carlin Project Area includes approximately 1,750 acres (
92 claims) that was staked by the Company, approximately 3,075 acres (150
claims) that was staked by Newmont, and approximately 6,250 acres of
Newmont-held surface and minerals fee land. The Cottonwood Creek Project Area
includes approximately 2,135 acres (111 claims) that was staked by Newmont.
There are no land holdings for the Susie Creek at this time.

Under the Carlin Agreement, the Company is required to make
exploration expenditures within each Project Area, with the exception of Susie
Creek, in the aggregate amount of US$3,500,000 over a period of five years for a
total of US$14,000,000, with 70% of such expenditures in direct drilling costs
and an initial $200,000 expenditure in each Project Area. In the event Newmont
or the Company acquires any interest in minerals within the Susie Creek Project
Area, the Company is required to incur US$3,500,000 in exploration expenditures
over a similar five year period from the acquisition date then determined. As of
March 31, 2008, CDN$3,067,430 had been incurred in exploration costs. Beginning
on the sixth anniversary of the Carlin Agreement, the Company is required to
spend at least $750,000 in exploration expenditures in each Project Area or pay
Newmont a rental of $10 per acre for such Project Area, escalating at 5% per
year.

The Carlin Agreement contains provisions for a 2% NSR on
precious metals and 5% gross production royalty on coal, oil, gas and other
hydrocarbons and geothermal resources applicable to certain properties. With
respect to each Project Area, Newmont retained an option to enter into one or
more joint ventures with the Company and earn a 51% interest in the Project Area
by expending 200% of the exploration expenditures made by the Company, and an
additional 19% interest (for a total undivided interest of 70%) by expending an
additional 150% of the exploration expenditures made by the Company.

Jake Creek Mineral Property

In late December, 2007 the Company acquired by staking
approximately 427 claims totalling 8,700 acres several kilometres northwest of
the Sheep Creeks mineral property in north-central Nevada.

For more information on the Companys current properties of
interest, please refer to Item 4.B. Business Overview and Item 4.D.
Property, Plants and Equipment, below.

Capital Expenditures

During the year ended March 31, 2008, the Company paid
US$10,000 to extend certain terms of the Winnemucca Agreement, US$10,000 in
compliance with the terms of the Malone Property Agreement, US$8,000 as part of
the interest in the Cottonwood Creek Project Area and US$200,000 together with
$19,523 in legal costs were also

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incurred to acquire the Rattlesnake Hills Option. In addition,
the Company incurred $5,398,736 in deferred exploration expenses relating to its
various mineral property interests and paid a total of $212,249 for office
furnishings and equipment required for new offices for both the Canadian and US
operations, and two vehicles and geological equipment used for exploration
purposes. With respect to the mineral property interests, $1,285,088 in deferred
expenditures have been written down to nil in the year ended March 31, 2008
including the Winnemucca write down of $1,235,889 and the Rye Patch write down
of $49,199. These expenditures were all financed from working capital. The
Company also issued common shares with a fair value of $400,000 and $2,950,000
with respect to the Winnemucca Option and Rattlesnake Option, respectively.

During the year ended March 31, 2007, the Company paid US$10,000
  for advance royalty payments with respect to the Winnemucca Option and US$10,000
  in compliance with the terms of the Malone Property Agreement. The Company also
  issued common shares with a fair value of $184,000 with respect to the Winnemucca
  Option, incurred $767,588 in deferred exploration expenses relating to its various
  property options and paid legal costs of $83,939 which were recorded as part
  of resource property acquisition cost. Reclamation deposits of $18,982 and office
  furnishings and equipment totalling $23,106 were also acquired during the year.

During the year ended March 31, 2006, the Company paid $35,000
in compliance with the terms of the Voisey Bay Option. The Company also issued
common shares with a fair value of $244,000 and paid cash of US$50,000 on
account of the Winnemucca Option as well as paying US$10,000 for advance royalty
payments payable pursuant to the terms of the Winnemucca Agreement. The Company
also incurred $173,466 in geological consulting, staking and recording and field
expenses related to its various property options and paid legal costs of
$39,596, which were recorded as part of the resource property acquisition cost.

Takeover Offers

We are not aware of any indication of any public takeover
offers by third parties in respect of our common shares during our last and
current financial years.

4.B. Business Overview

Business Strategy and Principal Activities

Since its incorporation, the Companys principal business has
been the acquisition and exploration of natural resource properties, with the
goal of placing into production any properties so warranting. Currently, the
Companys focus is on projects in Southwestern United States, particularly
Nevada with additional properties located in New Mexico and Wyoming. The Company
continues to emphasize the development of properties where management believes
there is potential for the discovery of high grade deposits (Figure 1).
Currently the Company is exploring ten separate mineral properties, primarily
in known, producing gold trends in Nevada including undertaking a drilling
program on the Boulder Valley, Sheep Creeks, Malone, Siesta and Fisher Canyon
prospects. Please refer to the above descriptions of mineral properties for more
detailed explanations of the current and planned exploration of each property.
The Companys primary properties are the Malone Property and the Rattlesnake
Hills Property.

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Figure 1: Properties Location Map



Malone Property

On April 17, 2006, the Company entered into the Malone
Agreement with Newmont North America Exploration Limited whereby the Company was
granted all rights, title, estate and interest in 80 unpatented mineral claims
located in Grant County in southwest New Mexico, in exchange for payment of
US$20,000 (paid). The Malone Agreement is subject to a 2% NSR royalty. By June,
2007, the Company had completed detailed mapping, surveying and sampling of this
property. A diamond drill program was initiated in October 2007 and was
completed on January 2, 2008. The diamond drilling totaled 950 meters in 10
holes, to depths of up to 183 meters. All ten holes encountered significant gold
and silver mineralization. Better intercepts include 17.6 m grading 0.48 grams
per tonne (gpt) gold and 41 gpt silver in MAL-04, 5.5 m grading 1.53 gpt gold,
and 164 gpt silver in MAL-06, 12.7 m grading 0.58 gpt gold and 57 gpt silver in
MAL-07. The Company has incurred deferred exploration costs of $448,548 on the
Malone Property during the year ended March 31, 2008, which included $158,713
for drilling, $87,067 for geological consulting, $138,032 for permits, staking
and recording, and $64,736 for field and other expenses.

Technical Report -In March 2007, a NI 43-101 Report,
prepared by Gerald E. Ray, Ph.D. as the qualified person and dated as at
February 20, 2007, on the Malone Property was filed on SEDAR. The NI 43-101
Report was subsequently amended as at May 23, 2007 and filed on SEDAR in June
2007.

The Company plans to continue to conduct a success-contingent
  exploration program in late calendar 2008 in an effort to detect both high grade
  veins and lower grade bulk tonnage deposits amenable to open pit mining. Drilling
  will target areas of newly discovered disseminated gold and silver mineralization
  encountered during the 2007 drill program and will have an anticipated budget
  of approximately US$300,000.

Rattlesnake Hills Property

In January 2008, the Company and the U.S. Sub entered into the
Rattlesnake Hills Option Agreement with Golden Predator and the Rattlesnake
Hills Letter Agreement with Bald Mountain. Pursuant to the Rattlesnake Hills
Option Agreement, the U.S. Sub was granted the Rattlesnake Hills Option. In
order to exercise the Rattlesnake Hills Option, the Company must issue 3,000,000
Share to Golden Predator (1,000,000 Shares have been issued as of the

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date of this Annual Report) over two years and the Company must
incur exploration expenditures totaling US$5,000,000 in stages on or before
August 14, 2010. As at March 31, 2008, $58,450 in geological consulting and
field expenses had been incurred with respect to the Rattlesnake Hills Property.

Golden Predator retained a 0.5% NSR royalty in respect of the
Rattlesnake Hills Property and the Company retained the right to buy back 0.25%
of that NSR royalty for US$375,000. The Rattlesnake Hills Property is subject to
a 4% NSR royalty payable to the underlying owners. In addition, Golden Predator
retained the right to purchase up to 10% of any Shares offered by the Company
during the term of the Rattlesnake Hills Option Agreement, with Golden
Predators purchase subject to the same terms and conditions as other purchaser
participating in the offering.

Pursuant to the Rattlesnake Hills Letter Agreement, Bald
Mountain assigned to the Company its rights under the option agreement, dated
December 11, 2007, between Golden Predator and Bald Mountain, which underlies
the Rattlesnake Hills Option Agreement. In consideration for this assignment,
the Company paid Bald Mountain US$200,000 and issued 400,000 Shares to Bald
Mountain.

A finders fee, by way of 75,000 Shares, was paid in connection
with the Companys acquisition of its interest in the Rattlesnake Hills
Property.

Subsequent to entering into the Rattlesnake Hills Option
Agreement and the Rattlesnake Hills Letter Agreement, the Company acquired,
through staking and filing on 35 unpatented claims, resulting in an additional
283 hectares (700 acres), thereby increasing its total Rattlesnake Hills
Property land position to approximately 1,618 hectares (4,000 acres).

Technical Report  In October 2007, a NI 43-101 Report,
prepared by Gerald E. Ray, Ph.D. as the qualified person and dated as at October
3, 2007, on the Rattlesnake Hills Property was filed on SEDAR. The NI 43-101
Report was subsequently amended as at December 7, 2007, January 29, 2008 and
February 15, 2008, and filed on SEDAR in December 2007, February 2008, and
February 2008, respectively.

The Rattlesnake Hills area is host to an alkaline volcanic
center comprised of over 40 intrusions and diatremes. Gold mineralization was
discovered here in the late 1980s by American Copper and Nickel Corporation and
was subsequently drilled by Newmont Corporation. Gold is closely associated with
alkaline volcanic rocks. The Rattlesnake Hills project is the focus of an
extensive drill campaign planned by the Company to test three sizeable targets
evident on the property. A total of approximately 7,000 m of diamond drilling is
planned. Two drills began operating on June 21, 2008 and have currently produced
approximately 1,300 m of core with assays expected by September, 2008. It is the
Companys intention to conduct sufficient drilling this season to enable it to
formally evaluate historic resources found on the property and results from this
first phase of drilling will determine the future level of drilling and other
exploration work to be performed.. A budget of approximately US$2,400,000 has
been allocated to the property.

Siesta Property

The Companys interest in the Siesta group is comprised of 702
unpatented mining claims covering 5,870 hectares situated in the Slumbering
Hills area of Humboldt County, Nevada. During the year ended March 31, 2008,
Evolving conducted systematic geophysical surveys of this claim group, and
undertook a concurrent geochemical survey with the objective of defining drill
targets. Two reverse circulation drills drilled a total of 34 exploration holes
at Siesta between January and May, 2008, testing geophysical anomalies. The
holes averaged a depth of 200 meters. Twenty-nine of these holes failed to
encounter the favourable rocks known to host gold mineralization in the region.
Five holes intersected Miocene age felsic volcanic rocks known to host gold
deposits at the adjoining Sleeper and Sandman properties. Clay alteration and
minor silicification were present over narrow intervals in these holes.
Anomalous gold values ranging from 0.01 -0.25 gpt are associated with these
altered zones As at March 31, 2008, the Company had incurred $1,166,046 in
deferred exploration expenditures for the fiscal year including drilling of
$461,050, geophysical and geological studies of $222,926, staking and recording
of $372,741, geological consulting of $44,445 and field and other expenses of
$64,884.

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The Company intends to review drill data coming in from its
recently completed drill program and decide on future plans by late 2008.

Fisher Canyon Property

The Companys interest in the Fisher Canyon Property consists
of 79 unpatented mining claims staked by the Company covering approximately 670
hectares located in the Humboldt Range in north central Nevada. In February,
2008, the Company signed a Letter of Intent with an individual to acquire an
undivided 100% interest in and to 12 unpatented mining claims near Fisher Canyon
property in exchange for US$8,000 on March 7, 2008 (paid), US$12,000 on March 7,
2009 and US$20,000 on March 7, 2010. The Company will also pay an NSR on
production of 3% to the individual and has the exclusive right and option to
purchase 50% of the royalty for US$150,000 within three years of the Letter of
Intent. During the year ended March 31, 2008 the Company conducted further
geochemical and geophysical surveys on this property, completed the initial
reconnaissance drilling phase as well as a second reverse circulation drilling
program completed in December, 2007. The December drilling program totalled 971
meters in thirteen holes, each ranging from 40 to 137 meters in depth with
twelve of the thirteen holes encountering gold values. Mineralized drill
intervals ranged up to 25.91 meters grading 0.87 grams per tonne (gpt) gold
including 7.62 meters grading 1.66 gpt gold from the reverse circulation
drilling program.

Once the new results are interpreted the Company plans to carry
out a more comprehensive drilling program over a broader area of the Fisher
Canyon Property.

For the year ended March 31, 2008 the Company incurred deferred
exploration expenditures of $428,893 including $269,759 for drilling, $41,275
for staking and recording and $117,859 for geological consulting, field and
other expenses. The Company plans to conduct further exploratory drilling on
additional targets on the property in late 2008. A budget of approximately
US$400,000 is planned for second phase drilling.

Alpha Butte Property

The Companys interest in the Alpha Butte Property consists of
62 staked claims covering 450 hectares located 30 km southwest of the town of
Winnemucca, Nevada. The Company is currently concentrating its efforts on the
Fisher Canyon and Siesta Properties but plans to continue surface mapping and
sampling of this property with the objective of defining drill targets over the
next year. As at March 31, 2008, deferred exploration expenditures of $91,606
have been incurred including $72,921 of exploration expenditures incurred in the
current year primarily for staking.

The Company intends to conduct further prospecting on the
property in late 2008.

North Carlin District

On November 28, 2007, the Company entered into the Carlin
Agreement with Newmont USA Limited, Newmont, Newmont Capital Limited, Elko Land
and Livestock Company and the U.S. Sub. Pursuant to the Carlin Agreement,
Newmont leased to the Company its interest in certain unpatented mining claims
and owned fee interests and subleased to the Company its interest in certain
leased lands and leased unpatented claims, subject to a back-in right. The
Carlin Agreement cover five separate Project Areas  Carlin, Cottonwood Creek,
Susie Creek, Boulder Valley and Sheep Creeks. The Sheep Creeks Project Area
includes the Battle Mountain Property (approximately 38,000 acres (1,959 claims)
that was staked by the Company) and approximately 10,500 acres of Newmont-held
surface and minerals fee land. The Boulder Valley Project Area includes
approximately 1,846 acres (94 claims) that was staked by Newmont and
approximately 11,000 acres of Newmont-held surface and minerals fee land. The
Carlin Project Area includes approximately 1,750 acres ( 92 claims) that was
staked by the Company, approximately 3,075 acres (150 claims) that was staked by
Newmont, and approximately 6,250 acres of Newmont-held surface and minerals fee
land. The Cottonwood Creek Project Area includes approximately 2,135 acres (111
claims) that was staked by Newmont. There are no land holdings for the Susie
Creek at this time.

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Under the Carlin Agreement, the Company is required to make
exploration expenditures within each Project Area, with the exception of Susie
Creek, in the aggregate amount of US$3,500,000 over a period of five years for a
total of US$14,000,000, with 70% of such expenditures in direct drilling costs
and an initial $200,000 expenditure in each Project Area

Beginning on the sixth anniversary of the Carlin Agreement, the
Company is required to spend at least $750,000 in exploration expenditures in
each Project Area or pay Newmont a rental of $10 per acre for such Project Area,
escalating at 5% per year. The Carlin Agreement contains provisions for a 2% NSR
on precious metals and 5% gross production royalty on coal, oil, gas and other
hydrocarbons and geothermal resources applicable to certain properties.

With respect to each Project Area, Newmont retained an option
to enter into one or more joint ventures with the Company and earn a 51%
interest in the Project Area by expending 200% of the exploration expenditures
made by the Company, and an additional 19% interest (for a total undivided
interest of 70%) by expending an additional 150% of the exploration expenditures
made by the Company.

Subsequent to entering into the Carlin Agreement, the Company
acquired, by staking and filing on, 427 mining claims covering 8,600 acres (the
Jake Creek Project) between the Carlin and Getchell Gold trends in
north-central Nevada.

A total of $62,088 of deferred exploration costs have been
incurred for the Carlin and Cottonwood Project Areas, which are in early stages
of exploration. The Boulder Valley Project Area had a total of $419,723 in
deferred exploration costs incurred on it for the current fiscal year comprised
of $349,609 in drilling, and $70,114 in other expenses. During fiscal 2008,
$2,585,619 in deferred exploration was incurred with respect to the Sheep Creeks
Project Area, comprised of $1,490,517 in drilling, $580,304 in staking and
recording, $171,233 in licenses and fees, $126,769 in geological consulting,
$117,629 in geophysical and geological studies and $99,167 in field and other
expenses.

With respect to the Sheep Creeks Mineral Property (RC-001) was
terminated after reaching a depth of 463 meters due to technical problems.
Assays from the lower portion of this hole averaged 0.22 gpt gold over
approximately 128 m, a non-economic yet geologically significant discovery. This
mineralization is associated with elevated levels of the typical pathfinder
elements (As, Sb, Hg and Tl) associated with large gold deposits of the region.
Because of these results, a diamond drill rig was mobilized to the site on
January 7, 2008. An attempt was made (RCC-001) to twin the initial reverse
circulation drill hole, but due to technical reasons, failed at about 372 m
depth. A second core hole (RCC-002) was attempted approximately 125 meters southwest
of the original RC-001 hole and was drilled to about 581 m depth. After completion of
RCC-002, a second attempt (RCC-003) was made to twin the original reverse
circulation hole, but was terminated (at 399 m) when seasonal flooding from snow
melt made the site inaccessible from late March to early June. Upon regaining
access to the site, core drilling resumed on June 2, 2008. Three more holes,
RCC-004 (788 m deep), RCC-005 (failed at 133 m) and RCC-006 (currently in
progress) have been undertaken. Results from the two failed twin holes, RCC-001
and RCC-003, confirm results from the original reverse circulation hole.
Beginning at approximately 300 m, gold values are typically 0.1 -0.3 gpt in each
hole with one spike of 1 m grading 4.8 gpt gold in RCC-001. Hole RCC-002
encountered numerous 1-50 m intervals grading 0.1 to 1.2 gpt gold beginning at
about 280 m to its terminus at 581 m. This hole provides further confirmation
that a large mineralized system has been encountered. Assays from the final
three hole should be returned by late August, 2008 at which time the project
will be evaluated for future work. Additional drilling is expected to test this
and other areas on this very large property.

At Boulder Valley, six attempts, both diamond drilling and
reverse circulation, were made between January and May 2008, to drill through
volcanic overburden to reach favourable sedimentary host rocks at depth. All six
holes terminated in badly broken ground above the targeted horizon. An induced
polarization survey was undertaken across the property to evaluate depths to
bedrock and help guide future drilling. Another attempt to drill is being
considered for late calendar 2008. Stratigraphic test holes are planned for the
Carlin and Cottonwood Creek properties, where drilling will commence in late
July or early August, 2008. Approximately 1500 meters of diamond drilling is
planned for each property.

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A mercury vapour study is being undertaken at Jake Creek to be
completed in mid-August 2008. Upon receiving results from this survey, it will
be determined where to drill an anticipated six reverse circulation drill holes
targeting buried Carlin-style mineralization. Drill permitting should be
completed by September 2008, and drilling should commence in October 2008.
$103,825 was incurred during the current fiscal year with respect to the staking
of the Jake Creek Project. A budget of approximately $600,000 has been allocated
to the project.

Competitive Conditions

The Company competes with other mineral resource exploration
companies for financing, for the acquisition of new mineral properties and for
the recruitment and retention of qualified employees and other personnel. Many
of the mineral resource exploration and development companies with which the
Company competes have greater financial and technical resources. Accordingly,
these competitors may be able to spend greater amounts on acquisitions of
mineral properties of merit, on exploration of their mineral properties and on
development of their mineral properties. In addition, they may be able to afford
more geological expertise in the targeting and exploration of mineral
properties. This competition could result in competitors having mineral
properties of greater quality and interest to prospective investors who may
finance additional exploration and development. This competition could have an
adverse impact on the Companys ability to finance further exploration and to
achieve the financing necessary for us to develop our mineral properties.

Compliance with Government Regulation

The Company is required to obtain work permits from the BLM for
any exploration work on its mineral properties that results in a physical
disturbance to the land. The Company is not required to obtain a work permit for
any phase of our proposed mineral exploration programs that does not involve any
physical disturbance to the mineral claims, such as data compilation, field work
and geochemical surveys. The Company is required to obtain work permits for all
drilling operations that it plans to conduct on its mineral properties. Prior to
commencing drilling operations on any of its properties, the Company must submit
a Notice of Intent to Operate to the BLM and post a bond as security for our
obligation to complete reclamation activities. The Company is required by the
BLM to undertake remediation work on any work that results in physical
disturbance to the mineral claims, including drilling programs. The Company
estimates that the cost of remediation work for our drilling programs ranges
from approximately US$8,000 to US$150,000 for each drilling program. Presently,
the Company has placed approximately US$275,000 in bonds as security to cover
costs of all reclamation on US lands. The estimated amount of remediation work
is included within the Companys budgets for its exploration programs. The
actual amount of reclamation cost will vary according to the degree of physical
disturbance.

The Company has made all current BLM filings for its
properties. All claims are in good standing until August 31, 2008. Applicable
county fees have also been paid.

Material Effects of Government Regulations

The current and anticipated future operations of the Company,
including further exploration activities, require permits from various Canadian
and U.S. Federal, Provincial and State governmental authorities. Such operations
are subject to various laws governing land use, the protection of the
environment, production, exports, taxes, labour standards, occupational health,
waste disposal, toxic substances, well safety and other matters. Unfavourable
amendments to current laws, regulations and permits governing operations and
activities of resource exploration companies, or more stringent implementation
thereof, could have a materially adverse impact on the Company and cause
increases in capital expenditures which could result in a cessation of
operations by the Company. As the Company is in the exploration stage, the
Company has incurred no material costs related to compliance or permits, and
anticipates no material costs in the next year.

4.C. Organizational Structure

The Company has one active wholly-owned subsidiary, Evolving
Gold Corp., which was incorporated pursuant to the laws of the State of
Nevada.

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4.D. Property, Plant and Equipment

Office Space

The Company subleases its office space pursuant to the terms of
a written lease agreement at 725  666 Burrard Street, Vancouver, British
Columbia, Canada V6C 2X8. The lease expires in April 30, 2012 and calls for
monthly payments of $4,394 plus an applicable portion of operating costs.
Operating costs are subject to change but are currently $3,217 per month. During
the current year, the U.S. Sub also signed an office lease agreement for
premises at 201  500 Coffman Street, Longmont, Colorado, USA 80501, which calls
for monthly payments of US$2,500 per month expiring on June 30, 2009.

The following provides a description of our material mineral
properties:

The Malone Property

On April 17, 2006, the Company entered into the Malone
Agreement with Newmont North America Exploration Limited whereby the Company was
granted all rights, title, estate and interest in unpatented mineral claims
located in Grant County in southwest New Mexico in exchange for payment of
US$20,000 (paid). The agreement is subject to a royalty of 2% of net smelter
returns. The following geological and technical information contained in this
section regarding the Malone Property has been extracted with permission from
the technical report dated February 20, 2007 (later amended as at May 23, 2007),
entitled Geological Report on the Malone Property, prepared at the Companys
request by Gerald E. Ray, Ph.D. in conformance with National Instrument 43-101
(the Malone Report). Dr. Ray does not have any relationship with the
Company other than his engagement to prepare the Malone Report and the
Rattlesnake Hills Report, discussed below. A copy of the Malone Report is
available for viewing as part of the Companys public filings at www.SEDAR.com.

Mineral Claims and Location

The Malone property in south-west New Mexico (Figure 2) is
wholly owned by the Companys subsidiary. It consists of 80 MAL claims that were
staked in the February 2005. The claims cover a partial rectangular area that is
approximately 4 km long north to south and 1.7 km wide east to west.

The property lies in Grant County of New Mexico (Figure 2) in
Sections 17-20, and 29 and 30, in T20S and R16W. It is situated approximately 17
miles northeast of Lordsburg township, New Mexico, and is easily accessible from
State Highway No. 90 which connects Lordsburg and Silver City. At UTM
731915-3597835, approximately 17 miles from Lordsburg, access is made by turning
north-north-west onto the Mill Canyon Road (dirt road No. 859). A drive of
approximately 3 miles reaches the southern claim boundary.

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Figure 2: Location of the Malone claim block in SW New
Mexico



Access, Climate and Infrastructure

The district surrounding the Malone property has a basin and
range topography characterized by wide, flat, alluvial-covered semi-desert
plains that alternate with elongate stretches of rocky hills and escarpments.
The semi-desert vegetation is sparse, and there is no difficulty for foot
access. Elevations on the claims range from 1,700 metres up to 2,000 metres. The
topography is dominated by the north to south trending Brock Ridge whose highest
point (Mill Hill) reaches 2,000 metres.

The claims lie in an arid, semi desert part of New Mexico that
has a low annual rainfall. The summers are hot and dry with temperatures
exceeding 25 degrees Celsius. Winters are also dry and temperatures can reach
down to freezing.

History and Previous Work

Early work at Malone may have taken place in the 1890s. There
are a number of prospect pits and adits in the southern part of the property,
all of which are inaccessible. One adit labeled the Paracutin lode suggests that
more recent work, possibly in the 1940s or 1950s may have taken place, but
there is no record of this work. Additionally, at least three drillhole collars
were noted during the Companys initial reconnaissance of the property. Results
of that drilling are not known.

In 2005, Newmont Gold Corporation staked the MAL 1-80 claims
with the concept that mineralization in the granite may be related to an alkali
gold system. Q. Hennigh and J.T Ray, Newmont geologists, collected 232 samples
which were analyzed for gold, silver, and trace elements.

Present Condition and Current State of Exploration

During 2005, the Company undertook property-scale geological
mapping and geochemical sampling of the Malone Property. Subsequently, Dr. G. E.
Ray was contracted to prepare an NI 43-101 compliant report, including a
recommended program for follow-up exploration. Diamond drilling was commenced on
the Malone Property in

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October 2007 and completed in January 2008. Assay results from
drill samples collected during the program were obtained in March 2008. For the
results of the program, please refer to the news release dated March 4, 2008
that is attached as Exhibit 99.5 to the Companys Form 6-K for July 2008, which
was filed with the SEC and can be viewed at www.sec.gov.

Property Geology

Regionally, the Malone claims lie in a zone of northerly to
north-west trending Basin and Range structures that lie off the south-east flank
of the Colorado Plateau. Extensional faulting and rifting during Tertiary time
was accompanied by continental volcanism dominated by rhyolite tuffs and flows,
with lesser amounts of andesite.

The exposed geology on the property includes a package of
northerly striking and easterly dipping Tertiary age volcaniclastics and flows.
This package overlies a highly leucocratic Pre-Cambrian granitoid basement. The
nature of the volcanic-granite contact is uncertain, but the Dr. Ray believes it
represents a steep easterly dipping fault that was related to recurrent
down-dropping along the western margin of a graben structure.

The Tertiary rhyodacitic volcaniclastics outcrop extensively
along the north-north-west trending Brock Ridge escarpment but the older
granitoids are only seen in a relatively narrow belt at lower elevation
immediately west of the ridge. The Pre-Cambrian basement includes several
generations of intrusive granitic rocks that range from fine to extremely coarse
grained and pegmatitic. Many are cut by several sets of brittle planar
structures, some of which contain quartz-feldspar ± pyrite veins up to 2 metres
thick. Locally the hosting granitoids are extensively and pervasively
overprinted and bleached by clay-sericite ± silica ± pyrite alteration, as well
as being stained or coated by Fe and Mn oxides. Extensive zones of quartz vein
stockworks also cut the granites.

The following types of basement granitic rocks occur on the
claims:

Type 1: An early generation of coarse to very coarse
grained massive and quartz-rich leuco-granite that ranges from weakly to
strongly feldspar porphyritic.

Type 2: A fine to coarse grained quartz-rich
granite-microgranite that is commonly bleached and which tends to be less
feldspar porphyritic than the Type 1 rock. In many cases the Type 1 and 2
granites are separated by a fault which may contain gold-bearing quartz
veins.

In addition, dikes of aplite, dacite-microgranite and K spar
rich pegmatite occur in the basement rocks on the claim. Structures on the
property are dominated by brittle faulting and block tilting, as evident from
the easterly dip of the younger Tertiary volcanics. No small scale folds were
noted and all the igneous rocks are unfoliated. The brittle faults are probably
related to the regional extension that accompanied the formation of the grabens
and half-grabens, as well as the extrusive volcanism. The claims are believed to
overlie the fault-zone boundary of one graben, and the 35 to 55 degree easterly
dip of the volcanics shows that most of the graben-related movement in this area
involved east-side down-dropping accompanied by easterly tilting.

Plotted rose diagrams of the planar structures show the
following:

| | (1) | The major brittle faults (up to 3 meters thick) are
      generally steep to sub-vertical (60 to 90 degrees). Several sets are
      present, the most common of which has an average strike azimuth of 115
      degrees (east-south-east to west-north-west). Less common sets strike east
      to west (azimuth 095 degrees) and north to north-north-east.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                
| | (2) | Sets of thin, closely spaced hair-line fractures occur
      where the granitic rocks have undergone brittle shattering.                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                
| | (3) | There are several sets of planar structures containing
      veins and dikes of either fine-grained granitic aplite or very coarse
      grained K-spar-rich pegmatites. One set strikes east-south-east, similar
      to an important set of major fault.                                                                                                    

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The nature of the volcanic-granite contact and the age of the
gold-silver mineralization are unknown. However, Dr. Ray believes that the
volcanic-granitic contact represents a graben-related fault zone that has
controlled the gold-bearing quartz veins. The following geological and
structural history is suggested:

| | (1) | Unconformable deposition of the Tertiary volcanics on a
      peneplaned granitic basement, possibly coeval with incipient development
      of graben structures.                                                                                                                                                                                                                     
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                        
| | (2) | Continued down-drop movement along a steeply east-dipping
      structure that formed the western margin of a graben; movement resulted in
      easterly tilting of the volcanics accompanied by fault- controlled
      mesothermal and epithermal mineralization that extended up into both the
      granites and younger volcanics.                                               
| |     |                                                                                                                                                                                                                                                                                                                                                                                        
| | (3) | Continued graben down-dropping east of the structure
      resulted in the mineralized granites to the west being juxtaposed against
      unaltered volcanics further east. Subsequent erosion has exposed the
      granite-hosted mesothermal mineralization, while east of the main
      structure the epithermal portion of the system may exist at depth in the
      volcanics.

If this model is correct it suggests
the following:

| | (i)   | The main granite-volcanic structure(s) is steep
      east-dipping.                                                                                                                                                                                                                                                                        
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                            
| | (ii)  | The Malone gold-silver mineralization is not related to
      the granite intrusions but is instead controlled by splay and cross-faults
      related to an extensional graben structure. It may post-date the Tertiary
      volcanics, but is more likely to have been coeval with the
    volcanism.                                   
| |       |                                                                                                                                                                                                                                                                                                                                            
| | (iii) | The volcanic rocks east of the structure could host
      epithermal mineralization, although this may be too deep to be
      economically viable. However, other granite-hosted mineralized structures
      may be present in the alluvium-covered western part of the claims, and
      some exploration should be done over this area.

Mineralization

The Malone gold-silver mineralization is mainly hosted by
planar quartz veins and irregular quartz stockworks and stringer zones. In
addition, some of the wide areas of fracturing with silicification and
disseminated pyrite represent good bulk tonnage targets, although to date little
methodical work has been done.

Assay chemistry suggests the gold is free although nothing is
known about the size of the gold grains, or whether they are spatially
associated with mineral crystals such as pyrite or quartz. Positive gold-silver
correlations suggest some of the silver is held in the lattice of the gold
grains, and it is also possible that some electrum is present. It is not known
whether some gold is chemically locked in the lattices of pyrite or any other
sulfides, and some of the granite-bearing pyritic zones should be systematically
tested for precious metals. Generally the precious metals are not associated
with significant base metals. Sporadic trace chalcopyrite is reported, and
assays suggest the local presence of some sphalerite and galen.

Previous sampling work done by a third party on the Malone claims
  show maximum values of 17.7 ppm Au and 695 ppm Ag, indicating the presence of
  high grade Bonanza-type mineralization. In addition, assays up to 1320 ppm Cu,
  148 ppm As, 112 ppm Bi, 0.87 ppm Hg, 672 ppm Mo, 62 ppm Sb, 1.08% Pb and 1.59%
  Zn were present. The silver:gold ratios for the 178 samples average 39.1. Binary
  plots show there is a good to moderate positive correlation between Au:Ag, Au:As,
  Au:Pb, Au:Cu and Au:Sb. However, there appears to be no significant correlation
  between Au:Hg, Au:Bi and Au:Zn.

Consulting geologist Dr. G.E. Ray, working on behalf of the
Company, collected 23 additional samples. This work included taking 13 chip
samples, each 8 feet in length, around the margins of an open pit located at UTM
732296-3604138. This pit exposes the structural contact between Type 1 and Type
2 granites, and the contact is occupied by one or more mineralized quartz veins
as well as some adjacent silica flooding and quartz stockworks. The assay

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results from the open pit demonstrate that not only is the
narrow zone of fracturing and veining enriched in precious metals, but the
stockwork-veined Type 1 granite adjacent to the zone is enriched also with
values up to 0.095 oz/t Au and 10 oz/t Ag. This indicates that other stockwork
zones on the property should be tested for their bulk tonnage potential.

Planned Work Program by the Company

A technical geological NI 43-101 report dated February 20, 2007
on the Malone property was filed on SEDAR in March 2007. The report was prepared
by Gerald E. Ray, Ph.D. as the qualified person and dated as at February 20,
2007 and later amended as at May 23, 2007 and filed on SEDAR on June 1, 2007.

At the Malone property, consultant Dr. G.E.Ray has outlined a
success-contingent exploration program which the Company intends to carry out.
Dr. Rays conclusions are that at Malone, Pre-Cambrian granitic rocks host
Au-Ag-bearing mesothermal and possibly deep-level epithermal quartz veins,
stockworks and stringer zones. Assays from over 200 samples indicate the
presence of some high grade Bonanza-type precious metal mineralization, as well
as the possibility of bulk tonnage targets in the stockwork zones. The Au-Ag
mineralization is generally not associated with very high quantities of base
metals or other pathfinder elements such as Bi, As, Sb or Hg. The granite-hosted
quartz veins, which reach up to 2 meters in width, are probably controlled by a
steep easterly dipping structural zone related to Tertiary-age extensional
movements related to graben down-dropping. Many of the larger veins
preferentially occur along the structural contact between two different
generations of granite (Type 1 and Type 2). Mapping the distribution of these
two granite types may be useful in the discovery of more veins and stockwork
zones.

Dr. Ray recommended further exploration for the following
reasons:

| | (i)   | There has been widespread past near surface small-scale
      mining via shallow pits and short tunnels/adits although little is known
      about this work.
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                              
| | (ii)  | Recent grab and chip sampling indicates the local
      presence of high Au and Ag values in the quartz veins and in some quartz
      stockwork zones.      
| |       |                                                                                                                                                              
| | (iii) | To his knowledge, there has been no modern exploration
      conducted on the property.                                                                      

The recommended exploration involves:

| | (a) | Further geochemical sampling, including rock, grid-soil
      and creek silt sampling. Emphasis should be directed to searching for both
      high grade veins and lower grade bulk tonnage deposits.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                       
| | (b) | Some suitable geophysical methods could be used under
      areas of alluvial cover to detect vein structures.                                                                                        
| |     |                                                                                                                                                                                                       
| | (c) | Areas with favourable geology and geochemistry should be
      drilled.                                                                                                                               

The Rattlesnake Hills Property

In January 2008, the Company and the U.S. Sub entered into the
Rattlesnake Hills Option Agreement with Golden Predator and the Rattlesnake
Hills Letter Agreement with Bald Mountain.

Pursuant to the Rattlesnake Hills Option Agreement, the U.S.
Sub was granted the Rattlesnake Hills Option. The Rattlesnake Hills Property is
located in Natrona County, Wyoming, which is approximately 70 kilometres west of
the city of Casper, Wyoming. In order to exercise the Rattlesnake Hills Option,
the Company must issue Shares to Golden Predator as follows: 1,000,000 Shares
upon Closing (issued); 1,000,000 Shares upon the one year anniversary of
Closing; and 1,000,000 Shares upon the two year anniversary of Closing.

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In addition, in order to exercise the Rattlesnake Hills Option,
the Company must incur exploration expenditures totalling US$5,000,000 as
follows: a total of US$1,000,000 on or before August 14, 2008, the commitment of
which is unconditional (approximately US$58,000 has been incurred as of March
31, 2008); a total of US$2,000,000 on or before August 14, 2009; and a total of
US$5,000,000 on or before August 14, 2010.

Golden Predator retained a 0.5% NSR royalty in respect of the
Rattlesnake Hills Property and the Company retained the right to buy back 0.25%
of that NSR royalty for US$375,000. The Rattlesnake Hills Property is subject to
a 4% NSR royalty payable to the underlying owners. In addition, Golden Predator
retained the right to purchase up to 10% of any Shares offered by the Company
during the term of the Rattlesnake Hills Option Agreement, with Golden
Predators purchase subject to the same terms and conditions as other purchaser
participating in the offering.

Pursuant to the Rattlesnake Hills Letter Agreement, Bald
Mountain assigned to the Company its rights under the option agreement, dated
December 11, 2007, between Golden Predator and Bald Mountain, which underlies
the Rattlesnake Hills Option Agreement. In consideration for this assignment,
the Company paid Bald Mountain US$200,000 and issued 400,000 Shares to Bald
Mountain.

A finders fee, by way of 75,000 Shares, was paid in connection
with the Companys acquisition of its interest in the Rattlesnake Hills
Property.

The geological and technical information contained in this
section regarding the Rattlesnake Hills Property has been extracted with
permission from the technical report dated October 3, 2007 (later amended as at
December 7, 2007, January 29, 2008 and February 15, 2008), entitled The Geology
and Gold Mineralization at the Rattlesnake Hills Property, prepared at the
Companys request by Gerald E. Ray, Ph.D. in conformance with National
Instrument 43-101 (the Rattlesnake Hills Report). Dr. Ray does not have
any relationship with the Company other than his engagement to prepare the
Malone Report and the Rattlesnake Hills Report. A copy of the Rattlesnake Hills
Report is available for viewing as part of the Companys public filings at
www.SEDAR.com.

Mineral Claims and Location

The Rattlesnake Hills Property consists of 30 unpatented lode
claims that were staked between 1985 and 1987, 97 unpatented lode claims that
were staked in 2006, and approximately 276 hectares of Wyoming State lease
lands. The Rattlesnake Hills Property covers an area approximately 6 km long N-S
and 1.6 to 3.0 km wide E-W.

The Rattlesnake Hills Property lies in Natrona County, Wyoming
(Figure 3) in Sections 13, 14, 15, 23, 24, 25, 26 and 36, T32N, R88W, and
Sections 18, 19, 30 and 21, T32N and R87W. It is situated approximately 47 miles
(77 km) WSW of Casper, Wyoming and is easily accessible from WY State Highway
220. Approximately 48 miles west of Casper, access is made by turning north onto
the Rattlesnake Hills Road. A drive of approximately 16 miles reaches the
turnoff into the property in Section 36, T32N, R88W.

- 32 -

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Figure 3: Location of the Rattlesnake Hills Property, Natorna
County Wyoming.



Climate and Infrastructure

The Rattlesnake Hills Property lies in a low range of
NW-SE-trending hills  the Rattlesnake Hills  characterized by moderately
rolling topography between elevations of 6,700 and 7,800 feet. The claims lie in
an arid part of Wyoming which generally has a low annual precipitation of less
than 30 cm per year. Summers are dry with temperatures often exceeding 25
degrees Celsius. Winters are variable with light snowfalls up to 1 metre in
total and daytime temperatures of -20 to 10 degrees Celsius.

The dominant trend of the steeply northerly dipping metamorphic
foliation and structures in the Archean basement is NW-SE to WNW-ESE. This
basement trend is transected by younger NE-SW to northerly-striking,
steeply-dipping faults that apparently controlled the distribution and
orientation of some Eocene alkaline plugs and dikes. Thus, areas where these two
sets of major structures intersect are regarded as favorable places for
exploration.

Also present are several sub-circular, moderately inclined
fractures that appear to circle some of the alkalic plugs and diatreme breccia
pipes. These may represent either ring fractures related to the intrusion of the
stocks or be related to post-eruption slumping. These curvilinear features are
economically important as they have controlled some of the potassic feldspar
alteration and Au mineralization.

History and Previous Work

Evidence of early work includes 20 to 30 shallow prospect pits
and two 10 to 20 foot-long shafts that are remnants of prospecting activities in
the early 1900s. Dr. Ray is not aware of any historical base or precious metal
production from the property.

In the 1970s the America Copper and Nickel Company
(ACNC) visited the property following reports by Pekarek (1974; 1978)
that the Archean schists contained iron formations and some Cu-Au
mineralization. ACNCs reconnaissance work identified 2.3 ppm (0.067 opt) and
3.8 ppm (0.111 opt) Au mineralization in surface geochemical samples. Evidently,
additional work by ACNC was cut short when they found that Frontier Energy had
already staked claims in the area.

- 33 -

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In the early 1980s ACNC was apparently the first company to
conduct a widespread exploration effort on the property. Geologic mapping,
surface geochemistry, and geophysical surveys were completed in 1983 and 1984.
ACNC negotiated a lease agreement with Frontier Energy and staked additional
claims in the area in 1985. They continued exploration through 1987 by
completing more geologic mapping, as well as some surface geochemical sampling
and geophysical surveys. This was accompanied by test drill programs in 1985,
1986 and 1987, and a total of 9,815 feet in 32 reverse circulation drill holes
were completed (MacLeod, 2003). Of this, 5,898 feet of drilling was completed in
22 of the holes drilled to test Au mineralization in a rock unit described as a
siliceous exhalite horizon or oxide-facies ferruginous chert, along more
than 5,000 feet of strike. This Archean horizon is located in the southern
portion of the property and was referred to by ACNC as the Main Zone East and
West. The remaining 3,917 feet of drilling involved 10 holes located in the
area referred to as the Northern Zone by ACNC and Antelope Basin in reports
written later by Newmont Exploration. Drilling in this area tested Au
mineralization in and around a small Tertiary monzonite plug.

Canyon Resources (CR) acquired the property in 1992.
They did additional geologic mapping and surface rock chip sampling; the results
of this work are currently unavailable. CR then entered into a joint venture
agreement with Newmont Exploration Ltd. (NEL) in 1993.

Between 1993 and 1995, NEL completed extensive geologic
mapping, soil, road cut and trench geochemical sampling, as well as some
geophysical surveying and drilling. The geophysical surveys included VLF, total
field magnetics and ground radiometrics (Th and K) although very little of this
data is apparently available. Reconnaissance geochemical sampling identified the
North Stock and the Eureka Peak areas as targets that had not been
previously drill tested. In 1994 and 1995 NEL drilled both targets (MacLeod,
2003), focusing particularly on the North Stock area. Only 400 feet of drilling
in one hole (R95-RS-15) was completed in the Eureka Peak area. NELs report by
Norby et. al. (1995) notes that the Eureka Peak area was a geologic target
that lacked any anomalous gold values in the surface samples. Also, no Au
mineralization was intersected by drilling at Eureka Peaks.

In the North Stock area, 10,705 feet of core and reverse
circulation drilling in 14 holes was undertaken. Of this, 1,365 feet of core
drilling was completed in their first two holes (RS-1 and RS-2) and 9,340 feet
of reverse circulation drilling was done in the remaining 12 holes. In addition,
NEL constructed seven trenches across the North Stock trend, two trenches in
the Antelope Basin (which was ACNCs Northern Zone). The company also sampled
eleven road cuts along North Stock drill access roads. At the end of 1995, NEL
terminated the joint venture agreement with Canyon, and at the end of 1997, CR
released their interests in the property.

In June of 2003, Bald Mountain leased 30 unpatented lode-mining
claims from David Miller and Dick Fruchey of Riverton, Wyoming. At that time
hard copies of the ACNC and Newmont data were provided to Bald Mountain, along
with two data tapes. Because the data tapes had been damaged, they were given to
a Rapid City SD computer company so the electronic files could be stripped
from the tapes and transferred to CD. The tapes contained AutoCAD drawings,
prepared by Newmont, of the surface geology and topography, but none of the
drill hole data (surveys, assays and locations) was in electronic format. All
that data has subsequently been input as electronic digital data and has been
stored as MS Excel and Minesight files.

In 2003, all the available geologic, geochemical, geophysical
and drill data gathered by ACNC and NEL was provided to Bald Mountain.

Property Geology

Precambrian-Archean basement rocks, with some Eocene intrusive
and lesser extrusive units of the Rattlesnake Hills Alkaline Complex (43-44 Ma;
million year old), are the dominant rock units on the property. The latter,
which will be the main focus of future Au exploration, comprise >15 Eocene
plugs, domes and small stocks, including some subcircular to oval shaped
intrusions that exceed 500 meters in diameter. The most economically important
of these known to date are often surrounded by, or spatially adjacent to,
diatreme breccias. In the central part of the property is the South Stock
(Figure 3), a 400 by 700 meter wide plug of nepheline trachyte, and the nearby
Antelope Basin where drilling has also outlined Au mineralization. Further
north is the Northeast Stock, a 700

- 34 -

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to 800 meter diameter central phonolite plug with its
surrounding breccia apron, and the North Stock where drilling has outlined
significant Au mineralization in its southern peripheral breccia halo.

Both monolithic and heterolithic Eocene breccias are present,
with the latter containing angular to sub-rounded fragments of Precambrian
schists and the contemporary Eocene alkalic intrusives. The high-level intrusive
activity was accompanied by the formation of explosive diatreme pipes and the
local eruption of tuffs and surge deposits, which locally blanket parts of the
Archean basement.

Mineralization

The following two types of Au mineralization occur on the
Rattlesnake Hills claims:

Type 1: Gold hosted by Fe-rich chert horizons in the Archean
basement, which is currently considered to have a low economic potential, and

Type 2: Disseminated, micron-size Au mineralization related to,
and largely hosted by the Eocene-age Rattlesnake Hills Alkalic Complex,
particularly the diatreme breccias. This type has a very high economic potential
and will be the focus of exploration efforts by Evolving Gold Corp.

The Type 2 mineralization is strikingly similar to that present
at the world class Cripple Creek Au camp in Colorado. On the Rattlesnake Hills
Property, previous drilling (mainly RC and with two core holes) cut substantial
lengths of mineralization close to the margins of two Tertiary intrusive bodies,
located in the Antelope Basin and at the North Stock. Significant intersections
include:

- Hole D94-RS-2. Between 480-530 feet averaged 0.068 opt Au
- Hole D94-RS-2. Between 545-625 feet averaged 0.074 opt Au
- Hole D94-RS-2. Between 645-670 feet averaged 0.120 opt Au
- Hole R94-RS-3. Between 320-345 feet averaged 0.081 opt Au
- Hole R94-RS-5. Between 375-405 feet averaged 0.053 opt Au
- Hole R94-RS-6. Between 680-745 feet averaged 0.060 opt Au

Assays suggest the Eocene Au mineralization occurs in two
styles. The most extensive occurs primarily in wide zones of low-grade, very
fine-grained gold ± arsenopyrite and pyrite. The other style appears to occur as
narrow (< 1 meter) zones of higher grade Au that is probably controlled by
fractures in the breccias and adjacent schists. The micronsize native gold is
enclosed or spatially associated with pyrite and arsenopyrite. Both types of
mineralization are associated with weak pyrite alteration and pervasive fine
grained adularia K-feldspar. The higher grade mineralization appears to
correlate with As, and it is likely that tellurides are present. The Ag content
is relatively low with Au:Ag ratios around 1:1. Other gangue minerals are quartz
and carbonate, including white calcite and brown ferro-dolomite. Also present
are clay, minor sericite, gypsum and trace alunite.

Planned Work Program by the Company

It is recommended that during the 2008 season the Company do
the following exploration work on the Rattlesnake Hills Property:

|1. | Complete drill road and drill pad construction after
      required permits are granted.
|-- | ----------------------------------------------------------------------------------------
|   |                                                                                         
|2. | Complete some grid-based soil sampling over target
      areas.                         

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|3. | Drill selected Eocene Au targets using core diamond drill
      equipment.
|-- | --------------------------------------------------------------------------

Fourteen holes are currently planned totaling 7,000 meters in
length. During the 2008 season it is planned to spend approximately US$2,400,000
on the exploration program.

Present Condition and Current State of Exploration

The Company commenced Phase One of the drill program on the
Rattlesnake Hills Property in June 2008. The purpose of the drill program is to
expand the gold mineralization indicated by previous drilling on the Rattlesnake
Hills Property.

Phase One drilling will focus on the North Stock diatreme
breccia which measures approximately 700 metres in diameter as well as the 900
metres long and 400 metres wide Antelope graben extending southward from the
diatreme. The Company expects that at least one hole will test the 500 metres
diameter South Stock alkaline intrusion at the southern terminus of Antelope
Graben. The Company will drill fans of holes at the North Stock diatreme breccia
from an array of pads on approximate 125 metres centers to a vertical depth of
500 metres.

The Company has identified a second diatreme with a diameter of
900 metres immediately northeast of the known, North Stock diatreme. The second
diatreme displays similar alteration to the North Stock diatreme and covers a
mapped footprint of alteration encompassing at least 1.5 square kilometres.

Subsequent to entering into the Rattlesnake Hills Option
Agreement and the Rattlesnake Hills Letter Agreement, the Company acquired,
through staking and filing on, 35 unpatented claims, resulting in an additional
283 hectares (700 acres), thereby increasing its total Rattlesnake Hills
Property land position to approximately 1,618 hectares (4,000 acres).

The following provides information regarding our other mineral
properties:

The Siesta Property

The Companys interest in the Siesta Property is comprised of
702 unpatented mining claims covering 5,870 hectares in the Slumbering Hills
area of Humboldt County. In June 2007, the Company signed contracts with Zonge
Geosciences, Inc. and Magee Geophysics, Inc. to undertake a systematic
geophysical survey of this claim group which was completed in September 2007. In
January 2008, reverse circulation drilling commenced on the Siesta Property
testing 34 geophysical targets in the largely sand-covered property. A total of
34 holes, each approximately 200-250 meters deep were drilled between January
and May, 2008. A review of incoming results is underway.

The Company is not aware of any previous operators on this property.
  This property is located 25 miles northwest of the Winnemucca property and is
  and can be accessed by vehicles 11 months of the year.

The Alpha Butte Property

With respect to its interest in Alpha Butte, Evolving has
staked 279 claims covering approximately 2,200 hectares. The Company intends to
perform surface mapping and sampling with the objective of defining drill
targets over the next several months. There is evidence on this property of
drilling within the past 40 years, however, the area has not experienced
exploration in recent times.The Company is not aware of the results of
any previous operators on this property. This property is located 15 miles west
of the Winnemucca Property and can be accessed by vehicles 12 months of the
year.

The Fisher Canyon Property

At Fisher Canyon, prospective gold-bearing sedimentary rocks
have recently been found over a broad area. The geology of these rocks displays
striking similarities to other such deposits throughout the state. Two of the
main showings on the property show no evidence of past drilling. The Company is
not aware of any previous operators

- 36 -

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on this property. The Company staked 79 unpatented lode mining
claims in late-March, 2007 covering about 670 acres of BLM maintained land with
federal minerals. This property is located 20 miles East of Lovelock and can be
accessed by vehicles 12 months of the year.

In February, 2008, the Company signed a Letter of Intent with
an individual to acquire an undivided 100% interest in and to 12 unpatented
mining claims near Fisher Canyon property in exchange for US$8,000 on March 7,
2008 (paid), US$12,000 on March 7, 2009 and US$20,000 on March 7, 2010. The
Company will also pay an NSR on production of 3% to the individual and has the
exclusive right and option to purchase 50% of the royalty for US$150,000 within
three years of the Letter of Intent.

The Company conducted a reverse circulation drilling program in
December 2007, with drilling performed by Diversified Drilling of Missoula,
Montana. The purpose of the drilling was to test a gold-silver-mineralized
calcareous shale horizon that was discovered out at surface on the Fisher Canyon
Property. In February 2008, the Company obtained the drilling programs assay
results from the ALS Chemex laboratory in Elko, Nevada. For the results of the
program, please refer to news release dated February 1, 2008 that is attached as
Exhibit 99.1 to the Companys Form 6-K for July 2008, which was filed with the
SEC and can be viewed at www.sec.gov.

The North Carlin District Properties

On November 28, 2007, the Company entered into the Carlin
Agreement with Newmont USA Limited, Newmont,Newmont Capital Limited,
Elko Land and Livestock Company and the U.S. Sub. Pursuant to the Carlin
Agreement, Newmont leased to the Company its interest in certain unpatented
mining claims and owned fee interests and has subleased to the Company its
interest in certain leased lands and leased unpatented claims, subject to a
back-in right. The Carlin Agreement covers five separate Project Areas 
Carlin, Cottonwood Creek, Susie Creek, Boulder Valley and Sheep Creeks. The
Sheep Creeks Project Area includes approximately 38,000 acres (1,959 claims)
that was staked by the Company (the Battle Mountain Property) and
approximately 10,500 acres of Newmont-held surface and minerals fee land. The
Boulder Valley Project Area includes approximately 1,846 acres (94 claims) that
was staked by Newmont and approximately 11,000 acres of Newmont-held surface and
minerals fee land. The Carlin Project Area includes approximately 1,750 acres (
92 claims) that was staked by the Company, approximately 3,075 acres (150
claims) that was staked by Newmont, and approximately 6,250 acres of
Newmont-held surface and minerals fee land. The Cottonwood Creek Project Area
includes approximately 2,135 acres (111 claims) that was staked by Newmont.
There are no land holdings for the Susie Creek at this time.

Under the Carlin Agreement, the Company is required to make
exploration expenditures within each Project Area, with the exception of Susie
Creek, in the aggregate amount of US$3,500,000 over a period of five years for a
total of US$14,000,000, with 70% of such expenditures in direct drilling costs
and an initial $200,000 expenditure in each Project Area. A total of $62,088 of
deferred exploration costs have been incurred for the Carlin and Cottonwood
Project Areas, which are in early stages of exploration. The Boulder Valley
Project Area had a total of $419,723 in deferred exploration costs incurred on
it for the current fiscal year comprised of $349,609 in drilling, and $70,114 in
other expenses. During fiscal 2008 $2,585,619 in deferred exploration was
incurred with respect to the Sheep Creeks Project Area, comprised of $1,490,517
in drilling, $580,304 in staking and recording, $171,233 in licenses and fees,
$126,769 in geological consulting, $117,629 in geophysical and geological
studies and $99,167 in field and other expenses.

Beginning on the sixth anniversary of the Carlin Agreement, the
Company is required to spend at least $750,000 in exploration expenditures in
each Project Area or pay Newmont a rental of $10 per acre for such Project Area,
escalating at 5% per year.

The Carlin Agreement contains provisions for a 2% NSR on
precious metals and 5% gross production royalty on coal, oil, gas and other
hydrocarbons and geothermal resources applicable to certain properties.

With respect to each Project Area, Newmont retained an option
to enter into one or more joint ventures with the Company and earn a 51%
interest in the Project Area by expending 200% of the exploration expenditures
made by the Company, and an additional 19% interest (for a total undivided
interest of 70%) by expending an additional 150% of the exploration expenditures
made by the Company.

- 37 -

---

Subsequent to entering into the Carlin Agreement, the Company
acquired, by staking and filing on, the Jake Creek Project  427 mining claims
covering 8,700 acres between the Carlin and Getchell Gold trends in
north-central Nevada.

Carlin

The Carlin Project Area comprises approximately 5,300 acres of
Newmont-held surface and minerals and 2,200 acres of Newmont-held lode claims on
BLM-lands lying between the Gold Quarry and Rain mines of the Carlin Trend.

Cottonwood Creek

The Cottonwood Creek Project Area comprises 1,800 acres of
Newmont-held lode claims on BLM-lands lying approximately 3 miles northeast of
the Gold Quarry mine.

Susie Creek

The Susie Creek Project Area comprises nil acres of
Newmont-held lands and nil acres of Company-held lands. It lies approximately
eight miles east of the Gold Quarry mine In the event either Newmont or the
Company acquires land within the defined project area, the Susie Creek Project
becomes subject to the Carlin Agreement.

Boulder Valley

The Boulder Valley Project Area comprises approximately 10,700
acres of Newmont-held surface and mineral rights and 1,600 acres of Newmont-held
lode claims on BLM-lands covering a series of low, rolling hills approximately
two miles west of the Genesis-Blue Star and Post-Betze mines of the northern
Carlin Trend.

Following several attempts to drill through cover rocks during
the first half of 2008, a series of induced polarization survey lines were
undertaken to re-evaluate depth to favourable rocks. A review of this data is
currently underway and will guide a future attempt to drill through cover in
late 2008.

Sheep Creeks

The Sheep Creeks Project Area includes the Battle Mountain
Property, which consists of approximately 38,000 acres (1,959 claims) that was
staked by the Company, and approximately 10,500 acres of Newmont-held surface
and minerals.

For years, exploration geologists have debated the relationship
between the prolific north-northwest trending Carlin Trend, host to over 100
million oz Au (Gold) and the northeast-trending Getchell Trend, host to over 30
million oz Au. The region lying at their projected intersection is largely
covered with volcanic rocks thought by many geologists to be thick and
prohibitive to exploration.

A new geologic model proposed by the Company based on
geophysical data and recognition of certain styles of faulting suggests that
much of this area is actually shallowly buried and that the same rocks that host
ore on the Carlin and Getchell trends are perhaps nearly outcropping in places
under a veneer of cover.

This model suggests that there may be about as much ground that
is shallowly buried as is presently exposed along these trends, a discovery that
would quickly revolutionize exploration in what is considered a well-hit area.
This is the next generation of gold target, and the time is right to take the
leap and test what could become an entirely new play.

The Company commenced a drill program on the Sheep Creeks
Project in November 2007. A total of 11 holes were planned, comprising
approximately 15,000 metres of reverse circulation drilling in total. One
reverse circulation and two diamond drill holes have been drilled. For a report
on the drill program please refer to the news

- 38 -

---

releases dated February 28, 2008 and March 4, 2008 that are
attached as Exhibits 99.4 and 99.5, respectively, to the Companys Form 6-K for
July 2008, which was filed with the SEC and can be viewed at www.sec.gov.

Jake Creek

The Jake Creek Project Area consists of 352 claims totalling
7272 acres, and is situated approximately 11 kilometres southeast of the Twin
Creeks and Turquoise Ridge deposits, which comprise part of the linear trend of
gold deposits known as the Getchell Trend.

Additional Technical Information

The Company has filed at www.sedar.com, NI 43-101 Reports for the Malone
Property and for the Rattlesnake Hills Property, which are available free of
charge to investors seeking additional information of a technical nature.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion for the fiscal years ended March 31,
2008, 2007, and 2006 should be read in conjunction with the financial statements
of the Company and the notes thereto and the section of this Annual Report
entitled Information on the Company.

Over the next 12 months, the Company plans to continue with the
exploration of its properties and proceed with the recommended work programs
outlined in its technical reports.

The Companys financial statements have been prepared in
accordance with Canadian GAAP. For an explanation of the material differences
between Canadian GAAP and US GAAP please refer to Note 13 in the Consolidated
Financial Statements provided herein.

5.A. Results of Operations

Year ended March 31, 2008 compared to year ended March
31, 2007

During the year ended March 31, 2008, the Company reported a
net loss of $8,742,364 ($0.21 loss per share) compared to a loss of $831,278
($0.07 loss per share) and a loss of $590,779 ($0.07 loss per share) reported
for the years ended March 31, 2007 and March 31, 2006, respectively, due to
significant increases in all expense categories. Other than interest received
from term deposits during the current year, the Company did not generate any
significant revenue during either reporting period.

The increased expenditure level evidenced for the year ended
March 31, 2008 is a result of Managements efforts to focus on the acquisition
and development of prospective mineral properties. Managements efforts have
resulted in seven new mineral properties being acquired in the year ended March
31, 2008. In addition, working capital was raised from private placements during
fiscal 2008 to fund a significant portion of the Companys ongoing exploration
program. In order to accomplish this objective, the Companys expenses for the
2008 fiscal year increased as follows:

- accounting and audit of $100,320 (2007 - $46,630, 2006 - $47,852) reflects
  both the increased level of activity, filing requirements, recorded
  transactions as well as 2007 fiscal year audit costs recorded in 2008, as they
  were higher than anticipated;

- 39 -

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- consulting fees of $211,821 (2007- $90,600, 2006 - $51,605) which reflects
  efforts to improve the corporate website, enhance investor liaison services
  and access for European investors, and attend tradeshows and industry
  conferences;
- directors fees of $10,000 (2007 and 2006 Nil)
- legal of $231,623 (2007  $91,469, 2006 - $55,715) reflecting TSX-V trading
  application costs as well as a marked increase in operations and legal
  agreements;
- management fees of $673,436 (2007  $145,059, 2006 - $7,279) reflects
  additional services provided as the Company pursued its application to list on
  the TSX-V, as well as costs associated with the Companys efforts to build a
  strong management team of highly experienced geo-science and financial
  professionals, although these costs were only incurred commencing late in the
  2007 year. Fiscal 2008 reflects a full year of these same costs compared to
  the part year included in 2007 results and includes a management bonus
  declared in 2008;
- office and miscellaneous of $168,944 (2007 - $35,897, 2006 - $13,713),
  which reflects the August 2007 opening of an office for the US subsidiary
  acquired in March 2007, and the hiring of personnel for the both the US and
  Canadian offices;
- promotion and advertising of $706,417 (2007 - $75,448, 2006 - $88,667),
  which now includes fees paid to investor liaison specialists, subscriptions to
  stock market publications and costs associated with industry tradeshows and
  conferences;
- property investigation costs of $96,313 (2007 and 2006  Nil) relating to
  costs to investigate potential properties that were not pursued;
- rent and administration fees $86,035 (2007 - $34,250, 2006 - $15,007) is a
  result of the Companys move to new premises in the current fiscal year and
  the opening of the US office;
- salaries and employee benefits of $99,352 (2007 and 2006  Nil) reflects
  the change to employee status of two office personnel and the provision of
  health coverage benefits to employees;
- stock-based compensation of $4,841,924 (2007 - $136,675, 2006 - $224,925)
  representing a non-cash charge incurred in connection with the granting of
  stock options, calculated using the Black Scholes option valuation model.
  Both the number of options granted and the call price used in option
  valuations increased in fiscal 2008, the call price increase due primarily to
  share trading prices;
- transfer agent and filing fees of $168,703 (2007 - $33,009, 2006 - $19,535)
  that reflect fees paid to the TSX-V, which have increased in correlation with
  the increase in required approvals, listing and changes to the Companys stock
  option plan;
- travel of $155,184 (2007  $18,170, 2006  $20,806) incurred primarily for
  Company personnel to visit mineral properties and attend industry tradeshows
  and conferences.
- write down of mineral exploration expenditures of $1,285,088 (2007 -
  $120,290, 2006 - $44,038) relating to exploration expenditures incurred with
  respect to the Companys interest in the Winnemucca and Rye Patch mineral
  properties;
- foreign exchange translation loss, a new item in fiscal 2008, arises from
  the translation of the U.S. Subs financial statements into Canadian dollars;
  and
- interest revenue of $157,851 arising from the influx of capital provided by
  the exercise of warrants and options and private placements undertaken during
  the fiscal 2008 year.

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Year ended March 31, 2007 compared to year ended March
31, 2006

During the year ended March 31, 2007, the Company reported a
net loss of $831,278 ($0.07 loss per share) compared to a loss of $590,779
reported for the fiscal year ended March 31, 2006. The Company did not generate
any revenue during either of the reporting periods. The net loss for 2007 was
primarily due to stock-based compensation and a write-down of exploration
expenditures . Stock-based compensation of $136,675 was recorded for the year
ended March 31, 2007 versus $224,925 for the 2006 fiscal year. The Company
recorded a write-down of mineral property exploration expenditures amounting to
$120,290 for 2007 and $44,038 for the year ended March 31, 2006. Major expense
items in 2007 also included management fees of $145,059, consulting of $90,600,
and legal of $91,469 which all increased over the 2006 fiscal year as a direct
reflection of the increase in activity related to property option, private
placement and stock option and other agreements prepared or amended during the
year.

5.B. Liquidity and Capital Resources

Source of Funds

Total assets as at March 31, 2008 of $34,216,744 dramatically
increased commensurate with cash and shares issued for the acquisition of, and
deferred exploration costs incurred for, the various mineral property interests.
In addition, capital derived from several private placements of shares, the
exercise of options and conversion of warrants has increased the balance of
assets offset by amounts required for administrative purposes. The 2007 fiscal
year working capital deficiency reflects the receipt of $610,201 (net of share
issue expense) from a private placement, the exercise of warrants and share
subscriptions received, offset by working capital required for administrative
costs, deferred exploration expenses and property option payments. Working
capital increased at March 31, 2008 reflecting a positive balance of
$24,391,360. This was the result of $32,987,401 received from private
placements, the exercise of options and the conversion of warrants during the
fiscal 2008 year offset by increases in cash used in deferred exploration and
acquisition costs as well as administrative expenses.

The Companys aggregate operating, investing and financing
activities for the year ended March 31, 2008 resulted in a cash increase of
$24,893,385. As at March 31, 2008, the Companys cash and cash equivalents
balance was recorded as $24,959,327 and the Company had working capital of
$24,391,360. The Company has not as yet put into commercial production any of
its mineral properties and as such has no operating revenues. The Company has
funded its operations primarily from the sale of Shares. Accordingly, the
Company is dependent on the equity markets as its sole source of operating
working capital. The Companys capital resources are largely determined by the
strength of the junior resource markets and by the status of the Companys
projects in relation to these markets, and its ability to compete for the
investor support of its projects. The Company will continue to require funds to
meet its obligations under its property option agreements and as a result, will
have to continue to rely on equity and debt financing during such period. There
can be no assurance that financing, whether debt or equity, will always be
available to the Company in the amount required at any particular time or for
any particular period or, if available, that it can be obtained on terms
satisfactory to the Company

Fiscal Year Ended March 31, 2008

In order to maintain the Malone Agreement and the Rattlesnake
Hills Option Agreement in good standing the Company must incur exploration
expenditures of at least $14,000,000 on or before November 28, 2012 and
$5,000,000 on or before August 14, 2010, respectively. In addition the Company
has the following commitments:

- The Company has signed three employment agreements with directors or
  companies controlled by directors of the Company whereby the Company will pay
  fixed monthly management fees totalling $25,000. These employment agreements
  have a term of two years and expire on January 31, 2009.
- The Company signed an office lease expiring April 30, 2012 that requires
  monthly payments of $4,394 plus an applicable portion of operating costs.
  Operating costs are subject to change but are currently $3,217 per month. The
  total estimated annual commitment over the term of the lease, based on the
  current amount of operating costs is $91,329.

- 41 -

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| |  | Effective April 1, 2008, the Company has signed a
      two-year employment agreement with the president of the Company whereby
      the Company will pay fixed monthly management fees of
      USD$12,000.                                                                                                                                                                                                                                                                                                          
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | Effective April 21, 2008 the Company negotiated a
      two-year consulting agreement to pay $6,500 per month for corporate
      communications services.                                                                                                                                                                                                                                                                                                                                                             
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | In April 2008, the company signed a Letter of Intent with
      a certain vendor (the Vendor) regarding exclusive lease and sublease of
      Excelsior Springs Property in Esmeralda County, Nevada. The Vendor
      controls that certain property through assignment from a third party.
      Under this binding Letter of Intent, the Company shall:                                                                                                                                                           
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | o                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | The primary term of the Letter of Intent shall be five
      years and so long thereafter as exploration, development or mining is
      being conducted on the property.                                                                                                                                                                                                                                                                                                                                              
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | Effective June 1, 2008, the U.S. Sub signed an office
      lease agreement expiring June 30, 2009, which replaces the original lease
      agreement signed on August 1, 2007. The agreement calls for monthly
      payments of USD$ 2,500.                                                                                                                                                                                                                                                                          
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  | Effective June 5, 2008, the Company signed a one-year employment agreement with the Chief Financial Officer of the Company, whereby the Company will pay fixed monthly fees of $13,333. In addition, the Company granted 250,000 share purchase options at an exercise price of $0.75, expiring June 5, 2013, which will vest as to one-third (1/3) at the end of the three month probationary period, 1/3 90 days after the end of the probationary period, and 1/3 180 days after the end of the probationary period.

Recent Financings

In April 2007, the Company completed a non-brokered private
placement of 2,350,000 units at $0.25 per unit resulting in proceeds of
$587,500. Each unit was comprised of one common share and one share purchase
warrant. Each warrant will entitle the holder to purchase one common share of
the Company at a price of $0.35 per share until April 19, 2009. Finders fees
for the April 2007 private placement were paid by the issue of 55,000 units with
a fair value of $24,639 consisting of $13,750 for the shares and $10,889 for the
warrants.

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Also in April, 2007, the Company completed a brokered private
placement of 12,053,000 units at $0.25 per unit resulting in net proceeds of
$2,931,291. The agent for this private placement elected to receive their
commission of 8% of gross proceeds in cash of $36,560 together with 818,000
units. Each unit was comprised of one common share and one share purchase
warrant. Each warrant will entitle the holder to purchase one common share of
the Company at a price of $0.35 per share until April 26, 2009. The agent also
received 1,205,300 compensation options which entitle the agent to purchase that
number of units at $0.30 per unit for two years.

In July 2007, the Company completed a private placement of
14,050,000 units at $0.40 per unit for proceeds of $5,620,000. Each unit
consisted of one share and one-half of a share purchase warrant. Each whole
warrant entitles the holder thereof to purchase one additional share at a price
of $0.60 per share until July 25, 2009. Finders fees for the private placement
were paid in lieu of cash by the issue of 689,500 units with a fair value of
$364,877, consisting of $275,800 for the shares and $89,077 for the warrants.
The Company also paid additional finders fees by paying $211,300 in cash and by
issuing 816,375 compensation options exercisable at $0.65 per share which will
expire on July 25, 2009.

In February 2008, the Company completed a non-brokered private
placement of 2,000,000 units at $1.00 per unit for proceeds of $2,000,000. Each
unit consisted of one share and one-half of a share purchase warrant. Each whole
warrant entitles the holder thereof to purchase one additional share at a price
of $1.50 per share until February 27, 2010. Finders fees for the non-brokered
private placement were paid in lieu of cash by the issue of 62,790 shares with a
fair market value of $62,790. The Company also issued 109,760 compensation
options in connection with this non-brokered private placement exercisable at
$1.25 per share which will expire on February 27, 2010.

Also in February 2008, the Company completed a brokered private
placement of 18,000,000 units at $1.00 per unit for proceeds of $18,000,000,
each unit being identical to those issued under terms of the February 2008
non-brokered private placement. Finders fees for the non-brokered private
placement were paid in lieu of cash by the issue of 1,165,500 units with a fair
value of $ 2,044,736, consisting of $1,165,500 for the shares and $879,236 for
the warrants. The Company also issued 1,260,000 compensation options in
connection with this non-brokered private placement exercisable at $1.25 per
share which will expire on February 27, 2010.

Significant Changes To Accounting Policy During The Year

Critical Accounting Policies

Our consolidated financial statements have been prepared in
accordance with accounting principle generally accepted in Canada. Material
differences from United States accounting principles are disclosed in Note 13 in
the Notes to the Consolidated Financial Statements in Item 17 of this Annual
Report on Form 20-F. Some accounting policies have a significant impact on the
amount reported in these financial statements. A summary of those significant
accounting policies can be found in the Summary of Significant Accounting
Policies in our consolidated financial statements. Note that our preparation of
this Annual Report on Form 20-F requires us to make estimates and assumptions
that affect the reported amount of assets and liabilities, disclosure of
contingent assets and liabilities at the date of our financial statements, and
the reported amounts of revenue and expenses during the reporting period. There
can be no assurance that actual results will not differ from those estimates.
The Company believes, as explained below, that our most critical accounting
policies cover the following areas: mineral properties and stock-based
compensation.

Mineral Properties

The Company defers the cost of acquiring, maintaining its
interest, exploring and developing mineral properties until such time as the
properties are placed into production, abandoned, sold or considered to be
impaired in value. Costs of producing properties will be amortized on a unit of
production basis and costs of abandoned properties are written-off. Proceeds
received from the sale of interests in mineral properties are credited to the
carrying value of the mineral properties, with any excess included in
operations. Write-downs due to impairment in value are charged to operations.

- 43 -

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The Company is in the process of exploring and developing its
mineral properties and has not yet determined the amount of reserves available.
Management reviews the carrying value of mineral properties on a periodic basis
and will recognize impairment in value based upon current exploration results,
the prospect of further work being carried out by the Company, the assessment of
future probability of profitable revenues from the property or from the sale of
the property. Amounts shown for properties represent costs incurred net of
write-downs and recoveries, and are not intended to represent present or future
values.

Environmental expenditures that relate to current operations
are expensed or capitalized as appropriate. Expenditures that relate to an
existing condition caused by past operations and which do not contribute to
current or future revenue generation are expensed. Liabilities are recorded when
environmental assessments and/or remedial efforts are probable, and the costs
can be reasonably estimated. Generally, the timing of these accruals coincides
with the earlier of completion of a feasibility study or the Companys
commitment to a plan of action based on the then known facts.

Stock Based Compensation

The Company has a stock-based compensation plan as disclosed in
Note 5, whereby stock options are granted in accordance with the policies of
regulatory authorities. The fair value of all share purchase options are
expensed over their vesting period with a corresponding increase to contributed
surplus.

Upon exercise of share purchase options, the consideration paid
by the option holder, together with the amount previously recognized in
contributed surplus, is recorded as an increase to share capital.

The Company uses the Black-Scholes option valuation model to
calculate the fair value of share purchase options at the date of grant. Option
valuation models require the input of highly subjective assumptions, including
the expected price volatility. Changes in these assumptions can materially
affect the fair market value estimate and therefore, the existing models do not
necessarily provide a reliable single measure of the fair value of the Companys
share purchase options.

New Accounting Pronouncements

On January 1, 2007, the Company adopted Financial Accounting
Standards Board (FASB) Interpretation No. 48, Accounting for
Uncertainty in Income Taxes. The interpretation clarifies the accounting for
uncertainty in income taxes recognized in a companys financial statements in
accordance with Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes. This interpretation provides guidance on recognition and
measurement of uncertainties in income taxes and is effective for the Companys
2007 fiscal year end. The adoption of FIN 48 did not have a significant impact
on the Companys results of operations or financial position.

The FASB has issued Statement of Financial Accounting Standards
(SFAS) 157, Fair Value Measurements, which defines fair value,
establishes a framework for consistently measuring fair value under GAAP and
expands disclosures about fair value measurements. SFAS 157 is to be effective
as of the first fiscal year that begins after November 15, 2007. In February
2008, the FASB deferred the effective date for one year for certain non
financial assets and non financial liabilities and removed certain leasing
transactions from its scope. (i.e. for the Companys fiscal year beginning April
1, 2009). The adoption of SFAS 157 is not expected to have a material effect on
the Companys financial position.

In February 2007, the FASB issued SFAS No. 159 The Fair Value
Option for Financial Assets and Financial Liabilities. This Statement permits
all entities to choose, at specified election dates, to measure eligible items
at fair value (the fair value option). A business entity shall report
unrealized gains and losses on items for which the fair value option has been
elected in earnings (or another performance indicator if the business entity
does not report earnings) at each subsequent reporting date. Upfront costs and
fees related to items for which the fair value option is elected shall be
recognized in earnings as incurred and not deferred. If an entity elects the
fair value option for a held-to-maturity or available-for sale- security in
conjunction with the adoption of this Statement, that security shall be reported
as a trading security under Statement 115, but the accounting for a transfer to
the trading category under paragraph 15 (b) of Statement 115 does not apply.
Electing the fair value option for an existing

- 44 -

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held-to-maturity security will not call into question the
intent of an entity to hold other debt securities to maturity in the future.
This statement is effective as of the first fiscal year that begins after
November 15, 2007 (i.e. for the Companys fiscal year beginning April 1, 2008).
The Company is currently analyzing the effects of SFAS 159 but does not expect
its implementation will have a significant impact on the Companys financial
condition or results of operations.

In December 2007, the SEC issued Staff Accounting Bulletin
(SAB) No. 110 which amends SAB 107 to allow for the continued use,
under certain circumstances, of the simplified method in developing an
estimate of the expected term of so-called plain vanilla stock options
accounted for under FAS 123R, Share-Based Payment. When SAB 107 was published,
the staff believed that more information about employee exercise behavior (e.g.,
employee exercise patterns by industry or other categories of companies) would
become available. Therefore, the staff stated in SAB 107 that it would not
expect the simplified method to be used for stock option grants after December
31, 2007. The staff now understands that such information will not be widely
available by December 31, 2007. Accordingly, the SEC staff will accept, under
certain circumstances, the use of the simplified method beyond December 31, 2007
for plain vanilla options (as described in SAB 110). The Company does not
believe that SAB 110 will have a significant impact on its financial statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007),
Business Combinations (FAS 141R), which replaces FAS 141 and SFAS No.
160, Non-controlling Interest in Consolidated Financial Statements, an
amendment of ARB No. 51 (FAS 160). FAS 141R establishes principles and
requirements for how an acquirer in a business combination recognizes and
measures in its financial statements the identifiable assets acquired, the
liabilities assumed, and any controlling interest; recognizes and measures the
goodwill acquired in the business combination or a gain from a bargain purchase;
and determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination. FAS 160 require retroactive adoption of the presentation and
disclosure requirements for existing minority interests. FAS 141R and FAS 160
shall be applied prospectively on or after an entitys fiscal year that begins
on or after December 15, 2008. The Company is currently assessing the impact
that FAS 141R and FAS 160 will have on its consolidated financial statements but
does not expect that it will have a material impact on the consolidated
financial statements.

5.C. Research and Development

Not applicable.

5.D. Trend Information

Some of the factors in mineral market fluctuations include the
pricing and demand, producing costs and capacity of natural resource markets and
processing equipment, governmental regulations, land tenure, land use,
regulation concerning the importing and exporting of minerals, and environmental
protection regulations. The exact effect of these factors cannot be accurately
predicted, but the combination of these factors may result in the Company not
receiving an adequate return on invested capital to be profitable or viable.

5.E. Off-Balance Sheet Arrangements

The Company does not have any 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 investors.

5.F. Tabular disclosure of contractual obligations

The following tables outlines our current contractual
obligations as at March 31, 2008:

- 45 -

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CDN$ Obligations
      Payments
        due by periodTotal
      Less than 1 year
      1-3 years
      3-5 years
      More than 5 yearsLong-term Debt Obligations
      Nil
      Nil
      Nil
      Nil
      NilCapital (Finance) Lease Obligations
      Nil
      Nil
      Nil
      Nil
      NilOperating Lease Obligations
      $372,939
      $91,332
      $281,607
      Nil
      NilPurchase Obligations
      $438,750
      $438,750
      Nil
      Nil
      NilOther Long-term Liabilities
      Nil
      Nil
      Nil
      Nil
      NilTotal
      $811,689
      $530,082
      $281,607
      Nil
      Nil


US$ Obligations
      Payments
        due by periodTotal
      Less than 1 year
      1-3 years
      3-5 years
      More than 5 yearsLong-term Debt Obligations
      Nil
      Nil
      Nil
      Nil
      NilCapital (Finance) Lease Obligations
      Nil
      Nil
      Nil
      Nil
      NilOperating Lease Obligations
      $27,400
      $27,400
      Nil
      Nil
      NilPurchase Obligations
      Nil
      Nil
      Nil
      Nil
      NilOther Long-term Liabilities
      Nil
      Nil
      Nil
      Nil
      NilTotal
      $17,059,400
      $1,039,400
      $6,420,000
      $9,600,000
      Nil


ITEM 6. DIRECTORS, SENIOR MANAGEMENT, AND EMPLOYEES

6.A. Directors and Senior Management

The following table sets forth information as at the date of
this annual report relating to the directors and senior officers of the Company.

Table No. 3 Directors and Senior Management

|Position with
      the Company and Province and Country of
      Residence          |  | Occupation, Business or Employment                                                                                                                                                                                                                               |  | Age |  | Period as a Director or Senior Officer of
      the Corporation
|------------------------------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --- |  | ---------------------------------------------------------------
|                                                                                     |  |                                                                                                                                                                                                                                                                  |  |     |  |                                                                
|Robert Bick Chief Executive Officer and
      Director       Vancouver, B.C., Canada |  | President of Click It Marketing
      Inc. (formerly called Fruits of the Earth Importers Limited) since 1995;
      Self- employed Management Consultant from 1999 to 2006; Co-founder and
      partner, Thinkx Intellectual Capital Inc. from 2004 to 2005. |  | 61  |  | Since February l, 2007                                         

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Position with the Company and Province and
      Country of Residence
    
    Occupation, Business or
      Employment
    
    Age
    
    Period as a Director or Senior
      Officer of the CorporationVitaly Melnikov Chief Financial Officer
      
      Burnaby, B.C., Canada
    
    Chief Financial Officer of the
      Company; Financial Advisor from July 2007 to May 2008; Vice- President
      Finance and Administration for Urasia Energy Ltd. from December 2005 to
      June 2007; Finance Manager for Hurricane Hydrocarbons Ltd. from July 2002
      to September 2007.
    
    34
    
    Since June 5, 2008Quinton Hennigh President,
      Vice-President Exploration, Chief Geologist and Director
      Longmont, CO, USA
    
    Geologist; Vice-President
      Exploration and Chief Geologist of the Company since May 2007; Research
      Geologist with Newmont Mining from May 2004 to March 2007.
    
    41
    
    Since April 4, 2008Desmond M. Balakrishnan Corporate
      Secretary Vancouver, B.C., Canada
    
    Barrister and Solicitor,
      Partner and lawyer with Lang Michener, LLP since February 2002; Corporate
      Secretary of the Company since May 2007, of Iciena Ventures Inc. since
      October 2006, of Capella Resources since July 2006, of Yankee Hat Minerals
      Ltd. since January 2005, and of Acero-Martin Exploration Inc. since
      November 2001; Director of Probe Resources Ltd. since November 2007 and of
      Copacabana Capital Limited since June 2005.
    
    37
    
    Since May 7, 2008Gildar (Gilles) Arseneau Director
            Vancouver, B.C., Canada
    
    Geologist; Manager Geology,
      Wardrop Engineering Ltd. since April 2006; Manager Geology, TSX Venture
      Exchange, from February 2002 to April 2006; Senior Geologist, RPA
      Consulting Ltd. from September 1996 to October 2002.
    
    50
    
    Since February l, 2007Lawrence A. Dick Director       North
      Vancouver, B.C., Canada
    
    Professional Geologist;
      Director of the Company; Vice-President of Exploration and a Director of
      Continuum Resources Ltd.; Director of General Minerals Corp.
    
    58
    
    Since June 19, 2003


- 47 -

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|Position with
      the Company and Province and Country of
      Residence |  | Occupation, Business or Employment                                                                                                                                                                                                                                 |  | Age |  | Period as a Director or Senior Officer of
      the Corporation
|--------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --- |  | ---------------------------------------------------------------
|                                                                            |  |                                                                                                                                                                                                                                                                    |  |     |  |                                                                
|Donald Gee Director       Burnaby, B.C.,
      Canada                       |  | Chartered Accountant; Chief
      Financial Officer of the Corporation from February 1, 2007 to April 4,
      2008; Director of the Corporation, La Quinta Resource Corp., CMC Metals
      Ltd., Eagle Hill Exploration Corp., and Acero-Martin Exploration Inc. |  | 58  |  | Since February 1, 2007                                         
|                                                                            |  |                                                                                                                                                                                                                                                                    |  |     |  |                                                                
|William (Bill) Majcher Director
            Vancouver, B.C., Canada         |  | Managing Director, Baron
      International Limited, part of the Baron Group (a HK based merchant bank)
      since August l, 2007; RCMP Officer from July 19, 1985 to August 15, 2007.                                                                           |  | 46  |  | Since September 21, 2007                                       

Robert F. Bick, MusBac. (CEO and Director):Robert F. Bick is an integral part of Canadian business legend  Bicks
Pickles. As an entrepreneur, Mr. Bick founded a childrens clothing company and
raised $25,000,000 in venture capital while president of a software start-up. As
a marketer, Robert Bick worked directly with Shell Oil national companies around
the world to launch Formula Shell and to develop exclusive, innovative pump
promotions. Mr. Bick has wide-ranging experience as a management consultant and
is co-founder of ThinkX Intellectual Capital Inc.

Vitaly Melniko, CPA, MBA(Chief Financial
  Officer): Mr. Melnikov has held senior management positions with international
  resource companies operating in North America, Europe, Russia and Central Asia.
  He recently served as Vice-President, Finance and Administration of UrAsia Energy
  Ltd., a uranium producer (acquired by Uranium One in April 2007). Mr. Melnikov
  has also held financial management positions with PetroKazakhstan (formerly
  Hurricane Hydrocarbons), a vertically integrated oil and gas company (acquired
  by China National Petroleum Corporation in October 2005), and Kumtor Operating
  Company with exploration activities and a large operating gold mine in Central
  Asia (currently owned by Centerra Gold).

Quinton Hennigh, M.Sc., Ph.D, (President, Vice-President
Exploration, Chief Geologist and Director): Through his career, Dr.
Hennigh has made significant contributions to Newmont Mining, Newcrest Mining
and Homestake Mining. He has experience working throughout North America, in
Europe, Australia, Asia and South America. He possesses the invaluable ability
to balance the pragmatics of business with bold innovation. Over the past
fifteen years, Quinton has established an enviable reputation for timely and
efficient completion of exploration programs under his supervision and maintains
a network of industry colleagues who are committed to maintaining ongoing
business relationships with him at the Company.

Desmond M. Balakrishnan, LL.B. (Corporate Secretary):Mr.
  Balakrishnan is a partner at Lang Michener LLP. His practice focuses on securities,
  mergers and acquisitions, listed company maintenance and general corporate and
  commercial. He is a member of the Law Society of British Columbia, the Vancouver
  Bar Association, and the Canadian Bar Association and is a recipient of Business
  in Vancouvers Top 40 Under 40 Award.

Gildar (Gilles) Arseneau, Ph.D., P.Geo (Director)
Mr. Arseneau has over 25 years in mineral exploration working as a consultant
and senior geologist for major and junior mining companies with experience in
gold, base metal, uranium and bauxite deposits in Canada, United States and
South America. He has particular expertise in resource modeling and mineral
property valuations. Most recently he was Manager  Geologist with the TSX
Venture Exchange where he was responsible for the review of NI 43-101 technical
reports. He is presently Manager of Geology at Wardrop Engineering Inc.

- 48 -

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Lawrence Dick, Ph.D., P.Geo (Director): Dr. Dick
is a Professional Geologist who received a B.Sc. (Hons.) from the University of
British Columbia in 1973 and a Ph.D. in Economic Geology from Queens University
in 1979. In addition to his directorship with the Company, Dr. Dick has served
as the Vice President of Exploration and a Director of Continuum Resources Ltd.,
an unrelated public company, since 2002. During 2001 and 2002 he was a self
employed geological consultant. He has been a Director of General Minerals
Corp., an unrelated public company, since 1994 and he served as the Executive
Vice President of General Minerals Corp. from August, 1995 until January 2001.
From 1980 to 1984 Dr. Dick served as the Manager of Exploration for Chevron
Minerals Ltd., based in Santiago, Chile.

Donald Gee, B.Sc. (Geology), Lic. Acct., C.A. (Director):Mr. Gee has over 28 years experience in private and public company
financing, corporate/capital structuring and management. His network of
relationships with retail brokers, fund managers and individual investors adds
to the Companys financing effectiveness. Don has served as a Director and key
executive of several public companies. His recent past positions were Chief
Financial Officer for a TSE listed gaming company and financial advisor to a
national aerospace company. Mr. Gee is a member of the Chartered Accountants of
British Columbia, Canadian Institute of Chartered Accountants, the Canadian
Institute of Mining and Metallurgy and the Society of Economic Geologists.

William (Bill) Majcher (Director):Mr. Majcher is
Managing Director for Baron International Limited (a member of the Baron Group
which is a Hong Kong based merchant bank), a fully licensed and registered
investment bank, asset manager and a member of the board for the Hong Kong Stock
Exchange. He is also a director of Disaster Preparedness System Inc., a Nevada
corporation that is currently finalizing filings with the SEC for a listing on
the OTCBB and he is the Executive Director of China Investment Fund Company
Limited, a reporting company listed on the Hong Kong Stock Exchange. He is also
a Director of Baron Total Absolute Return Fund, a hedge fund managed in Hong
Kong.

Robert Barker, Ph.D. (Senior Geological
Consultant):Dr. Barker has over 40 years of geological
experience. In his most recent position as General Manager, American Exploration
for Newcrest Resources, Dr. Barker established new exploration companies in
North and South America. He initiated a gold exploration program in Nevada and
refocused a pre-existing South American exploration program. During his career,
he has served as Exploration Manager with Newcrest Mining, Homestake Mining and
AMAX, Inc.

Tom Weis, MSc. (Consulting Geophysicist): Mr.
Weis has been a practicing geophysicist for over 30 years, most recently as
Chief Geophysicist for Newmont Mining Corporation. He is an expert in all
aspects of the applicability of geophysical techniques to the exploration for
buried gold deposits. Mr. Weis credentials in his field are unsurpassed and he
has had a part in many significant gold discoveries. He has played a critical
role in our current field programs, melding geophysics with geological criteria
for the orientation of our drilling campaigns.

Patty Rehn, MSc. (Geochemist): With over 30 years
experience as a geochemist, Ms. Rehn has focused on the remote detection of
precious metals systems in the Southwestern United States, principally Nevada.
Ms. Rehn developed a mercury vapor technique for detecting targets for drilling
for gold beneath overburden, and has extensive experience in the field and in
the lab. Her previous clients include Barrick Gold, Newmont Mining Corporation,
Echo Bay Mines, and Goldfields.

No Director and/or Senior Management had been the subject of
any order, judgment, or decree of any governmental agency or administrator or of
any court or competent jurisdiction, revoking or suspending for cause any
license, permit or other authority of such person or of any corporation of which
he is a Director and/or Senior Management, to engage in the securities business
or in the sale of a particular security or temporarily or permanently
restraining or enjoining any such person or any corporation of which he is an
officer or director from engaging in or continuing any
conduct/practice/employment in connection with the purchase or sale of
securities, or convicting such person of any felony or misdemeanour involving a
security or any aspect of the securities business or of theft or of any felony.

There are no family relationships between any two or more
Directors or Senior Management. There are no arrangements or understandings with
major shareholders, customers, suppliers or others, pursuant to which any person
referred to above was selected as a Director or member of senior management.

- 49 -

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6.B. Compensation

Total compensation accrued or paid to all directors and senior
officers of the Company during the year ended March 31, 2008 was $683,436. The
following table sets forth options granted to the Companys senior officers in
the fiscal year ended March 31, 2008.

In this section Named Executive Officer means each
  Chief Executive Officer, each Chief Financial Officer and each of the three
  most highly compensated executive officers, other than each Chief Executive
  Officer and Chief Financial Officer, who were serving as executive officers
  at the end of the most recently completed fiscal year and whose total salary
  and bonus exceeds $150,000.

Table No. 4Compensation paid to the Named
Executive Officers during the Companys 
  three most recently completed financial years is as set out below:

Annual Compensation
      Long
        Term CompensationAwards
      PayoutsNAMED EXECUTIVE OFFICERS Name and Principal Position
      Year
      Salary ($)
      Bonus ($)
      Other Annual Compen-
        sation ($)
      Securities Under Options
        Granted (#)
      Shares or Units Subject to
        Resale Restrictions ($)
      LTIP Payouts ($)
      All Other Compen- sation ($)
      Total Compen- sation
        $(13)Lawrence A. Dick(1)
        Former President and 
        Former Chief Executive 
        Officer
      2008 
        2007 
        2006
      92,000 
        45,449 
        2,675
      70,000 
        Nil 
        Nil
      Nil 
        Nil 
        15,000(8)
      875,000 
        80,000 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      773,540 
        74,249 
        17,675Robert Bick(2)
        Chief Executive Officer
      2008 
        2007
      112,500 
        22,000
      122,500 
        Nil
      Nil 
        15,000(9)
      1,275,000 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      1,023,953 
        37,000Warren M. McIntyre(3)
        Former Chief Financial 
        Officer
      2007 
        2006 
        2005
      22,500 
        7,500 
        49,500
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      Nil 
        Nil 
        Nil
      22,500 
        7,500 
        49,500Donald Gee(4)
        Former Chief Financial 
        Officer
      2008 
        2007
      60,000 
        10,000
      70,000 
        Nil
      Nil 
        15,000(10)
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      130,000 
        25,000Quinton Hennigh(5)
        President, Former Vice- 
        President, Former Chief 
        Geologist
      2008 
        2007
      61,823 
        Nil
      88,286 
        Nil
      13,131(11)
        7,735(11)
      1,380,000 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      134,994(12)
        -(12)
      1,113,325 
        7,735Herrick Lau(6)
        Interim Chief Financial 
        Officer
      2008
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      NilVitaly Melnikov(7)
        Chief Financial Officer
      2008
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil
      Nil


|Notes: |                                                                                                                                                                                                                                                                                                            
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1)    | Dr. Dick resigned as President on April 4, 2008 and
      resigned as Chief Executive Officer on February l, 2007. Dr. Dick was
      appointed Chairman of the Board on April 4, 2008.                                                                                                                    
|(2)    | Mr. Bick was appointed as Chief Executive Officer on
      February l, 2007.                                                                                                                                                                                                                               
|(3)    | Mr. McIntyre resigned as Chief Financial Officer on
      February l, 2007.                                                                                                                                                                                                                                
|(4)    | Mr. Gee was appointed as Chief Financial Officer on
      February l, 2007 and resigned as Chief Financial Officer on April 4,
      2008.                                                                                                                                                                 
|(5)    | Dr. Hennigh was appointed as President on April 4,
      2008.                                                                                                                                                                                                                                             
|(6)    | Mr. Lau served as interim Chief Financial Officer from
      April 4, 2008 to June 5, 2008.                                                                                                                                                                                                                
|(7)    | Mr. Melnikov was appointed as Chief Financial Officer on
      June 5, 2008.                                                                                                                                                                                                                               
|(8)    | These funds represent a signing bonus.                                                                                                                                                                                                                                                                     
|(9)    | These funds represent a signing bonus pursuant to
      Management Services Agreements entered into on February l, 2007 between
      the Corporation, Click It Marketing Inc. (ClickIt) and Mr. Bick.
      Mr. Bick is the President of ClickIt.                                                       
|(10)   | These funds represent a signing bonus pursuant to
      Management Services Agreements entered into on February l, 2007 between
      the Corporation, Cantech Capital Corporation (Cantech) and Mr.
      Gee. Mr. Gee is the President of Cantech.                                                     
|(11)   | These funds represent compensation paid to Dr. Hennigh as
      Vice-President and Chief Geologist.                                                                                                                                                                                                        
|(12)   | These funds represent geological consulting fees incurred
      prior to Dr. Hennigh becoming President of the Company and reimbursement
      expenses incurred on behalf of the Company to carry out exploration of
      mineral properties. This amount could not be readily determined for
      2007.
|(13)   | The securities under the options granted were valued at
      the $ amount recognized for financial statement reporting
  purposes.                                                                                                                                                                        

- 50 -

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Long-Term Incentive Plan Awards

Long term incentive plan awards (LTIP) means a plan
providing compensation intended to motivate performance over a period greater
than one financial year. LTIPs do not include option or stock appreciation
rights plans or plans for compensation through shares or units that are subject
to restrictions on resale. The Company did not award any LTIPs to any Named
Executive Officer during the most recently completed financial year.

Options

The stock options granted to directors and senior officers of
the Company during the fiscal year ended March 31, 2008 were as follows:

Table No. 5Option Grants During the Most Recently
Completed Fiscal Year

Name and Position
    Securities Under
      Options Granted (#)
    % of Total Options
      Granted to Officers and Directors in
      Fiscal Year
    Exercise or Base
      Price ($/Security)
    Market Value of
      Securities Underlying Options on the Date of
      Grant ($/Security)(1)
    Expiration DateRobert Bick Chief Executive Officer and
      Director
    500,000 140,000 125,000 510,000
    6.46 1.81 1.62 6.59
    0.42 0.80 0.88 1.70
    0.38(7)1.00 1.13 1.55
    May 2, 2012 November 28, 2012 January
      23, 2013 March 4, 2013Quinton Hennigh(2)President, Vice- President Exploration, Chief Geologist
      and Director
    300,000 130,000 100,000 850,000
    3.88 1.68 1.29 10.98
    0.42 0.80 0.88 1.70
    0.38(7)1.00 1.13 1.55
    May 2, 2012 November 28, 2012 January
      23, 2013 March 4, 2013Gildar (Gilles) Arseneau Director
    350,000 150,000
    4.52 1.94
    0.42 1.70
    0.38(7)1.55
    May 2, 2012 March 4, 2013Desmond M. Balakrishnan(3)Corporate Secretary
    100,000
    1.29
    0.42
    0.38(7)
    May 2, 2012Lawrence A. Dick(4)(5)Director
    200,000 140,000 125,000 410,000
    2.58 1.81 1.62 5.30
    0.42 0.80 0.88 1.70
    0.38(7)1.00 1.13 1.55
    May 2, 2012 November 28, 2012 January
      23, 2013 March 4, 2013Donald Gee(6)Former Chief
      Financial Officer and Director
    400,000 120,000 85,000 225,000
    5.17 1.55 1.10 2.91
    0.42 0.80 0.88 1.70
    0.38(7)1.00 1.13 1.55
    May 2, 2012 November 28, 2012 January
      23, 2013 March 4, 2013William (Bill) Majcher Director
    250,000 150,000
    3.23 1.94
    0.40 1.70
    0.39 1.55
    September 21, 2012 March 4, 2013


|Notes: |                                                                                                                   
|------ | ------------------------------------------------------------------------------------------------------------------
|(1)    | Unless otherwise indicated, the closing price for the
      Common Shares from the TSX-V on the date of the
grant.

- 51 -

---

|(2) | Dr. Hennigh was appointed President and a Director on
      April 4, 2008, and Vice-President Exploration and Chief Geologist on
      September 21, 2007.              
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Mr. Balakrishnan was appointed a Director on May 7,
      2007.                                                                                                         
|(4) | Mr. Dick resigned as President on April 4, 2008 and
      resigned as Chief Executive Officer on February l, 2007.                                                      
|(5) | Mr. Dick holds options to purchase 80,000 common shares
      in the capital of the Company, which were granted on April 7, 2006 at
      $0.36, expiring April 7, 2011.
|(6) | Mr. Gee was appointed as Chief Financial Officer on
      February l, 2007 and resigned as Chief Financial Officer on April 4,
      2008.                              
|(7) | The closing price for the Common Shares from the OTCBB on
      the date of the grant.                                                                                  

The value of the unexercised in-the-money options at the
financial year March 31, 2008 was 2,175,000. No share options were repriced on
behalf of the Named Executive Officers during the financial year ended March 31,
2008.

Subsequent to fiscal year end, stock options were granted to
directors and senior officers of the Company as follows:

Table No. 6Stock Option Grants Subsequent to
Fiscal Year End

Name and Position
    Securities Under
      Options Granted (#)
    Exercise or Base
      Price ($/Security)
    Market Value of Securities
      Underlying Options on the Date of Grant
      ($/Security)(1)
    Expiration DateVitaly Melnikov(2)Chief Financial
      Officer
    250,000
    0.75
    0.75
    June 5, 2013


|Notes: |                                                                                       
|------ | --------------------------------------------------------------------------------------
|(1)    | The closing price for the Common Shares from the TSX-V on
      the date of the grant.
|(2)    | Mr. Melnikov was appointed as Chief Financial Officer on
      June 5, 2008.          

The Stock Options exercised by directors and senior officers of
the Company during the fiscal year ended March 31, 2008 are as follows:

Table No. 7Stock Option Exercises During the Most
Recently Completed Fiscal Year

Name and Position
    Securities Acquired on
      Exercise (#)
    Aggregate Value
      Realized ($)
    Unexercised Options at
      March 31, 2008 (#)
    Value of Unexercised
      In-The-Money Options at March 31, 2008
      ($)Gildar (Gilles) Arseneau Director
    150,000
    63,000
    350,000(1)
    147,000Desmond M. Balakrishnan(2)Corporate Secretary
    100,000
    42,000
    Nil
    NilDonald Gee(4)Former Chief Financial
      Officer and Director
    400,000
    168,000
    430,000(2)
    170,800William (Bill) Majcher Director
    150,000
    60,000
    250,000(3)
    40,000


- 52 -

---

Notes:

|(1) | Options to purchase 200,000 common shares in the capital
      of the Company, which were granted on May 3, 2007 at $0.42, expiring May
      2, 2012 and options to purchase 150,000 common shares in the capital of
      the Company, which were granted on March 4, 2008 at $1.70, expiring March
      4, 2013.                                                                                                                                                                             
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Options to purchase 120,000 common shares in the capital
      of the Company, which were granted on November 28, 2007 at $0.80, expiring
      November 28, 2012, options to purchase 85,000 common shares in the capital
      of the Company, which were granted on January 23, 2008 at $0.88, expiring
      January 23, 2013, and options to purchase 225,000 common shares in the
      capital of the Company, which were granted on March 4, 2008 at $1.70,
      expiring March 4, 2013.
|(3) | Options to purchase 100,000 common shares in the capital
      of the Company, which were granted on September 21, 2007 at $0.40,
      expiring September 21, 2012 and options to purchase 150,000 common shares
      in the capital of the Company, which were granted on March 4, 2008 at
      $1.70, expiring March 4, 2013.                                                                                                                                                               

Equity Compensation Plan Information

The following table sets forth as at March 31, 2008, the number
of securities authorized for issuance under the 2007 Plan:

Table No. 8 Equity Compensation Plan

Plan Category
    No. of Securities to be      Issued Upon Exercise of Outstanding Options,
      Warrants and Rights (a)
    Weighted-Average Exercise      Price of Outstanding Options, Warrants and
      Rights (b)
    No. of Securities Remaining
      Available for Future Issuance Under Equity
      Compensation Plans (excluding securities
      reflected in column (a)) (c)Equity Compensation Plans Approved by Securityholders
    4,835,000
    0.56
    2,873,245Equity Compensation Plans Not Approved by
      Securityholders
    N/A
    N/A
    N/ATotal:
    4,835,000
    
    2,873,245


|(1) | On a pre-consolidation basis.
|--- | -----------------------------

Change of Control Remuneration. The Company had no plans
or arrangements in respect of remuneration received or that may be received by
Executive Officers of the Company during the fiscal year ended March 31, 2008 to
compensate such officers in the event of termination of employment (as a result
of resignation, retirement, change of control) or a change of responsibilities
following a change of control, where the value of such compensation exceeds
US$60,000 per Senior Management.

Other Compensation. No Senior Management/Director
received other compensation in excess of the lesser of US$25,000 or 10% of
such officers cash compensation while serving in a Senior Management/Director
position, and all Senior Management/Directors as a group did not receive other
compensation which exceeded US$25,000 times the number of persons in the group
or 10% of the compensation.

Bonus/Profit Sharing/Non-Cash Compensation. Except for
the Companys stock option plan, the Company had no material bonus or profit
sharing plans pursuant to which cash or non-cash compensation is or may be paid
to the Companys Directors or Senior Management.

Pension/Retirement Benefits. No funds were set aside or
accrued by the Company during the fiscal year ended March 31, 2008 to provide
pension, retirement or similar benefits for Directors or Senior Management.

Compensation of Directors. During the fiscal year ended
March 31, 2008, independent directors of the Company were paid $10,000 as
directors fees and meeting fees.

- 53 -

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Termination of Employment, Change in Responsibilities and
Employment Contracts

There were no arrangements under which directors were
compensated by the Corporation and its subsidiaries during the most recently
completed financial year for their services in their capacity as directors or
consultants. The directors who are not employees of the Corporation were not
paid any cash compensation during the year ended March 31, 2008.

During 2008 the Company continued to build a strong team of
highly experienced geo-science and financial professionals. In April 2008, Dr.
Quinton Hennigh, M. Sc., Ph.D. became the Companys new President, replacing Dr.
Lawrence Dick who continues in his role as Director and now serves on the
Companys Technical Advisory Committee. In June 2008, Mr. Vitaly Melnikov became
the Companys new Chief Financial Officer, replacing Mr. Herrick Lau who had
served as Interim Chief Financial Officer, from April 2008 until June 2008,
after the resignation of Mr. Donald Gee in April 2008.

On February l, 2007, the Company entered into a management
services agreement with Click It Marketing Inc. (ClickIt) and Robert
Bick, President of ClickIt, for a term of two years. In accordance with this
management services agreement, Mr. Bick was nominated by the Companys
management for election as a director of the Company. Mr. Bick was elected as a
director of the Company on February 1, 2007. Pursuant to the management services
agreement, the management fee payable to Mr. Bick is $7,500 per month, together
with goods and services taxes and any and all other taxes payable by law. This
amount was increased to $10,000 per month by the Board of Directors of the
Company effective November 1, 2007. Mr. Bick received a signing bonus of $15,000
payable in cash and is entitled to participate in the Companys share option
plan or any successors thereto. The Company may terminate this agreement before
its expiry date for cause which constitutes just cause for termination at law
and only if the Company gives written notice to Mr. Bick specifying in detail
the act or acts which the Company alleges would constitute just cause for
termination of the employment of Mr. Bick at law if Mr. Bick were an employee of
the Company and upon the death of Mr. Bick, without notice.

On April 1, 2008, the Company entered into an executive employment
  agreement (the Hennigh Agreement) with Quinton Hennigh for
  a term of two years. Dr. Hennigh will receive an annual base salary of USD$144,000
  (USD$12,000 per month), less applicable deductions for income tax, and will
  be reimbursed for out-of-pocket expenses. Dr. Hennigh is entitled to an annual
  bonus, based on the extent to which he achieves his annual performance objectives
  as set by Dr. Hennigh and the board of directors of the Company, and to participate
  in the 2007 Plan. The Company may terminate the Hennigh Agreement before its
  expiry date upon 90 days prior written notice or, without notice, upon Dr. Hennighs
  death, upon the physical or mental incapacity of Dr. Hennigh that results in
  his inability to perform his duties under the Hennigh Agreement for a period
  in excess of 90 days, or for just cause.

On June 5, 2008, the Company entered into an executive
employment agreement with Vitaly Melnikov. Mr. Melnikov will receive an annual
base salary of CAD$160,000, less applicable deductions for income tax, and will
be reimbursed for out-of-pocket expenses. Mr. Melnikov is entitled to an annual
bonus, based on the extent to which he achieves his annual performance
objectives as set by the Chief Executive Officer and the Board of Directors of
the Company. The Company may terminate the agreement before its expiry date upon
90 days prior written notice or for just cause.

6.C. Board Practices

The Directors have served in their respective capacities since
their election and/or appointment and will serve until the next Annual General
Meeting or until a successor is duly elected, unless the office is vacated in
accordance with the Articles/By-Laws of the Company. The Senior Management
serves at the pleasure of the Board of Directors.

The Company has an Audit Committee, which advises the Board of
Directors with respect to the engagement of the independent auditors of the
Company and reviews the scope and results of the Companys audits with the
independent auditors, the Companys internal accounting controls, and the
professional services furnished by the independent auditors to the Company. The
current members of the Audit Committee are Gilles Arseneau, Donald Gee and
William Majcher. Donald Gee C.A. is the Chairman of the Audit Committee. Mr.
Arseneau and Mr.

- 54 -

---

Majcher are independent as defined in Multilateral Instrument
52-110 Audit Committees, the Canadian regulatory policy respect audit
committees. Mr. Gee is not independent as he was the Chief Financial Officer of
the Company from February 2007 to April 2008. The Audit Committee typically
meets each quarter. A copy of the Audit Committee Charter has been filed as
Exhibit 1.6 to this Form 20-F Annual Report

The Company has a Compensation Committee, which advises the
Board of Directors with respect to the compensation of senior management of the
Company. The current members of the Compensation Committee are Gilles Arseneau,
Lawrence Dick and Donald Gee. The Compensation Committee met once during the
fiscal year ended March 31, 2008.

6.D. Employees

The Company has two employees, excluding Senior Management, and
has utilized independent contractors, who perform work on the Companys
properties.

6.E. Share Ownership

As at the date of this Annual Report, there were 78,590,217
Shares issued and outstanding, each carrying the right to one vote. No group of
shareholders has the right to elect a specified number of directors, nor are
there cumulative or similar voting rights attached to the Shares.

To the knowledge of the directors and executive officers of the
  Company, the only persons or corporations that beneficially owned, directly
  or indirectly, or exercised control or direction over, Shares carrying more
  than 5% of the voting rights attached to all outstanding Shares of the Company
  as at the date of this Annual Report are set forth in the following table:

Table No. 9Persons or Corporations Carrying More
Than 5% of Outstanding Shares

Shareholder Name
    Number of Shares Held(1)
    Percentage of Issued Shares(2)Pinetree Resource Partnership
    9,099,100
    11.40%


Notes:
  (1)	Includes 7,849,100 common shares and 1,250,000 common share purchase warrants, exercisable at $0.60 until July 25, 2009.
(2)	Based on 78,590,217 issued and outstanding common shares and assuming the 1,250,000 common share purchase warrants were exercised.

The following table sets forth, to the Companys knowledge, as
  at the date of this Annual Report, information relating to shares of the Company
  held by directors and officers of the Company:

Table No. 10Shareholdings of Directors and Senior
Management

Name of Beneficial Owner
    Number of Common
      Shares
    Percent of Shares
      Outstanding
    Number of Options
    Exercise Price
      ($)
    Expiry Date
    Number of Warrants
    Exercise Price
      ($)
    Expiry DateRobert F. Bick
    188,000
    *
    500,000 140,000 125,000 510,000
    0.42 0.80 0.88 1.70
    May 2, 2012 Nov. 28, 2012
      Jan. 23, 2013 March 4, 2013
    188,000
    0.35
    April 19, 2009Vitaly Melnikov
    Nil
    N/A
    250,000
    0.75
    June 5, 2013
    Nil
    N/A
    N/AQuinton Hennigh
    100,000
    *
    300,000 130,000 100,000 850,000
    0.42 0.80 0.88 1.70
    May 2, 2012 Nov. 28, 2012
      Jan. 23, 2013 March 4, 2013
    100,000
    0.35
    April 19, 2009Desmond M. Balakrishnan
    Nil
    N/A
    Nil
    N/A
    N/A
    Nil
    N/A
    N/A


- 55 -

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Name of Beneficial Owner
    Number of Common
      Shares
    Percent of Shares
      Outstanding
    Number of Options
    Exercise Price
      ($)
    Expiry Date
    Number of Warrants
    Exercise Price
      ($)
    Expiry DateGildar (Gilles) Arseneau
    Nil
    N/A
    200,000 150,000
    0.42 1.70
    May 2, 2012 March 4, 2013
    Nil
    N/A
    N/ALawrence A. Dick
    944,640
    1.2
    80,000 200,000 140,000 125,000
      410,000
    0.36 0.42 0.80 0.88 1.70
    April 7, 2011 May 2, 2012
      Nov. 28, 2012 Jan. 23, 2013 March 4, 2013
    200,000
    0.35
    April 19, 2009Donald Gee
    Nil
    N/A
    120,000 85,000 225,000
    0.80 0.88 1.70
    Nov. 28, 2012 Jan. 23, 2013
      March 4, 2013
    Nil
    N/A
    N/AWilliam Majcher
    45,000
    *
    100,000 150,000
    0.40 1.70
    Sept. 21, 2012 March 4, 2013
    Nil
    N/A
    N/ATotal
    1,277,640
    
    4,890,000
    
    
    488,000


* Less than 1%.

Stock Options

In September 2004, the shareholders of the Company approved the
2004 Plan, wherein 10% of the issued and outstanding Shares were reserved for
issuance. In March 2007, the directors proposed that the Company terminate the
2004 Plan and adopt the 2007 Plan to comply with the policies of the TSX-V, this
proposal was accepted by the shareholders at the Companys annual general
meeting on September 21, 2007. The 2007 Plan uses a rolling number of shares.
Under the 2007 Plan, a maximum of 10% of the issued and outstanding Shares of
the Company at the time an option is granted, less any outstanding options, will
be reserved for issuance as options to be granted at the discretion of the
Companys Board to Optionees. In other words, while the 2007 Plan is in effect,
there can never be more than 10% of the Companys issued and outstanding Shares
reserved for issuance under the 2007 Plan, at any point in time. Currently, the
Company has 78,590,217 Shares issued and outstanding and options to purchase
7,208,500 Shares have been granted and are outstanding. Options granted under
the 2004 Plan will be rolled into and be deemed to be granted under the 2007
Plan. It is the responsibility of the Companys Board to ensure that the
provisions of the 2007 Plan are adhered to. This type of stock option plan is
called a rolling plan.

The Company is of the view that the 2007 Plan permits the
Company to attract and maintain the services of executives, employees and other
service providers with other companies in the industry. Directors have the
authority to amend the 2007 Plan to reduce, but not increase, the benefits to
its participants if in their discretion it is necessary or advisable in order to
obtain any necessary regulatory approvals.

The 2007 Plan was accepted by the TSX-V on October 25, 2007.

Eligible Optionees

Under the policies of the TSX-V, to be eligible for the
issuance of a stock option under the 2007 Plan an Optionee must either be a
director, officer, employee, consultant or an employee of a company providing
management or other services to the Company or a subsidiary at the time the
option is granted.

Options may be granted only to an individual or to a
non-individual that is wholly-owned by individuals eligible for an option grant.
If the option is granted to a non-individual, it must provide the TSX-V with an
undertaking that it will not permit any transfer of its securities, nor issue
further securities, to any individual or other entity as long as the option
remains in effect, without the consent of the TSX-V.

- 56 -

---

Material Terms of the Plan

The following is a summary of the material terms of the 2007
Plan:

(a)          
all options granted under the 2007 Plan are non-assignable, non-transferable and
exercisable for a period of up to 5 years (10 years if the Company becomes a
Tier 1 issuer on the TSX-V);

(b)          
for stock options granted to employees or service providers (inclusive of
management company employees), the Company must ensure that the proposed
Optionee is a bona fide employee or service provider (inclusive of management
company employees), as the case may be, of the Company or any subsidiary;

(c)           if
an Optionee ceases to be employed by the Company (other than as a result of
termination with cause) or ceases to act as a director or officer of the Company
or a subsidiary of the Company, any option held by such Optionee may be
exercised within 90 days after the date of such Optionee ceases to be employed
or act as an officer or director (30 days if the Optionee is engaged in Investor
Relations Activities (as defined in the policies of the TSX-V) and the Company
is a Tier 2 issuer);

(d)          
the minimum exercise price of an option granted under the 2007 Plan must not be
less than the Discounted Market Price (as defined in the policies of the
TSX-V);

(e)           no
Optionee can be granted an option or options to purchase more than 5% of the
outstanding listed shares of the Company in any one year period; and

(f)          
Options granted under the 2004 Plan will be deemed to have been granted under
the 2007 Plan and will be subject to the terms and conditions of the 2007 Plan.

The foregoing summary of the 2007 Plan is not complete and is
qualified in its entirety by reference to the 2007 Plan, a copy of which has
been filed as Exhibit 4.7 to this Form 20-F Annual Report

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.A. Major Shareholders

Major Shareholders

For holdings by major shareholders, see Item 6.E. and Table No.
9. The Companys major shareholders do not have different voting rights.

Geographic Breakdown of Shareholders

As at the date of this Annual Report, there were 78,590,217
Shares outstanding held by 23 holders of record resident in Canada holding
67,847,161 Shares, 20 holders of record resident in the USA holding 8,318,131
Shares and 8 holders of record resident in other countries holding 2,424,925
Shares. Shares registered in intermediaries were assumed to be held by residents
of the same country in which the clearing house was located.

Transfer Agent

Our securities are recorded in registered form on the books of
our transfer agent, Pacific Corporate Trust Company, located at 510 Burrard
Street, 2nd Floor, Vancouver, British Columbia, V6C 3B9. However, the
majority of such shares are registered in the name of intermediaries such as
brokerage houses and clearing houses (on behalf of their respective brokerage
clients). We do not have knowledge or access to the identities of the beneficial
owners of such shares registered through intermediaries.

- 57 -

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Control

To the best of our knowledge, we are not directly or indirectly
owned or controlled by any other corporation, by any foreign government or by
any other natural or legal person, severally or jointly. There are no
arrangements known to us which, at a subsequent date, may result in a change in
control of the Company.

7.B. Related Party Transactions

To the knowledge of management of the Company, no person (a
director, officer or holder of 10% or more of the Shares) or nominee for
election as a director of the Company or any associate or affiliate of any such
person or proposed director had any interest in any transaction which has
materially affected or would materially affect the Company or any of its
subsidiaries during the period beginning April 1, 2007 up to the date hereof, or
has any interest in any material transaction in the current year other than as
set out herein or in the audited year end financial statements of the Company.

For the Years Ended March 31, 2008 and 2007

During the year ended March 31, 2008, the Company did not issue
any Shares to directors of the Company, pursuant to the exercise of warrants.

The Company has signed three employment agreements with
directors or companies controlled by directors of the Company whereby the
Company will pay fixed monthly management fees totaling $25,000. These
employment agreements have a term of two years and expire on January 31, 2009.

During the years ended March 31 the Company incurred charges to
significant shareholders, directors and former directors of the Company as
follows:

| |                                     |   | Year
      ended March 31, | 
| | ----------------------------------- | - | -------------------------- | 
| |                                     |   |                            | 
| |                                     |   | 2008                       | 
| |                                     |   |                            | 
| |                                     |   |                            | 
| | Consulting                          | $ | 61,159                     | 
| | Director Fees                       |   | 10,000                     | 
| | Legal                               |   | 177,848                    | 
| | Management fees                     |   | 673,436                    | 
| | Promotion and advertising           |   | 177,722                    | 
| | Rent and administration fees        |   | Nil                        | 
| | Salaries and employee benefits      |   | 12,997                     | 
| | Travel                              |   | 126,574                    | 
| | Deferred exploration costs          |   |                            | 
| | - geological consulting             |   | 183,936                    | 
| | - staking and recording
      costs |   | Nil                        | 
| |                                     |   | 1,423,672                  | 

These transactions were measured by the exchange amount, which
is agreed upon by the transacting parties.

Other receivables include $16,972 (2007: Nil) and prepaid
expenses include $1,125 (2007: $11,360) derived from travel and other expense
advances to officers.

Accounts payable and accrued liabilities include $153,026
(2007: $101,950) due to directors and officers of the Company.

Share issue expenses include $170,000 paid to a significant
shareholder as finders fees for the July 2007 private placement (2007: Nil).

- 58 -

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April 1, 2008 to Present

Subsequent to fiscal year end, effective April 1, 2008, the
Company has signed a two-year employment agreement with the President of the
Company whereby the Company will pay fixed monthly management fees of
USD$12,000.

Effective April 21, 2008 the Company negotiated a two-year
consulting agreement to pay $6,500 per month for corporate communications
services.

In April 2008, the Company signed a Letter of Intent with a
certain vendor (Vendor) regarding exclusive lease and sublease of Excelsior
Springs Property in Esmeralda County, Nevada. The Vendor controls that certain
property through assignment from a third party. Under this binding Letter of
Intent, the Company shall:

| |  | assume all rights and obligations under the original
      lease between the Vendor and the third party;                 
| |  | -------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                          
| |  | pay claim maintenance fees and filings to maintain the
      unpatented claims.                                          
| |  |                                                                                                                          
| |  | pay to the Vendor a 2% NSR on production subject to
      recoupment of advance royalty payments made by the Company; and
| |  |                                                                                                                          
| |  | pay to the Vendor the following advance royalty
      payments:                                                          
| |  |                                                                                                                          
| |  | o                                                                                                                        
| |  |                                                                                                                          
| |  | o                                                                                                                        
| |  |                                                                                                                          
| |  | o                                                                                                                        
| |  |                                                                                                                          
| |  | o                                                                                                                        
| |  |                                                                                                                          
| |  | o                                                                                                                        

The primary term of the Letter of Intent shall be five years
and so long thereafter as exploration, development or mining is being conducted
on the property.

Effective June 1, 2008, the U.S. Sub signed an office lease
agreement expiring June 30, 2009, which replaces the original lease agreement
signed on August 1, 2007. The agreement calls for monthly payments of USD$
2,500.

Effective June 5, 2008, the Company signed a one-year employment agreement with the Chief Financial Officer of the Company, whereby the Company will pay fixed monthly fees of $13,333. In addition, the Company granted 250,000 share purchase options at an exercise price of $0.75, expiring June 5, 2013, which will vest as to one-third (1/3) at the end of the three month probationary period, 1/3 90 days after the end of the probationary period, and 1/3 180 days after the end of the probationary period.

Accounting Fees

The Company paid audit and audit-related fees of $18,730 and
$27,737 to BDO Dunwoody LLP (formerly Amisano Hanson) during Fiscal 2007 and
Fiscal 2008 (to date), respectively. These accounting fees consisted of auditing
the Companys annual financial statements.

Shareholder Loans

None.

- 59 -

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7.C. Interests of Experts and Counsel

Not applicable.

ITEM 8. FINANCIAL INFORMATION

8.A. Consolidated Statements and Other Financial Information

The Companys financial statements are stated in Canadian
Dollars (CDN$) and are prepared in accordance with Canadian Generally Accepted
Accounting Principles (GAAP), the application of which, in the case of the
Company, conforms in all material respects for the periods presented with United
States GAAP, except as discussed in footnotes to the financial statements.

The financial statements as required under Item 17 are attached
hereto and found immediately following the text of this Annual Report. The audit
reports of BDO Dunwoody LLP are included herein immediately preceding the
financial statements.

Legal Proceedings

The Directors and the management of the Company do not know of
any material, active or pending, legal proceedings against them; nor is the
Company involved as a plaintiff in any material proceeding or pending
litigation. The Directors and the management of the Company know of no active or
pending proceedings against anyone that might materially adversely affect an
interest of the Company.

Dividends

The Company has not paid any dividends on its Shares since
incorporation. The Company does not have any intention of paying dividends. The
Companys future dividend policy will be determined by the board of directors on
the basis of earnings, financial requirements and other relevant factors.

8.B. Significant Changes

Other than as described in this document, there have been no
significant changes since the financial statements contained herein.

ITEM 9. THE OFFER AND LISTING

9.A. Common Share Trading Information

The Companys Shares have traded on the TSX-V under the symbol
EVG, since June 13, 2007. The Companys Shares began trading on the OTCBB
exchange in the United States under the symbol EVOGF, on July 26, 2005, and on
the Frankfurt Stock Exchange, on August 13, 2007, under the symbol EV7.

The Companys Shares traded on the CNQ in Toronto, Ontario,
Canada from June 14, 2004 until the Company graduated to the TSX-V on June 13,
2007.

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The following table sets forth the high and low sales prices on
the CNQ, TSX-V and OTCBB for the periods indicated:

Table No. 11Common Shares Trading Activity

TSX-V Canadian Dollars
      OTCBB U.S. Dollars
      CNQ Canadian DollarsHigh
      Low
      High
      Low
      High
      LowMonthlyJune 2008
      0.79
      0.54
      0.77
      0.66May 2008
      1.02
      0.61
      0.97
      0.62April 2008
      1.34
      0.61
      1.30
      0.75March 2008
      1.85
      0.90
      1.79
      0.89February 2008
      2.60
      1.40
      2.55
      1.38January 2008
      1.65
      0.84
      1.69
      0.90QuarterlyJune 30, 2008
      1.34
      0.54
      1.30
      0.62March 31, 2008
      2.60
      0.84
      2.55
      0.89December 31, 2007
      1.15
      0.34
      1.15
      0.34September 30, 2007
      0.56
      0.30
      0.54
      0.29June 30, 2007
      0.44
      0.35
      0.46
      0.16
      0.48
      0.25March 31, 2007
      
      
      0.26
      0.18
      0.28
      0.20December 31, 2006
      
      
      0.34
      0.17
      0.36
      0.17September 30, 2006
      
      
      0.42
      0.20
      0.45
      0.20June 30, 2006
      
      
      0.51
      0.30
      0.57
      0.30YearlyMarch 31, 2008
      
      
      2.55
      0.16March 31, 2007
      
      
      0.51
      0.17
      0.57
      0.17March 31, 2006
      
      
      0.71
      0.22
      1.05
      0.25March 31, 2005
      
      
      
      
      0.60
      0.14March 31, 2004


9.B. Plan of Distribution

Not applicable.

9.C. Stock Exchanges Identified

The common shares of the Company trade on the TSX-V, the OTCBB
and the Frankfurt Stock Exchange. Please refer to Item 9.A.

9.D. Selling Shareholders

Not applicable.

9.E. Dilution

Not applicable.

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9.F. Expenses of the Issue

Not applicable.

ITEM 10. ADDITIONAL INFORMATION

10.A. Share Capital

Not applicable.

10.B. Memorandum and Articles of Association

The Company has unlimited common shares without par value
authorized. As of the date of this annual report there were 78,590,217 common
shares issued and outstanding. All shares are initially issued and registered in
the name of the shareholder or its nominee. There are no restrictions on the
transferability of the shares imposed by the Companys constating documents. The
register and transfer agent for the Shares is Pacific Corporate Trust of Canada
located at 2nd Floor, 510 Burrard Street, Vancouver, B.C. V6C 3B9.

The Company was incorporated on June 19, 2003 under the CBCA.
There are no restrictions on the business that the Company may carry on in its
Articles of Incorporation.

The following is a summary of certain material provisions of
(i) the Companys Articles of Incorporation, as amended by the Articles of
Amendment; (ii) the Companys bylaws; and (ii) certain provisions of the CBCA
applicable to the Company.

A director of the Company is not allowed to vote on a proposal,
arrangement, contract or transaction in which the director is materially
interested. A director who is, in any way, directly or indirectly, interested in
a material contract or proposed material contract with the Company shall
disclose the nature and extent of his interest at a meeting of the directors in
accordance with the provisions of the CBCA. A director shall not vote in respect
of any such contract unless the contract is:

(a)          
one primarily relating to the directors remuneration as a director, officer,
employee or agent of the Company or an affiliate;

(b)          
one for indemnity or insurance of the director; or

(c)          
one with an affiliate.

Article 7 of the Companys bylaws address the borrowing powers
of the directors. The borrowing powers are summarized as follows:

The Directors may, from time to time on behalf of the Company:

(a)          
borrow money in such manner and amount, on such security from such sources and
upon such terms and conditions as they think fit;

(b)          
issue bonds or other debt instruments outright or as security for any liability
or obligation for either the Company or any other person;

(c)          
mortgage any part or the whole of any property or assets of the Company;

There are no age limit requirements pertaining to the
retirement or non-retirement of directors and a director need not be a
shareholder of the Company.

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The rights, preferences and restrictions attaching to each
class of the Companys shares are as follows:

Common Shares

All of the authorized shares of common stock of the Company are
of the same class and, once issued, rank equally as to dividends, voting powers,
and participation in assets. Holders of common stock are entitled to one vote
for each share held of record on all matters to be acted upon by the
shareholders. Holders of common stock are entitled to receive such dividends as
may be declared from time to time by the Board of Directors, in its discretion,
out of funds legally available therefore.

Upon liquidation, dissolution or winding up of the Company,
holders of common stock are entitled to receive pro rata the assets of
Company, if any, remaining after payments of all debts and liabilities. No
shares have been issued subject to call or assessment. There are no pre-emptive
or conversion rights and no provisions for redemption or purchase for
cancellation, surrender, or sinking or purchase funds.

The Company may by ordinary resolution filed with the Registrar
amend its bylaws to increase the authorized capital of the Company by:

| | (a) | creating shares with par value or shares without par
      value                                          
| | --- | ----------------------------------------------------------------------------------------------------------
| |     |                                                                                                           
| | (b) | increasing the number of shares with par value or without
      par value                                 
| |     |                                                                                                           
| | (c) | increasing the par value of a class of shares with par
      value, if no shares of that class are issued.

The Company may by special resolution alter its bylaws to
subdivide, consolidate or change the designation of any or all of its shares in
such manner and with such consents of members holding a class of shares as the
CBCA provides.

The Company may alter its bylaws:

| | (a) | by special resolution, to create, define and attach
      special rights and restrictions to any shares, and
| | --- | ------------------------------------------------------------------------------------------------------------
| |     |                                                                                                             
| | (b) | by special resolution to vary or abrogate any special
      rights and restrictions attached to any shares  

but no right attached to any issued shares shall be prejudiced
or interfered with unless all members holding shares of each class whose right
is so affected has given consent in writing, or unless a resolution consenting
is passed by three-fourths of such holders at a separate class meeting of the
holders.

There are no provisions discriminating against any existing or
prospective holder of securities as a result of such shareholder owning a
substantial number of shares.

The conditions governing the manner in which annual meetings
and special meetings of shareholders are convoked, including conditions of
admission are described in Articles 39 and 40 of the Companys bylaws. These
conditions are summarized as follows:

Annual Meeting. An annual
meeting shall be held once in every calendar year at such time and place as
determined by the Directors, but not more than 15 months after the holding of
the last preceding annual meeting.

Special Meetings. The Board, the
Chairman of the Board, the Managing Director or the President may convene a
special meeting whenever they see fit. Others who wish to convene a meeting may
requisition to do so through the process provided under the CBCA.

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Every member who is present in person shall have one vote and
every member shall have one vote for which he is the registered holder either in
person or by proxy. A member holding more than one share in respect of which he
is entitled to vote shall be entitled to a proxy holder, or one or more
alternate proxy holders to attend, act and vote for him.

There are no limitations on the rights to own securities.

There are no provisions of the Companys articles of
association, charter or bylaws that would have an effect of delaying, deferring
or preventing a change in control of the Company and that would operate only
with respect to a merger, acquisition or corporate restructuring involving the
Company.

Shareholder Protection Provisions

On March 20, 2008 at a Special Meeting, shareholders of the
Company approved a shareholder rights plan (the Rights Plan), which had
been adopted by the board of directors on January 23, 2008. The Rights Plan was
implemented and made effective as of January 23, 2008. The purpose of the Rights
Plan is to encourage the fair treatment of shareholders in connection with any
take-over bid or similar proposal to acquire Shares. It provides the board of
directors and the Companys shareholders more time to evaluate any unsolicited
take-over bid and, if appropriate, to seek out alternatives to maximize
shareholder value. The Rights Plan was not adopted in response to, or in
anticipation of, any known proposal to acquire control of the Company.

The Rights Plan was not designed to prevent take-over bids that
treat the Companys shareholders fairly. Pursuant to the terms of the Rights
Plan, any bid that meets certain criteria intended to protect the interests of
all shareholders are deemed to be Permitted Bids. A Permitted Bid must
be made by way of a take-over bid circular prepared in compliance with
applicable securities laws and, in addition to certain other conditions, must
remain open for 60 days. In the event that a take-over bid does not meet the
Permitted Bid requirements of the Rights Plan, the rights issued under the plan
will entitle shareholders, other than any shareholder or shareholder involved in
the take-over bid, to purchase additional common shares of the Company at a
significant discount to the market price of the common shares at that time.

A copy of the Shareholder Rights Plan Agreement between the
Company and Pacific Corporate Trust, as rights agent has been filed as Exhibit
2.1 to this Form 20-F Annual Report.

10.C. Material Contracts

| | (a) | Earn-in Agreement between the Company and Meridian Gold
      Inc., dated July 31, 2006. Please refer to Item 4.A. for a summary of this
      agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (b) | Amended and Restated Option and Royalty Agreement among
      the Company, Golden Sands and AHL dated July 7, 2006 and as amended on
      April 11, 2007. Please refer to Item 4.A. for a summary of this
      agreement.                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (c) | Malone Property Agreement between the Company and Newmont
      North America Exploration Ltd., dated April 17, 2006. Please refer to Item
      4.A. for a summary of this agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | (d) | Corporate Advisory Agreement between the Company and
      Excelsior Communications Incorporated (Excelsior) dated September
      1, 2007. Under the agreement, Excelsior is to provide investor relations
      services, in exchange for which the Company has granted to Excelsior
      options to acquire common shares of the Company, exercisable for a period
      of five years at a price of $0.35, paid to Excelsior a $6,500 advance and
      y agreed to pay to Excelsior a monthly retainer of $6,500. This agreement
      is for a term of one year. A copy of this agreement is filed as an exhibit
      to this Annual Report.

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| | (e) | Minerals Lease, Sublease and Agreement among Newmont USA
      Limited, Newmont Capital Limited, Elko Land and Livestock Company, the
      U.S. Sub and the Company, dated November 28, 2007. Please refer to Item
      4.A. for a summary of this agreement.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                
| | (f) | Rattlesnake Hills Property Option Agreement among Golden
      Predator (US) Mines Inc., the U.S. Sub and the Company, dated January 16,
      2008. Please refer to Item 4.A. for a summary of this agreement.                                                
| |     |                                                                                                                                                                                                                                                                
| | (g) | Letter Agreement between the Company and Bald Mountain
      Mining Company, dated January 15, 2008. Please refer to Item 4.A. for a
      summary of this agreement.                                                                                          

10.D. Exchange Controls

There is no law or governmental decree or regulation in Canada
that restricts the export or import of capital, or affects the remittance of
dividends, interest or other payments to a non-resident holder of common shares
of the Company, other than withholding tax requirements. See 10.E. Taxation.

There is no limitation imposed by Canadian law or by the
charter or other constituent documents of the Company on the right of a
non-resident to hold or vote common shares of the Company, other than as
provided in the Investment Canada Act (Canada) (the Investment
Act).

The following discussion summarizes the principal features of
the Investment Act for a non-resident who proposes to acquire common shares of
the Company. It is general only, it is not a substitute for independent legal
advice from an investors own advisor, and it does not anticipate statutory or
regulatory amendments.

The Investment Act is a federal statute of broad application
regulating the establishment and acquisition of Canadian businesses by
non-Canadians, including individuals, governments or agencies thereof,
corporations, partnerships, trusts or joint ventures (each an entity).
Investments by non-Canadians to acquire control over existing Canadian
businesses or to establish new ones are either reviewable or notifiable under
the Investment Act. If an investment by a non-Canadian to acquire control over
an existing Canadian business is reviewable under the Investment Act, the
Investment Act prohibits implementation of the investment unless after review
the Director of Investments, who is appointed by the Minster of Industry, is
satisfied that the investment is likely to be of net benefit to Canada.

A non-Canadian would acquire control of the Company for the
purposes of the Investment Act through the acquisition of common shares if the
non-Canadian acquired a majority of the common shares of the Company. Further,
the acquisition of less than a majority but one third or more of the common
shares of the Company would be presumed to be an acquisition of control of the
Company unless it could be established that, on the acquisition, the Company was
not controlled in fact by the acquirer through the ownership of common shares.

For a direct acquisition that would result in an acquisition of
control of the Company, subject to the exception for WTO-investors that are
controlled by persons who are resident in World Trade Organization
(WTO) member nations, a proposed investment would be reviewable where
the value of the acquired assets is CAD $5 million or more, or if an order for
review was made by the federal cabinet on the grounds that the investment
related to Canadas cultural heritage or national identity, regardless of the
value of the assets of the Company.

For a proposed indirect acquisition that would result in an
acquisition of control of the Company through the acquisition of a non-Canadian
parent entity, the investment would be reviewable where (a) the value of the
Canadian assets acquired in the transaction is CAD $50 million or more, or (b)
the value of the Canadian assets is greater than 50% of the value of all of the
assets acquired in the transaction and the value of the Canadian assets is CAD
$5 million or more.

In the case of a direct acquisition by or from a WTO
investor, the threshold is significantly higher, and is adjusted for inflation
each year. The 2008 threshold is CAD$295 million. Other than the exception noted
below, an indirect acquisition involving a WTO investor is not reviewable under
the Investment Act.

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The higher WTO threshold for direct investments and the
exemption for indirect investments do not apply where the relevant Canadian
business is carrying on the following businesses that have been deemed to be
sensitive: (i) the production of uranium and the ownership of an interest in a
producing uranium property in Canada; (ii) the provision of any financial
service; (iii) the provision of any transportation service ; or (iv) a
cultural business.

Certain transactions relating to common shares of the Company
are exempt from the Investment Act, including:

| | (a) | acquisition of common shares of the Company by a person
      in the ordinary course of that persons business as a trader or dealer in
      securities,                                                                                                                            
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                      
| | (b) | acquisition of control of the Company in connection with
      the realization of security granted for a loan or other financial
      assistance and not for a purpose related to the provisions on the
      Investment Act, and                                                   
| |     |                                                                                                                                                                                                                                                                                      
| | (c) | acquisition of control of the Company by reason of an
      amalgamation, merger, consolidation or corporate reorganization following
      which the ultimate direct or indirect control in fact of the Company,
      through the ownership of common shares, remained
  unchanged.

10.E. Taxation

Certain Canadian Federal Income Tax Information for United
States Residents

The following summarizes the principal Canadian federal income
tax considerations generally applicable to the holding and disposition of Common
Shares of the Company by a holder (a) who, for the purposes of the Income Tax
Act (Canada) (the Tax Act), is not resident in or deemed to be resident in
Canada, deals at arms length with the Company, holds the Common Shares as
capital property and does not use or hold the Common Shares in the course of
carrying on, or otherwise in connection with, a business in Canada, and (b) who,
for the purposes of the Canada-United States Income Tax Convention (the
Treaty), is a resident of the United States, has never been a resident of
Canada, has not held or used (and does not hold or use) Common Shares in
connection with a permanent establishment or fixed base in Canada, and who
otherwise qualifies for the full benefits of the Treaty. Holders who meet all
such criteria in clauses (a) and (b) are referred to herein as a US Holder or
US Holders, and this summary only addresses such US Holders. The summary does
not deal with special situations, such as particular circumstances of traders or
dealers, limited liability companies, tax-exempt entities, insurers, financial
institutions (including those to which the mark-to-market provisions of the Tax
Act apply), or otherwise.

This summary is based on the current provisions of the Tax Act
and the regulations thereunder, all proposed amendments to the Tax Act and
regulations publicly announced by the Minister of Finance (Canada) to the date
hereof, the current provisions of the Treaty and our understanding of the
current administrative practices of the Canada Revenue Agency. It has been
assumed that all currently proposed amendments will be enacted as proposed and
that there will be no other relevant change in any governing law, the Treaty or
administrative policy, although no assurance can be given in these respects.
This summary does not take into account provincial, US or other foreign income
tax considerations, which may differ significantly from those discussed herein.
The summary also assumes that the Company will be treated as a resident of
Canada and will maintain its listing on a designated exchange, for purposes of
the Tax Act.

This summary is not exhaustive of all possible Canadian income
tax consequences. It is not intended as legal or tax advice to any particular
holder of Common Shares and should not be so construed. The tax consequences to
any particular holder of Common Shares will vary according to the status of that
holder as an individual, trust, corporation or member of a partnership, the
jurisdictions in which that holder is subject to taxation and, generally,
according to that holders particular circumstances. Each holder should
consult the holders own tax advisor with respect to the income tax consequences
applicable to the holders own particular circumstances.

Dividends

Dividends paid or deemed to be paid or credited by the Company
to a US Holder are subject to Canadian withholding tax. Under the Treaty, the
rate of withholding tax on dividends paid to a US Holder is generally limited

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to 15% of the gross dividend (or 5% in the case of corporate
shareholders owning at least 10% of the Companys voting shares).

Disposition

A US Holder is subject to tax under the Tax Act in respect of a
capital gain realized on the sale or other disposition of a Common Share only if
the US Holder holds the Common Share as taxable Canadian property for purposes
of the Tax Act and is not entitled to relief under the Treaty.

In general, provided the Common Shares are listed on a
designated exchange in Canada at the relevant time (maintaining the current TSX
Venture Exchange listing would be sufficient for this purpose), Common Shares
will not be taxable Canadian property unless (i) at any time during the 60
month period ending at the time of disposition, the US Holder and/or persons and
entities not dealing at arms length with the US Holder owned (alone or
together) 25% or more of the issued shares of any class or series of the capital
stock of the Company, or (ii) the US Holders Common Shares were acquired in
certain types of transactions in consideration for property that was itself
taxable Canadian property.

Furthermore, even if Common Shares are so held as taxable
Canadian property, relief under the Treaty may be available depending on all
relevant factors at the relevant time. US Holders claiming Treaty relief should
consult with their own advisors in this regard and regarding the relevant
Canadian compliance requirements.

Investors are advised to consult their tax advisors with
respect to the tax implications of acquiring, holding or disposing of Common
Shares and the application of any applicable income tax treaty.

United States Federal Income Tax Consequences

The following is a general discussion of all material United
States federal income tax consequences, under current law, generally applicable
to a U.S. Holder (as hereinafter defined) of common shares of the Company. This
discussion does not address individual consequences to persons subject to
special provisions of federal income tax law, such as those described below as
excluded from the definition of a U.S. Holder. In addition, this discussion does
not cover any state, local or foreign tax consequences. (See Canadian Federal
Income Tax Considerations above).

The following discussion is based upon the sections of the
Internal Revenue Code of 1986, as amended (the Code), Treasury
Regulations, published Internal Revenue Service (IRS) rulings,
published administrative positions of the IRS and court decisions that are
currently applicable, any or all of which could be materially and adversely
changed, possibly on a retroactive basis, at any time. This discussion does not
consider the potential effects, both adverse and beneficial, of any recently
proposed legislation which, if enacted, could be applied, possibly on a
retroactive basis, at any time. This discussion is for general information only
and it is not intended to be, nor should it be construed to be, legal or tax
advice to any holder or prospective holder of common shares of the Company and
no opinion or representation with respect to the United States federal income
tax consequences to any such holder or prospective holder is made. Accordingly,
holders and prospective holders of common shares of the Company are urged to
consult their own tax advisors about the federal, state, local, and foreign tax
consequences of purchasing, owning and disposing of common shares of the
Company.

As used herein, a U.S. Holder means a holder of common shares
of the Company who is a citizen or individual resident of the United States, a
corporation or partnership created or organized in or under the laws of the
United States or of any political subdivision thereof or a trust whose income is
taxable in the United States irrespective of source. This summary does not
address the tax consequences to, and U.S. Holder does not include, persons
subject to specific provisions of federal income tax law, such as tax-exempt
organizations, qualified retirement plans, individual retirement accounts and
other tax-deferred accounts, financial institutions, insurance companies, real
estate investment trusts, regulated investment companies, broker-dealers,
non-resident alien individuals, persons or entities that have a functional
currency other than the U.S. dollar, shareholders who hold common shares as
part of a straddle, hedging or a conversion transaction, and shareholders who
acquired their common shares through the exercise of employee stock options or
otherwise as compensation for services. This summary is limited to U.S.

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Holders who own common shares as capital assets. This summary
does not address the consequences to a person or entity holding an interest in a
shareholder or the consequences to a person of the ownership, exercise or
disposition of any options, warrants or other rights to acquire common shares.

U.S. Holders receiving dividend distributions (including
constructive dividends) with respect to common shares of the Company are
required to include in gross income for United States federal income tax
purposes the gross amount of such distributions equal to the U.S. dollar value
of such dividends on the date of receipt (based on the exchange rate on such
date) to the extent that the Company has current or accumulated earnings and
profits, without reduction for any Canadian income tax withheld from such
distributions. Such Canadian tax withheld may be credited, subject to certain
limitations, against the U.S. Holders federal income tax liability or,
alternatively, may be deducted in computing the U.S. Holders federal taxable
income by those who itemize deductions. (See more detailed discussion at
Foreign Tax Credit below). To the extent that distributions exceed current or
accumulated earnings and profits of the Company, they will be treated first as a
return of capital up to the U.S. Holders adjusted basis in the common shares
and thereafter as gain from the sale or exchange of the common shares.
Preferential tax rates for long-term capital gains are applicable to a U.S.
Holder which is an individual, estate or trust. There are currently no
preferential tax rates for long-term capital gains for a U.S. Holder which is a
corporation.

In the case of foreign currency received as a dividend that is
not converted by the recipient into U.S. dollars on the date of receipt, a U.S.
Holder will have a tax basis in the foreign currency equal to its U.S. dollar
value on the date of receipt. Generally any gain or loss recognized upon a
subsequent sale or other disposition of the foreign currency, including the
exchange for U.S. dollars, will be ordinary income or loss. However, an
individual whose realized gain does not exceed $200 will not recognize that
gain, to the extent that there are no expenses associated with the transaction
that meet the requirement for deductibility as a trade or business expense
(other than travel expenses in connection with a business trip) or as an expense
for the production of income.

Dividends paid on the common shares of the Company will not
generally be eligible for the dividends received deduction provided to
corporations receiving dividends from certain United States corporations. A U.S.
Holder which is a corporation may, under certain circumstances, be entitled to a
70% deduction of the United States source portion of dividends received from the
Company (unless the Company qualifies as a foreign personal holding company or
a passive foreign investment company, as defined below) if such U.S. Holder
owns shares representing at least 10% of the voting power and value of the
Company. The availability of this deduction is subject to several complex
limitations which are beyond the scope of this discussion.

Under current temporary Treasury Regulations, dividends paid on
the Companys common shares, if any, generally will not be subject to
information reporting and generally will not be subject to U.S. backup
withholding tax. However, dividends paid, and the proceeds of a sale of the
Companys common shares, in the U.S. through a U.S. or U.S. related paying agent
(including a broker) will be subject to U.S. information reporting requirements
and may also be subject to the 28% U.S. backup withholding tax, unless the
paying agent is furnished with a duly completed and signed Form W-9. Any amounts
withheld under the U.S. backup withholding tax rules will be allowed as a refund
or a credit against the U.S. Holders U.S. federal income tax liability,
provided the required information is furnished to the IRS.

A U.S. Holder who pays (or has withheld from distributions)
Canadian income tax with respect to the ownership of common shares of the
Company may be entitled, at the option of the U.S. Holder, to either receive a
deduction or a tax credit for such foreign tax paid or withheld. Generally, it
will be more advantageous to claim a credit because a credit reduces United
States federal income taxes on a dollar-for-dollar basis, while a deduction
merely reduces the taxpayers income subject to tax. This election is made on a
year-by-year basis and applies to all foreign taxes paid by (or withheld from)
the U.S. Holder during that year. There are significant and complex limitations
which apply to the credit, among which is the general limitation that the credit
cannot exceed the proportionate share of the U.S. Holders United States income
tax liability that the U.S. Holders foreign sources income bears to his or its
worldwide taxable income. In the determination of the application of this
limitation, the various items of income and deduction must be classified into
foreign and domestic sources. Complex rules govern this classification process.
In addition, this limitation is calculated separately with respect to specific
classes of income such as passive income, high withholding tax interest,
financial services income, shipping income, and certain other
classifications of income. Dividends distributed by the Company will generally
constitute passive income or, in the case of certain

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U.S. Holders, financial services income for these purposes.
The availability of the foreign tax credit and the application of the
limitations on the credit are fact specific, and U.S. Holders of common shares
of the Company should consult their own tax advisors regarding their individual
circumstances.

A U.S. Holder will recognize gain or loss upon the sale of
common shares of the Company equal to the difference, if any, between (i) the
amount of cash plus the fair market value of any property received, and (ii) the
shareholders tax basis in the common shares of the Company. Preferential tax
rates apply to long-term capital gains of U.S. Holders who are individuals,
estates or trusts. This gain or loss will be capital gain or loss if the common
shares are a capital asset in the hands of the U.S. Holder, which will be
long-term capital gain or loss if the common shares of the Company are held for
more than one year. Deductions for net capital loss may be carried over to be
used in later tax years until such net capital loss is thereby exhausted. For
U.S. Holders that are corporations (other than corporations subject to
Subchapter S of the Code), an unused net capital loss may be carried back three
years and carried forward five years from the loss year to be offset against
capital gains until such net capital loss is thereby exhausted.

In the following circumstances, the above sections of this
discussion may not describe the United States federal income tax consequences
resulting from the holding and disposition of common shares:

A U.S. Holder who holds stock in a foreign corporation during
any year in which such corporation qualifies as a passive foreign investment
company ("PFIC") is subject to U.S. federal income taxation of that foreign
corporation under one of two alternative tax methods at the election of each
such U.S. Holder.

Section 1297 of the Code defines a PFIC as a foreign (non-U.S.)
corporation, if for any taxable year, either (i) 75% or more of its gross income
is "passive income," which includes but is not limited to interest, dividends
and certain rents and royalties or (ii) the average percentage, by value (or, if
the company is a controlled foreign corporation or makes an election, adjusted
tax basis), of its assets that produce or are held for the production of
"passive income" is 50% or more. The Company believes that it is presently a
PFIC.

As a PFIC, each U. S. Holder's income or gain with respect to a
disposition or deemed disposition of the Company's shares or a distribution
payable on such shares will generally be subject to tax at the highest marginal
rates applicable to ordinary income and certain interest charges discussed
below, unless the U.S. Holder has timely made a "qualified electing fund"
election or a "mark-to-market" election for those shares. A U.S. Holder who
elects in a timely manner to treat the Company as a Qualified Electing Fund
("QEF"), as defined in the Code, (an "Electing U.S. Holder") will be subject,
under Section 1293 of the Code, to current federal income tax for any taxable
year in which the Company's qualifies as a PFIC on his pro-rata share of the
Company's (i) "net capital gain" (the excess of net long-term capital gain over
net short-term capital loss), which will be taxed as long-term capital gain to
the Electing U.S. Holder and (ii) "ordinary earnings" (the excess of earnings
and profits over net capital gain), which will be taxed as ordinary income to
the Electing U.S. Holder, in each case, for the U.S. Holder's taxable year in
which (or with which) the Company taxable year ends, regardless of whether such
amounts are actually distributed. A U.S. Holder's tax basis in the common shares
will be increased by such amount that is included in income but not distributed.

A QEF election also allows the Electing U.S. Holder to (i)
generally treat any gain realized on the disposition of his common shares (or
deemed to be realized on the pledge of his common shares) as capital gain; (ii)
treat his share of the Company's net capital gain, if any, as long-term capital
gain instead of ordinary income, and (iii) either avoid interest charges
resulting from PFIC status altogether (see discussion of interest charge below),
or make an annual election, subject to certain limitations, to defer payment of
current taxes on his share of the Company's annual realized net capital gain and
ordinary earnings subject, however, to an interest charge. If the Electing U.S.
Holder is not a corporation, such an interest charge would be treated as
nondeductible "personal interest."

The procedure a U.S. Holder must comply with in making a timely
QEF election will depend on whether the year of the election is the first year
in the U.S. Holder's holding period in which the Company is a PFIC. If the U.S.
Holder makes a QEF election in such first year, (sometimes referred to as a
"Pedigreed QEF Election"), then the U.S. Holder may make the QEF election by
simply filing the appropriate documents at the time the U.S. Holder files its
tax return for such first year. If, however, the Company qualified as a PFIC in
a prior year, then in addition to filing

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documents, the U.S. Holder may also elect to recognize as an
"excess distribution" (i) under the rules of Section 1291 (discussed below), any
gain that he would otherwise recognize if the U.S. Holder sold his stock on the
application date or (ii) if the Company is a controlled foreign corporation
("CFC"), the Holder's pro rata share of the corporation's earnings and profits.
(But see "Elimination of Overlap Between Subpart F Rules and PFIC Provisions").
Either the deemed sale election or the deemed dividend election will result in
the U.S. Holder being deemed to have made a timely QEF election.

With respect to a situation in which a Pedigreed QEF election
is made, if the Company no longer qualifies as a PFIC in a subsequent year,
normal Code rules and not the PFIC rules will apply.

If a U.S. Holder has not made a QEF Election at any time (a
"Non-electing U.S. Holder"), then special taxation rules under Section 1291 of
the Code will apply to (i) gains realized on the disposition (or deemed to be
realized by reason of a pledge) of his common shares and (ii) certain "excess
distributions", as specially defined, by the Company.

A Non-electing U.S. Holder generally would be required to
pro-rate all gains realized on the disposition of his common shares and all
excess distributions over the entire holding period for the common shares. All
gains or excess distributions allocated to prior years of the U.S. Holder (other
than years prior to the first taxable year of the Company during such U.S.
Holder's holding period and beginning after January 1, 1987 for which it was a
PFIC) would be taxed at the highest marginal tax rate for each such prior year
applicable to ordinary income. The Non-electing U.S. Holder also would be liable
for interest on the foregoing tax liability for each such prior year calculated
as if such liability had been due with respect to each such prior year. A
Non-electing, non-corporate U.S. Holder must treat this interest charge as
"personal interest" which, as discussed above, is wholly non-deductible. The
balance of the gain or the excess distribution will be treated as ordinary
income in the year of the disposition or distribution, and no interest charge
will be incurred with respect to such balance.

If the Company is a PFIC for any taxable year during which a
Non-electing U.S. Holder holds common shares, then the Company will continue to
be treated as a PFIC with respect to such common shares, even if it is no longer
by definition a PFIC. A Non-electing U.S. Holder may terminate this deemed PFIC
status by electing to recognize gain (which will be taxed under the rules
discussed above for Non-Electing U.S. Holders) as if such common shares had been
sold on the last day of the last taxable year for which it was a PFIC.

Under Section 1291(f) of the Code, the Department of the
Treasury has issued proposed regulations that would treat as taxable certain
transfers of PFIC stock by Non-electing U.S. Holders that are generally not
otherwise taxed, such as gifts, exchanges pursuant to corporate reorganizations,
and transfers at death.

If a U.S. Holder makes a QEF Election that is not a Pedigreed
Election (i.e., it is made after the first year during which the Company is a
PFIC and the U.S. Holder holds shares of the Company) (a "Non-Pedigreed
Election"), the QEF rules apply prospectively but do not apply to years prior to
the year in which the QEF first becomes effective. U.S. Holders are encouraged
to consult their tax advisors regarding the specific consequences of making a
Non-Pedigreed QEF Election.

Certain special, generally adverse, rules will apply with
respect to the common shares while the Company is a PFIC whether or not it is
treated as a QEF. For example under Section 1298(b)(6) of the Code, a U.S.
Holder who uses PFIC stock as security for a loan (including a margin loan)
will, except as may be provided in regulations, be treated as having made a
taxable disposition of such stock.

Mark-to-Market Election for PFIC Stock

A U.S. Holder of a PFIC may make a mark-to-market election with
respect to the stock of the PFIC if such stock is marketable as defined below.
This provision is designed to provide a current inclusion provision for persons
that are Non-Electing Holders. Under the election, any excess of the fair market
value of the PFIC stock at the close of the tax year over the Holder's adjusted
basis in the stock is included in the Holder's income. The Holder may deduct any
excess of the adjusted basis of the PFIC stock over its fair market value at the
close of the tax year. However,

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deductions are limited to the net mark-to-market gains on the
stock that the Holder included in income in prior tax years, or so called
"unreversed inclusions."

For purposes of the election, PFIC stock is marketable if it is
regularly traded on (1) a national securities exchange that is registered with
the Securities and Exchange Commission ("SEC"), (2) the national market system
established under Section 11A of the Securities Exchange Act of 1934, or (3) an
exchange or market that the IRS determines has rules sufficient to ensure that
the market price represents legitimate and sound fair market value.

A Holder's adjusted basis of PFIC stock is increased by the
income recognized under the mark-to-market election and decreased by the
deductions allowed under the election. If a U.S. Holder owns PFIC stock
indirectly through a foreign entity, the basis adjustments apply to the basis of
the PFIC stock in the hands of the foreign entity for the purpose of applying
the PFIC rules to the tax treatment of the U.S. owner. Similar basis adjustments
are made to the basis of the property through which the U.S. persons hold the
PFIC stock.

Income recognized under the mark-to-market election and gain on
the sale of PFIC stock with respect to which an election is made is treated as
ordinary income. Deductions allowed under the election and loss on the sale of
PFIC with respect to which an election is made, to the extent that the amount of
loss does not exceed the net mark-to-market gains previously included, are
treated as ordinary losses. The U.S. or foreign source of any income or losses
is determined as if the amount were a gain or loss from the sale of stock in the
PFIC.

If PFIC stock is owned by a controlled foreign corporation
("CFC"), the CFC is treated as a U.S. person that may make the mark-to-market
election. Amounts includable in the CFC's income under the election are treated
as foreign personal holding company income, and deductions are allocable to
foreign personal holding company income. A CFC is a foreign corporation in which
more than 50% of the voting power of all classes of stock or the total value of
the stock is owned, directly or indirectly, by U.S. Holders, each of whom own
10% or more of the total combined voting power.

The above provisions apply to tax years of U.S. persons
beginning after December 31, 1997, and to tax years of foreign corporations
ending with or within such tax years of U.S. persons.

The rules of Code Section 1291 applicable to nonqualified funds
generally do not apply to a U.S. Holder for tax years for which a mark-to-market
election is in effect. If Code Section 1291 is applied and a mark-to-market
election was in effect for any prior tax year, the U.S. Holder's holding period
for the PFIC stock is treated as beginning immediately after the last tax year
of the election. However, if a taxpayer makes a mark-to-market election for PFIC
stock that is a nonqualified fund after the beginning of a taxpayer's holding
period for such stock, a coordination rule applies to ensure that the taxpayer
does not avoid the interest charge with respect to amounts attributable to
periods before the election.

The foregoing discussion is based on currently effective
provisions of the Code, existing and proposed regulations thereunder, and
current administrative rulings and court decisions, all of which are subject to
change. Any such change could affect the validity of this discussion. In
addition, the implementation of certain aspects of the PFIC rules requires the
issuance of regulations which in many instances have not been promulgated and
which may have retroactive effect. There can be no assurance that any of these
proposals will be enacted or promulgated, and if so, the form they will take or
the effect that they may have on this discussion. Accordingly, and due to the
complexity of the PFIC rules, U.S. Holders of the Company are strongly urged to
consult their own tax advisors concerning the impact of these rules on their
investment in the Company.

If more than 50% of the voting power of all classes of shares
or the total value of the shares of the Company is owned, directly or
indirectly, by citizens or residents of the United States, United States
domestic partnerships and corporations or estates or trusts other than foreign
estates or trusts, each of whom own 10% or more of the total combined voting
power of all classes of shares of the Company ("United States
shareholder"), the Company could be treated as a "controlled foreign
corporation" under Subpart F of the Code. This classification would effect many
complex results one of which is the inclusion of certain income of a CFC which
is subject to current U.S. tax. The United States generally taxes a United
States shareholder of a CFC currently on their pro rata share of the Subpart F
income of the CFC. Such U.S. shareholders are generally treated as having
received a current distribution out of the

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CFC's Subpart F income and are also subject to current U.S. tax
on their pro rata share of the CFC's earnings invested in U.S. property. The
foreign tax credit described above may reduce the U.S. tax on these amounts. In
addition, under Section 1248 of the Code, gain from the sale or exchange of
shares by a U.S. Holder of common shares of the Company who is or was a United
States shareholder at any time during the five-year period ending with the sale
or exchange is treated as dividend to the extent of earnings and profits of the
Company attributable to the shares sold or exchanged. If a foreign corporation
is both a PFIC and a CFC, the foreign corporation generally will not be treated
as a PFIC with respect to United States shareholders of the CFC. This rule
generally will be effective for taxable years of United States shareholders
beginning after 1997 and for taxable years of foreign corporations ending with
or within such taxable years of United States shareholders. Special rules apply
to United States shareholders who are subject to the special taxation rules
under Section 1291 discussed above with respect to a PFIC. Because of the
complexity of Subpart F, and because it is not clear that Subpart F would apply
to U.S. Holders of common shares of the Company, a more detailed review of these
rules is outside of the scope of this discussion.

10.F. Dividends and Paying Agents

Not applicable.

10.G. Statement by Experts

Not applicable.

10.H. Documents on Display

The documents concerning the Company referred to in this Annual
  Report may be viewed at Suite 725, 666 Burrard Street, Vancouver, British Columbia,
  Canada during normal business hours. Copies of our financial statements and
  other continuous disclosure documents required under the Securities Act
  (British Columbia) are available for viewing on the internet at www.SEDAR.com.

10.I. Subsidiary Information

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

We are currently not subject to any material market risks.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY
SECURITIES

Not applicable.

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.

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ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
  HOLDERS AND USE OF PROCEEDS

None.

ITEM 15. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company carried out an evaluation of the effectiveness of
the design and operation of the Companys disclosure controls and procedures as
of March 31, 2008 being the date of our most recently completed fiscal year.
Based upon that evaluation, our chief executive officer and our chief financial
officer concluded that the Companys disclosure controls and procedures are
effective in timely alerting management to material information relating to us
required to be included in our periodic SEC filings.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Securities Exchange Act of 1934 (the
Exchange Act) is recorded, processed, summarized and reported, within the time
periods specified in the Securities and Exchange Commission's rules and forms.
Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed our
reports filed under the Exchange Act is accumulated and communicated to
management, including our chief executive officer and chief financial officer to
allow timely decisions regarding required disclosure.

Managements Annual Report on Internal Control over
Financial Reporting

Management is responsible for establishing and maintaining
adequate internal control over financial reporting for the Company. Management
has designed such internal control over financial reporting to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
Canadian GAAP, and reconciled to US GAAP, as applicable.

Because of its inherent limitations, the Companys internal
control over financial reporting may not prevent or detect all possible
misstatements or frauds. Also, projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with policies
or procedures may deteriorate.

To evaluate the effectiveness of the Companys internal control
over financial reporting, Management has used the Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) and utilized a top-down risk-based approach in its
analysis.

Management has assessed the effectiveness of the Companys
internal control over financial reporting and concluded that such internal
control over financial reporting is effective as of March 31, 2008.

Changes in Internal Control over Financial Reporting

During our most recently completed fiscal year ended March 31,
2008, there were no changes in the Companys internal control over financial
reporting that have materially affected, or are reasonably likely to affect, our
internal control over financial reporting.

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

Donald Gee, Chartered Accountant, is the Audit Committees
financial expert. Mr. Gee is a director of the Company and, since resigning as
Chief Financial Officer of the Company on April 4, 2008 and, has served as an
independent member of the Companys Audit Committee.

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ITEM 16B. CODE OF ETHICS

The Company has not formally adopted a written code of ethics.
  The Company is reviewing the adoption of a formal code of ethics. The Company
  has guided its conduct by the provisions of the CBCA and the securities

legislation applicable to it. Due to its size, management had
  not deemed it necessary to adopt a formal written code of ethics at this time.

ITEM 16C. PRINCIPAL ACCOUNTING FEES AND SERVICES

Fees incurred with BDO Dunwoody LLP for audit and non-audit
services in the last two fiscal years for audit fees are outlined in the
following table.

Table No. 12 Principal Accounting Fees

Nature of Services
    Fees Paid to Auditor in Year
      Ended March 31, 2008
    Fees Paid to Auditor in Year Ended
      March 31, 2007Audit
      Fees(1)
    $27,737
    $16,800Audit-Related
      Fees(2)
    Nil
    $1,930Tax
      Fees(3)
    $3,962
    NilAll Other
      Fees(4)
    Nil
    NilTotal
    $31,699
    $18,730


Notes:

|(1) | Audit Fees include fees necessary to perform the annual
      audit and quarterly reviews of the Corporations consolidated financial
      statements. Audit Fees include fees for review of tax provisions and for
      accounting consultations on matters reflected in the financial statements.
      Audit Fees also include audit or other attest services required by
      legislation or regulation, such as comfort letters, consents, reviews of
      securities filings and statutory audits.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Audit-Related Fees include services that are
      traditionally performed by the auditor. These audit-related services
      include employee benefit audits, due diligence assistance, accounting
      consultations on proposed transactions, internal control reviews and audit
      or attest services not required by legislation or regulation.                                                                                                                                                    
|(3) | Tax Fees include fees for all tax services other than
      those included in Audit Fees and Audit-Related Fees. This category
      includes fees for tax compliance, tax planning and tax advice. Tax
      planning and tax advice includes assistance with tax audits and appeals,
      tax advice related to mergers and acquisitions, and requests for rulings
      or technical advice from tax authorities.                                                                                   
|(4) | All Other Fees include all other non-audit
    services.                                                                                                                                                                                                                                                                                                                                                                                                                                                    

A. Audit Fees

The aggregate fees billed by the auditors of the Company were
$16,800 and $27,737 for the fiscal years ended March 31, 2007 and 2008,
respectively. These fees relate to the audit of the Companys financial
statements.

B. Audit-Related Fees

The aggregate fees billed by the auditors of the Company for
assurance and related services were Nil and $1,930 for the fiscal years ended
March 31, 2007 and 2008, respectively.

C. Tax Fees

The aggregate fees billed by the auditors of the Company for
professional services were $3,962 and Nil for the fiscal years ended March 31,
2007 and 2008, respectively. These fees relate to the Companys tax compliance.

D. All Other Fees

Nil.

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E. Audit Committee Pre-Approval Policies and Procedures

Our audit committee has adopted a formal policy on auditor
independence requiring it to approve all professional services rendered by our
independent auditor prior to the commencement of the specified services. The
audit committee will consider annually and, if appropriate, approve the
provision of audit services by our independent auditor and consider and, if
appropriate, pre-approve the provision of certain defined audit and non-audit
services. The audit committee also will consider on a case-by-case basis and, if
appropriate, approve specific engagements that are not otherwise pre-approved.
Any proposed engagement that does not fit within the definition of a
pre-approved service may be presented to the audit committee for consideration
at its next regular meeting or, if earlier consideration is required, to the
audit committee for action by written consent.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
COMMITTEES

Not applicable.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE
ISSUER/AFFILIATED PURCHASERS

Not applicable.

PART III

ITEM 17. FINANCIAL STATEMENTS

This Annual Report on Form 20-F includes the Companys
consolidated audited financial statements for the years ended March 31, 2008 and
2007, including the following:

|1. | Independent Auditors Report of BDO Dunwoody LLP dated
      July 22, 2008.                              
|-- | ---------------------------------------------------------------------------------------------------------
|   |                                                                                                          
|2. | Balance Sheets as at March 31, 2008 and March 31,
      2007.                                            
|   |                                                                                                          
|3. | Statements of Operations for the years ended March 31,
      2008, 2007 and 2006.                        
|   |                                                                                                          
|4. | Statements of Cash Flows for the years ended March 31,
      2008, 2007 and 2006.                        
|   |                                                                                                          
|5. | Statement of Shareholders Equity for the period for the
      years ended March 31, 2008, 2007 and 2006.
|   |                                                                                                          
|6. | Notes to the Financial
Statements.                                                                       

ITEM 18. FINANCIAL STATEMENTS

The Company has elected to provide financial statements
pursuant to Item 17.

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ITEM 19. EXHIBITS

The following exhibits are included in this Form 20-F:

|EXHIBITNUMBER | DESCRIPTION OFEXHIBIT                                                                                                                                                                                    
|------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|              |                                                                                                                                                                                                          
|1.1           | Certificate
      of Incorporation under the Business Corporations Act(Canada) dated
      June 19, 2003                                                                                                 
|              |                                                                                                                                                                                                          
|1.2           | Articles
      of Incorporation                                                                                                                                                                          
|              |                                                                                                                                                                                                          
|1.3           | Certificate and Articles of Amendment
      dated September 30, 2003                                                                                                                                     
|              |                                                                                                                                                                                                          
|1.4           | Certificate and Articles
    of Amendment dated March 27, 2008                                                                                                                                           
|              |                                                                                                                                                                                                          
|1.5           | By-Laws                                                                                                                                                                                                  
|              |                                                                                                                                                                                                          
|1.6           | Charter
        of the Audit Committee of the Company                                                                                                                                                    
|              |                                                                                                                                                                                                          
|2.1           | Shareholder
        Rights Plan Agreement between the Company and Pacific Corporate Trust,
        dated effective January 23, 2008                                                                      
|              |                                                                                                                                                                                                          
|4.1           | Earn-in Agreement between the
        Company and Meridian dated July 31, 2006(1)                                                                                                                        
|              |                                                                                                                                                                                                          
|4.2           | Amended and Restated Option
        and Royalty Agreement among the Company, Golden Sands and AHL dated July
        7, 2006(1)                                                                          
|              |                                                                                                                                                                                                          
|4.3           | Amending Agreement to the Amended
        and Restated Option and Royalty Agreement among the Company, Golden Sands
        and AHL, dated April 11, 2007(2)                                             
|              |                                                                                                                                                                                                          
|4.4           | Malone Property Agreement between
        the Company and Newmont North America Exploration Ltd., dated April 17,
        2006(1)                                                                        
|              |                                                                                                                                                                                                          
|4.5           | Corporate Advisory Agreement
        between the Company and Excelsior Communications Incorporated dated September
        1, 2007(2)                                                                    
|              |                                                                                                                                                                                                          
|4.6           | Minerals
        Lease, Sublease and Agreement among Newmont USA Limited, Newmont Capital
        Limited, Elko Land and Livestock Company, the U.S. Sub and the Company,
        dated November 28, 2007
|              |                                                                                                                                                                                                          
|4.7           | Stock
        option plan of the Company dated March 14, 2007, presented to and approved
        by the shareholders at the September 21, 2007 shareholders meeting                                     
|              |                                                                                                                                                                                                          
|4.8           | Rattlesnake
        Hills Property Option Agreement among Golden Predator (US) Mines Inc.,
        the U.S. Sub and the Company, dated January 16, 2008                                                  
|              |                                                                                                                                                                                                          
|4.9           | Letter
        Agreement between the Company and Bald Mountain Mining Company, dated
        January 15, 2008                                                                                            
|              |                                                                                                                                                                                                          
|8.1           | Subsidiaries of the Company                                                                                                                                                                              
|              |                                                                                                                                                                                                          
|              | Evolving
    Gold Corp., incorporated in the jurisdiction of Nevada.                                                                                                                                     
|              |                                                                                                                                                                                                          
|12.1          | Certification
        of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002                                                                                       
|              |                                                                                                                                                                                                          
|12.2          | Certification
        of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002                                                                                       
|              |                                                                                                                                                                                                          
|13.1          | Certification
        of Chief Executive Officer pursuant to pursuant to 18 U.S.C. Section 1350,
        as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                            

- 76 -

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|EXHIBITNUMBER | DESCRIPTION OFEXHIBIT                                                                                                                                                        
|------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|              |                                                                                                                                                                              
|13.2          | Certification
        of Chief Financial Officer pursuant to pursuant to 18 U.S.C. Section 1350,
        as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

|(1) | Incorporated by reference to the Companys Annual Report
      on Form 20-F for the fiscal year ended March 31, 2006.
|--- | ---------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                      
|(2) | Incorporated by reference to the Companys Annual Report
      on Form 20-F for the fiscal year ended March 31,
2007.

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SIGNATURE

Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant certifies that it meets all of the
requirements for filing of Form 20-F and has duly caused this Annual Report to
be signed on its behalf by the undersigned, thereunto duly authorized.

EVOLVING GOLD CORP. (Registrant)

By: /s/ *Robert Bick*
  Name: ROBERT F. BICK
Title: Chief Executive Officer

DATE: July 28, 2008

---

EVOLVING GOLD CORP.

(An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2008 and 2007

(Stated in Canadian Dollars)

---

| | BDO DunwoodyLLP 
      Chartered
      Accountants | #604  750 West Pender Street 
      Vancouver,
      BC, Canada V6C 2T7 
      Telephone: (604) 689-0188 
      Fax: (604) 689-9773
| | -------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
  FIRM

To the Shareholders, 
  Evolving Gold Corp.
  (An Exploration
  Stage Company)

We have audited the consolidated balance sheets of Evolving
  Gold Corp. (An Exploration Stage Company) as at March 31, 2008 and 2007 and the
  consolidated statements of operations, cash flows and shareholders equity for
  each of the years in the three-year period ended March 31, 2008. These financial
  statements are the responsibility of the Companys management. Our
  responsibility is to express an opinion on these financial statements based on
  our audits.

We conducted our audits in accordance with Canadian generally
  accepted auditing standards and the standards of the Public Company Accounting
  Oversight Board (United States). Those standards require that we plan and
  perform an audit to obtain reasonable assurance whether the financial statements
  are free of material misstatement. An audit includes examining, on a test basis,
  evidence supporting the amounts and disclosures in the financial statements. An
  audit also includes assessing the accounting principles used and significant
  estimates made by management, as well as evaluating the overall financial
  statement presentation.

In our opinion, these consolidated financial statements present
  fairly, in all material respects, the financial position of the Company as at
  March 31, 2008 and 2007 and the results of its operations and its cash flows for
  each of the years in the three-year period ended March 31, 2008, in accordance
  with Canadian generally accepted accounting principles.

(signed) BDO Dunwoody LLP

Chartered Accountants

Vancouver, Canada 
  July 22, 2008

COMMENTS BY AUDITORS FOR U.S. READERSON CANADA
   UNITED STATES REPORTING DIFFERENCES

The reporting standards of the Public Company Accounting
  Oversight Board (United States) (PCAOB) for auditors require the addition of
  an explanatory paragraph (following the opinion paragraph) when changes in an
  accounting policy, such as those described in Note 2, have a material effect on
  the consolidated financial statements. Although we conducted our audit in
  accordance with both Canadian generally accepted auditing standards and the
  standards of the PCAOB, our report to the shareholders on the Consolidated
  Financial Statements dated July 22, 2008, is expressed in accordance with
  Canadian reporting standards which do not permit a reference to such conditions
  and events in the auditors report when these are adequately disclosed in the
  financial statements.

(signed) BDO Dunwoody LLP

Chartered Accountants

Vancouver, Canada 
  July 22, 2008

BDODunwoodyLLP isa
  LimitedLiabilityPartnershipregisteredinOntario

---

|EVOLVING GOLD CORP.           
|------------------------------
|(An Exploration Stage Company)
|CONSOLIDATED BALANCE SHEETS   
|March 31, 2008 and 2007       
|(Stated in Canadian Dollars)  

|ASSETS                                                    |   | 2008        |   |   | 2007       |  
|--------------------------------------------------------- | - | ----------- | - | - | ---------- | -
|                                                          |   |             |   |   |            |  
|Current                                                   |   |             |   |   |            |  
|Cash and cash equivalents                                 | $ | 24,959,327  |   | $ | 65,942     |  
|GST receivable                                            |   | 38,662      |   |   | 22,046     |  
|Other receivables  Note 6                                |   | 23,131      |   |   | -          |  
|Prepaid expenses  Note
      6                           |   | 191,281     |   |   | 23,331     |  
|                                                          |   |             |   |   |            |  
|                                                          |   | 25,212,401  |   |   | 111,319    |  
|Equipment  Note 3                                        |   | 180,101     |   |   | 22,543     |  
|Mineral properties  Notes 4 and 6,
      Schedule 1      |   | 8,824,242   |   |   | 1,113,875  |  
|                                                          |   |             |   |   |            |  
|                                                          | $ | 34,216,744  |   | $ | 1,247,737  |  
|                                                          |   |             |   |   |            |  
|LIABILITIES                                               |   |             |   |   |            |  
|                                                          |   |             |   |   |            |  
|Current                                                   |   |             |   |   |            |  
|Accounts payable and accrued
      liabilities  Note 6   | $ | 821,041     |   | $ | 288,995    |  
|                                                          |   |             |   |   |            |  
|SHAREHOLDERS' EQUITY                                      |   |             |   |   |            |  
|                                                          |   |             |   |   |            |  
|Share capital  Notes 5 and 9                             |   |             |   |   |            |  
|Authorized:                                               |   |             |   |   |            |  
|Unlimited number
      of common shares without par value |   |             |   |   |            |  
|Issued:                                                   |   |             |   |   |            |  
|77,082,448 shares
      (2007: 12,529,842 shares)         |   | 35,502,433  |   |   | 2,408,045  |  
|Share subscriptions                                       |   | -           |   |   | 100,000    |  
|Contributed surplus  Note 5                              |   | 8,612,027   |   |   | 427,090    |  
|Deficit accumulated during the exploration
      stage    |   | (10,718,757 | ) |   | (1,976,393 | )
|                                                          |   |             |   |   |            |  
|                                                          |   | 33,395,703  |   |   | 958,742    |  
|                                                          |   |             |   |   |            |  
|                                                          | $ | 34,216,744  |   | $ | 1,247,737  |  

Commitments  Notes 4, 5, 9 and 10 
  Subsequent Events 
  Notes 4, 5 and 9

APPROVED BY THE DIRECTORS:

|Robert
      Bick | Director | Lawrence Dick | Director
|------------------- | -------- | --------------- | --------
|Robert Bick         |          | Lawrence Dick   |         

SEE ACCOMPANYING NOTES

---

|EVOLVING GOLD CORP.                              
|-------------------------------------------------
|(An Exploration Stage Company)                   
|CONSOLIDATED STATEMENTS OF OPERATIONS            
|for the years ended March 31, 2008, 2007 and 2006
|(Stated in Canadian Dollars)                     

|                                               |   | 2008       |   |   | 2007       |   |   | 2006      |  
|---------------------------------------------- | - | ---------- | - | - | ---------- | - | - | --------- | -
|                                               |   |            |   |   |            |   |   |           |  
|Expenses                                       |   |            |   |   |            |   |   |           |  
|Accounting and audit                           | $ | 100,320    |   | $ | 46,630     |   | $ | 47,852    |  
|Bank charges and
      interest                |   | 7,693      |   |   | 2,031      |   |   | 1,593     |  
|Consulting  Note 6                            |   | 211,821    |   |   | 90,600     |   |   | 51,605    |  
|Depreciation                                   |   | 54,691     |   |   | 1,750      |   |   | 44        |  
|Directors fees  Note 6                        |   | 10,000     |   |   | -          |   |   | -         |  
|Foreign exchange                               |   | 2,671      |   |   | -          |   |   | -         |  
|Legal- Note 6                                  |   | 231,623    |   |   | 91,469     |   |   | 55,715    |  
|Management fees  Note
      6                 |   | 673,436    |   |   | 145,059    |   |   | 7,279     |  
|Office and miscellaneous                       |   | 168,944    |   |   | 35,897     |   |   | 13,713    |  
|Promotion and
      advertising  Note 6       |   | 706,417    |   |   | 75,448     |   |   | 88,667    |  
|Property investigation costs                   |   | 96,313     |   |   | -          |   |   | -         |  
|Rent and administration
      fees  Note 6    |   | 86,035     |   |   | 34,250     |   |   | 15,007    |  
|Salaries and employee benefits  Note 6        |   | 99,352     |   |   | -          |   |   | -         |  
|Stock-based
      compensation  Note 5        |   | 4,841,924  |   |   | 136,675    |   |   | 224,925   |  
|Transfer agent and filing fees                 |   | 168,703    |   |   | 33,009     |   |   | 19,535    |  
|Travel- Note 6                                 |   | 155,184    |   |   | 18,170     |   |   | 20,806    |  
|Write-down of mineral properties- Note
      4 |   | 1,285,088  |   |   | 120,290    |   |   | 44,038    |  
|                                               |   |            |   |   |            |   |   |           |  
|Loss before the following item                 |   | (8,900,215 | ) |   | (831,278   | ) |   | (590,779  | )
|                                               |   |            |   |   |            |   |   |           |  
|Interest income                                |   | 157,851    |   |   | -          |   |   | -         |  
|                                               |   |            |   |   |            |   |   |           |  
|Net loss and comprehensive loss for the year   | $ | (8,742,364 | ) | $ | (831,278   | ) | $ | (590,779  | )
|                                               |   |            |   |   |            |   |   |           |  
|Basic and diluted loss per share               | $ | (0.21      | ) | $ | (0.07      | ) | $ | (0.07     | )
|                                               |   |            |   |   |            |   |   |           |  
|Weighted average number of shares outstanding  |   | 41,403,489 |   |   | 11,581,952 |   |   | 8,505,316 |  

SEE ACCOMPANYING NOTES

---

|EVOLVING GOLD CORP.                              
|-------------------------------------------------
|(An Exploration Stage Company)                   
|CONSOLIDATED STATEMENTS OF CASH FLOWS            
|for the years ended March 31, 2008, 2007 and 2006
|(Stated in Canadian Dollars)                     

|                                                     |   | 2008       |   |   | 2007     |   |   | 2006     |  
|---------------------------------------------------- | - | ---------- | - | - | -------- | - | - | -------- | -
|                                                     |   |            |   |   |          |   |   |          |  
|Operating Activities                                 |   |            |   |   |          |   |   |          |  
|Net loss and comprehensive loss for the
      year   | $ | (8,742,364 | ) | $ | (831,278 | ) | $ | (590,779 | )
|Add items not affecting
      cash:                  |   |            |   |   |          |   |   |          |  
|Stock-based
      compensation                       |   | 4,841,924  |   |   | 136,675  |   |   | 224,925  |  
|Depreciation                                         |   | 54,691     |   |   | 1,750    |   |   | 44       |  
|Write-down of
      mineral exploration expenditures |   | 1,285,088  |   |   | 120,290  |   |   | 44,038   |  
|Changes in non-cash
      working capital items      |   |            |   |   |          |   |   |          |  
|related to operations:                               |   |            |   |   |          |   |   |          |  
|GST receivable                                       |   | (16,616    | ) |   | (17,085  | ) |   | (976     | )
|Other receivables                                    |   | (23,224    | ) |   | -        |   |   | -        |  
|Prepaid expenses                                     |   | (169,272   | ) |   | (23,331  | ) |   | -        |  
|Accounts payable
      and accrued liabilities       |   | 112,736    |   |   | 181,741  |   |   | 252,414  |  
|                                                     |   |            |   |   |          |   |   |          |  
|                                                     |   | (2,657,037 | ) |   | (431,238 | ) |   | (70,334  | )
|                                                     |   |            |   |   |          |   |   |          |  
|Investing Activities                                 |   |            |   |   |          |   |   |          |  
|Purchase of equipment                                |   | (212,249   | ) |   | (23,106  | ) |   | (1,231   | )
|Deferred exploration costs                           |   | (4,987,685 | ) |   | (374,551 | ) |   | (147,729 | )
|Amounts received
      pursuant to earn-in agreement |   | -          |   |   | 168,552  |   |   | -        |  
|Acquisition of resource properties                   |   | (246,719   | ) |   | (106,869 | ) |   | (173,466 | )
|                                                     |   |            |   |   |          |   |   |          |  
|                                                     |   | (5,446,653 | ) |   | (335,974 | ) |   | (322,426 | )
|                                                     |   |            |   |   |          |   |   |          |  
|Financing Activities                                 |   |            |   |   |          |   |   |          |  
|Issue of common shares
      for cash, net of share  |   |            |   |   |          |   |   |          |  
|issue expense                                        |   | 33,087,401 |   |   | 510,201  |   |   | 622,959  |  
|Share subscriptions                                  |   | (100,000   | ) |   | 100,000  |   |   | -        |  
|Advance payable                                      |   | -          |   |   | -        |   |   | (10,000  | )
|                                                     |   |            |   |   |          |   |   |          |  
|                                                     |   | 32,987,401 |   |   | 610,201  |   |   | 612,959  |  
|                                                     |   |            |   |   |          |   |   |          |  
|Effect on foreign exchange on cash                   |   | 9,674      |   |   | -        |   |   | -        |  
|                                                     |   |            |   |   |          |   |   |          |  
|Increase (decrease) in cash during the year          |   | 24,893,385 |   |   | (157,011 | ) |   | 220,199  |  
|                                                     |   |            |   |   |          |   |   |          |  
|Cash and cash equivalents, beginning of the year     |   | 65,942     |   |   | 222,953  |   |   | 2,754    |  
|                                                     |   |            |   |   |          |   |   |          |  
|Cash and cash equivalents, end of the year           | $ | 24,959,327 |   | $ | 65,942   |   | $ | 222,953  |  

/contd

SEE ACCOMPANYING NOTES

---

|Continued                                        
|-------------------------------------------------
|EVOLVING GOLD CORP.                              
|(An Exploration Stage Company)                   
|CONSOLIDATED STATEMENTS OF CASH FLOWS            
|for the years ended March 31, 2008, 2007 and 2006
|(Stated in Canadian Dollars)                     

|                                                        |   | 2008       |  |   | 2007    |  |   | 2006    | 
|------------------------------------------------------- | - | ---------- |  | - | ------- |  | - | ------- | 
|                                                        |   |            |  |   |         |  |   |         | 
|Cash and cash equivalents is comprised of:              |   |            |  |   |         |  |   |         | 
|Cash                                                    | $ | 848,619    |  | $ | 65,942  |  | $ | 222,953 | 
|Short-term investments                                  |   | 24,110,708 |  |   | -       |  |   | -       | 
|                                                        |   |            |  |   |         |  |   |         | 
|                                                        | $ | 24,959,327 |  | $ | 65,942  |  | $ | 222,953 | 
|                                                        |   |            |  |   |         |  |   |         | 
|Supplemental disclosure of cash flow
      information: |   |            |  |   |         |  |   |         | 
|Accounts payable relating to mineral
      properties   | $ | 411,051    |  | $ | -       |  | $ | -       | 
|Shares issued for share
      issue expense             |   | 1,722,340  |  |   | 30,000  |  |   | 29,100  | 
|Shares issued for acquisition of
      mineral property |   | 3,350,000  |  |   | 184,000 |  |   | 244,000 | 
|Shares issued for debt
      settlement                 |   | -          |  |   | -       |  |   | 285,610 | 
|Contributed surplus on exercise of
      stock options  |   | 398,497    |  |   | -       |  |   | -       | 
|Warrants issued for
      finders fee                  |   | 3,741,511  |  |   | -       |  |   | 11,640  | 
|                                                        |   |            |  |   |         |  |   |         | 
|Cash paid for:                                          |   |            |  |   |         |  |   |         | 
|Interest                                                | $ | -          |  | $ | -       |  | $ | -       | 
|                                                        |   |            |  |   |         |  |   |         | 
|Income taxes                                            | $ | -          |  | $ | -       |  | $ | -       | 

SEE ACCOMPANYING NOTES

---

|EVOLVING GOLD CORP.                              
|-------------------------------------------------
|(An Exploration Stage Company)                   
|CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY  
|for the years ended March 31, 2008, 2007 and 2006
|(Stated in Canadian Dollars)                     

|                                                                       |  |                    |            |  |         |            |  |               |           |  |        |         |  |               |         |  |             |            |   | Deficit     |          |   |         |  
|---------------------------------------------------------------------- |  | ------------------ | ---------- |  | ------- | ---------- |  | ------------- | --------- |  | ------ | ------- |  | ------------- | ------- |  | ----------- | ---------- | - | ----------- | -------- | - | ------- | -
|                                                                       |  |                    |            |  |         |            |  |               |           |  |        |         |  |               |         |  |             |            |   | Accumulated |          |   |         |  
|                                                                       |  |                    |            |  |         |            |  |               |           |  |        |         |  |               |         |  |             |            |   | During the  |          |   |         |  
|                                                                       |  |                    |            |  |         |            |  | Share Capital |           |  | Share  |         |  | Contributed   |         |  | Exploration |            |   |             |         
|                                                                       |  |                    |            |  |         |            |  | Number        |           |  | Amount |         |  | Subscriptions |         |  | Surplus     |            |   | Stage       |          |   | Total   |  
|                                                                       |  |                    |            |  |         |            |  |               |           |  |        |         |  |               |         |  |             |            |   |             |          |   |         |  
|Balance, March 31, 2005                                                |  |                    |            |  |         | 7,350,100  |  | $             | 498,600   |  | $      | -       |  | $             | 128,165 |  | $           | (554,336   | ) | $           | 72,429   |  
|Issuance of shares                                                     |  |                    |            |  |         |            |  |               |           |  |        |         |  |               |         |  |             |            |   |             |          |   |         |  
|Pursuant
      to resource property acquisition                        |  | - at $0.61         |            |  | 400,000 |            |  | 244,000       |           |  | -      |         |  | -             |         |  | -           |            |   | 244,000     |         
|Pursuant to debt settlement                                            |  |                    | - at $0.66 |  |         | 432,742    |  |               | 285,610   |  |        | -       |  |               | -       |  |             | -          |   |             | 285,610  |  
|Pursuant to
      private placement                                    |  |                    | - at $0.50 |  |         | 290,000    |  |               | 145,000   |  |        | -       |  |               | -       |  |             | -          |   |             | 145,000  |  
|Pursuant to private placement                                          |  |                    | - at $0.30 |  |         | 1,270,000  |  |               | 381,000   |  |        | -       |  |               | -       |  |             | -          |   |             | 381,000  |  
|Pursuant to
      conversion of options                                |  |                    |            |  |         | 300,000    |  |               | 79,500    |  |        | -       |  |               | -       |  |             | -          |   |             | 79,500   |  
|Pursuant to conversion of
      warrants                               |  |                    |            |  |         | 130,000    |  |               | 32,500    |  |        | -       |  |               | -       |  |             | -          |   |             | 32,500   |  
|Stock-based compensation charge                                        |  |                    |            |  |         | -          |  |               | -         |  |        | -       |  |               | 224,925 |  |             | -          |   |             | 224,925  |  
|Transfer from contributed surplus on conversion
      of stock options |  |                    |            |  |         |            |  |               |           |  |        |         |  |               |         |  |             |            |  
|                                                                       |  |                    |            |  |         |            |  | -             |           |  | 74,315 |         |  | -             |         |  | (74,315     | )          |   | -           |          |   | -       |  
|Share issue expense                                                    |  | - Cash             |            |  | -       |            |  | (15,041       | )         |  | -      |         |  | -             |         |  | -           |            |   | (15,041     | )       
|                                                                       |  | - Finders fees     |            |  | 97,000  |            |  | -             |           |  | -      |         |  | -             |         |  | -           |            |   | -           |         
|                                                                       |  | - Finders warrants |            |  | -       |            |  | (11,640       | )         |  | -      |         |  | 11,640        |         |  | -           |            |   | -           |         
|Net loss for the year ended March
      31, 2006                       |  |                    |            |  |         | -          |  |               | -         |  |        | -       |  |               | -       |  |             | (590,779   | ) |             | (590,779 | )
|                                                                       |  |                    |            |  |         |            |  |               |           |  |        |         |  |               |         |  |             |            |   |             |          |   |         |  
|Balance, March 31, 2006                                                |  |                    |            |  |         | 10,269,842 |  |               | 1,713,844 |  |        | -       |  |               | 290,415 |  |             | (1,145,115 | ) |             | 859,144  |  
|Issuance of shares                                                     |  |                    |            |  |         |            |  |               |           |  |        |         |  |               |         |  |             |            |   |             |          |   |         |  
|Pursuant to resource property
      acquisition                        |  | - at $0.46         |            |  | 400,000 |            |  | 184,000       |           |  | -      |         |  | -             |         |  | -           |            |   | 184,000     |         
|Pursuant to private placement                                          |  |                    | - at $0.30 |  |         | 1,500,000  |  |               | 450,000   |  |        | -       |  |               | -       |  |             | -          |   |             | 450,000  |  
|Pursuant to
      conversion of warrants                               |  |                    |            |  |         | 260,000    |  |               | 65,000    |  |        | -       |  |               | -       |  |             | -          |   |             | 65,000   |  
|Stock-based compensation charge                                        |  |                    |            |  |         | -          |  |               | -         |  |        | -       |  |               | 136,675 |  |             | -          |   |             | 136,675  |  
|Share issue expense                                                    |  | - Cash             |            |  |         |            |  | -             |           |  | (4,799 | )       |  | -             |         |  | -           |            |   | -           |          |   | (4,799  | )
|                                                                       |  | - Finders fees     |            |  |         |            |  | 100,000       |           |  | -      |         |  | -             |         |  | -           |            |   | -           |          |   | -       |  
|Net loss for the year ended March
      31, 2007                       |  |                    |            |  |         | -          |  |               | -         |  |        | -       |  |               | -       |  |             | (831,278   | ) |             | (831,278 | )
|Share subscriptions                                                    |  |                    |            |  |         |            |  | -             |           |  | -      |         |  | 100,000       |         |  | -           |            |   | -           |          |   | 100,000 |  
|                                                                       |  |                    |            |  |         |            |  |               |           |  |        |         |  |               |         |  |             |            |   |             |          |   |         |  
|Balance, March 31, 2007                                                |  |                    |            |  |         | 12,529,842 |  |               | 2,408,045 |  |        | 100,000 |  |               | 427,090 |  |             | (1,976,393 | ) |             | 958,742  |  

/contd

SEE ACCOMPANYING NOTES

---

|Continued                                        
|-------------------------------------------------
|EVOLVING GOLD CORP.                              
|(An Exploration Stage Company)                   
|CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY  
|for the years ended March 31, 2008, 2007 and 2006
|(Stated in Canadian Dollars)                     

|                                                                       |  |                    |            |  |           |            |  |               |            |   |        |          |   |               |           |  |             |             |   | Deficit     |            |   |       | 
|---------------------------------------------------------------------- |  | ------------------ | ---------- |  | --------- | ---------- |  | ------------- | ---------- | - | ------ | -------- | - | ------------- | --------- |  | ----------- | ----------- | - | ----------- | ---------- | - | ----- | 
|                                                                       |  |                    |            |  |           |            |  |               |            |   |        |          |   |               |           |  |             |             |   | Accumulated |            |   |       | 
|                                                                       |  |                    |            |  |           |            |  |               |            |   |        |          |   |               |           |  |             |             |   | During the  |            |   |       | 
|                                                                       |  |                    |            |  |           |            |  | Share Capital |            |   | Share  |          |   | Contributed   |           |  | Exploration |             |   |             |           
|                                                                       |  |                    |            |  |           |            |  | Number        |            |   | Amount |          |   | Subscriptions |           |  | Surplus     |             |   | Stage       |            |   | Total | 
|                                                                       |  |                    |            |  |           |            |  |               |            |   |        |          |   |               |           |  |             |             |   |             |            |   |       | 
|Balance, March 31, 2007                                                |  |                    |            |  |           | 12,529,842 |  | $             | 2,408,045  |   | $      | 100,000  |   | $             | 427,090   |  | $           | (1,976,393  | ) | $           | 958,742    |  
|                                                                       |  |                    |            |  |           |            |  |               |            |   |        |          |   |               |           |  |             |             |   |             |            |   |       | 
|Issuance of shares                                                     |  |                    |            |  |           |            |  |               |            |   |        |          |   |               |           |  |             |             |   |             |            |   |       | 
|Pursuant to resource
      property acquisition                        |  | - at $0.80         |            |  | 500,000   |            |  | 400,000       |            |   | -      |          |   | -             |           |  | -           |             |   | 400,000     |           
|Pursuant
      to resource property acquisition                        |  | - at $2.00         |            |  | 1,475,000 |            |  | 2,950,000     |            |   | -      |          |   | -             |           |  | -           |             |   | 2,950,000   |           
|Pursuant to private placement                                          |  |                    | - at $0.25 |  |           | 14,403,000 |  |               | 3,600,750  |   |        | (100,000 | ) |               | -         |  |             | -           |   |             | 3,500,750  |  
|Pursuant to
      private placement                                    |  |                    | - at $0.40 |  |           | 14,050,000 |  |               | 5,620,000  |   |        | -        |   |               | -         |  |             | -           |   |             | 5,620,000  |  
|Pursuant to private placement                                          |  |                    | - at $1.00 |  |           | 20,000,000 |  |               | 20,000,000 |   |        | -        |   |               | -         |  |             | -           |   |             | 20,000,000 |  
|Pursuant to
      conversion of warrants                               |  |                    |            |  |           | 10,108,816 |  |               | 3,835,786  |   |        | -        |   |               | -         |  |             | -           |   |             | 3,835,786  |  
|Pursuant to exercise of
      options                                  |  |                    |            |  |           | 1,225,000  |  |               | 466,500    |   |        | -        |   |               | -         |  |             | -           |   |             | 466,500    |  
|Stock-based compensation charge                                        |  |                    |            |  |           | -          |  |               | -          |   |        | -        |   |               | 4,841,924 |  |             | -           |   |             | 4,841,924  |  
|Transfer from contributed surplus on conversion
      of stock options |  |                    | -          |  |           | 398,497    |  |               | -          |   |        | (398,497 | ) |               | -         |  |             | -           |  
|Share issue expense                                                    |  | - Cash             |            |  |           | -          |  |               | (435,635   | ) |        | -        |   |               | -         |  |             | -           |   |             | (435,635   | )
|                                                                       |  | - Finders fees     |            |  |           | 2,790,790  |  |               | -          |   |        | -        |   |               | -         |  |             | -           |   |             | -          |  
|                                                                       |  | - Finders warrants |            |  |           | -          |  |               | (3,741,510 | ) |        | -        |   |               | 3,741,510 |  |             | -           |   |             | -          |  
|Net loss for the year ended March 31, 2008                             |  |                    |            |  |           | -          |  |               | -          |   |        | -        |   |               | -         |  |             | (8,742,364  | ) |             | (8,742,364 | )
|                                                                       |  |                    |            |  |           |            |  |               |            |   |        |          |   |               |           |  |             |             |   |             |            |   |       | 
|Balance, March 31, 2008                                                |  |                    |            |  |           | 77,082,448 |  | $             | 35,502,433 |   | $      | -        |   | $             | 8,612,027 |  | $           | (10,718,757 | ) | $           | 33,395,703 |  

SEE ACCOMPANYING NOTES

---

|                                            | Schedule 1
|------------------------------------------- | ----------
|EVOLVING GOLD CORP.                        
|(An Exploration Stage Company)             
|CONSOLIDATED SCHEDULE OF MINERAL PROPERTIES
|for the years ended March 31, 2008 and 2007
|(Stated in Canadian Dollars)               

|                                     |   | Canada   |   |   | United States |   |   |            |  
|------------------------------------ | - | -------- | - | - | ------------- | - | - | ---------- | -
|                                     |   |          |   |   |               |   |   |            |  
|                                     |   |          |   |   |               |   |   |            |  
|                                     |   | Murray   |   |   | Voisey Bay    |   |   | Winnemucca |  
|                                     |   | Property |   |   | Property      |   |   | Property   |  
|                                     |   |          |   |   |               |   |   |            |  
|Balance, March 31, 2006              | $ | -        |   | $ | 58,818        |   | $ | 678,479    |  
|                                     |   |          |   |   |               |   |   |            |  
|Acquisition costs                    |   |          |   |   |               |   |   |            |  
|Cash                                 |   | -        |   |   | -             |   |   | 11,570     |  
|Shares                               |   | -        |   |   | -             |   |   | 184,000    |  
|Legal                                |   |          |   |   | 554           |   |   | 83,385     |  
|                                     |   |          |   |   |               |   |   |            |  
|                                     |   | -        |   |   | 554           |   |   | 278,955    |  
|                                     |   |          |   |   |               |   |   |            |  
|Deferred exploration costs           |   |          |   |   |               |   |   |            |  
|Assays and reports                   |   | -        |   |   | -             |   |   | 8,621      |  
|Field expenses and other             |   | -        |   |   | -             |   |   | 115        |  
|Geological consulting 
      Note 6 |   | -        |   |   | 2,198         |   |   | 23,559     |  
|Geophysical and geological studies   |   | -        |   |   | -             |   |   | -          |  
|Licenses and fees                    |   | -        |   |   | -             |   |   | -          |  
|Staking and recording costs  Note 6 |   | 11,825   |   |   | 18,600        |   |   | -          |  
|                                     |   |          |   |   |               |   |   |            |  
|                                     |   | 11,825   |   |   | 20,798        |   |   | 32,295     |  
|                                     |   |          |   |   |               |   |   |            |  
|Write-down of properties             |   | (11,825  | ) |   | (80,170       | ) |   | -          |  
|Amounts received pursuant to earn-in |   | -        |   |   | -             |   |   | (168,552   | )
|agreement                            |   |          |   |   |               |   |   |            |  
|                                     |   |          |   |   |               |   |   |            |  
|Balance, March 31, 2007              | $ | -        |   | $ | -             |   | $ | 821,177    |  

contd

SEE ACCOMPANYING NOTES

---

|                                            | Schedule 1  (contd)
|------------------------------------------- | ---------------------
|EVOLVING GOLD CORP.                        
|(An Exploration Stage Company)             
|CONSOLIDATED SCHEDULE OF MINERAL PROPERTIES
|for the years ended March 31, 2008 and 2007
|(Stated in Canadian Dollars)               

|                           |   | United States | 
|-------------------------- | - | ------------- | 
|                           |   | Alpha         | 
|                           |   | Butte         | 
|                           |   |               | 
|Balance, March 31, 2007    | $ | 18,685        | 
|                           |   |               | 
|Acquisition costs          |   |               | 
|Cash                       |   | -             | 
|Shares                     |   | -             | 
|Legal                      |   | -             | 
|                           |   |               | 
|                           |   | -             | 
|                           |   |               | 
|Deferred exploration costs |   |               | 
|Assays
      and reports   |   | -             | 
|Drilling                   |   | -             | 
|Field
      expenses and   |   |               | 
|other                      |   | 5,777         | 
|Geological consulting      |   |               | 
| Note 6                   |   | 12,717        | 
|Geophysical and            |   |               | 
|geological studies         |   | 16,540        | 
|Licenses
      and fees    |   | 1,184         | 
|Staking and recording      |   |               | 
|costs                      |   | 36,703        | 
|                           |   |               | 
|                           |   | 72,921        | 
|                           |   |               | 
|Write-down of existing     |   |               | 
|properties                 |   | -             | 
|                           |   |               | 
|Balance, March 31, 2008    | $ | 91,606        | 

SEE ACCOMPANYING NOTES

---

|EVOLVING GOLD CORP.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)                  

|Note 1 | Nature of Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | Evolving Gold Corp. (the Company) was incorporated as
      6109527 Canada Ltd. on June 19, 2003, under the Canada Business
      Corporation Act and is in the business of acquiring, exploring and
      evaluating mineral properties. On September 30, 2003, the Company changed
      its name to Evolving Gold Corp. The Company is in the exploration stage
      and has interests in mineral properties located in the United States of
      America. Effective June 13, 2007, the common shares of the Company were
      listed on the TSX Venture Exchange (TSX) and trade under the symbol EVG.  
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | The recoverability of amounts shown for mineral
      properties is dependent upon the discovery of economically recoverable
      reserves, confirmation of the Companys interest in the underlying mineral
      claims, the ability of the Company to obtain financing to complete their
      development, and future profitable production or disposition thereof.                                                                                                                                                                                                                                           
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Note 2 | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | The consolidated financial statements of the Company have
      been prepared in accordance with generally accepted accounting principles
      in Canada. Differences with respect to accounting principles generally
      accepted in the United States of America are described in Note 13. Because
      a precise determination of many assets and liabilities is dependent upon
      future events, the preparation of financial statements for a period
      necessarily involves the use of estimates, which have been made using
      careful judgement. Actual results may vary from these estimates.
|       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       | The consolidated financial statements, have in
      managements opinion, been properly prepared within the framework of the
      significant accounting policies summarized below:                                                                                                                                                                                                                                                                                                                                                                                                                              

| | a) | Principles of Consolidation                                                                                                                                                                                                                                                                                                      
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                  
| |    | These consolidated financial statements include the
      accounts of the Company and its wholly-owned subsidiaries Evolving Gold
      Corp., a United States company and Exemplar Gold Corp., a Canadian company
      incorporated on February 19, 2008. All significant intercompany
      transactions have been eliminated.

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 2         

|Note 2 | Summary of Significant Accounting Policies (contd)
|------ | ----------------------------------------------------

| | b) | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Cash and cash equivalents include cash in accounts and
      securities that on acquisition are convertible to cash within three
      months. These investments are highly liquid marketable securities and
      deposits, which are designated as held-for-trading and are recorded at
      their fair values. Fair values are determined by reference to quoted
      market prices at the balance sheet date. Unrealized gains and losses on
      held-for-trading investments are recognized in income. Investment
      transactions are recognized on the trade date with transaction costs
      included in the underlying balance. Cash and cash equivalents are placed
      with institutions of high-credit ratings.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | As at March 31, 2008, the portfolio consists of
      short-term notes with a yield of 3.398% to 3.401%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | c) | Mineral Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The Company defers the cost of acquiring, maintaining its
      interest, exploring and developing mineral properties until such time as
      the properties are placed into production, abandoned, sold or considered
      to be impaired in value. Costs of producing properties will be amortized
      on a unit of production basis and costs of abandoned properties are
      written-off. Proceeds received from the sale of interests in mineral
      properties are credited to the carrying value of the mineral properties,
      with any excess included in operations. Write-downs due to impairment in
      value are charged to operations.                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The Company is in the process of exploring and developing
      its mineral properties and has not yet determined the amount of reserves
      available. Management reviews the carrying value of mineral properties on
      a periodic basis and will recognize impairment in value based upon current
      exploration results, the prospect of further work being carried out by the
      Company, the assessment of future probability of profitable revenues from
      the property or from the sale of the property. Amounts shown for
      properties represent costs incurred net of write-downs and recoveries, and
      are not intended to represent present or future values.                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Environmental expenditures that relate to current
      operations are expensed or capitalized as appropriate. Expenditures that
      relate to an existing condition caused by past operations and which do not
      contribute to current or future revenue generation are expensed.
      Liabilities are recorded when environmental assessments and/or remedial
      efforts are probable, and the costs can be reasonably estimated.
      Generally, the timing of these accruals coincides with the earlier of
      completion of a feasibility study or the Companys commitment to a plan of
      action based on the then known facts.                                                                              

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 3         

|Note 2 | Summary of Significant Accounting Policies (contd)
|------ | ----------------------------------------------------

| | d) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company follows the asset and liability method of
      accounting for income taxes. Under this method, current income taxes are
      recognized for the estimated income taxes payable for the current period.
      Future income tax assets and liabilities are recognized for temporary
      differences between the tax and accounting basis of assets and liabilities
      as well as for the benefit of losses available to be carried forward to
      future years for tax purposes only if it is more likely than not that they
      can be realized.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | e) | Stock Based Compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company has a stock-based compensation plan as
      disclosed in Note 5, whereby stock options are granted in accordance with
      the policies of regulatory authorities. The fair value of all share
      purchase options are expensed over their vesting period with a
      corresponding increase to contributed surplus.                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Upon exercise of share purchase options, the
      consideration paid by the option holder, together with the amount
      previously recognized in contributed surplus, is recorded as an increase
      to share capital.                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | The Company uses the Black-Scholes option valuation model
      to calculate the fair value of share purchase options at the date of
      grant. Option valuation models require the input of highly subjective
      assumptions, including the expected price volatility. Changes in these
      assumptions can materially affect the fair value estimate.                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | f) | Basic and Diluted Loss Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | Basic loss per share is computed by dividing the net loss
      available to common shareholders by the weighted average number of common
      shares outstanding during the year. Diluted earnings per share reflect the
      potential dilution of securities that could share in earnings of an
      entity.                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | In a loss year, potentially dilutive common shares are
      excluded from the loss per share calculation as the effect would be
      anti-dilutive. Basic and diluted loss per share are the same for the years
      presented.                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    | For the years ended March 31, 2008, 2007 and 2006,
      potentially dilutive common shares (relating to options and warrants
      outstanding at year-end) totalling 36,957,088 (2007: 4,276,742; 2006:
      3,241,742) were not included in the computation of loss per share because
      their effect was anti-dilutive.                                                                                                                                                                                                                                        

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 4         

|Note 2 | Summary of Significant Accounting Policies (contd)
|------ | ----------------------------------------------------

| | g) | Equipment and Depreciation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | Equipment is carried at cost and consists of vehicles,
      computer equipment and office furniture and equipment. Depreciation is
      calculated on the straight-line method over the estimated useful life of
      the asset, being five, three and three years respectively. No depreciation
      is taken on artwork, which has been included in office furniture and
      equipment. Computer software is fully depreciated in the year of
      acquisition.                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | h) | Asset Retirement Obligation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | The fair value of obligations associated with the
      retirement of tangible long-lived assets are recorded in the period it is
      incurred, with a corresponding increase to the carrying amount of the
      related asset. The obligations recognized are statutory, contractual or
      legal obligations. The liability is accreted over time for changes in the
      fair value of the liability through charges to accretion, which is
      included in depletion, depreciation and accretion expense. The costs
      capitalized to the related assets are amortized in a manner consistent
      with the depletion and depreciation of the related asset.                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | At March 31, 2008, and 2007 there were no significant
      asset retirement obligation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | i) | Impairment of Long-lived Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | Canadian generally accepted accounting principles require
      that long-lived assets and intangibles to be held and used by the Company
      be reviewed for possible impairment whenever events or changes in
      circumstances indicate that the asset may not be recoverable. If changes
      in circumstances indicate that the carrying amount of an asset that an
      entity expects to hold and use may not be recoverable, future cash flows
      expected to result from the use of the asset and its disposition must be
      estimated. If the undiscounted value of the future cash flows is less than
      the carrying amount of the asset, impairment is recognized.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | j) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | Monetary items denominated in a foreign currency are
      translated into Canadian dollars at exchange rates prevailing at the
      balance sheet date and non-monetary items are translated at exchange rates
      prevailing when the assets were acquired or obligations incurred. Foreign
      currency denominated revenue and expense items are translated at exchange
      rates prevailing at the transaction date. Gains or losses arising from the
      translations are included in operations.                                                                                                                                                                              

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 5         

|Note 2 | Summary of Significant Accounting Policies (contd)
|------ | ----------------------------------------------------

| | j) | Foreign Currency Translation (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | The Company considers its US subsidiary to be an
      integrated foreign operation and as such the financial statements of the
      subsidiary are translated using the temporal method. Under this method
      monetary items of the US subsidiary are translated into Canadian dollars
      at exchange rates prevailing at the balance sheet date, non-monetary items
      are translated at exchange rates prevailing when the assets were acquired
      or obligations incurred and revenue and expense items are translated at
      exchange rates prevailing at the transaction date. Gains or losses arising
      from the translation are included in operations.                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | k) | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | On April 1, 2007, the Company adopted CICA Handbook
      Sections 1530, Comprehensive Income, Section 3251, Equity, Section
      3855, Financial Instruments  Recognition and Measurement, Section 3861,
      Financial Instruments  Disclosure and Presentation and Section 3865,
      Hedges. Section 1530 establishes standards for reporting and presenting
      comprehensive income, which is defined as the change in equity from
      transactions and other events from non-owner sources. Other comprehensive
      income refers to items recognized in comprehensive income that are
      excluded from net income calculated in accordance with Canadian generally
      accepted accounting principles.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | Section 3861 establishes standards for presentation of
      financial instruments and non-financial derivatives and identifies the
      information that should be disclosed about them. Under the new standards,
      policies followed for periods prior to the effective date generally are
      not reversed and, therefore, the comparative figures have not been
      restated. Section 3865 describes when and how hedge accounting can be
      applied as well as the disclosure requirements. Hedge accounting enables
      the recording of gains, losses, revenues and expenses from derivative
      financial instruments in the same period as for those related to the
      hedged item.                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    | Section 3251 establishes new standards on the
      presentation of equity and changes in equity require a separate
      presentation of the components of equity including retained earnings,
      accumulated other comprehensive income, contributed surplus, share capital
      and revenues and the changes therein.                                                                                                                                                                                                                                                                                                                                                                                                            

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 6         

|Note 2 | Summary of Significant Accounting Policies (contd)
|------ | ----------------------------------------------------

| | k) | Financial Instruments (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Section 3855 prescribes when a financial asset, financial
      liability or non-financial derivative is to be recognized on the balance
      sheet and at what amount, requiring fair value or cost-based measures
      under different circumstances. Under Section 3855, financial instruments
      must be classified into one of these five categories: held-for- trading,
      held-to-maturity, loans and receivables, available-for-sale financial
      assets or other financial liabilities. All financial instruments,
      including derivatives, are measured in the balance sheet at fair value
      except for loans and receivables, held-to- maturity investments and other
      financial liabilities which are measured at amortized cost. Subsequent
      measurement and changes in fair value will depend on their initial
      classification, as follows: held-for-trading financial assets are measured
      at fair value and changes in fair value are recognized in net earnings;
      available-for-sale financial instruments are measured at fair value with
      changes in fair value recorded in other comprehensive income until the
      investment is derecognized or impaired at which time the amounts would be
      recorded in net earnings.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Under adoption of these new standards, the Company
      designated other receivables as loans and receivables. They are recorded
      at cost, which on initial recognition represents their fair value.
      Subsequent valuations are recorded at amortized cost using the effective
      interest method. Accounts payable and accrued liabilities are classified
      as other financial liabilities, which are measured initially at fair
      value. Subsequent valuations are recorded at amortized cost using the
      effective interest method. The Company designated its cash and cash
      equivalent as held-for-trading which is measured at fair value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The adoption of these Handbook Sections had no impact on
      opening deficit or accumulated other comprehensive income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | l) | Accounting Policy Choice for Transaction
      Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | On June 1, 2007, the Emerging Issues Committee of the
      CICA issued Abstract No. 166, Accounting Policy Choice for Transaction
      Costs (EIC-166). This EIC addresses the accounting policy choice of
      expensing or adding transaction costs related to the acquisition of
      financial assets and financial liabilities that are classified as other
      than held-for-trading. Specifically, it requires that the same accounting
      policy choice be applied to all similar financial instruments classified
      as other than held-for-trading, but permits a different policy choice for
      financial instruments that are not similar. The Company has adopted
      EIC-166 effective March 31, 2008 and requires retroactive application to
      all transaction costs accounted for in accordance with CICA Handbook
      Section 3855, Financial Instruments  Recognition and Measurement. The
      Company has evaluated the impact of EIC-166 and determined that no
      adjustments are currently required.                                                                                                                                                                                                                                            

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 7         

|Note 2 | Summary of Significant Accounting Policies (contd)
|------ | ----------------------------------------------------

| | m) | Accounting Changes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | As of April 1, 2007, the Company adopted revised CICA
      Section 1506 "Accounting Changes",which provides expanded
      disclosures for changes in accounting policies, accounting estimates and
      corrections of errors. Under the new standard, accounting changes should
      be applied retrospectively unless otherwise permitted or where
      impracticable to determine. As well, voluntary changes in an accounting
      policy are made only when required by a primary source of GAAP or when the
      change results in more relevant and reliable information. There is no
      material impact to the Company's financial statements as a result of
      implementing this new standard.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | n) | Cash Distributions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | CICA Handbook Section 1540, Cash Flow Statements, has
      been amended to require additional disclosures where cash distributions
      are made in accordance with a contractual obligation for cash
      distributions. The revised requirements are effective for interim and
      annual financial statements for fiscal years ending on or after March 31,
      2007. The adoption of this section did not result in any changes on the
      disclosure within the financial statements.                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | o) | Future Accounting Changes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Capital Disclosures and financial Instruments 
      Disclosures and Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | On December 1, 2006, the CICA issued three new accounting
      standards: Handbook Section 1535, Capital Disclosures, Handbook Section
      3862, Financial Instruments  Disclosures, and Handbook Section 3863,
      Financial instruments  Presentation. These standards are effective for
      interim and annual financial statements for the Companys reporting period
      beginning on April 1, 2008.                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Section 1535 specifies the disclosure of (i) an entitys
      objectives, policies and processes for managing capital; (ii) quantitative
      data about what the entity regards as capital; (iii) whether the entity
      has complied with any capital requirements; and (iv) if it has not
      complied, the consequences of such non-compliance.                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The new Sections 3862 and 3863 replace Handbook Section
      3861, Financial Instruments  Disclosure and Presentation, revising and
      enhancing its disclosure requirements, and carrying forward unchanged its
      presentation requirements. These new sections place increased emphasis on
      disclosures about the nature and extent of risks arising from financial
      instruments and how the entity manages those risks.                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The Company is currently assessing the impact of these
      new accounting standards on its financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 8         

|Note 2 | Summary of Significant Accounting Policies (contd)
|------ | ----------------------------------------------------

| | o) | Future Accounting Changes (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | International Financial Reporting Standards
      (IFRS)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | In 2006, the Canadian Accounting Standards Board (AcSB)
      published a new strategic plan that will significantly affect financial
      reporting requirements for Canadian companies. The AcSB strategic plan
      outlines the convergence of Canadian generally accepted accounting
      principles (GAAP) and IFRS over an expected five year transitional
      period. In February 2008 the AcSB announced that 2011 is the changeover
      date for publicly-listed companies to use IFRS, replacing Canadas own
      GAAP. The date is for interim and annual financial statements relating to
      fiscal years beginning on or after January 1, 2011. The transition date of
      January 1, 2011 will require the restatement for comparative purposes of
      amounts reported by the Company for the year ended March 31, 2010. While
      the Company has begun assessing the adoption of IFRS for 2011, the
      financial reporting impact of the transition to IFRS cannot be reasonably
      estimated at this time.                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | Goodwill and Intangible Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | The AcSB issued CICA Handbook Section 3064 which replaces
      Section 3062, Goodwill and Other Intangible Assets, and Section 3450,
      Research and Development Costs. This new section establishes standards for
      the recognition, measurement, presentation and disclosure of goodwill
      subsequent to its initial recognition and of intangible assets. Standards
      concerning goodwill remain unchanged from the standards included in the
      previous Section 3062. The section applies to interim and annual financial
      statements relating to fiscal years beginning on or after October 1, 2008.
      Accordingly, the Company will adopt the new standards for its fiscal year
      beginning April 1, 2009. It establishes standards for the recognition,
      measurement, presentation and disclosure of goodwill subsequent to its
      initial recognition and of intangible assets by profit-oriented
      enterprises. Standards concerning goodwill are unchanged from the
      standards included in the previous Section 3062. The Company is currently
      evaluating the impact of the adoption of this new Section on its financial
      statements.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | Assessing Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | The Canadian Accountability Standards Board (AcSB) AcSB
      amended CICA Handbook Section 1400, to include requirements for management
      to assess and disclose an entitys ability to continue as a going concern.
      This section applies to interim and annual financial statements relating
      to fiscal years beginning on or after January 1, 2008. The adoption of
      this Section is not expected to result in any material changes on the
      disclosure within the financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 9         

|Note 3 | Equipment
|------ | ---------

| |                                |   | 2008    | 
| | ------------------------------ | - | ------- | 
| |                                |   |         | 
| |                                |   | Cost    | 
| |                                |   |         | 
| | Office furniture and equipment | $ | 83,867  | 
| | Computer equipment             |   | 86,259  | 
| | Vehicles - exploration         |   | 66,460  | 
| |                                |   |         | 
| |                                | $ | 236,586 | 

| |                                |   | 2007   | 
| | ------------------------------ | - | ------ | 
| |                                |   |        | 
| |                                |   | Cost   | 
| |                                |   |        | 
| | Office furniture and equipment | $ | 10,943 | 
| | Computer equipment             |   | 13,394 | 
| |                                |   |        | 
| |                                | $ | 24,337 | 

|Note 4 | Mineral Properties Note 6
|------ | --------------------------

| | a) | Winnemucca Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Pursuant to an option agreement dated December 3, 2004
      and amended January 7, 2005, February 25, 2005, April 21, 2005, January
      26, 2006, April 27, 2006, June 16, 2006, July 7, 2006, with Golden Sands
      Exploration Inc. (Golden) and its subsidiary company AHL Holdings Ltd.
      (AHL), the Company was granted the right to acquire a 100% interest in
      unpatented mining claims (referred to as Golden Arc claims), located in
      Humboldt County, Nevada (the Winnemucca Property). In order to exercise
      its interest the Company must make aggregatet payments of US$80,000 (paid)
      and issue 1,800,000 shares (issued) and incur exploration expenditures of
      US$4,000,000, pay various costs related to amending the agreement . In
      addition the Company staked additional unpatented mining claims.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | On April 11, 2007, the Company paid US$10,000 to extend
      certain terms of the agreement and on October 17, 2007 the Company further
      amended the option agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Pursuant to an earn-in agreement between the Company and
      Meridian Gold Inc. (subsequently assigned to Meridian Minerals Corp.
      (Meridian)) dated July 31, 2006, the Company agreed to grant Meridian an
      earn-in to acquire, directly or indirectly, an undivided 70% interest in
      Evolvings option to purchase 100% of the right, title and interest in the
      Winnemucca Claims.                                                                                                                                                                                                                                                                                                                                                                                                                                                       

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 10        

|Note 4 | Mineral Properties Note 6  (contd)
|------ | -------------------------------------

| | a) | Winnemucca Property (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    | In December 2007, Meridian terminated their earn-in
      agreement and in February, 2008, the Company decided to terminate its own
      option agreement with Golden and wrote off $1,235,889 in deferred
      expenditures relating to this property.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | b) | Battle Mountain  Sheep Creeks Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    | In September, 2007 the Company signed a Letter of Intent
      to enter into an agreement with Newmont USA Limited, Newmont Capital
      Limited and Elko Land and Livestock Company (collectively Newmont)
      concerning an exploration partnership on the Sheep Creeks Property and
      four other prospective gold project areas in Nevada. Three of these
      properties are now herein referred to as Boulder Valley, Carlin, and
      Cottonwood Creek. The fourth property, identified as Susie Creek, has had
      no expenditures incurred on its behalf during the current fiscal year. A
      Mineral Lease, Sublease and Agreement was subsequently signed effective
      November 28, 2007. Under the terms of this Agreement Newmont would lease
      or sublease to Evolving its interest in certain lands, unpatented mining
      claims and fee interests in these areas, subject to a back-in right in
      exchange for Evolving:

| |  | Assuming all of Newmonts lease obligations insofar as
      they pertain to these project areas.                                                                                                                                                                                                                           
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                             
| |  | Incurring exploration expenditures on each of the four
      project areas and aggregate exploration expenditures of $3,500,000 over
      five years for a total of US$14,000,000, with 70% of such expenditures in
      direct drilling costs and an initial $200,000 expenditure in each Project
      Area, as follows:
| |  |                                                                                                                                                                                                                                                                                                                             
| |  |                                                                                                                                                                                                                                                                                                                             
| |  |                                                                                                                                                                                                                                                                                                                             
| |  |                                                                                                                                                                                                                                                                                                                             
| |  |                                                                                                                                                                                                                                                                                                                             
| |  |                                                                                                                                                                                                                                                                                                                             
| |  |                                                                                                                                                                                                                                                                                                                             
| |  | In the event Newmont or the Company acquire any interest
      in minerals within the Susie Creek project area, Evolving will need to
      incur US$3,500,000 in exploration expenditures over a similar five year
      period from the acquisition date then determined.                                                 
| |  |                                                                                                                                                                                                                                                                                                                             
| |  | Reimburse Newmont for all payments and filings necessary
      to keep the properties in good standing.                                                                                                                                                                                                                     
| |  |                                                                                                                                                                                                                                                                                                                             
| |  | Provide semi-annual reports to Newmont for each project
      areas work program and costs incurred, the first year-end report to be
      delivered by August 1, 2008.                                                                                                                                                    

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 11        

|Note 4 | Mineral Properties Note 6  (contd)
|------ | -------------------------------------

| | b) | Battle Mountain  Sheep Creeks Property
      (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | After one year Newmont can elect to terminate the
      agreement and enter into one or more joint venture agreements with the
      Company covering all or portions of each project area. Newmont may earn a
      51% interest in the joint venture property by expending on the property
      200% of the exploration expenditures made by the Company from the date of
      the agreement to the date Newmont elects to exercise their joint venture
      option and may elect to earn an additional 19% interest in the joint
      venture property by expending on the property an additional 150% of the
      Companys expenditures on the joint venture property.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | The Company will have the right to provide sixty days
      written notice at any time after making a total of $200,000 in exploration
      expenditures on each project area to surrender the agreement as to all or
      any part of these properties.                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | If the Company decides to commence mineral production of
      any project area and Newmont elects not to exercise the joint venture
      option or elects not to complete its earn-in expenditures, Newmont would
      agree to sell its interest in the project area property to the
      Company.                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | c) | Boulder Valley, Carlin, Cottonwood and Jake Creek
      Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | The Boulder Valley, Carlin and Cottonwood Creek
      properties all form part of the Newmont Agreement aforementioned under the
      Battle Mountain  Sheep Creeks property.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | In December, 2007, the Company increased its exploration
      activities in north-central Nevada and acquired additional claims near the
      Sheep Creeks area (the Jake Creek property).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 12        

|Note 4 | Mineral Properties Note 6  (contd)
|------ | -------------------------------------

| | d) | Fisher Canyon, Alpha Butte and Siesta
      Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The Company has acquired by staking three properties
      consisting of Fisher Canyon, Alpha Butte and Siesta Properties. The Fisher
      Canyon property mining claims lie on the east side of the Humboldt Range.
      In December 2007 the Company commenced a drilling program on this
      property.                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | In February 2008, the Company signed a Letter of Intent
      with an individual to acquire an undivided 100% interest in and to all of
      the unpatented mining claims near Fisher Canyon property in exchange for
      scheduled payments as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The Company will pay an NSR on production of 3% to the
      individual and has the exclusive right and option to purchase 50% of the
      royalty for US$150,000 within three years of the Letter of
      Intent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | e) | Rye Patch Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | During the year ended March 31, 2008, the Company also
      acquired, by staking, an interest in an additional Nevada mineral
      property. Management has decided not to pursue development of this
      property and accordingly deferred exploration costs of $49,199 incurred to
      date on this property have been written down.                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | f) | Rattlesnake Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | In July 2007, the Company entered into a Letter of Intent
      with Golden Predator Mines, Inc. and Golden Predator Mines (US) Inc.
      (collectively GPM) for the acquisition of Golden Predators mining
      option on a 100% interest in Bald Mountain Mining Companys (BMM)
      Rattlesnake Hills mineral property located in Natrona County,
      Wyoming.                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | On December 11, 2007 BMM signed an amended and restated
      Option Agreement with GPM with respect to BMM acquiring a 100% interest in
      this property. On January 15, 2008 a Letter of Agreement was signed to
      formalize the terms by which BMM would assign its interest in the amended
      and restated Rattlesnake Hills Option Agreement to the Company. Under the
      terms of the January 15, 2008 Letter of Agreement, the Company would
      acquire its interest in the property option from BMM in exchange for the
      issue of cash of US$200,000 (paid) and the issuance of 400,000 shares
      which has been valued at the share price at the date of issuance (issued
      at March 31, 2008).

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 13        

|Note 4 | Mineral Properties Note 6  (contd)
|------ | -------------------------------------

| | f) | Rattlesnake Property (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | On January 16, 2008, the Company signed a property option
      agreement with GPM. Under the terms of this Agreement, the Company can
      acquire up to a 100% interest in the Rattlesnake Hills Property in
      exchange for: Shares to be issued                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | The 1,000,000 shares have been valued at the share price
      at the date of issuance. Incurring exploration expenditures of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | As part of the agreement GPM will retain a 0.5% NSR with
      respect to the property and the Company will have the option to purchase
      0.25% of that NSR for US$375,000. The property is currently subject to a
      4% NSR payable to the underlying owners. In addition the Company will act
      as the Operator with respect to this property. Also pursuant to the terms
      of the agreement, at any time during the term of this agreement GPM shall
      have the right to purchase up to 10% of the shares offered in private
      placements undertaken by the Company, such purchase to be at the same
      terms and conditions as other purchasers participating in the
      offering.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | On March 7, 2008 the Company signed a Letter of Agreement
      with GPM whereby GPM would be able to purchase 1,000,000 units in the
      Company for total proceeds of $1,000,000. These units were subsequently
      issued and the $1,000,000 proceeds were received in April, 2008. Each unit
      price is calculated based on volume weighted average market price for five
      consecutive trading days prior to the issuance. Each unit was comprised of
      one common share and one-half of a share purchase warrant. One whole
      warrant will entitle the holder to purchase one share at a price of $1.50
      per share expiring in April 10, 2009.                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | A finders fee was paid in connection with this
      transaction by the issuance of 75,000 shares which has been valued at the
      share price at the date of issuance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 14        

|Note 4 | Mineral Properties Note 6  (contd)
|------ | -------------------------------------

| | g) | Malone Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | On April 17, 2006 the Company entered into a quitclaim
      deed and royalty agreement with Newmont North America Exploration Limited
      whereby the Company was granted all rights, title, estate and interest in
      unpatented mineral claims located in Lordsburg, New Mexico, United States
      of America in exchange for payment of US$ 10,000 (paid) and an additional
      US$ 10,000 payable in one year (paid). The agreement is subject to a
      royalty of 2% of net smelter returns.                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | h) | Murray Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | Pursuant to a property option agreement dated July 22,
      2003 and amended September 16, 2004, between the Company and International
      Zimtu Technologies Inc., a public company, the Company had the option to
      earn a 70% undivided interest in certain mineral claims (the Property),
      located 78 kilometres northeast of Yellowknife, Northwest
      Territories.                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | During the year ended March 31, 2006, the Company
      abandoned this option and wrote-off $37,998 in mineral property costs.
      Similarly $11,825 of mineral property costs incurred during the year ended
      March 31, 2007, was also written off.                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | i) | Voisey Bay Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    | Pursuant to an option agreement dated May 4, 2005 between
      the Company and Geocore Exploration Inc. the Company was granted the right
      to acquire a 60% interest in a licence to a mine and explore 192 claims
      located in Labrador, Canada in exchange for $35,000 and the obligation to
      incur exploration expenditures of $500,000 by October 31, 2007. During the
      year ended March 31, 2007, the Company terminated this option agreement
      and wrote-off $80,170 in expenditures related to this
      property.

|Note 5 | Share Capital Note 9
|------ | ---------------------

Escrow Shares:

As at March 31, 2008 there were Nil
  (2007: 199,401) shares held in escrow

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 15        

|Note 5 | Share Capital Note 9  (contd)
|------ | --------------------------------

Commitments:

Warrants

In April 2007, the Company completed a
  private placement of 2,350,000 units at $0.25 per unit resulting in proceeds of
  $587,500 of which $100,000 was included in share subscriptions as at March 31,
  2007. Each unit is comprised of one common share and one share purchase warrant.
  Each warrant will entitle the holder to purchase one common share of the Company
  at a price of $0.35 per share until April 19, 2009. The Company applied the
  residual approach and allocated the total proceeds of $587,500 to the common
  shares and $nil to the attached warrants.

Finders fees for the April, 2007
  private placement were paid by the issue of 55,000 units with a fair value of
  $24,639 consisting of $13,750 for the shares and $10,889 for the warrants.

Also in April 2007, the Company
  completed a private placement of 12,053,000 units at $0.25 per unit resulting in
  proceeds of $3,013,250. Each unit is comprised of one common share and one share
  purchase warrant. Each warrant will entitle the holder to purchase one common
  share of the Company at a price of $0.35 per share until April 26, 2009. The
  Company applied the residual approach and allocated the total proceeds to the
  common shares and $nil to the attached warrants. The agent for this private
  placement elected to receive their commission of 8% of gross proceeds in cash of
  $36,560 together with 818,000 units with a fair value of $400,509 consisting of
  $204,500 for the shares and $196,009 for the warrants. The agent also received
  1,205,300 compensation options which entitle the agent to purchase that number
  of shares at $0.30 per share for two years. Stock based compensation of $288,800
  arising from the issue of these compensation options has been charged to share
  issue costs and credited to contributed surplus.

In July 2007, the Company completed a
  private placement of 14,050,000 units at $0.40 per unit for proceeds of
  $5,620,000. Each unit consisted of one common share and one-half of a share
  purchase warrant. Each whole warrant entitles the holder thereof to purchase one
  additional share of the Company at a price of $0.60 per share until July 25,
  2009. The Company applied the residual approach and allocated the total proceeds
  to the common shares and $nil to the attached warrants. Finders fees for the
  private placement were paid in lieu of cash by the issue of 689,500 units with a
  fair value of $364,877 consisting of $275,800 for the shares and $89,077 for the
  warrants. The Company also paid additional finders fees by paying $211,300 in
  cash and by issuing 816,375 compensation options exercisable at $0.65 per share
  which will expire on July 25, 2009. Stock based compensation of $210,900 arising
  from the issue of these compensation options has been charged to share issue
  costs and credited to contributed surplus.

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 16        

|Note 5 | Share Capital Note 9  (contd)
|------ | --------------------------------

Commitments:  (contd)

Warrants (contd)

In February 2008, the Company
  completed a non-brokered private placement of 2,000,000 units at $1.00 per unit
  for proceeds of $2,000,000. Each unit consisted of one common share and one-half
  of a share purchase warrant. Each whole warrant entitles the holder thereof to
  purchase one additional share of the Company at a price of $1.50 per share until
  February 27, 2010. The Company applied the residual approach and allocated the
  total proceeds to the common shares and $nil to the attached warrants. Finders
  fees for the non-brokered private placement were paid in lieu of cash by the
  issue of 62,790 shares with a fair market value of $62,790. This amount has been
  charged to share issue costs and credited to share capital.

The Company also issued 109,760
  compensation options in connection with this private placement exercisable at
  $1.25 per share which will expire on February 27, 2010. Stock based compensation
  of $165,600 arising from the issue of these compensation options has been
  charged to share issue costs and credited to contributed surplus.

Also in February 2008, the Company
  completed a brokered private placement of 18,000,000 units at $1.00 per unit for
  proceeds of $18,000,000, each unit being identical to those issued under terms
  of the February 2008 non-brokered private placement. The Company applied the
  residual approach and allocated the total proceeds to the common shares and $nil
  to the attached warrants. Finders fees for the brokered private placement were
  paid in lieu of cash by the issue of 1,165,500 units with a fair value of $
  2,044,736 consisting of $1,165,500 for the shares and $879,236 for the warrants.
  The Company also issued 1,260,000 compensation options in connection with this
  non-brokered private placement exercisable at $1.25 per share which will expire
  on February 27, 2010. Stock based compensation of $1,901,000 arising from the
  issue of these compensation options has been charged to share issue costs and
  credited to contributed surplus.

For purposes of the calculations of
  compensation charge associated with agents warrants granted, the following
  assumptions were used for the Black-Scholes model:

| |                         |  | Years ended March 31, | 
| | ----------------------- |  | --------------------- | 
| |                         |  | 2008                  | 
| |                         |  |                       | 
| | Risk-free interest rate |  | 3.05% - 4.69%         | 
| | Expected life           |  | 2 years               | 
| | Expected volatility     |  | 109% - 114%           | 
| | Expected dividends      |  | Nil                   | 

The expected volatility is based on
  the Companys historical share price.

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 17        

|Note 5 | Share Capital Note 9  (contd)
|------ | --------------------------------

Commitments:  (contd)

Warrants (contd)

At March 31, 2008, there were
  29,997,088 share purchase warrants outstanding entitling the holders thereof the
  right to purchase one common share for each warrant held:

| |            |  |  |   |          |  |  |                   |  |  | Weighted         | 
| | ---------- |  |  | - | -------- |  |  | ----------------- |  |  | ---------------- | 
| |            |  |  |   |          |  |  |                   |  |  | Average          | 
| | Number of  |  |  |   | Exercise |  |  |                   |  |  | Remaining        | 
| | Shares     |  |  |   | Price    |  |  | Expiry Date       |  |  | Contractual Life | 
| |            |  |  |   |          |  |  |                   |  |  |                  | 
| | 1,330,713  |  |  | $ | 0.40     |  |  | September 7, 2008 |  |  | 0.44 years       | 
| | 49,125     |  |  | $ | 0.45     |  |  | September 7, 2008 |  |  | 0.44 years       | 
| | 1,700,000  |  |  | $ | 0.35     |  |  | April 19, 2009    |  |  | 1.05 years       | 
| | 7,177,769  |  |  | $ | 0.35     |  |  | April 26, 2009    |  |  | 1.07 years       | 
| | 548,198    |  |  | $ | 0.30     |  |  | April 26, 2009    |  |  | 1.07 years       | 
| | 6,461,715  |  |  | $ | 0.60     |  |  | July 25, 2009     |  |  | 1.32 years       | 
| | 777,058    |  |  | $ | 0.65     |  |  | July 25, 2009     |  |  | 1.32 years       | 
| | 10,582,750 |  |  | $ | 1.50     |  |  | February 27, 2010 |  |  | 1.91 years       | 
| | 1,369,760  |  |  | $ | 1.25     |  |  | February 27, 2010 |  |  | 1.91 years       | 
| |            |  |  |   |          |  |  |                   |  |  |                  | 
| | 29,997,088 |  |  |   |          |  |  |                   |  |  | 1.44 years       | 

In May 2007 the Company received
  exchange approval to change the exercise price of 432,742 warrants issued in May
  2005 from $0.82 to $0.35 per share. Also in May, 2007 321,969 of these warrants
  were exercised for proceeds of $112,689 and the remaining 110,773 warrants
  expired. In September 2007, an additional 290,000 warrants expired. During the
  remainder of the year 9,786,847 warrants were exercised for proceeds of
  $3,723,097. Changes in the year are presented below:

| |                                |  | 2008            |   |   | 2007     | 
| | ------------------------------ |  | --------------- | - | - | -------- | 
| |                                |  | Number of       |   |   | Weighted | 
| |                                |  | Shares issuable |   |   | Average  | 
| |                                |  | Pursuant to     |   |   | Exercise | 
| |                                |  | Warrants        |   |   | Price    | 
| |                                |  |                 |   |   |          | 
| | Outstanding, beginning of year |  | 3,786,742       |   | $ | 0.41     | 
| | Issued                         |  | 36,719,935      |   | $ | 0.77     | 
| | Expired                        |  | (400,773        | ) | $ | 0.49     | 
| | Exercised                      |  | (10,108,816     | ) | $ | 0.38     | 
| |                                |  |                 |   |   |          | 
| | Outstanding, end of year       |  | 29,997,088      |   | $ | 0.86     | 

Subsequent to March 31, 2008 an
  additional 456,269 warrants were exercised for proceeds of $182,511 and 500,000
  warrants were issued pursuant to the Rattlesnake Property option agreement.

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 18        

|Note 5 | Share Capital Note 9  (contd)
|------ | --------------------------------

Commitments:  (contd)

Stock Option Plan and Stock-based
  Compensation

The Company established a share
  purchase option plan (the Plan) in September 2004. In September, 2007
  shareholder approval was obtained to adopt a rolling stock option plan. The
  Board of Directors administers the Plan, pursuant to which the Board of
  Directors may grant from time to time incentive stock options up to an aggregate
  maximum of 10% of the issued and outstanding shares of the Company to directors,
  officers, employees, consultants or advisors. All options granted under the Plan
  shall expire not later than the fifth anniversary of the date the options were
  granted.

The exercise price of an option is
  determined by the Board of Directors, but shall not be less than the market
  price of the common shares of the Company on the TSX on the last business day
  before the date on which the options are granted, less any discount permitted by
  the rules of the exchange. Vesting and terms are at the discretion of the Board
  of Directors. The vesting of options range from a three month period to six
  month period from the date of the grant, at 25% and 33% respectively. Options
  granted for Investor relations vest in accordance with TSX regulation. All
  options are granted for a maximum term of five years.

During the year ended March 31, 2008,
  the Company granted options to directors, officers and consultants as
  follows:

| |           |  |  |   |          |  |   | Stock-based   |  |  |            | 
| | --------- |  |  | - | -------- |  | - | ------------- |  |  | ---------- | 
| |           |  |  |   |          |  |   | Compensation  |  |  |            | 
| | Number of |  |  |   |          |  |   | Attributed to |  |  |            | 
| | Options   |  |  |   | Exercise |  |   | Vested        |  |  | Vesting    | 
| | Granted   |  |  |   | Price    |  |   | Options       |  |  | Provisions | 
| |           |  |  |   |          |  |   |               |  |  |            | 
| | 2,060,000 |  |  | $ | 0.42     |  | $ | 693,700       |  |  | Vested     | 
| | 200,000   |  |  | $ | 0.50     |  |   | 78,800        |  |  | Vested     | 
| | 250,000   |  |  | $ | 0.35     |  |   | 238,457       |  |  | 1⁄2 vested   | 
| | 650,000   |  |  | $ | 0.40     |  |   | 188,800       |  |  | Vested     | 
| | 1,145,000 |  |  | $ | 0.80     |  |   | 951,500       |  |  | Vested     | 
| | 435,000   |  |  | $ | 0.88     |  |   | 399,000       |  |  | Vested     | 
| | 3,000,000 |  |  | $ | 1.70     |  |   | 2,291,667     |  |  | 1/3 vested | 
| |           |  |  |   |          |  |   |               |  |  |            | 
| | 7,740,000 |  |  |   |          |  | $ | 4,841,924     |  |  |            | 

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 19        

|Note 5 | Share Capital Note 9  (contd)
|------ | --------------------------------

Commitments:  (contd)

Stock Option Plan and Stock-based
  Compensation (contd)

Details of stock options outstanding
  as at March 31, 2008 are as follows:

| | Number of |  |  |   | Exercise |  |  |                    | 
| | --------- |  |  | - | -------- |  |  | ------------------ | 
| | Shares    |  |  |   | Price    |  |  | Expiry Date        | 
| |           |  |  |   |          |  |  |                    | 
| | 240,000   |  |  | $ | 0.36     |  |  | April 7, 2011      | 
| | 1,315,000 |  |  | $ | 0.42     |  |  | May 2, 2012        | 
| | 200,000   |  |  | $ | 0.50     |  |  | May 13, 2012       | 
| | 250,000   |  |  | $ | 0.35     |  |  | September 1, 2012  | 
| | 375,000   |  |  | $ | 0.40     |  |  | September 21, 2012 | 
| | 1,145,000 |  |  | $ | 0.80     |  |  | November 28, 2012  | 
| | 435,000   |  |  | $ | 0.88     |  |  | January 23, 2013   | 
| | 3,000,000 |  |  | $ | 1.70     |  |  | March 4, 2013      | 
| |           |  |  |   |          |  |  |                    | 
| | 6,960,000 |  |  |   |          |  |  |                    | 

At March 31, 2008, of the total
  outstanding share purchase options, 4,835,000 (2007: 490,000) with a weighted
  average exercise price of $0.56 were exercisable.

A summary of the status of the stock
  option plan as of March 31, 2008 and 2007 and changes during the years then
  ended is presented below:

| |                                |  | 2008       |  
| | ------------------------------ |  | ---------- | -
| |                                |  |            |  
| |                                |  |            |  
| |                                |  |            |  
| |                                |  | Number of  |  
| |                                |  | Options    |  
| |                                |  |            |  
| | Outstanding, beginning of year |  | 490,000    |  
| | Granted                        |  | 7,740,000  |  
| | Cancelled                      |  | (45,000    | )
| | Exercised                      |  | (1,225,000 | )
| |                                |  |            |  
| | Outstanding, end of year       |  | 6,960,000  |  

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 20        

|Note 5 | Share Capital Note 9  (contd)
|------ | --------------------------------

Commitments:  (contd)

Stock Option Plan and Stock-based
  Compensation (contd)

| |                                |  | 2007      |  
| | ------------------------------ |  | --------- | -
| |                                |  |           |  
| |                                |  |           |  
| |                                |  |           |  
| |                                |  | Number of |  
| |                                |  | Options   |  
| |                                |  |           |  
| | Outstanding, beginning of year |  | 585,000   |  
| | Granted                        |  | 430,000   |  
| | Cancelled                      |  | (525,000  | )
| |                                |  |           |  
| | Outstanding, end of year       |  | 490,000   |  

Subsequent March 31, 2008, an
  additional 51,500 options were exercised for proceeds of $18,025.

The weighted fair value of the share
  purchase options granted during the year ended March 31, 2008 of $0.79 per
  option (2007: $0.30; 2006: $0.46) is estimated using the Black-Scholes option
  valuation model with the following assumptions:

| |                                 |  | 2008        |  |  | 2007    |  |  | 2006        | 
| | ------------------------------- |  | ----------- |  |  | ------- |  |  | ----------- | 
| |                                 |  |             |  |  |         |  |  |             | 
| | Average risk-free interest rate |  | 3.4% - 4.3% |  |  | 4.13%   |  |  | 3.4% - 3.8% | 
| | Expected life                   |  | 5 years     |  |  | 5 years |  |  | 4  5 years | 
| | Expected volatility             |  | 112% - 117% |  |  | 118%    |  |  | 111% - 125% | 
| | Expected dividends              |  | Nil         |  |  | Nil     |  |  | Nil         | 

|Note 6 | Related Party Transactions
|------ | --------------------------

Other receivables include $16,972
  (2007: $Nil) and prepaid expenses include $1,125 (2007: $11,360) derived from
  travel and other expense advances to officers.

Accounts payable and accrued
  liabilities include $153,026 (2007: $101,950) due to directors and officers of
  the Company.

Share issue expenses include $170,000
  paid to a significant shareholder as finders fees for the July, 2007 private
  placement (2007: $Nil).

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 21        

|Note 6 | Related Party Transactions (contd)
|------ | ------------------------------------

During the years ended March 31, the
  Company incurred charges to significant shareholders, directors and former
  directors of the Company as follows:

| |                                     |   | 2008      |  |   | 2007    |  |   | 2006    | 
| | ----------------------------------- | - | --------- |  | - | ------- |  | - | ------- | 
| |                                     |   |           |  |   |         |  |   |         | 
| | Consulting                          | $ | 61,159    |  | $ | 39,600  |  | $ | 40,396  | 
| | Director Fees                       |   | 10,000    |  |   | -       |  |   | -       | 
| | Legal                               |   | 177,848   |  |   | -       |  |   | -       | 
| | Management fees                     |   | 673,436   |  |   | 145,059 |  |   | 7,279   | 
| | Promotion and advertising           |   | 177,722   |  |   | 2,812   |  |   |         | 
| | Rent and administration fees        |   | -         |  |   | 3,000   |  |   | 9,000   | 
| | Salaries and employee benefits      |   | 12,997    |  |   | -       |  |   | -       | 
| | Travel                              |   | 126,574   |  |   | 12,901  |  |   | 2,442   | 
| | Deferred exploration costs          |   |           |  |   |         |  |   |         | 
| | - geological consulting             |   | 183,936   |  |   | 110,573 |  |   | 25,000  | 
| | - staking and recording
      costs |   | -         |  |   | 11,825  |  |   | 82,505  | 
| |                                     |   |           |  |   |         |  |   |         | 
| |                                     | $ | 1,423,672 |  | $ | 325,770 |  | $ | 166,622 | 

These transactions were measured by
  the exchange amount, which is agreed upon by the transacting parties.

|Note 7 | Income Taxes
|------ | ------------

A reconciliation of the income tax
  provisions computed at statutory rates to the reported income tax provision is
  as follows:

| |                                                       |   | 2008       |   |   | 2007     |   |   | 2006     |  
| | ----------------------------------------------------- | - | ---------- | - | - | -------- | - | - | -------- | -
| |                                                       |   |            |   |   |          |   |   |          |  
| | Statutory rate                                        |   | 33.5%      |   |   | 34.1%    |   |   | 34.1%    |  
| |                                                       |   |            |   |   |          |   |   |          |  
| | Provision for income taxes based on
      statutory   |   |            |   |   |          |   |   |          |  
| | Canadian combined federal and provincial              |   |            |   |   |          |   |   |          |  
| | income tax rates                                      | $ | (2,926,000 | ) | $ | (284,000 | ) | $ | (202,000 | )
| | Stock-based compensation                              |   | 1,620,000  |   |   | 47,000   |   |   | 77,000   |  
| | Resource Allowance                                    |   | -          |   |   | 13,000   |   |   | -        |  
| | Effect of reduction in statutory rates                |   | 361,000    |   |   | -        |   |   | -        |  
| | Difference in tax rates of foreign
      jurisdiction |   | 3,000      |   |   |          |   |   | -        |  
| | Change in valuation allowance                         |   | 942,000    |   |   | 224,000  |   |   | 125,000  |  
| |                                                       |   |            |   |   |          |   |   |          |  
| |                                                       | $ | -          |   | $ | -        |   | $ | -        |  

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 22        

|Note 7 | Income Taxes (contd)
|------ | ----------------------

Significant components of the
  Companys future tax assets and liabilities, after applying enacted corporate
  income tax rates, are as follows:

| |                                                           |   | 2008       |   |   | 2007     |  
| | --------------------------------------------------------- | - | ---------- | - | - | -------- | -
| |                                                           |   |            |   |   |          |  
| | Future income tax assets (liabilities)                    |   |            |   |   |          |  
| | Share issue costs                                         | $ | 451,000    |   | $ | 4,000    |  
| | Equipment                                                 |   | 17,000     |   |   | 1,000    |  
| | Mineral properties and related deferred
      exploration |   | 324,000    |   |   | (13,000  | )
| | Non-capital losses
      carried forward                  |   | 1,105,000  |   |   | 396,000  |  
| |                                                           |   |            |   |   |          |  
| |                                                           |   | 1,897,000  |   |   | 388,000  |  
| | Less: valuation allowance                                 |   | (1,897,000 | ) |   | (388,000 | )
| |                                                           |   |            |   |   |          |  
| |                                                           | $ | -          |   | $ | -        |  

The Company recorded a valuation
  allowance against its future income tax assets, based on the extent to which it
  is more likely-than-not that sufficient taxable income will not be realized
  during the carry-forward periods to utilize all the future tax assets.

At March 31, 2008, the Company has
  accumulated non-capital losses totalling approximately $3,882,000 in Canada and
  275,000 in the US and resource related deductions of $5,859,000 that may be
  applied against future years taxable income in Canada. The non-capital losses
  expire as follows:

| |      |   | Canada    |  |   | US      |  |   | Total     | 
| | ---- | - | --------- |  | - | ------- |  | - | --------- | 
| | 2011 | $ | 120,000   |  | $ | -       |  | $ | 120,000   | 
| | 2015 |   | 224,000   |  |   | -       |  |   | 224,000   | 
| | 2026 |   | 278,000   |  |   | -       |  |   | 278,000   | 
| | 2027 |   | 539,000   |  |   | -       |  |   | 539,000   | 
| | 2028 |   | 2,721,000 |  |   | 275,000 |  |   | 2,996,000 | 
| |      |   |           |  |   |         |  |   |           | 
| |      | $ | 3,882,000 |  | $ | 275,000 |  | $ | 4,157,000 | 

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 23        

|Note 8 | Segmented Information
|------ | ---------------------

The Company operates in one reportable
  operating segment, being the exploration and evaluation of mineral properties
  for development. Geographical information is as follows:

| |                |   | Years ending March 31, |  
| | -------------- | - | ---------------------- | -
| |                |   | 2008                   |  
| |                |   | Canada                 |  
| | Net loss       | $ | (7,103,955             | )
| | Current assets | $ | 24,793,435             |  
| | Mineral        |   |                        |  
| | Properties     | $ | -                      |  
| | Equipment      | $ | 45,290                 |  

|Note 9 | Subsequent Events Notes 4 and 5
|------ | --------------------------------

| | a) | Effective April 1, 2008, the Company has signed a
      two-year employment agreement with the President of the Company whereby
      the Company will pay fixed monthly management fees of US$12,000.                                                                                                                                                  
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                         
| | b) | Effective April 21, 2008 the Company negotiated a
      two-year consulting agreement to pay $6,500 per month for corporate
      communications services.                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                         
| | c) | In April 2008, the company signed a Letter of Intent with
      a certain vendor (Vendor) regarding exclusive lease and sublease of
      Excelsior Springs Property in Esmeralda County, Nevada. The Vendor
      controls that certain property through assignment from a third party.
      Under this binding Letter of Intent, the Company shall:
| |    |                                                                                                                                                                                                                                                                                                                                                         
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| |    |                                                                                                                                                                                                                                                                                                                                                         

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 24        

|Note 9 | Subsequent Events Notes 4 and 5 
      (contd)
|------ | -------------------------------------------------

| |    | The primary term of the Letter of Intent shall be five
      years and so long thereafter as exploration, development or mining is
      being conducted on the property.                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | d) | Effective June 1, 2008, the Companys wholly owned
      subsidiary Evolving Gold Corp, signed an office lease agreement expiring
      June 30, 2009 which replaced the original lease agreement signed on August
      1, 2007. The agreement calls for monthly payments of US$ 2,500.                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | e) | Effective June 5, 2008, the Company signed a one-year
      employment agreement with the Chief Financial Officer of the Company
      whereby the Company will pay fixed monthly management fees of $13,333. In
      addition, the Company granted 250,000 share purchase options with an
      exercise price of $0.75 per share, which will vest as to one-third (1/3)
      at the end of the three month probationary period, 1/3 after 90 days after
      the end of the probationary period, and 1/3 after 180 days after the end
      of the probationary period with a term of five
      years.

|Note 10 | Commitments Notes 4, 5 and 9
|------- | -----------------------------

| | a) | The Company has signed three employment agreements with
      directors or companies controlled by directors of the Company whereby the
      Company will pay fixed monthly management fees totalling $25,000. These
      employment agreements have a term of two years and expire on January 31,
      2009.                                                                        
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                         
| | b) | The Company signed an office lease expiring April 30,
      2012 which requires monthly payments of $4,394 plus an applicable portion
      of operating costs. Operating costs are subject to change but are
      currently $3,217 per month. The total estimated annual commitment over the
      term of the lease, based on the current amount of operating costs is
      $91,329.

|Note 11 | Financial Instruments
|------- | ---------------------

Currency Risk

The Company is exposed to foreign
  currency fluctuations as many of the Companys operations are carried out in the
  United States of America. As at March 31, 2008, the Company has in US dollars
  cash of $316,827 (2007: $NIL), and accounts payable of $532,798 (2007: $NIL)
  which are subject to exchange rate fluctuations between Canadian dollar and the
  United States dollar.

|Note 12 | Comparative Figures
|------- | -------------------

Certain comparative figures for the
  year ended March 31, 2007 have been reclassified in order to comply with the
  financial statement presentation adopted for the current year.

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 25        

|Note 13 | Differences Between Canadian and United States Generally Accepted Accounting Principles
|------- | ---------------------------------------------------------------------------------------

The financial statements have been
  prepared in accordance with accounting principles generally accepted in Canada
  (CDN GAAP) that differ in certain respects with those principles and practices
  that the Company would have followed had its financial statements been prepared
  in accordance with accounting principles and practices generally accepted in the
  United States of America (US GAAP).

The Companys CDN GAAP differ from US
  GAAP as follows:

Mineral Properties and Deferred
  Exploration Costs

Under Canadian GAAP mineral property
  acquisition costs and exploration costs may be deferred and amortized to the
  extent they meet certain criteria. Under US GAAP, mineral property acquisition
  costs are considered tangible assets and must be initially capitalized and
  evaluated periodically for impairment. Any exploration costs incurred from that
  point until proven reserves are supported are expensed. The Company has expensed
  mineral property cost as incurred and will capitalize mineral property
  acquisition costs when it has been determined that a mineral property can be
  economically developed as a result of a final feasibility study establishing
  proven and probable reserves. Costs incurred prospectively to develop the
  property are capitalized as incurred and are amortized using the units of
  production method over the estimated life of the ore body based on estimated
  recoverable ounces mined from proven and probable reserves. Therefore,
  additional exploration expenses are required under US GAAP for the years ended
  March 31, 2008, 2007 and 2006.

The Canadian GAAP cash flows relating
  to mineral properties acquired and exploration costs incurred are reported as
  investing activities. For US GAAP, these costs would be characterized as
  operating activities.

Development stage company

Pursuant to US GAAP, the Company would
  be subject to the disclosure requirements applicable to a development stage
  enterprise as the Company is devoting its efforts to establishing commercially
  viable mineral properties. However, the identification of the Company as such
  for accounting purposes does not impact the measurement principles applied to
  these financial statements.

Income taxes

Under Canadian GAAP, future tax assets
  and liabilities may be recorded at substantially enacted tax rates. Under US
  GAAP, deferred tax assets and liabilities are recorded at enacted tax rates.
  There were no significant differences between enacted and substantially enacted
  tax rates.

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 26        

|Note 13 | Differences Between Canadian and United States Generally Accepted Accounting Principles (contd)
|------- | -------------------------------------------------------------------------------------------------

Newly Adopted Accounting
  Pronouncements

On January 1, 2007, the Company
  adopted Financial Accounting Standards Board (FASB) Interpretation No. 48,
  Accounting for Uncertainty in Income Taxes. The interpretation clarifies the
  accounting for uncertainty in income taxes recognized in a companys financial
  statements in accordance with Statement of Financial Accounting Standards No.
  109, Accounting for Income Taxes. This interpretation provides guidance on
  recognition and measurement of uncertainties in income taxes and is effective
  for the Companys 2007 fiscal year end. The adoption of FIN 48 did not have a
  significant impact on the Companys results of operations or financial position.

The FASB has issued Statement of
  Financial Accounting Standards (SFAS) 157, Fair Value Measurements, which
  defines fair value, establishes a framework for consistently measuring fair
  value under GAAP and expands disclosures about fair value measurements. SFAS 157
  is to be effective as of the first fiscal year that begins after November 15,
  2007. In February 2008, the FASB deferred the effective date for one year for
  certain non financial assets and non financial liabilities and removed certain
  leasing transactions from its scope. (i.e. for the Companys fiscal year
  beginning April 1, 2009). The adoption of SFAS 157 is not expected to have a
  material effect on the Companys financial position.

In February, 2007, the FASB issued
  SFAS No. 159 The Fair Value Option for Financial Assets and Financial
  Liabilities. This Statement permits all entities to choose, at specified
  election dates, to measure eligible items at fair value (the fair value
  option). A business entity shall report unrealized gains and losses on items
  for which the fair value option has been elected in earnings (or another
  performance indicator if the business entity does not report earnings) at each
  subsequent reporting date. Upfront costs and fees related to items for which the
  fair value option is elected shall be recognized in earnings as incurred and not
  deferred. If an entity elects the fair value option for a held-to-maturity or
  available-for sale- security in conjunction with the adoption of this Statement,
  that security shall be reported as a trading security under Statement 115, but
  the accounting for a transfer to the trading category under paragraph 15 (b) of
  Statement 115 does not apply. Electing the fair value option for an existing
  held-to-maturity security will not call into question the intent of an entity to
  hold other debt securities to maturity in the future. This statement is
  effective as of the first fiscal year that begins after November 15, 2007 (i.e.
  for the Companys fiscal year beginning April 1, 2008). The Company is currently
  analyzing the effects of SFAS 159 but does not expect its implementation will
  have a significant impact on the Companys financial condition or results of
  operations.

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 27        

|Note 13 | Differences Between Canadian and United States Generally Accepted Accounting Principles (contd)
|------- | -------------------------------------------------------------------------------------------------

Newly Adopted Accounting
  Pronouncements (contd)

In December 2007, the SEC issued Staff
  Accounting Bulletin (SAB) No. 110 which amends SAB 107 to allow for the
  continued use, under certain circumstances, of the simplified method in
  developing an estimate of the expected term of so-called plain vanilla stock
  options accounted for under FAS 123R, Share-Based Payment. When SAB 107 was
  published, the staff believed that more information about employee exercise
  behavior (e.g., employee exercise patterns by industry or other categories of
  companies) would become available. Therefore, the staff stated in SAB 107 that
  it would not expect the simplified method to be used for stock option grants
  after December 31, 2007. The staff now understands that such information will
  not be widely available by December 31, 2007. Accordingly, the SEC staff will
  accept, under certain circumstances, the use of the simplified method beyond
  December 31, 2007 for plain vanilla options (as described in SAB 110). The
  Company does not believe that SAB 110 will have a significant impact on its
  financial statements.

In December 2007, the FASB issued SFAS
  No. 141 (revised 2007), Business Combinations (FAS 141R), which replaces FAS
  141 and SFAS No. 160, Non-controlling Interest in Consolidated Financial
  Statements, an amendment of ARB No. 51 (FAS 160). FAS 141R establishes
  principles and requirements for how an acquirer in a business combination
  recognizes and measures in its financial statements the identifiable assets
  acquired, the liabilities assumed, and any controlling interest; recognizes and
  measures the goodwill acquired in the business combination or a gain from a
  bargain purchase; and determines what information to disclose to enable users of
  the financial statements to evaluate the nature and financial effects of the
  business combination. FAS 160 require retroactive adoption of the presentation
  and disclosure requirements for existing minority interests. FAS 141R and FAS
  160 shall be applied prospectively on or after an entitys fiscal year that
  begins on or after December 15, 2008. The Company is currently assessing the
  impact that FAS 141R and FAS 160 will have on its consolidated financial
  statements but does not expect that it will have a material impact on the
  consolidated financial statements.

Reconciliation of net loss determined
  in accordance with CDN GAAP to net loss determined under US GAAP are as
  follows:

| |                                         |   | Years ended March 31, |  
| | --------------------------------------- | - | --------------------- | -
| | Statement of Operations                 |   | 2008                  |  
| |                                         |   |                       |  
| | Net loss for the year per Canadian GAAP | $ | (8,742,364            | )
| | Mineral property exploration and        |   |                       |  
| | acquisition costs                       |   | (7,710,367            | )
| |                                         |   |                       |  
| | Net loss and comprehensive loss for the |   |                       |  
| | year per US GAAP                        | $ | (16,452,731           | )
| |                                         |   |                       |  
| | Basic and diluted loss per share per US |   |                       |  
| | GAAP                                    | $ | (0.40                 | )

---

|Evolving Gold Corp.                           
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to the Consolidated Financial Statements
|March 31, 2008 and 2007                       
|(Stated in Canadian Dollars)  Page 28        

|Note 13 | Differences Between Canadian and United States Generally Accepted Accounting Principles (contd)
|------- | -------------------------------------------------------------------------------------------------

The effects of the differences in
  accounting under CDN GAAP and US GAAP on the statements of cash flows and the
  balance sheets are as follows:

| |                                                                  |   | Year ended March 31, |  
| | ---------------------------------------------------------------- | - | -------------------- | -
| | Statement of Cash Flows                                          |   | 2008                 |  
| |                                                                  |   |                      |  
| | Cash flows used in operating activities per
      Canadian       |   |                      |  
| | GAAP                                                             | $ | (2,657,037           | )
| | Mineral properties acquired and exploration
      costs incurred |   | (5,234,404           | )
| |                                                                  |   |                      |  
| | Cash flows used in operating activities per
      US GAAP        |   | (7,891,441           | )
| |                                                                  |   |                      |  
| | Cash flows used in investing activities per
      Canadian       |   |                      |  
| | GAAP                                                             |   | (5,446,653           | )
| | Mineral properties acquired and exploration
      costs incurred |   | 5,234,404            |  
| |                                                                  |   |                      |  
| | Cash flows provided by investing activities
      per US GAAP    |   | (212,249             | )
| |                                                                  |   |                      |  
| | Cash flows provided by financing activities
      per            |   |                      |  
| | Canadian and US GAAP                                             |   | 32,987,401           |  
| |                                                                  |   |                      |  
| | Effect on foreign exchange on cash per Canadian and US           |   |                      |  
| | GAAP                                                             |   | 9,674                |  
| |                                                                  |   |                      |  
| | Increase (decrease) in cash per Canadian
      and US GAAP       | $ | 24,893,385           |  

| |                                                          |   | March 31,   |   |   | March 31,  |  
| | -------------------------------------------------------- | - | ----------- | - | - | ---------- | -
| | Balance Sheet                                            |   | 2008        |   |   | 2007       |  
| | Total assets per Canadian GAAP                           | $ | 34,216,744  |   | $ | 1,247,737  |  
| | Mineral property exploration and acquisition costs       |   | (8,824,242  | ) |   | (1,113,875 | )
| | Total assets per US GAAP                                 | $ | 25,392,502  |   | $ | 133,862    |  
| | Total liabilities per Canadian and US GAAP               | $ | 821,041     |   | $ | 288,995    |  
| | Shareholders Equity                                     |   |             |   |   |            |  
| | Deficit, per Canadian GAAP                               | $ | (10,718,757 | ) | $ | (1,976,393 | )
| | Mineral property exploration and
      acquisition costs |   | (8,824,242  | ) |   | (1,113,875 | )
| | Deficit, per US GAAP                                     |   | (19,542,999 | ) |   | (3,090,268 | )
| | Share capital per Canadian and US GAAP                   |   | 35,502,433  |   |   | 2,408,045  |  
| | Share subscription                                       |   | -           |   |   | 100,000    |  
| | Contributed surplus per Canadian and US
      GAAP       |   | 8,612,027   |   |   | 427,090    |  
| |                                                          |   | 24,571,461  |   |   | (155,133   | )
| |                                                          | $ | 25,392,502  |   | $ | 133,862    |  



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