----

----

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

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

|   | Colorado                                                       |   | 98-0461154                           |   |
|--------|----------------------------------------------------------------|--------|--------------------------------------|--------|
|   | (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No.) |   |

----

----

----

|   | Item 1. | Financial Statements |
|--------|---------|----------------------|

|   | Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|--------|---------|---------------------------------------------------------------------------------------------|

|   | Item 4. | Controls and Procedures |
|--------|---------|-------------------------|

----

ILSAN

| Item 1. | Financial Statements                                                                                                                                                                |   |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|    | Unaudited Consolidated Balance Sheets as of October 31, 2008 and April 30, 2008                                                                                                     | 4      |
|    | Unaudited Consolidated Statements of Operations for the Three and Six Months Ended October 31, 2008 and 2007 and for the period from Inception on April 3, 1998 to October 31, 2008 | 5      |
|    | Unaudited Consolidated Statements of Stockholders’ Equity and Comprehensive Income for the Six Months Ended October 31, 2008 and 2007                                         | 6      |
|    | Unaudited Consolidated Statements of Cash Flows for the Six Months Ended October 31, 2008 and 2007 and for the period from Inception on April 3, 1998 to October 31, 2008           | 7      |
|    | Unaudited Notes to Consolidated Financial Statements                                                                                                                                | 8      |
|    |                                                                                                                                                                                |   |
| Item 2  | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                                                         | 24     |
| Item 4  | Controls and Procedures                                                                                                                                                             | 32     |

| Item 1A. | Risk Factors                                                | 33 |
|----------|-------------------------------------------------------------|----|
| Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds | 33 |
| Item 4.  | Submission of Matters to a Vote of Security Holders         | 34 |
| Item 6.  | Exhibits                                                    | 34 |
|     | Signatures                                                  | 36 |

----

Table of Contents

| · | the amount and nature of future capital, exploration and development expenditures; |
|--------|------------------------------------------------------------------------------------|

| · | the timing of exploration and development activities; |
|--------|-------------------------------------------------------|

| · | business strategies and development of our business plan and exploration programs; and |
|--------|----------------------------------------------------------------------------------------|

| · | potential estimates as to the volume and nature of petroleum deposits that are expected to be found present when lands are developed in a project. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

UE

|                                                                                                                                                                                               | October 31, 2008                |                       |         | April 30, 2008 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|----------------------------|--------------|----------------|--------|
|                                                                                                                                                                                               | (as restated)    |    (as restated) |         |
| ASSETS                                                                                                                                                                                             |                            |
| Current Assets:                                                                                                                                                                                    |                            |                       |         |
| Cash and cash equivalents                                                                                                                                                                          |                            | $                          | 51,958,179   |           |   | $ | 26,498,038 |   |
| Accounts receivable                                                                                                                                                                                |                            |                       | 2,188,064    |           |   |   | 3,363,642 |   |
| Short-term investments                                                                                                                                                                             |                            |                       | 28,565,556   |           |   |   | 19,811,788 |   |
| Prepaid expenses                                                                                                                                                                                   |                            |                       | 780,770      |           |   |   | 562,593 |   |
| Available for sale securities                                                                                                                                                                      |                            |                       | 29,596       |           |   |   | 390,733 |   |
| Total Current Assets                                                                                                                                                                               |                            |                       | 83,522,165   |           |   |   | 50,626,794 |   |
|                                                                                                                                                                                               |                            |                       |         |           |   |   |   |   |
| Property and Equipment (note 4)                                                                                                                                                                    |                            |                       | 393,954,877  |           |   |   | 459,492,571 |   |
| Total Assets                                                                                                                                                                                       |                            | $                          | 477,477,042  |           |   | $ | 510,119,365 |   |
|                                                                                                                                                                                               |                            |                       |         |           |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                         |                            |
| Current Liabilities:                                                                                                                                                                               |                            |                       |         |           |   |   |   |   |
| Accounts payable (note 13)                                                                                                                                                                         |                            | $                          | 25,370,259   |           |   | $ | 16,400,508 |   |
| Flow-through share premium liability (note 8)                                                                                                                                                      |                            |                       | 1,577,144    |           |   |   | - |   |
| Total Current Liabilities                                                                                                                                                                          |                            |                       | 26,947,403   |           |   |   | 16,400,508 |   |
|                                                                                                                                                                                               |                            |                       |         |           |   |   |   |   |
| Deferred Taxes                                                                                                                                                                                     |                            |                       | 68,105,526   |           |   |   | 93,952,338 |   |
| Asset Retirement Obligation (note 5)                                                                                                                                                               |                            |                       | 3,528,883    |           |   |   | - |   |
|                                                                                                                                                                                               |                            |                       | 98,581,812   |           |   |   | 110,352,846 |   |
| STOCKHOLDERS’ EQUITY                                                                                                                                                                         |                            |
| Capital Stock                                                                                                                                                                                      |                            |                       |         |           |   |   |   |   |
| Preferred stock, par value of $0.001 each, 10,000,000 shares authorized, 1 Series B Preferred share outstanding (note 7)                                                                           |                            |                       | 1            |           |   |   | 1 |   |
| Common stock, par value of $0.001 each, 750,000,000 shares authorized 240,031,644 and 213,861,958 shares outstanding at October 31, 2008 and April 30, 2008 respectively (notes 6, 7, 8, 9 and 10) |                            |                       | 240,031      |           |   |   | 213,862 |   |
| Additional Paid-in Capital                                                                                                                                                                         |                            |                       | 708,453,090  |           |   |   | 602,754,989 |   |
| Deficit Accumulated During Development Stage                                                                                                                                                  |                            |                       | (298,231,612 | )              |   |   | (238,934,700 | ) |
| Other Comprehensive (Loss) Income                                                                                                                                                                  |                            |                       | (31,566,280  | )              |   |   | 36,732,367 |   |
| Total Stockholders’ Equity                                                                                                                                                                   |                            |                       | 378,895,230  |           |   |   | 399,766,519 |   |
| Total Liabilities and Stockholders’ Equity                                                                                                                                                   |                            | $                          | 477,477,042  |           |   | $ | 510,119,365 |   |
| Subsequent events (note 14)                                                                                                                                                                        |                            |                       |         |           |   |   |   |   |
| See Notes to Unaudited Consolidated Financial Statements                                                                                                                                           |                            |                       |         |           |   |   |   |   |

----

Table of Contents

LSA

|                                                                         |   | Three Months EndedOctober 31, |        |   | Six Months EndedOctober 31, |   |        | From Inception on April 3, 1998 through to October 31, |   |
|------------------------------------------------------------------------------|--------|-------------------------------|-------------|--------|-----------------------------|--------|-------------|--------------------------------------------------------|--------|
|                                                                         |   | 2008                          |        |   | 2007                        |   |        | 2008                                                   |   |   | 2007 |   |   | 2008 |   |
|                                                                         |   | (as restated)                 |        |   | (as restated)               |   |        | (as restated)                                          |   |   | (as restated) |   |   | (as restated) |   |
| Expenditures                                                                 |   |                          |        |   |                        |   |        |                                                   |   |   |   |   |   |   |   |
| Exploration costs                                                            |   | $                             | 37,274,533  |   |                        | $      | 17,509,171  |                                                   |   | $ | 47,747,275 |   |   | $ | 22,550,689 |   |   | $ | 182,017,215 |   |
| General and administrative                                                   |   |                          |        |   |                        |   |        |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash consideration                                                           |   |                          | 8,021,344   |   |                        |   | 1,354,112   |                                                   |   |   | 11,659,049 |   |   |   | 3,070,549 |   |   |   | 40,694,740 |   |
| Stock-based consideration (note 9)                                           |   |                          | 9,551,029   |   |                        |   | 8,279,103   |                                                   |   |   | 13,120,186 |   |   |   | 10,149,433 |   |   |   | 135,234,885 |   |
| Depreciation and accretion                                                   |   |                          | 453,436     |   |                        |   | 265,843     |                                                   |   |   | 771,162 |   |   |   | 502,073 |   |   |   | 2,211,554 |   |
|                                                                         |   |                          | 55,300,342  |   |                        |   | 27,408,229  |                                                   |   |   | 73,297,672 |   |   |   | 36,272,744 |   |   |   | 360,158,394 |   |
| Other Items                                                                  |   |                          |        |   |                        |   |        |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                                              |   |                          | (365,802    | )      |                        |   | (541,906    | )                                                      |   |   | (795,080 | ) |   |   | (1,109,870 | ) |   |   | (5,067,798 | ) |
| Gain on extinguishment of certainliabilities                                 |   |                          | -           |   |                        |   | -           |                                                   |   |   | - |   |   |   | - |   |   |   | (936,469 | ) |
| Net loss before income tax recovery and non-controlling shareholder interest |   |                          | 54,934,540  |   |                        |   | 26,866,323  |                                                   |   |   | 72,502,592 |   |   |   | 35,162,874 |   |   |   | 354,154,127 |   |
| Income tax recovery                                                          |   |                          | (10,761,310 | )      |                        |   | (5,599,526  | )                                                      |   |   | (14,205,680 | ) |   |   | (8,585,170 | ) |   |   | (48,228,261 | ) |
|                                                                         |   |                          |        |   |                        |   |        |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss before non-controlling shareholder interest                         |   |                          | 44,173,230  |   |                        |   | 21,266,797  |                                                   |   |   | 58,296,912 |   |   |   | 26,577,704 |   |   |   | 305,925,866 |   |
| Non-controlling shareholder interest (note 6)                                |   |                          | -           |   |                        |   | -           |                                                   |   |   | - |   |   |   | - |   |   |   | (7,694,254 | ) |
| Net Loss                                                                     |   | $                             | 44,173,230  |   |                        | $      | 21,266,797  |                                                   |   | $ | 58,296,912 |   |   | $ | 26,577,704 |   |   | $ | 298,231,612 |   |
|                                                                         |   |                          |        |   |                        |   |        |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss Per Share                                                           |   | $                             | 0.17        |   |                        | $      | 0.10        |                                                   |   | $ | 0.23 |   |   | $ | 0.12 |   |   |   |   |   |
| Weighted Average Number of Common Shares Outstanding (note 7)                |   |                          | 259,498,487 |   |                        |   | 217,655,813 |                                                   |   |   | 255,811,160 |   |   |   | 216,739,261 |   |   |   |   |   |
| See Notes to Unaudited Consolidated Financial Statements                     |   |

----

Table of Contents

LS

|                                                               |   | Common Stock |        |   | Preferred Stock |   |    | Additional Paid in |   |   | Accumulated Other Comprehensive (Loss) |   |   | Deficit Accumulated During the Development |   |   | Total Stockholders’ |   |
|--------------------------------------------------------------------|--------|--------------|-------------|--------|-----------------|--------|---------|--------------------|--------|--------|----------------------------------------|--------|--------|--------------------------------------------|--------|--------|---------------------------|--------|
|                                                               |   | Shares       |        |   | Par Value       |   |    | Shares             |   |   | Par Value                              |   |   | Capital                                    |   |   | Income                    |   |   | Stage |   |   | Equity |   |
| Balance, April 30, 2008, as restated                               |   |         | 213,861,958 |   |            | $      | 213,862 |               |   |   | 1                                      |   |   | $                                          | 1      |   |                      | $      | 602,754,989 |   |   | $ | 36,732,367 |   |   | $ | (239,934,700 | ) |   | $ | 399,766,519 |   |
| Common stock issued for:                                           |   |         |        |   |            |   |    |               |   |   |                                   |   |   |                                       |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                                                               |   |         | 23,784,917  |   |            |   | 23,785  |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | 91,215,543 |   |   |   | - |   |   |   | - |   |   |   | 91,239,328 |   |
| Property (note 4 d))                                               |   |         | 640,000     |   |            |   | 640     |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | 3,717,760 |   |   |   | - |   |   |   | - |   |   |   | 3,718,400 |   |
| Premium on flow-through shares allocated to liability              |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | (1,802,753 | ) |   |   | - |   |   |   | - |   |   |   | (1,802,753 | ) |
| Stock option exercises                                             |   |         | 35,000      |   |            |   | 35      |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | 165,115 |   |   |   | - |   |   |   | - |   |   |   | 165,150 |   |
| Exchange of OQI Sask  Exchangeable Shares                |   |         | 1,709,769   |   |            |   | 1,709   |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | (1,709 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Stock-based compensation expense                                   |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | 13,120,186 |   |   |   | - |   |   |   | - |   |   |   | 13,120,186 |   |
| Share issue costs                                                  |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | (2,238,966 | ) |   |   | - |   |   |   | - |   |   |   | (2,238,966 | ) |
| Proceeds from exercise of subsidiary options (post reorganization) |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | 1,522,925 |   |   |   | - |   |   |   | - |   |   |   | 1,522,925 |   |
| Other comprehensive income                                         |   |         |        |   |            |   |    |               |   |   |                                   |   |   |                                       |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| Transfer of unrealized loss to net loss                            |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | - |   |   |   | 141,970 |   |   |   | - |   |   |   | 141,970 |   |
| Exchange loss on translation                                       |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | - |   |   |   | (68,440,617 | ) |   |   | - |   |   |   | (68,440,617 | ) |
| Net Loss                                                           |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | - |   |   |   | - |   |   |   | (58,296,912 | ) |   |   | (58,296,912 | ) |
| Balance, October 31, 2008, as restated                             |   |         | 240,031,644 |   |            | $      | 240,031 |               |   |   | 1                                      |   |   | $                                          | 1      |   |                      | $      | 708,453,090 |   |   | $ | (31,566,280 | ) |   | $ | (298,231,612 | ) |   | $ | 378,895,230 |   |
|                                                               |   |         |        |   |            |   |    |               |   |   |                                   |   |   |                                       |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, April 30, 2007, as restated                               |   |         | 164,624,278 |   |            | $      | 164,624 |               |   |   | 1                                      |   |   | $                                          | 1      |   |                      | $      | 440,527,975 |   |   | $ | 3,365,649 |   |   | $ | (148,903,384 | ) |   | $ | 295,154,865 |   |
| Common stock issued for:                                           |   |         |        |   |            |   |    |               |   |   |                                   |   |   |                                       |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                                                               |   |         | 20,638,349  |   |            |   | 20,639  |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | 58,365,787 |   |   |   | - |   |   |   | - |   |   |   | 58,386,426 |   |
| Premium on flow-through shares allocated to liability              |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | (1,493,275 | ) |   |   | - |   |   |   | - |   |   |   | (1,493,275 | ) |
| Property                                                           |   |         | 750,000     |   |            |   | 750     |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | 3,291,750 |   |   |   | - |   |   |   | - |   |   |   | 3,292,500 |   |
| Employee compensation                                              |   |         | 44,000      |   |            |   | 44      |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | 116,387 |   |   |   | - |   |   |   | - |   |   |   | 116,431 |   |
| Exchange of OQI Sask Exchangeable Shares                           |   |         | 4,739,079   |   |            |   | 4,739   |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | (4.739 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Stock-based compensation expense                                   |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | 10,033,002 |   |   |   | - |   |   |   | - |   |   |   | 10,033,002 |   |
| Share issue costs                                                  |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | (2,773,486 | ) |   |   | - |   |   |   | - |   |   |   | (2,773,486 | ) |
| Proceeds from exercise of subsidiary options (post reorganization) |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | 289,715 |   |   |   | - |   |   |   | - |   |   |   | 289,715 |   |
| Other comprehensive income                                         |   |         |        |   |            |   |    |               |   |   |                                   |   |   |                                       |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized loss on available for sale securities                   |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | - |   |   |   | (30,393 | ) |   |   | - |   |   |   | (30,393 | ) |
| Exchange gain on translation                                       |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | - |   |   |   | 53,947,493 |   |   |   | - |   |   |   | 53,947,493 |   |
| Net Loss                                                           |   |         | -           |   |            |   | -       |               |   |   | -                                      |   |   |                                       | -      |   |                      |   | - |   |   |   | - |   |   |   | (26,577,704 | ) |   |   | (26,577,704 | ) |
| Balance, October 31, 2007, as restated                             |   |         | 190,795,706 |   |            | $      | 190,796 |               |   |   | 1                                      |   |   | $                                          | 1      |   |                      | $      | 508,353,116 |   |   | $ | 57,282,749 |   |   | $ | (175,481,088 | ) |   | $ | 390,345,574 |   |
|  See Notes to Unaudited Consolidated Financial Statements     |   |

----

Table of Contents

SA

|                                                                             |   | Six Months Ended October 31, |        |   | From Inception on April 3, 1998 Through to October 31, |   |
|----------------------------------------------------------------------------------|--------|------------------------------|-------------|--------|--------------------------------------------------------|--------|
|                                                                             |   | 2008                         |        |   | 2007                                                   |   |   |  2008 |   |
|                                                                             |   | (as restated)                |        |   | (as restated)                                          |   |   | (as restated) |   |
| Operating Activities                                                             |   |                         |        |   |                                                   |   |   |   |   |
| Net loss                                                                         |   | $                            | (58,296,912 | )      |                                                   | $      | (26,577,704 | ) |   | $ | (298,231,612 | ) |
| Non-cash adjustments to net loss                                                 |   |                         |        |   |                                                   |   |   |   |   |   |   |   |
| Stock-based compensation expense                                                 |   |                         | 13,120,186  |   |                                                   |   | 10,033,002 |   |   |   | 88,387,418 |   |
| Deferred income tax recovery                                                     |   |                         | (14,205,680 | )      |                                                   |   | (8,585,170 | ) |   |   | (47,307,087 | ) |
| Depreciation and accretion                                                       |   |                         | 771,162     |   |                                                   |   | 502,073 |   |   |   | 2,211,554 |   |
| Operating expenses paid with shares                                              |   |                         | -           |   |                                                   |   | 116,431 |   |   |   | 11,070,439 |   |
| Non-controlling shareholder interest                                             |   |                         | -           |   |                                                   |   | - |   |   |   | (7,694,254 | ) |
| Non-cash financing expense                                                       |   |                         | -           |   |                                                   |   | - |   |   |   | 36,472,143 |   |
| Gain on extinguishment of certain liabilities                                    |   |                         | -           |   |                                                   |   | - |   |   |   | (936,469 | ) |
| Write off of exploration property                                                |   |                         | -           |   |                                                   |   | - |   |   |   | 856,359 |   |
| Other                                                                            |   |                         | 145,908     |   |                                                   |   | - |   |   |   | 272,128 |   |
| Changes in Non-Cash Working Capital                                              |   |                         |        |   |                                                   |   |   |   |   |   |   |   |
| Accounts receivable and prepaid expenses                                         |   |                         | 378,737     |   |                                                   |   | (1,286,181 | ) |   |   | (2,359,201 | ) |
| Accounts payable                                                                 |   |                         | 14,038,472  |   |                                                   |   | 5,659,940 |   |   |   | 32,198,892 |   |
|                                                                             |   |                         |        |   |                                                   |   |   |   |   |   |   |   |
| Cash Used in Operating Activities                                                |   |                         | (44,048,127 | )      |                                                   |   | (20,137,609 | ) |   |   | (185,059,690 | ) |
|                                                                             |   |                         |        |   |                                                   |   |   |   |   |   |   |   |
| Investing Activities                                                             |   |                         |        |   |                                                   |   |   |   |   |   |   |   |
| Capital expenditures                                                             |   |                         | (6,843,535  | )      |                                                   |   | (2,801,889 | ) |   |   | (78,838,768 | ) |
| Short-term investment                                                            |   |                         | (8,753,768  | )      |                                                   |   | - |   |   |   | (28,565,556 | ) |
| Other investments                                                                |   |                         | 116,824     |   |                                                   |   | - |   |   |   | (548,048 | ) |
| Changes in Non-Cash Working Capital                                              |   |                         |        |   |                                                   |   |   |   |   |   |   |   |
| Accounts payable                                                                 |   |                         | 723,676     |   |                                                   |   | - |   |   |   | 723,676 |   |
|                                                                             |   |                         |        |   |                                                   |   |   |   |   |   |   |   |
| Cash used in Investing Activities                                                |   |                         | (14,756,803 | )      |                                                   |   | (2,801,889 | ) |   |   | (107,228,696 | ) |
|                                                                             |   |                         |        |   |                                                   |   |   |   |   |   |   |   |
| Financing Activities                                                             |   |                         |        |   |                                                   |   |   |   |   |   |   |   |
| Issuance of shares for cash                                                      |   |                         | 89,165,512  |   |                                                   |   | 55,612,940 |   |   |   | 328,430,312 |   |
| Bank loan                                                                        |   |                         | -           |   |                                                   |   | (21,207,500 | ) |   |   | - |   |
| Shares issued on exercise of subsidiary options and warrants post reorganization |   |                         | 1,522,925   |   |                                                   |   | 289,715 |   |   |   | 4,176,336 |   |
| Shares issued by subsidiary to non-controlling interest                          |   |                         | -           |   |                                                   |   | - |   |   |   | 7,663,666 |   |
| Convertible debentures                                                           |   |                         | -           |   |                                                   |   | - |   |   |   | 8,384,496 |   |
| Cash Provided by Financing Activities                                            |   |                         | 90,688,437  |   |                                                   |   | 34,695,155 |   |   |   | 348,654,810 |   |
|                                                                             |   |                         |        |   |                                                   |   |   |   |   |   |   |   |
| Inflow of Cash                                                                   |   |                         | 31,883,507  |   |                                                   |   | 11,755,657 |   |   |   | 56,366,424 |   |
| Effects of exchange rate changes on cash                                         |   |                         | (6,423,366  | )      |                                                   |   | 3,240,331 |   |   |   | (4,408,245 | ) |
| Cash and cash equivalents, Beginning of Period                                   |   |                         | 26,498,038  |   |                                                   |   | 32,393,871 |   |   |   | - |   |
| Cash and cash equivalents, End of Period                                         |   | $                            | 51,958,179  |   |                                                   | $      | 47,389,859 |   |   | $ | 51,958,179 |   |
|                                                                             |   |                         |        |   |                                                   |   |   |   |   |   |   |   |
| Non-Cash Financing Activities                                                    |   |                         |        |   |                                                   |   |   |   |   |   |   |   |
| Common stock issued for properties                                               |   | $                            | 3,718,400   |   |                                                   | $      | 3,292,500 |   |   | $ | 10,848,342 |   |
| Warrants granted on purchase of properties                                       |   | $                            | -           |   |                                                   | $      | - |   |   | $ | 1,763,929 |   |
| Common stock issued for services                                                 |   | $                            | -           |   |                                                   | $      | 116,431 |   |   | $ | 10,504,594 |   |
| Common stock issued for debt settlement                                          |   | $                            | -           |   |                                                   | $      | - |   |   | $ | 28,401,029 |   |

----

Table of Contents

ILSA

| 1. | DESCRIPTION OF BUSINESS AND FUTURE OPERATIONS |
|----|-----------------------------------------------|

| 2. | RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS |
|----|--------------------------------------------------|

----

Table of Contents

| As of October 31, 2008                                                                                                              |   | As previously reported |           |   | Restatement adjustment |   |         | As restated |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|----------------|--------|------------------------|--------|--------------|-------------|--------|
|     ASSETS                                                                                                      |   |                   |           |   |                   |   |         |        |   |
| Current Assets:                                                                                                                     |   |                   |           |   |                   |   |         |        |   |
| Cash and cash equivalents                                                                                                           |   | $                      | 51,958,179     |   |                   | $      | -            |        |   | $ | 51,958,179 |   |
| Accounts receivable                                                                                                                 |   |                   | 2,188,064      |   |                   |   | -            |        |   |   | 2,188,064 |   |
| Short-term investments                                                                                                              |   |                   | 28,565,556     |   |                   |   | -            |        |   |   | 28,565,556 |   |
| Prepaid expenses                                                                                                                    |   |                   | 780,770        |   |                   |   | -            |        |   |   | 780,770 |   |
| Available for sale securities                                                                                                       |   |                   | 29,596         |   |                   |   | -            |        |   |   | 29,596 |   |
| Total Current Assets                                                                                                                |   |                   | 83,522,165     |   |                   |   | -            |        |   |   | 83,522,165 |   |
|                                                                                                                                |   |                   |           |   |                   |   |         |        |   |   |   |   |
| Property and Equipment                                                                                                              |   |                   | 509,923,969    |   |                   |   | (115,969,092 | )           |   |   | 393,954,877 |   |
| Total Assets                                                                                                                        |   | $                      | 593,446,134    |   |                   | $      | (115,969,092 | )           |   | $ | 477,477,042 |   |
|     LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                  |   |                   |           |   |                   |   |         |        |   |   |   |   |
| Current Liabilities:                                                                                                                |   |                   |           |   |                   |   |         |        |   |   |   |   |
| Accounts payable                                                                                                                    |   | $                      | 25,370,259     |   |                   | $      | -            |        |   | $ | 25,370,259 |   |
| Flow-through share premium liability                                                                                                |   |                   | 1,577,144      |   |                   |   | -            |        |   |   | 1,577,144 |   |
| Total Current Liabilities                                                                                                           |   |                   | 26,947,403     |   |                   |   | -            |        |   |   | 26,947,403 |   |
| Deferred Taxes                                                                                                                      |   |                   | 102,405,910    |   |                   |   | (34,300,384  | )           |   |   | 68,105,526 |   |
| Asset Retirement Obligations                                                                                                        |   |                   | 3,528,883      |   |                   |   | -            |        |   |   | 3,528,883 |   |
|                                                                                                                                |   |                   | 132,882,196    |   |                   |   | (34,300,384  | )           |   |   | 98,581,812 |   |
|      STOCKHOLDERS’ EQUITY                                                                            |   |                   |           |   |                   |   |         |        |   |   |   |   |
| Capital Stock                                                                                                                       |   |                   |           |   |                   |   |         |        |   |   |   |   |
| Preferred stock, par value of $0.001 each, 10,000,000 shares authorized 1 Series B Preferred share outstanding                      |   |                   | 1              |   |                   |   | -            |        |   |   | 1 |   |
| Common stock, par value of $0.001 each, 750,000,000 shares authorized 240,031,644  shares outstanding at October 31, 2008 |   |                   |   240,031 |   |                   |   |   -     |        |   |   |   240,031 |   |
| Additional Paid-in Capital                                                                                                          |   |                   | 782,892,799    |   |                   |   | (74,439,709  | )           |   |   | 708,453,090 |   |
| Deficit Accumulated During Development Stage                                                                                   |   |                   | (285,912,255   | )      |                   |   | 12,319,357   |        |   |   | (298,231,612 | ) |
| Other Comprehensive Income (Loss)                                                                                                   |   |                   | (36,656,638    | )      |                   |   | 5,090,358    |        |   |   | (31,566,280 | ) |
| Total Stockholders’ Equity                                                                                                    |   |                   | 460,563,938    |   |                   |   | (81,668,708  | )           |   |   | 378,895,230 |   |
| Total Liabilities and Stockholders’ Equity                                                                                    |   | $                      | 593,446,134    |   |                   | $      | (115,969,092 | )           |   | $ | 477,477,042 |   |

----

Table of Contents

| April 30, 2008                                                                                                         |   | As previously reported |                  |   | Restatement adjustment |   |            | As restated |   |
|------------------------------------------------------------------------------------------------------------------------|--------|------------------------|-----------------------|--------|------------------------|--------|-----------------|-------------|--------|
|     ASSETS                                                                                         |   |                   |                  |   |                   |   |            |        |   |
| Current Assets:                                                                                                        |   |                   |                  |   |                   |   |            |        |   |
| Cash and cash equivalents                                                                                              |   | $                      | 26,498,038            |   |                   | $      | -               |        |   | $ | 26,498,038 |   |
| Accounts receivable                                                                                                    |   |                   | 3,363,642             |   |                   |   | -               |        |   |   | 3,363,642 |   |
| Short-term investments                                                                                                 |   |                   | 19,811,788            |   |                   |   | -               |        |   |   | 19,811,788 |   |
| Prepaid expenses                                                                                                       |   |                   | 562,593               |   |                   |   | -               |        |   |   | 562,593 |   |
| Available for sale securities                                                                                          |   |                   | 390,733               |   |                   |   | -               |        |   |   | 390,733 |   |
| Total Current Assets                                                                                                   |   |                   | 50,626,794            |   |                   |   | -               |        |   |   | 50,626,794 |   |
|                                                                                                                   |   |                   |                  |   |                   |   |            |        |   |   |   |   |
| Property and Equipment                                                                                                 |   |                   | 595,611,114           |   |                   |   | (136,118,543    | )           |   |   | 459,492,571 |   |
| Total Assets                                                                                                           |   | $                      | 646,237,908           |   |                   | $      | (136,118,543    | )           |   | $ | 510,119,365 |   |
|     LIABILITIES AND STOCKHOLDERS’ EQUITY                                                     |   |                   |                  |   |                   |   |            |        |   |   |   |   |
| Current Liabilities:                                                                                                   |   |                   |                  |   |                   |   |            |        |   |   |   |   |
| Accounts payable                                                                                                       |   | $                      | 16,400,508            |   |                   | $      | -               |        |   | $ | 16,400,508 |   |
| Total Current Liabilities                                                                                              |   |                   | 16,400,508            |   |                   |   | -               |        |   |   | 16,400,508 |   |
| Deferred Taxes                                                                                                         |   |                   | 137,577,448           |   |                   |   | (43,625,110     | )           |   |   | 93,952,338 |   |
|                                                                                                                   |   |                   | 153,977,956           |   |                   |   | (43,625,110     | )           |   |   | 110,352,846 |   |
|      STOCKHOLDERS’ EQUITY                                                               |   |                   |                  |   |                   |   |            |        |   |   |   |   |
| Capital Stock                                                                                                          |   |                   |                  |   |                   |   |            |        |   |   |   |   |
| Preferred stock, par value of $0.001 each, 10,000,000 shares authorized 1 Series B Preferred share outstanding         |   |                   | 1                     |   |                   |   | -               |        |   |   | 1 |   |
| Common stock, par value of $0.001 each, 500,000,000 shares authorized 213,861,958 shares outstanding at April 30, 2008 |   |                   |     213,862 |   |                   |   |     - |        |   |   | 213,862 |   |
| Additional Paid-in Capital                                                                                             |   |                   | 678,774,284           |   |                   |   | (76,019,295     | )           |   |   | 602,754,989 |   |
| Deficit Accumulated During Development Stage                                                                           |   |                   | (230,306,540          | )      |                   |   | (9,628,160      | )           |   |   | (239,934,700 | ) |
| Other Comprehensive Income (Loss)                                                                                      |   |                   | 43,578,345            |   |                   |   | (6,845,978      | )           |   |   | 36,732,367 |   |
| Total Stockholders’ Equity                                                                                       |   |                   | 492,259,952           |   |                   |   | (92,493,433     | )           |   |   | 399,766,519 |   |
| Total Liabilities and Stockholders’ Equity                                                                       |   | $                      | 646,237,908           |   |                   | $      | (136,118,543    | )           |   | $ | 510,119,365 |   |

----

Table of Contents

| Three Months Ended October 31, 2008                                          |   | As previously reported |        |   | Restatementadjustment |   |    | As restated |   |
|------------------------------------------------------------------------------|--------|------------------------|-------------|--------|-----------------------|--------|---------|-------------|--------|
| Expenditures                                                                 |   |                   |        |   |                  |   |    |        |   |
| Exploration costs                                                            |   | $                      | 37,274,533  |   |                  | $      | -       |        |   | $ | 37,274,533 |   |
| General and administrative                                                   |   |                   |        |   |                  |   |    |        |   |   |   |   |
| Cash consideration                                                           |   |                   | 8,091,693   |   |                  |   | (70,349 | )           |   |   | 8,021,344 |   |
| Stock-based consideration                                                    |   |                   | 9,305,369   |   |                  |   | 245,660 |        |   |   | 9,551,029 |   |
| Depreciation                                                                 |   |                   | 453,436     |   |                  |   | -       |        |   |   | 453,436 |   |
|                                                                         |   |                   | 55,125,031  |   |                  |   | 175,311 |        |   |   | 55,300,342 |   |
| Other Items                                                                  |   |                   |        |   |                  |   |    |        |   |   |   |   |
| Interest income                                                              |   |                   | (365,802    | )      |                  |   | -       |        |   |   | (365,802 | ) |
| Net loss before income tax recovery and non-controlling shareholder interest |   |                   | 54,759,229  |   |                  |   | 175,311 |        |   |   | 54,934,540 |   |
| Income tax recovery                                                          |   |                   | (11,526,008 | )      |                  |   | 764,698 |        |   |   | (10,761,310 | ) |
| Net loss before non-controlling shareholder interest                         |   |                   | 43,233,221  |   |                  |   | 940,009 |        |   |   | 44,173,230 |   |
| Non-controlling shareholder interest                                         |   |                   | -           |   |                  |   | -       |        |   |   | - |   |
| Net loss                                                                     |   | $                      | 43,233,221  |   |                  | $      | 940,009 |        |   | $ | 44,173,230 |   |
| Net Loss Per Share                                                           |   | $                      | (0.17       | )      |                  |   |    |        |   | $ | (0.17 | ) |
| Weighted Average Number of Common Shares Outstanding                         |   |                   | 259,498,487 |   |                  |   |    |        |   |   | 259,498,487 |   |

| Three Months Ended October 31, 2007                                          |   | As previously reported |        |   | Restatement adjustment |   |    | As restated |   |
|------------------------------------------------------------------------------|--------|------------------------|-------------|--------|------------------------|--------|---------|-------------|--------|
| Expenditures                                                                 |   |                   |        |   |                   |   |    |        |   |
| Exploration costs                                                            |   | $                      | 17,509,171  |   |                   | $      | -       |        |   | $ | 17,509,171 |   |
| General and administrative                                                   |   |                   |        |   |                   |   |    |        |   |   |   |   |
| Cash consideration                                                           |   |                   | 1,354,112   |   |                   |   | -       |        |   |   | 1,354,112 |   |
| Stock-based consideration                                                    |   |                   | 7,665,451   |   |                   |   | 613,652 |        |   |   | 8,279,103 |   |
| Depreciation                                                                 |   |                   | 265,843     |   |                   |   |    |        |   |   | 265,843 |   |
|                                                                         |   |                   | 26,794,577  |   |                   |   | 613,652 |        |   |   | 27,408,229 |   |
| Other Items                                                                  |   |                   |        |   |                   |   |    |        |   |   |   |   |
| Interest income                                                              |   |                   | (541,906    | )      |                   |   | -       |        |   |   | (541,906 | ) |
| Net loss before income tax recovery and non-controlling shareholder interest |   |                   | 26,252,671  |   |                   |   | 613,652 |        |   |   | 26,866,323 |   |
| Income tax recovery                                                          |   |                   | (5,814,000  | )      |                   |   | 214,474 |        |   |   | (5,599,526 | ) |
| Net loss before non-controlling shareholder interest                         |   |                   | 20,438,671  |   |                   |   | 828,126 |        |   |   | 21,266,797 |   |
| Non-controlling shareholder interest                                         |   |                   | -           |   |                   |   | -       |        |   |   | - |   |
| Net loss                                                                     |   | $                      | 20,438,671  |   |                   | $      | 828,126 |        |   | $ | 21,266,797 |   |
| Net Loss Per Share                                                           |   | $                      | (0.09       | )      |                   |   |    |        |   | $ | (0.10 | ) |
| Weighted Average Number of Common Shares Outstanding                         |   |                   | 218,370,100 |   |                   |   |    |        |   |   | 218,370,100 |   |

| Six Months Ended October 31, 2008                                            |   | As previously reported |        |   | Restatementadjustment |   |      | As restated |   |
|------------------------------------------------------------------------------|--------|------------------------|-------------|--------|-----------------------|--------|-----------|-------------|--------|
| Expenditures                                                                 |   |                   |        |   |                  |   |      |        |   |
| Exploration costs                                                            |   | $                      | 47,747,275  |   |                  | $      | -         |        |   | $ | 47,747,275 |   |
| General and administrative                                                   |   |                   |        |   |                  |   |      |        |   |   |   |   |
| Cash consideration                                                           |   |                   | 11,774,526  |   |                  |   | (115,477  | )           |   |   | 11,659,049 |   |
| Stock-based consideration                                                    |   |                   | 11,425,123  |   |                  |   | 1,695,063 |        |   |   | 13,120,186 |   |
| Depreciation                                                                 |   |                   | 771,162     |   |                  |   | -         |        |   |   | 771,162 |   |
|                                                                         |   |                   | 71,718,086  |   |                  |   | 1,579,586 |        |   |   | 73,297,672 |   |
| Other Items                                                                  |   |                   |        |   |                  |   |      |        |   |   |   |   |
| Interest income                                                              |   |                   | (795,080    | )      |                  |   | -         |        |   |   | (795,080 | ) |
| Net loss before income tax recovery and non-controlling shareholder interest |   |                   | 70,923,006  |   |                  |   | 1,579,586 |        |   |   | 72,502,592 |   |
| Income tax recovery                                                          |   |                   | (15,317,291 | )      |                  |   | 1,111,611 |        |   |   | (14,205,680 | ) |
| Net loss before non-controlling shareholder interest                         |   |                   | 55,605,715  |   |                  |   | 2,691,197 |        |   |   | 58,296,912 |   |
| Non-controlling shareholder interest                                         |   |                   | -           |   |                  |   | -         |        |   |   | - |   |
| Net loss                                                                     |   | $                      | 55,605,715  |   |                  | $      | 2,691,197 |        |   | $ | 58,296,912 |   |
| Net Loss Per Share                                                           |   | $                      | (0.22       | )      |                  |   |      |        |   | $ | (0.23 | ) |
| Weighted Average Number of Common Shares Outstanding                         |   |                   | 255,811,160 |   |                  |   |      |        |   |   | 255,811,160 |   |

----

Table of Contents

| Six Months Ended October 31, 2007                                            |   | As previously reported |        |   | Restatement adjustment |   |       | As restated |   |
|------------------------------------------------------------------------------|--------|------------------------|-------------|--------|------------------------|--------|------------|-------------|--------|
| Expenditures                                                                 |   |                   |        |   |                   |   |       |        |   |
| Exploration costs                                                            |   | $                      | 22,550,689  |   |                   | $      | -          |        |   | $ | 22,550,689 |   |
| General and administrative                                                   |   |                   |        |   |                   |   |       |        |   |   |   |   |
| Cash consideration                                                           |   |                   | 3,070,549   |   |                   |   | -          |        |   |   | 3,070,549 |   |
| Stock-based consideration                                                    |   |                   | 8,849,658   |   |                   |   | 1,299,775  |        |   |   | 10,149,433 |   |
| Depreciation                                                                 |   |                   | 502,073     |   |                   |   | -          |        |   |   | 502,073 |   |
|                                                                         |   |                   | 34,972,969  |   |                   |   | 1,299,775  |        |   |   | 36,272,744 |   |
| Other Items                                                                  |   |                   |        |   |                   |   |       |        |   |   |   |   |
| Interest income                                                              |   |                   | (1,109,870  | )      |                   |   | -          |        |   |   | (1,109,870 | ) |
| Net loss before income tax recovery and non-controlling shareholder interest |   |                   | 33,863,099  |   |                   |   | 1,299,775  |        |   |   | 35,162,874 |   |
| Income tax recovery                                                          |   |                   | (7,233,944  | )      |                   |   | (1,351,226 | )           |   |   | (8,585,170 | ) |
| Net loss before non-controlling shareholder interest                         |   |                   | 26,629,155  |   |                   |   | (51,451    | )           |   |   | 26,577,704 |   |
| Non-controlling shareholder interest                                         |   |                   | -           |   |                   |   | -          |        |   |   | - |   |
| Net loss                                                                     |   | $                      | 26,629,155  |   |                   | $      | (51,451    | )           |   | $ | 26,577,704 |   |
| Net Loss Per Share                                                           |   | $                      | (0.12       | )      |                   |   |       |        |   | $ | (0.12 | ) |
| Weighted Average Number of Common Shares Outstanding                         |   |                   | 216,739,261 |   |                   |   |       |        |   |   | 216,739,261 |   |

|  Six Months Ended October 31, 2008                                          |   | As previously reported |        |   | Restatementadjustment |   |       | As restated |   |
|----------------------------------------------------------------------------------|--------|------------------------|-------------|--------|-----------------------|--------|------------|-------------|--------|
| Operating Activities                                                             |   |                   |        |   |                  |   |       |        |   |
| Net loss                                                                         |   | $                      | (55,605,715 | )      |                  | $      | (2,691,197 | )           |   | $ | (58,296,912 | ) |
| Non-cash adjustments to net loss                                                 |   |                   |        |   |                  |   |       |        |   |   |   |   |
| Stock-based compensation expense                                                 |   |                   | 11,425,123  |   |                  |   | 1,695,063  |        |   |   | 13,120,186 |   |
| Deferred income tax recovery                                                     |   |                   | (15,317,291 | )      |                  |   | 1,111,611  |        |   |   | (14,205,680 | ) |
| Depreciation                                                                     |   |                   | 771,162     |   |                  |   | -          |        |   |   | 771,162 |   |
| Other                                                                            |   |                   | 145,908     |   |                  |   | -          |        |   |   | 145,908 |   |
| Changes in Non-Cash Working Capital                                              |   |                   |        |   |                  |   |       |        |   |   |   |   |
| Accounts receivable and prepaid expenses                                         |   |                   | 378,737     |   |                  |   | -          |        |   |   | 378,737 |   |
| Accounts payable                                                                 |   |                   | 14,038,472  |   |                  |   | -          |        |   |   | 14,038,472 |   |
| Cash Used in Operating Activities                                                |   |                   | (44,163,604 | )      |                  |   | 115,477    |        |   |   | (44,048,127 | ) |
| Investing Activities                                                             |   |                   |        |   |                  |   |       |        |   |   |   |   |
| Capital expenditures                                                             |   |                   | (6,843,535  | )      |                  |   | -          |        |   |   | (6,843,535 | ) |
| Short-term investment                                                            |   |                   | (8,753,768  | )      |                  |   | -          |        |   |   | (8,753,768 | ) |
| Other investment                                                                 |   |                   | 116,824     |   |                  |   | -          |        |   |   | 116,824 |   |
| Changes in Non-Cash Working Capital                                         |   |                   |        |   |                  |   |       |        |   |   |   |   |
| Accounts payable                                                                 |   |                   | 723,676     |   |                  |   | -          |        |   |   | 723,676 |   |
| Cash Used in Investing Activities                                                |   |                   | (14,756,803 | )      |                  |   | -          |        |   |   | (14,756,803 | ) |
| Financing Activities                                                             |   |                   |        |   |                  |   |       |        |   |   |   |   |
| Issuance of shares for cash                                                      |   |                   | 89,280,989  |   |                  |   | (115,477   | )           |   |   | 89,165,512 |   |
| Shares issued on exercise of subsidiary options and warrants post reorganization |   |                   | 1,522,925   |   |                  |   | -          |        |   |   | 1,522,925 |   |
| Cash Provided by Financing Activities                                            |   |                   | 90,803,914  |   |                  |   | (115,477   | )           |   |   | 90,688,437 |   |
| Inflow of Cash                                                                   |   |                   | 31,883,507  |   |                  |   | -          |        |   |   | 31,883,507 |   |
| Effects of exchange rate changes on cash                                         |   |                   | (6,423,366  | )      |                  |   | -          |        |   |   | (6,423,366 | ) |
| Cash and cash equivalents, Beginning of Period                                   |   |                   | 26,498,038  |   |                  |   | -          |        |   |   | 26,498,038 |   |
| Cash and cash equivalents, End of Period                                         |   | $                      | 51,958,179  |   |                  | $      | -          |        |   | $ | 51,958,179 |   |
| Non-Cash Financing Activities                                                    |   |                   |        |   |                  |   |       |        |   |   |   |   |
| Common stock issued for properties                                               |   | $                      | 3,718,400   |   |                  | $      | -          |        |   | $ | 3,718,400 |   |

----

Table of Contents

| Six Months Ended October 31, 2007                       |   | As previously reported |        |   | Restatementadjustment |   |       | As restated |   |
|---------------------------------------------------------|--------|------------------------|-------------|--------|-----------------------|--------|------------|-------------|--------|
| Operating Activities                                    |   |                   |        |   |                  |   |       |        |   |
| Net loss                                                |   | $                      | (26,629,155 | )      |                  | $      | 51,451     |        |   | $ | (26,577,704 | ) |
| Non-cash adjustments to net loss                        |   |                   |        |   |                  |   |       |        |   |   |   |   |
| Stock-based compensation expense                        |   |                   | 8,733,227   |   |                  |   | 1,299,775  |        |   |   | 10,033,002 |   |
| Deferred income tax recovery                            |   |                   | (7,233,944  | )      |                  |   | (1,351,226 | )           |   |   | (8,585,170 | ) |
| Depreciation                                            |   |                   | 502,073     |   |                  |   | -          |        |   |   | 502,073 |   |
| Flow-through share premium liability                    |   |                   | 116,431     |   |                  |   | -          |        |   |   | 116,431 |   |
| Changes in Non-Cash Working Capital                     |   |                   |        |   |                  |   |       |        |   |   |   |   |
| Accounts receivable and prepaid expenses                |   |                   | (1,286,181  | )      |                  |   | -          |        |   |   | (1,286,181 | ) |
| Accounts payable                                        |   |                   | 5,659,940   |   |                  |   | -          |        |   |   | 5,659,940 |   |
| Cash Used in Operating Activities                       |   |                   | (20,137,609 | )      |                  |   | -          |        |   |   | (20,137,609 | ) |
| Investing Activities                                    |   |                   |        |   |                  |   |       |        |   |   |   |   |
| Capital expenditures                                    |   |                   | (2,801,889  | )      |                  |   | -          |        |   |   | (2,801,889 | ) |
| Cash Used in Investing Activities                       |   |                   | (2,801,889  | )      |                  |   | -          |        |   |   | (2,801,889 | ) |
| Financing Activities                                    |   |                   |        |   |                  |   | -          |        |   |   |   |   |
| Issuance of shares for cash                             |   |                   | 55,612,940  |   |                  |   | -          |        |   |   | 55,612,940 |   |
| Bank loan                                               |   |                   | (21,207,500 | )      |                  |   | -          |        |   |   | (21,207,500 | ) |
| Shares issued by subsidiary to non-controlling interest |   |                   | 289,715     |   |                  |   | -          |        |   |   | 289,715 |   |
| Convertible debentures                                  |   |                   | -           |   |                  |   | -          |        |   |   | - |   |
| Cash Provided by Financing Activities                   |   |                   | 34,695,155  |   |                  |   | -          |        |   |   | 34,695,155 |   |
| Inflow of Cash                                          |   |                   | 11,755,657  |   |                  |   | -          |        |   |   | 11,755,657 |   |
| Effects of exchange rate changes on cash                |   |                   | 3,240,331   |   |                  |   | -          |        |   |   | 3,240,331 |   |
| Cash and cash equivalents, Beginning of Period          |   |                   | 32,393,871  |   |                  |   | -          |        |   |   | 32,393,871 |   |
| Cash and cash equivalents, End of Period                |   | $                      | 47,389,859  |   |                  | $      | -          |        |   | $ | 47,389,859 |   |
| Non-Cash Financing Activities                           |   |                   |        |   |                  |   |       |        |   |   |   |   |
| Common stock issued for properties                      |   | $                      | 3,292,500   |   |                  | $      | -          |        |   | $ | 3,292,500 |   |
| Warrants granted on purchase of properties              |   | $                      | -           |   |                  | $      | -          |        |   | $ | - |   |
| Common stock issued for services                        |   | $                      | 116,431     |   |                  | $      | -          |        |   | $ | 116,431 |   |
| Common stock issued for debt settlement                 |   | $                      | -           |   |                  | $      | -          |        |   | $ | - |   |

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| 3. | BASIS OF PRESENTATION |
|----|-----------------------|

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| 4. | PROPERTY AND EQUIPMENT |
|----|------------------------|

|                           |   | October 31, 2008 |        |   | April 30, 2008 |   |
|--------------------------------|--------|------------------|-------------|--------|----------------|--------|
|                           |   | (as restated)    |        |   | (as restated)  |   |
| Saskatchewan Oil Sands Rights  |   |             |        |   |           |   |
| Permits                        |   | $                | 339,106,414 |   |           | $      | 403,474,977 |   |
| Licenses                       |   |             | 1,913,838   |   |           |   | 2,306,274 |   |
| Alberta Oil Sands Rights       |   |             |        |   |           |   |   |   |
| Permits                        |   |             | 29,372,011  |   |           |   | 35,394,800 |   |
| Leases                         |   |             | 6,499,467   |   |           |   | 2,426,940 |   |
| Oil Shale Rights (Permits)     |   |             | 9,271,348   |   |           |   | 11,101,908 |   |
| Equipment                      |   |             | 9,648,663   |   |           |   | 6,297,687 |   |
|                           |   |             |        |   |           |   |   |   |
| Less: Accumulated Depreciation |   |             | (1,856,864  | )      |           |   | (1,510,015 | ) |
| Net Book Value                 |   | $                | 393,954,877 |   |           | $      | 459,492,571 |   |

|   | a) | Saskatchewan Oil Sands Permits |
|--------|----|--------------------------------|

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|   | b) | Saskatchewan Oil Sands Licenses |
|--------|----|---------------------------------|

|   | c) | Alberta Oil Sands Permits |
|--------|----|---------------------------|

|   | d) | Alberta Oil Sands Lease |
|--------|----|-------------------------|

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|   | e) | Oil Shale Rights |
|--------|----|------------------|

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|   | f) | During the six months ended October 31, 2008 the Company had $4,810,112 in additions to equipment. |
|--------|----|----------------------------------------------------------------------------------------------------|

|   | 5. | ASSET RETIREMENT OBLIGATION |
|--------|----|-----------------------------|

| Continuity of Asset Retirement Obligation       |   |   |      |
|-------------------------------------------------|--------|--------|-----------|
| Present value of obligation at April 30, 2008   |   | $      | -         |   |
| Liabilities incurred                            |   |   | 3,873,055 |   |
| Accretion expense                               |   |   | 83,257    |   |
| Foreign currency translation adjustment         |   |   | (427,429  | ) |
| Present value of obligation at October 31, 2008 |   | $      | 3,528,883 |   |

|   | 6. | SUBSIDIARY OPTIONS OUTSTANDING |
|--------|----|--------------------------------|

|                                                             |   | Number |      |   | Weighted Average Exercise Price (CDN) |   |
|------------------------------------------------------------------|--------|--------|-----------|--------|---------------------------------------|--------|
|                                                             |   |   |      |   |                                  |   |
| Outstanding, April 30, 2008                                      |   |   | 1,640,000 |   |                                  | $      | 16.96 |   |
| Exercised and exchanged into shares of OQI common stock (note 7) |   |   | (125,000  | )      |                                  | $      | 12.50 |   |
| Expired                                                          |   |   | (60,000   | )      |                                  | $      | 25.00 |   |
| Outstanding, October 31, 2008                                    |   |   | 1,455,000 |   |                                  | $      | 17.01 |   |

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| Exercise Price (CDN) |   | Number Outstanding at October 31, 2008 |      | Number Exercisable at October 31, 2008 |      | Weighted Average Remaining Contractual Life |
|----------------------|--------|----------------------------------------|-----------|----------------------------------------|-----------|---------------------------------------------|
| $                    | 0.50   |                                   | 75,000    |                                   | 75,000    |                                        | 1.03 years |
| $                    | 3.00   |                                   | 100,000   |                                   | 100,000   |                                        | 1.75 years |
| $                    | 6.00   |                                   | 465,000   |                                   | 465,000   |                                        | 2.26 years |
| $                    | 25.00  |                                   | 765,000   |                                   | 665,000   |                                        | 2.50 years |
| $                    | 50.00  |                                   | 50,000    |                                   | 37,500    |                                        | 2.75 years |
|                 |   |                                   | 1,455,000 |                                   | 1,342,500 |                                        | 2.30 years |

| 7. | PREFERRED SHARES |
|----|------------------|

|                                                                   |   | OQI Sask Exchangeable Shares |       |   | OQI Sask Exchangeable Shares issuable on exercise of OQI Sask options |   |       | Total OQI Sask Exchangeable Shares |   |
|------------------------------------------------------------------------|--------|------------------------------|------------|--------|-----------------------------------------------------------------------|--------|------------|------------------------------------|--------|
| Balance, April 30, 2008                                                |   |                         | 27,952,840 |   |                                                                  |   | 13,497,200 |                               |   |   | 41,450,040 |   |
| OQI Sask options exercised (note 6)                                    |   |                         | 1,028,750  |   |                                                                  |   | (1,028,750 | )                                  |   |   | - |   |
| OQI Sask options expired (note 6)                                      |   |                         | -          |   |                                                                  |   | (493,800   | )                                  |   |   | (493,800 | ) |
| OQI Sask Exchangeable shares exchanged into shares of OQI common stock |   |                         | (1,709,769 | )      |                                                                  |   | -          |                               |   |   | (1,709,769 | ) |
|                                                                   |   |                         |       |   |                                                                  |   |       |                               |   |   |   |   |
| Balance, October 31, 2008                                              |   |                         | 27,271,821 |   |                                                                  |   | 11,974,650 |                               |   |   | 39,246,471 |   |

| 8. | COMMON STOCK |
|----|--------------|

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| 9. | STOCK OPTIONS |
|----|---------------|

|                          |   | Number of Options |       |   | Weighted Average Exercise Price |   |
|-------------------------------|--------|-------------------|------------|--------|---------------------------------|--------|
| Outstanding, April 30, 2008   |   |              | 13,027,000 |   |                            | $      | 5.22 |   |
| Granted                       |   |              | 7,636,000  |   |                            | $      | 4.73 |   |
| Exercised                     |   |              | (35,000    | )      |                            | $      | 4.72 |   |
| Expired                       |   |              | (390,000   | )      |                            | $      | 5.70 |   |
| Outstanding, October 31, 2008 |   |              | 20,238,000 |   |                            | $      | 5.03 |   |

| Expected life (years)   |   |   | 4.98 |   |
|-------------------------|--------|--------|------|--------|
| Risk free interest rate |   |   | 3.67 | %      |
| Expected volatility     |   |   | 71   | %      |
| Dividend yield          |   |   | 0    | %      |

| Exercise Price |   | Number Outstanding at October 31, 2008 |       | Number Exercisable at October 31, 2008 |      | Weighted Average Remaining Contractual Life |
|----------------|--------|----------------------------------------|------------|----------------------------------------|-----------|---------------------------------------------|
| $              | 4.57   |                                   | 250,000    |                                   | 250,000   |                                        | 0.30 years |
| $              | 6.00   |                                   | 30,000     |                                   | 30,000    |                                        | 0.55 years |
| $              | 5.05   |                                   | 2,860,000  |                                   | 1,072,500 |                                        | 2.81 years |
| $              | 3.89   |                                   | 390,000    |                                   | 140,000   |                                        | 2.92 years |
| $              | 5.25   |                                   | 50,000     |                                   | 12,500    |                                        | 3.08 years |
| $              | 6.75   |                                   | 4,000,000  |                                   | 4,000,000 |                                        | 3.32 years |
| $              | 2.70   |                                   | 100,000    |                                   | 62,500    |                                        | 3.36 years |
| $              | 2.47   |                                   | 100,000    |                                   | 50,000    |                                        | 3.66 years |
| $              | 4.27   |                                   | 4,057,000  |                                   | 2,028,500 |                                        | 3.75 years |
| $              | 5.04   |                                   | 30,000     |                                   | 30,000    |                                        | 3.84 years |
| $              | 4.60   |                                   | 150,000    |                                   | 75,000    |                                        | 3.95 years |
| $              | 4.59   |                                   | 115,000    |                                   | 28,750    |                                        | 4.20 years |
| $              | 3.37   |                                   | 200,000    |                                   | 50,000    |                                        | 4.26 years |
| $              | 4.00   |                                   | 320,000    |                                   | 80,000    |                                        | 4.37 years |
| $              | 3.97   |                                   | 10,000     |                                   | 2,500     |                                        | 4.42 years |
| $              | 4.25   |                                   | 40,000     |                                   | 10,000    |                                        | 4.46 years |
| $              | 4.79   |                                   | 200,000    |                                   | 50,000    |                                        | 4.55 years |
| $              | 4.63   |                                   | 15,000     |                                   | 3,750     |                                        | 4.56 years |
| $              | 4.57   |                                   | 60,000     |                                   | 27,500    |                                        | 4.59 years |
| $              | 5.45   |                                   | 2,000,000  |                                   | 500,000   |                                        | 4.71 years |
| $              | 4.51   |                                   | 5,226,000  |                                   | 1,306,500 |                                        | 4.75 years |
| $              | 1.41   |                                   | 35,000     |                                   | 8,750     |                                        | 4.96 years |
|           |   |                                   | 20,238,000 |                                   | 9,818,750 |                                        | 3.85 years |

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| 10. | WARRANTS |
|-----|----------|

| ExpiryDate       |   | Exercise Price |   |   | Number of Warrants |   |
|------------------|--------|----------------|--------|--------|--------------------|--------|
|             |   |           |   |   |               |   |
| December 5, 2009 |   | $              | 6.75   |   |               |   | 6,325,000 |   |

| 11. | FAIR VALUE MEASUREMENTS |
|-----|-------------------------|

|                            |   | As of October 31, 2008 |       |
|---------------------------------|--------|------------------------|------------|
|                            |   |                   |       |   |   |   |   | Fair Value Measures Using: |   |
|                            |   | Carrying Amount        |       |   | Total Fair Value |   |   | Quoted Prices In Active Markets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
| Financial Assets (Liabilities): |   |                   |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities Held for Sale        |   |                   | 29,596     |   |   |   | 29,596 |   |   |   | 29,596 |   |   |   | - |   |   |   | - |   |
| Asset Retirement Obligation     |   |                   | (3,528,883 | ) |   |   | (3,528,883 | ) |   |   | - |   |   |   | - |   |   |   | (3,528,883 | ) |

|                                                     |   | As of April 30, 2008 |    |
|----------------------------------------------------------|--------|----------------------|---------|
|                                                     |   |                 |    |   |   |   | Fair Value Measures Using: |   |
|                                                     |   | Carrying Amount      |    |   | Total Fair Value |   |   | Quoted Prices In Active Markets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
|                                                     |   |                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial Assets (Liabilities): Securities Held for Sale |   |                 | 390,733 |   |   |   | 390,733 |   |   |   | 390,733 |   |   |   | - |   |   |   | - |   |
| Asset Retirement Obligation                              |   |                 | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |

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| 12. | COMPREHENSIVE LOSS |
|-----|--------------------|

|                                                                     |   | Three months ended October 31, |        |   | Six months ended October 31, |   |
|--------------------------------------------------------------------------|--------|--------------------------------|-------------|--------|------------------------------|--------|
|                                                                     |   | 2008                           |        |   | 2007                         |   |   | 2008 |   |   | 2007 |   |
|                                                                     |   | (as restated)                  |        |   | (as restated,)               |   |   | (as restated) |   |   | (as restated) |   |
| Net Loss                                                                 |   | $                              | 44,173,230  |   |                         | $      | 21,266,797 |   |   | $ | 58,296,912 |   |   | $ | 26,577,704 |   |
| Other comprehensive income                                               |   |                           |        |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized (gain) loss on available for sale securities                  |   |                           | -           |   |                         |   | 69,494 |   |   |   | - |   |   |   | 30,393 |   |
| Transfer of unrealized loss on available for sale securities to net loss |   |                           | -           |   |                         |   | - |   |   |   | (141,970 | ) |   |   | - |   |
| Foreign exchange (gain) loss on translation                              |   |                           | 62,575,662  |   |                         |   | (39,239,714 | ) |   |   | 68,440,617 |   |   |   | (53,947,493 | ) |
| Total Comprehensive Loss (Gain)                                          |   | $                              | 106,748,892 |   |                         | $      | (17,903,423 | ) |   | $ | 126,595,559 |   |   | $ | (27,339,396 | ) |

| 13. | RELATED PARTY TRANSACTIONS |
|-----|----------------------------|

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| 14. | SUBSEQUENT EVENTS |
|-----|-------------------|

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agem

| · | We completed two private placements by issuing 10.8 million shares of common stock on a flow-through basis at a price of $3.675 CDN per share for total gross proceeds of $39.7 million CDN ($36.7 million).                                                                                                                                                                                                                                                                                                                                   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | We drilled 33 exploration and delineation oil sands test holes in the Axe Lake area along with 11 exploration test holes on the Pasquia Hills oil shale prospect. Evaluation of the drilling results is underway.                                                                                                                                                                                                                                                                                                                              |
| · | As further described below, installation and construction of the reservoir test program facilities at Test Site 1 neared completion and the drilling of several test holes for the reservoir test program, which included successfully drilling three 750-metre horizontal holes (300 metres length within the reservoir) was completed. A short-termheating test program at Test Site 3 also commenced during the period.                                                                                                                     |
| · | We continued our in-house computer simulation studies, which are supported by advanced laboratory measurements by selected industry experts specializing in reservoir structural analysis, petro-physical characteristics and laboratory scale reservoir production testing.                                                                                                                                                                                                                                                                   |
| · | As a consequence of current capital and commodity market conditions, we have undertaken an aggressive program of expenditure prioritization. Our activities are focused on the primary goals of determining the quality of our resources, adding to the Company’s resource values, and maintaining our asset base and core team. We have undertakendecisions to curtail and or defer some of our expenditure plans for the remainder of the fiscal year. The impact of these decisions is further detailed in the Outlook section below. |

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| · | We announced independent third party resource estimates for our Axe Lake Discovery and Raven Ridge Discovery which have been disclosed in our Form 10-K/A.                                                                                                                                                               |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | We signed an exploration agreement establishing a formal economic relationship with the Northern Village of La Loche in Saskatchewan through which the environmental, social and economic impacts of our exploration activities on the Northern Village of La Loche and certain other local communities will be managed. |
| · | We announced the appointment of our President & Chief Operating Officer and other executives as part of our growing management team along with increasing the size of our operations, reservoir and facilities engineering groups and relocating our corporate office in Calgary                                     |
| · | In aggregate, we have completed three private placements by issuing 23.78 million shares of common stock for total gross proceeds of $91.2 million.                                                                                                                                                                      |

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| Item 4. | Controls and Procedures (As Restated) |
|---------|---------------------------------------|

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TH

is

regist

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ubmis

orma

hi

| 3.1 | Articles of Incorporation, as amended. (1), (2), (3), (4), (5) (8) |
|-----|-------------------------------------------------------------------------|

| 3.2 | By laws, as amended. (6)(7) |
|-----|-----------------------------|

| 31.1 | Certification of CEO Pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31.2 | Certification of CFO Pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1 | Certification of CEO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.2 | Certification of CFO Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------|

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| (1) | Incorporated by reference from Form 10-SB, filed October 14, 1999; and Form 8-K, filed November 29, 2004. |
|-----|-----------------------------------------------------------------------------------------------------------|

| (2) | Incorporated by reference from Form 10-Q/SB dated December 14, 2005. |
|-----|----------------------------------------------------------------------|

| (3) | Incorporated by reference from Form 8-K dated March 13, 2006. |
|-----|---------------------------------------------------------------|

| (4) | Incorporated by reference from Form 8-K dated August 14, 2006. |
|-----|----------------------------------------------------------------|

| (5) | Incorporated by reference herein from Form 10-Q/SB filed December 15, 2006. |
|-----|-----------------------------------------------------------------------------|

| (6) | Incorporated by reference herein from Form 8-K filed July 26, 2007. |
|-----|---------------------------------------------------------------------|

| (7) | Incorporated by reference herein from Form 8-K filed November 23, 2007. |
|-----|-------------------------------------------------------------------------|

| (8) | Incorporated by reference herein from Form 8-K filed October 21, 2008. |
|-----|------------------------------------------------------------------------|

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NATUR

|                           | OILSANDS QUEST INC. |
|--------------------------------|---------------------|
|                           |                |   |
|                           |                |   |
| Date:  July 29, 2009 | By:                 |   /s/ Christopher H. Hopkins |
|                           |                | Christopher H. Hopkins, President, Chief Executive Officer and Director |
|                           |                |   |
|                           |                |   |
| Date:  July 29, 2009 | By:                 |   /s/ Garth Wong |
|                           |                | Garth Wong, Chief Financial Officer |

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