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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 
For the fiscal year ended December 31, 2008

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the transition period from _____ to _____

COMMISSION FILE NUMBER000-50033

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

|NEVADA                                                             | 91-2147049                                     
|------------------------------------------------------------------ | -----------------------------------------------
|State or other jurisdiction of incorporation or
      organization | (I.R.S. Employer Identification No.)           
|                                                                   |                                                
|2441 West Horizon Ridge Parkway, Suite 100                         |                                                
|Henderson, Nevada                                                  | 89052                                          
|(Address of principal executive offices)                           | (Zip Code)                                     
|                                                                   |                                                
|(702) 932-0353                                                     |                                                
|Registrant's telephone number, including area code                 |                                                
|                                                                   |                                                
|Securities registered pursuant to Section 12(b) of the
      Act:  | NONE.                                          
|                                                                   |                                                
|Securities registered pursuant to Section 12(g) of the
      Act:  | Common Stock, $0.001 Par Value Per
      Share.

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined by Rule 405 of the Securities Act.[ 
 ]Yes    [X]No

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act.[  
]Yes    [X]No

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

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (s229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K.
[   ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a

smaller reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

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

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

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at
which the common equity was last sold, or the average bid and asked price of
such common equity, as of the
last business day of the registrants most
recently completed second fiscal quarter: $50,234,582 as of June 30,
2008,based on an average of the closing bid of $0.91
and the closing ask of $0.98 as quoted by the OTC Bulletin Boardon that date.

Indicate the number of shares outstanding of each of the
registrants classes of common stock, as of the latest practicable date.
As of March 25, 2009, the Registrant had 97,010,087 shares of common stock
outstanding.

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IRELAND INC.

ANNUAL REPORT ON FORM 10-KFOR THE YEAR ENDED
DECEMBER 31, 2008

TABLE OF CONTENTS

PAGEPART I
      
      3ITEM 1.
      BUSINESS
      3ITEM 1A.
      RISK FACTORS
      5ITEM 2.
      PROPERTIES
      9ITEM 3.
      LEGAL PROCEEDINGS
      20ITEM 4.
      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
      20PART II
      
      21ITEM 5.
      MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
        MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
      21ITEM 7.
      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS
      22ITEM 8.
      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
      29ITEM 9.
      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
        AND FINANCIAL DISCLOSURE
      30ITEM 9A(T).
      CONTROLS AND PROCEDURES
      30ITEM 9B.
      OTHER INFORMATION
      31PART III
      
      32ITEM 10.
      DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
      32ITEM 11.
      EXECUTIVE COMPENSATION.
      33ITEM 12.
      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
        AND RELATED STOCKHOLDER MATTERS.
      34ITEM 13.
      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
        INDEPENDENCE.
      37ITEM 14.
      PRINCIPAL ACCOUNTING FEES AND SERVICES.
      39ITEM 15.
      EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
      39SIGNATURES
      41


2

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PART I

The information in this discussion contains forward-looking
statements. These forward-looking statements involve risks and uncertainties,
including statements regarding the Company's capital needs, business strategy
and expectations. Any statements contained herein that are not statements of
historical facts may be deemed to be forward-looking statements. In some cases,
you can identify forward-looking statements by terminology such as "may,"
"will," "should," "expect," "plan," "intend," "anticipate," "believe,"
"estimate, "predict," "potential" or "continue", the negative of such terms or
other comparable terminology. Actual events or results may differ materially. In
evaluating these statements, you should consider various factors, including the
risks described below, and, from time to time, in other reports the Company
files with the United States Securities and Exchange Commission (the SEC).
These factors may cause the Company's actual results to differ materially from
any forward-looking statement. The Company disclaims any obligation to publicly
update these statements, or disclose any difference between its actual results
and those reflected in these statements.

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

ITEM
1.              
 BUSINESS.

General

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

In February 2008, we acquired our lead project, a prospective
gold, silver and calcium carbonate property located in Esmeralda County, Nevada
that we call the Columbus Project. We acquired the Columbus Project through
the acquisition of Columbus Brine Inc. (CBI), which was merged into our wholly
owned subsidiary incorporated for the sole purpose of completing the
acquisition, CBI Acquisition, Inc. A description of the consideration paid to
the former stockholders of CBI is provided in the description of the Columbus
Project contained in Item 2 of this Annual Report.

In addition to the Columbus Project, we own the right to
acquire a prospective gold, silver and tungsten property located in San
Bernardino County, California that we call the Red Mountain Project, and we
are the owners of a mineral property located in Clark County, Nevada known as
the Ireland Claim.

Recent Corporate Developments

The following significant developments have occurred since the
end of our last fiscal quarter ended September 30, 2008:

|1. | In October 2008, we completed the installation of, and
      commenced operations at, our pilot production plant located at the
      Columbus Project. The pilot production plant is being operated as part of
      our pre- feasibility program designed to test the commercial viability of
      mining and extracting precious metals from the Columbus Project. A diagram
      and description outlining the pilot production process for the Columbus
      Project is attached as an exhibit to this Annual Report.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|2. | On October 31, 2008, our Board of Directors unanimously
      resolved to extend the term of the options previously granted to our
      officers, directors and one of our consultants in March 2007 for an
      additional 3 years as follows:                                                                                                                                                                                                                                                                            

Optionee
    No. of Options
    Exercise Price
    Expiry DateDouglas D.G Birnie Chief Executive
      Officer, President, Secretary and Director
    2,200,000
    $0.05
    March 30, 2012


3

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Robert D. McDougal Chief Financial
      Officer, Treasurer and Director
    500,000
    $0.05
    March 30, 2012Michael A. Steele Director
    500,000
    $0.05
    March 30, 2012Andrew Dall Consultant
    500,000
    $0.05
    March 30, 2012


|   | Other than extending the term for which the options
      granted may be exercised by the respective optionees listed above, no
      other amendments were made.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|3. | On November 4, 2008, Lawrence E. Chizmar, Jr. resigned
      from our Board of Directors due to personal health reasons. There were no
      disagreements between us and Mr. Chizmar relating to our operations,
      policies, practices or otherwise. A replacement to fill the vacancy in our
      Board caused by Mr. Chizmars resignation has not yet been
  chosen.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|4. | In March 2009 we received assay results from 7 of 39
      exploratory holes drilled at the Columbus Project. Samples from this drill
      program were collected in accordance with strict chain-of-custody
      parameters and are being analyzed by two independent laboratories. The 7
      holes for which the results were received were located within a newly
      discovered mineralized area located approximately 3 miles south of our
      permitted mine area. We have labeled the area where these 7 holes were
      drilled as Zone B. The drill samples were analyzed using a caustic
      fusion technique and the results reported were from the extracted precious
      metals. The weight mean average grade for all the mineralized intercepts
      amongst the 7 holes was 0.045 ounces per ton (opt) of gold equivalent.
      The weight mean average grade within a potentially surface minable of zero
      to 100 feet was 0.043 opt of gold equivalent. The minable material down to
      at least 100 feet should be easily minable at a low cost using the dredge
      type mining method currently employed at our permitted mine area located
      approximately 3 miles north, which we have labeled Zone A. Detailed
      results for these 7 holes are provided under the description of the
      Columbus Project contained in Item 2 of this Annual Report. We have not
      yet received the results from the remaining 32 holes drilled in the third
      quarter of 2008, including an additional 7 holes drilled adjacent to Zone
      B. We will disclose these results once they have been received and
  analyzed.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|5. | In March 2009 we also received the results of a bulk leach test that was conducted on 1,738 pounds of material extracted from our permitted mine area on the Columbus Project that we have labelled  “Zone A.” The test was conducted by an independent laboratory commissioned by us. The bulk material used in the test assayed 0.055 opt of gold and 0.520 opt of silver. The leach test extracted 0.047 opt of gold and 0.464 opt of silver into solution. The precious metals were then collected on resins and processed to produce gold and silver bullion for a net extraction of 0.038 opt of gold and 0.385 opt of silver. This represents a leach extraction rate of 86.2% of gold into solution and 69.1% of gold recovered as metal. The overall extraction was 0.043 opt of gold equivalent (calculated at $900/oz gold and $12/oz silver). Upon completion of the test, the precious metal beads were delivered to us. We will commission further testing in an effort to optimize net metal recovery.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

Competition

We are a mineral resource exploration and development company.
We compete with other mineral resource exploration and development companies for
the acquisition of new mineral properties, the services of contractors,
equipment and financing. Many of the mineral resource exploration and
development companies with whom we compete may have greater access to a limited
supply of qualified technical personnel and contractors and to specialized
equipment needed in the exploration, development and operation of mineral
properties. This could have an adverse effect on our ability to explore and
develop our properties in a timely manner. In addition, because many of our
competitors are more established and have a longer operating history than us,
they may have greater access to promising mineral properties.

In addition, many of our competitors have greater financial
resources than us. Accordingly, these competitors may be able to spend greater
amounts on acquisitions of mineral properties of merit, on exploration of their
mineral properties and on development of their mineral properties. In addition,
they may be able to afford greater geological expertise in the targeting and
exploration of mineral properties. This may make our competitors more attractive to potential investors and could adversely impact
our ability to obtain additional financing if and when needed.

4

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Government Regulations

The mining industry in the United States is highly regulated.
We intend to secure all necessary permits for the exploration of the Columbus
Project, the Red Mountain Project and Ireland Claim and, if development is
warranted on the properties, will file final plans of operation prior to
starting any mining operations. The consulting geologists that we hire are
experienced in conducting mineral exploration activities and are familiar with
the necessary governmental regulations and permits required to conduct such
activities. As such, we expect that our consulting geologists will inform us of
any government permits that we will be required to obtain prior to conducting
any planned activities on the Columbus Project, the Red Mountain Project and the
Ireland Claim. We are not able to estimate the full costs of complying with
environmental laws at this time since the full nature and extent of our proposed
mining activities cannot be determined until we complete our exploration
program.

If we enter into the development or production stages of any
mineral deposits found on the Columbus Project, the Red Mountain Project and the
Ireland Claim, of which there are no assurances, the cost of complying with
environment laws, regulations and permitting requirements will be substantially
greater than in the exploration phases because the impact on the project area is
greater. Permits and regulations will control all aspects of any mineral deposit
development or production program if the project continues to those stages
because of the potential impact on the environment. Examples of regulatory
requirements include:

| | - | Water discharge will have to meet
      water standards;                                                                                
| | - | ----------------------------------------------------------------------------------------------------------------------------------------
| | - | Dust generation will have to be
      minimal or otherwise re-mediated;                                                                 
| | - | Dumping of material on the
      surface will have to be re-contoured and re-vegetated;                                                 
| | - | An assessment of all material to
      be left on the surface will need to be environmentally benign;                                   
| | - | Ground water will have to be
      monitored for any potential contaminants;                                                            
| | - | The socio-economic impact of the
      project will have to be evaluated and if deemed negative, will have to be
      re-mediated; and,
| | - | There will have to be a report of
      the potential impact of the work on the local fauna and flora.                                  

Employees

As of the date of this Annual Report, other than our officers
and directors, we have five full-time employees. We do not have any part-time
employees.

Research And Development Expenditures

We have not incurred any research or development expenditures
since our incorporation.

ITEM
1A.             
RISK FACTORS.

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

Although we have begun operation of a pilot production
module for the Columbus Project, there is no assurance that this project is
commercially feasible.

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

5

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

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

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

We currently have sufficient financial resources to pay for the
anticipated costs of our exploration and development programs for the first half
of 2009. We will require additional financing in order to proceed with our
planned exploration and development programs beyond the first half of 2009. In
addition, the actual costs of completing those programs could be greater than we
have anticipated.

There is no assurance that we will be able to obtain additional
financing when need or in an amount sufficient to meet our needs or that such
financings will be offered on terms that are acceptable to our management. Our
ability to obtain additional financing will be subject to a number of factors,
including the variability of market prices for gold and silver, investor
interest in our mineral projects, and the performance of equity markets in
general. These factors may make the timing, amount, terms or conditions of
additional financing unavailable to us. If we are not able to obtain financing
when needed or in an amount sufficient to enable us to complete our programs, we
may be required to scale back our exploration and development programs.

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

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

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

In order to maintain our rights to the Columbus Project, Red
Mountain Project and Ireland Claim, we will be required to make annual filings
with federal and state regulatory authorities. Currently the amount of these
fees is nominal; however, these maintenance fees are subject to adjustment. In
addition, we may be required by federal and/or state legislation or regulations
to complete minimum annual amounts of mineral exploration work on the Columbus
Project, Red Mountain Project and Ireland Claim. A failure by us to meet the
annual maintenance requirements under federal and state laws could cause our
rights to the Columbus Project, Red Mountain Project and Ireland Claim to lapse.

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

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

6

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

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

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

The search for valuable minerals as a business is extremely
risky. We may not find commercially exploitable reserves of gold or silver on
our mineral claims. Exploration for minerals is a speculative venture,
necessarily involving substantial risk. The expenditures to be made by us in the
upcoming exploration of our mineral projects may not result in the discovery of
commercial quantities of ore. Problems such as unusual or unexpected formations
and other conditions are involved in mineral exploration and often result in
unsuccessful exploration efforts. In such a case, we would be unable to complete
our business plan.

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

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

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

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

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

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

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

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

7

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

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

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

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

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

If our applications for permits from the relevant regulatory
bodies are denied, we may not be able to proceed with our exploration and
development programs as disclosed above, which could have a negative affect on
our business.

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

If the results of our geological exploration program indicate
commercially exploitable reserves, and we decide to pursue commercial production
of our mineral claims, we may be subject to an environmental review process
under environmental assessment legislation. Compliance with an environmental
review process may be costly and may delay commercial production. Furthermore,
there is the possibility that we would not be able to proceed with commercial
production upon completion of the environmental review process if government
authorities did not approve our mine or if the costs of compliance with
government regulation adversely affected the commercial viability of the
proposed mine.

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

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

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

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

No Assurance That Forward Looking Assessments Will Be
Realized.

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

8

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

ITEM
2.               
PROPERTIES.

We currently lease office space located at Suite 100, 2441 W.
Horizon Ridge Parkway, Henderson, NV 89052 at a rate of $4,625 per month. The
lease terms expired on August 31, 2008, and we continue to rent the existing
space on a month-to-month basis.

We currently own an interest in, or rights to, three mineral
projects that we refer to as the Columbus Project, the Red Mountain Project and
the Ireland Claim.

THE COLUMBUS PROJECT

The Columbus Project is a potential gold, silver and calcium
carbonate project that is currently made up of 128 mineral and millsite claims
that we refer to as the CSM Claims and rights to an additional 147 mineral
claims that we refer to as the DDB Claims.

Location

The mineral claims that make up the Columbus Project are
located in the Columbus Salt Marsh, in Esmeralda County, Nevada, approximately
41 miles west of Tonopah, halfway between Las Vegas and Reno. The Columbus Salt
Marsh is an enclosed basin and is a dry lake bed for the majority of the year.
All surface drainage from the surrounding 300 square mile area flows into the
Columbus Salt Marsh.

9

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Figure 1. Location of Columbus Project



Title and Ownership Rights to the CSM Claims and the DDB
Claims

The CSM Claims are wholly owned by Columbus S.M., LLC (CSM).
CSM was a wholly owned subsidiary of CBI, and is now our wholly owned
subsidiary. The DDB Claims are wholly owned by a mining syndicate known as the
DDB Syndicate. Lawrence E. Chizmar Jr., a former member of our Board of
Directors (and a former director of CBI) and a limited liability company
controlled by Douglas D.G. Birnie, our President and Chief Executive Officer,
and a member of our Board of Directors, are each the owners of a 1/8 interest in
the DDB Syndicate. The remaining members of the DDB Syndicate are made up of the
former officers and directors of CBI, the brother of a former officer and
director of CBI, and certain affiliates of Nanominerals Corp. (Nanominerals).
Nanominerals is a significant shareholder in our Company. Mr. Birnie also owns a
3.5% interest in Nanominerals. The DDB Claims were located by the DDB Syndicate
in February, 2007, prior to Mr. Birnies, Nanominerals or Mr. Chizmars
involvement with our Company. Mr. Birnie also acquired his interest in
Nanominerals prior to his or their involvement with our Company.

10

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Figure 2. Location of the CSM Claims and the DDB Claims



We acquired our interest in the CSM Claims and the DDB Claims
from Nanominerals pursuant to an assignment by Nanominerals of its rights to
both the Columbus Project and the Red Mountain Project under the terms of two
letter agreements (the Columbus Letter Agreement and the Red Mountain Letter
Agreement, respectively). In August 2007, Nanominerals completed the assignment
of its rights and interests under both the Columbus Letter Agreement and the Red
Mountain Letter Agreement to us, in consideration for which we:

| | (a) | issued an aggregate of 30,000,000 shares of our common
      stock to Nanominerals and certain business associates of Nanominerals
      (including 1,200,000 shares to Robert D. McDougal, our current Chief
      Financial Officer, Treasurer and a member of our Board of
    Directors);
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                              
| | (b) | granted Nanominerals a 5% royalty on any net smelter
      returns from either of the Columbus Project or the Red Mountain Project,
      or any other mineral projects that Nanominerals may assign or transfer to
      us in the future;                                                  
| |     |                                                                                                                                                                                                                                                                                              
| | (c) | assumed all of Nanominerals obligations under the
      Columbus Letter Agreement and the Red Mountain Letter Agreement;
  and                                                                                                                                                               
| |     |                                                                                                                                                                                                                                                                                              
| | (d) | agreed to reimburse Nanominerals for any properly
      documented expenditures made by it on either the Columbus Project or the
      Red Mountain Project.                                                                                                                                 

In addition to the consideration paid by us, Lorrie Ann
Archibald, then our Chief Executive Officer, Treasurer and sole director, and
our principal shareholder, sold to Nanominerals 18,200,000 shares of our common
stock, being all of the shares of our common stock owned by Ms. Archibald at
that time, for an aggregate of $45,500. Mr. Birnie was appointed as our Chief
Executive Officer, President and Secretary, and Mr. McDougal was appointed as
our Chief Financial Officer pursuant to the terms of the Nano Agreement.

11

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By December 2007, under the terms of the Columbus Letter
Agreement, we had earned a 15% operating interest in the Columbus Project by:

| | (a) | paying a total $24,000 per month split amongst CSM, John
      T. Arkoosh (the former President and a former director of CBI) and William
      Maghan (a former director of CBI) until December 31, 2007; and
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                               
| | (b) | spending a total of $3,000,000 on examining, testing,
      exploring or developing the Columbus Project before December 31, 2007 (the
      CP Expenditures).                                              

In February 2008, we increased our ownership of the Columbus
Project to 100% by merging CBI with and into our wholly owned subsidiary
incorporated for the sole purpose of acquiring CBI, CBI Acquisition, Inc. To
complete the merger, we issued to the former stockholders of CBI an aggregate of
10,440,087 shares of our common stock and share purchase warrants to acquire an
additional 5,220,059 shares of our common stock. The warrants issued are
exercisable at a price of $2.39 per share and expire on February 19, 2013. After
August 19, 2010, if our common stock trades at an average price of 150% of the
exercise price of the warrants over a period of 20 consecutive trading days,
than we may accelerate the expiration date to a date that is 30 days after the
date that we send notice of our intention to exercise the acceleration right.
The warrants issued to the former stockholders of CBI provide the holder with a
cashless exercise right. In addition, we agreed to honor the terms of an option
previously granted by CBI to one of its former stockholders, and to extend that
option to June 29, 2010. As a result, this person may exercise an option to
purchase 79,719 at a price of $1.36 per share on or before June 29, 2010.

After completing the acquisition of CBI, we acquired CBIs
rights under the terms of a mining lease that CBI entered into with the DDB
Syndicate in November 2007 (the DDB Agreement). The DDB Agreement provides us
with a 5 year lease on the DDB Claims, ending on November 29, 2012, with an
option to purchase the DDB Claims at anytime during the lease period. During the
year ended December 31, 2008, we paid the DDB Syndicate $130,000 under the terms
of the DDB Agreement, and we must pay the DDB Syndicate rental payments of
$30,000 per year, payable on June 30, 2009, 2010 and 2011 respectively in order
to maintain our lease rights. Under the option rights provided under the DDB
Agreement, we may purchase the DDB Claims by either:

| | (a) | paying the DDB Syndicate the purchase price of $400,000,
      less any rental payments previously made prior to exercise of the option
      right; or
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                        
| | (b) | paying the DDB Syndicate $10, plus granting the DDB
      Syndicate a royalty of 2% of net smelter returns on the DDB
  Claims.                        

Access and Infrastructure

The Columbus Project contains an existing mill site with power
generator sets and an onsite fresh water well. Water used for processing is
available from existing wells located on the surrounding basin (the Columbus
Basin). There is also a high voltage grid located at the Candelaria Mines,
approximately three miles from the Columbus Project.

Permits have been obtained for the production of calcium
carbonate and the extraction of precious metals from an area of interest
consisting of approximately 380 acres, including millsite, roads and mineable
acreage.

History

The Columbus Project is located in an area that has
historically been known as a well mineralized region. A gold and silver mining
operation known as the Candelaria Mine is located approximately three miles
northwest of the Columbus Project. The Clayton Valley Brine Project, a lithium
extraction project, is located approximately 25 miles southeast of the Columbus
Project.

The history of the area dates back to the 1860s upon the
discovery of significant deposits of silver. During this period, the Candelaria
Mine was established. To date, the Candelaria Mine has produced approximately 68
million ounces of silver.

12

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The Clayton Valley Brine Project was established in the 1960s
and uses a brine aquifer to extract minerals. Clayton Valley has historically
been one of the largest sources of lithium in the United States.

Geology

The Columbus Basin is an enclosed basin that appears to be a
sediment-filled collapsed caldera of a volcano or a rift basin. A caldera is a
volcanic feature formed by the collapse of land following a volcanic eruption.
Surveys conducted on the area indicate that there appears to be a two mile wide
fault structure in the northwest section of the Columbus Basin. The subsurface
of the Columbus Basin contains an ash layer approximately 150 feet thick,
located at a depth of approximately 400 feet. This ash layer hosts a large brine
aquifer.

Exploration Activities Conducted on the Columbus Project to
Date

Surface Sampling Program

In 2002, independent consultants SRK Consulting conducted a
study on Zone A, reporting 8.8 million tons of material minable for calcium
carbonate production within a 270 acre area to a depth of 25 feet. In August,
2006, Nanominerals commissioned Arrakis, Inc., an independent mining and
metallurgical consulting engineering firm, to conduct surface sampling studies
on the Columbus Project. Fifty-nine surface samples were taken by Arrakis and
were processed at Arrakis laboratory in Englewood, Colorado. The results from
these samples indicated an anomaly area located south of Zone A containing an
average in-situ area wide grade of 0.078 opt of gold. These results were from
surface samples only, and are not necessarily indicative of the mineralization
found at depth.

In December, 2006, Arrakis returned to the Columbus Project and
took five additional surface samples, four borings and a two thousand pound bulk
sample. One boring went down to a depth of 10 feet, two borings went down to a
depth of 15 feet and the final boring when down to a depth of 20 feet. The
results of these additional samples fit the trend shown by the original surface
samples, with no significant variations at depth.

The bulk sample taken by Arrakis was used to conduct gravity
concentration tests. Most of the gold contained in the samples appear to be less
than 50 microns. Arrakis noted that the gravity concentration tests indicated
that more than 90% of the ore was made up of a clay matrix that would need to be
carefully de-agglomerated and diluted prior to effective gravity concentration.
A high grade calcium carbonate product is expected to be producible from these
clay tailings.

2007 Drill Program  Zone A

In the fourth quarter of 2007, a drill program was conducted by
Arrakis within the 320-acre permitted area of the Columbus Project, an area that
we have now labeled as Zone A. The program consisted of 18 holes drilled to a
maximum of 100 feet in depth. Independent analyses of the 18 holes indicate an
average gold grade as follows:

154 sample average = 0.074 opt gold
18 drill hole average = 0.070 opt gold

The drill program and sample analyses were completed under chain-of-custody
  (COC) parameters by Arrakis. The samples were analyzed using an Acid Microwave
  Digestion method.

Drilling was completed by using a split auger to collect 2-foot
composite samples every 10 feet down each hole. Holes were drilled to a maximum
depth of 100 feet, with some holes being shallower due to bedrock or drilling
conditions The drill program covered the 320-acre permitted mine site with 18
drill holes in a 6-hole by 3-hole evenly spaced grid.

13

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Zone A  2007 Drill Program Results

|Composite Depth | Hole A1 (Au opt) | Hole A2 (Au opt) | Hole A3 (Au opt) | Hole A4 (Au opt) | Hole A5 (Au opt) | Hole A6 (Au opt)
|--------------- | ---------------- | ---------------- | ---------------- | ---------------- | ---------------- | ----------------
|10  12       | 0.082            | 0.083            | 0.087            | 0.107            | 0.129            | 0.070           
|20  22       | 0.089            | 0.071            | 0.062            | 0.086            | 0.094            | 0.064           
|30  32       | 0.080            | 0.072            | 0.081            | 0.067            | 0.080            | 0.066           
|40  42       | 0.079            | 0.070            | 0.095            | 0.096            | 0.073            | 0.064           
|50  52       | 0.089            | 0.078            | 0.083            | 0.108            | 0.088            | 0.064           
|60  62       | 0.086            | 0.069            | 0.092            | 0.097            | 0.076            | 0.060           
|70  72       | 0.074            | 0.085            | 0.089            | 0.092            | 0.072            | 0.060           
|80  82       | 0.082            | 0.047            | 0.063            | 0.092            | 0.074            | 0.054           
|90  92       | 0.086            | 0.067            | 0.074            | 0.065            | 0.071            | 0.053           
|100  102     | 0.039            |                  | 0.063            | 0.083            | 0.060            | 0.060           
|                |                  |                  |                  |                  |                  |                 
|Average         | 0.079            | 0.071            | 0.079            | 0.089            | 0.082            | 0.062           

Composite Depth
    Hole A7 (Au opt)
    Hole A8 (Au opt)
    Hole A9 (Au opt)
    Hole A10 (Au opt)
    Hole A11 (Au opt)
    Hole A12 (Au opt)10  12
    0.062
    0.063
    0.086
    0.128
    0.116
    0.10320  22
    0.054
    0.044
    0.057
    0.089
    0.095
    0.08530  32
    0.077
    0.068
    0.078
    0.085
    0.053
    0.07740  42
    0.062
    0.062
    0.076
    0.110
    0.076
    0.07050  52
    0.054
    0.066
    0.077
    0.117
    0.108
    0.10460  62
    0.076
    0.065
    0.081
    0.109
    0.102
    0.08970  72
    
    0.069
    0.079
    0.100
    0.109
    0.10480  82
    
    0.061
    0.081
    0.089
    0.102
    0.10990  92
    
    
    0.068
    0.091
    0.078
    0.105100  102
    
    
    0.085
    0.095
    0.086
    0.101Average
    0.064
    0.062
    0.077
    0.101
    0.092
    0.095


Composite Depth
    Hole A13 (Au opt)
    Hole A14 (Au opt)
    Hole A15 (Au opt)
    Hole A16 (Au opt)
    Hole A17 (Au opt)
    Hole A18 (Au opt)10  12
    0.009
    0.076
    0.089
    0.092
    0.055
    0.07920  22
    0.035
    0.046
    0.063
    0.029
    0.047
    0.05930  32
    0.034
    0.100
    0.113
    0.093
    0.028
    0.04940  42
    
    0.058
    0.093
    0.085
    
    0.07250  52
    
    0.007
    0.066
    0.069
    
    0.06460  62
    
    
    0.047
    0.081
    
    0.05970  72
    
    
    0.029
    0.028
    
    0.06180  82
    
    
    0.035
    0.029
    
    0.05290  92
    
    
    
    0.021
    
    0.031100  102
    
    
    
    0.025
    
    0.043Average
    0.026
    0.057
    0.067
    0.055
    0.044
    0.057


Based on the test results on the samples taken from the
Columbus Project, Arrakis recommended proceeding with (1) a pilot processing
installation at the existing mill site located on the property; and (2)
exploration drilling of an anomalous zone indicated by the samples in an effort
to determine the economic viability of the project. The anomalous zone has been
labeled by us as Zone B and is located approximately 3 miles south of Zone A,
where our permitted mine area and pilot production plant are located.

2009 Bulk Leach Test Results  Zone A

In the first quarter of 2009 we sent 1,738 pounds of material
extracted and collected under COC parameters by Arrakis from our permitted mine
site in Zone A of the Columbus Project to independent consultants AuRIC
Metallurgical Laboratories of Salt Lake City, Utah (AuRIC) for bulk leach
testing. No mineral processing operations such as crushing, grinding, drying or
screening were performed on the sample. We received the testing results in March
2009. The sample was analyzed using a caustic fusion technique and reported head

14

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grades of 0.055 opt gold and 0.520 opt silver. The material was
then leached and resulted in the extraction of 0.047 opt gold and 0.464 opt
silver into solution. The precious metals were then collected on resins and
processed to produce gold and silver bullion for a net extraction of 0.038 opt
gold and 0.385 opt silver. This represents leach extraction of 86.2% of gold
into solution and 69.1% of gold recovered as metal. The overall extraction was a
0.043 opt gold equivalent value.

2008 Drill Program  Zone A and Zone B

In the third quarter of 2008, a 39-hole exploratory drill
program was completed to depths ranging from 200 feet to 400 feet below the
surface in the anomaly area previously identified in the 2006 surface sampling
program conducted by Arrakis. A total of 25 holes were drilled within Zone A and
an additional 14 holes were drilled south of Zone A. Over 1,000 samples were
collected under COC parameters and delivered to two independent laboratories for
analysis.

In the first quarter of 2009, we received assay results from
independent consultants McEwen Geological LLC of Arvada, Colorado, (McEwen),
from 7 contiguous holes drilled within an area located approximately 3 miles
south of Zone A. We have labeled the area where these 7 holes were drilled as
Zone B. The drill samples were analyzed using a caustic fusion technique and
the results reported were from the extracted precious metals. The weight mean
average grade for all the mineralized intercepts was 0.045 opt of gold
equivalent (see table below). The weight mean average grade for a potential
surface mine area (0-100 feet) was 0.043 opt of gold equivalent. The material
from the surface to at least 100 feet is easily minable at low cost using the
dredge type mining method currently employed at our mine site, located in Zone
A, three miles to the north.

Zone B  2008 Drill Program Results to Date

Hole ID
      DepthDrilled
      MineralizedInterval1
      Thickness
      Gold - Au(opt)
      Silver - Ag(opt)
      Au (opt)2EquivalentS7B
      200
      0
        to 200
      200
      0.037
      0.160
      0.040S8B
      400
      0
        to 350
      350
      0.040
      0.187
      0.044S9B
      200
      0
        to 200
      200
      0.048
      0.244
      0.053S10B
      400
      0
        to 310
      310
      0.040
      0.254
      0.046360
        to 400
      40
      0.080
      0.265
      0.088S11B
      200
      0
        to 140
      140
      0.042
      0.224
      0.046S12B
      200
      0
        to 60
      60
      0.057
      0.318
      0.062150
        to 200
      50
      0.026
      0.095
      0.028S13B
      400
      0
        to 100
      100
      0.053
      0.246
      0.058170
        to 250
      80
      0.029
      0.109
      0.028290
        to 350
      60
      0.052
      0.252
      0.061Weight
        Mean Average for All Drill Hole Intercepts
      0.042
      0.213
      0.045


Assay results from the 7 additional holes drilled in an area
adjacent to Zone B and the 25 holes drilled in Zone A have not yet been
returned. Ireland will disclose the results from the additional holes drilled in
Zone B and Zone once those results have been returned and analyzed.

The extent of the Zone A and Zone B mineralization has yet to
be determined by further drill sample analysis. To confirm the drill results
Ireland will conduct additional bulk sample tests in both Zone A and Zone B.
Current drill results, together with geological modeling by McEwen, have
outlined an area approximately 1⁄2 mile wide by 1-7/8 mile long in Zone B that
hosts approximately 68 million tons of potentially minable materials within 100
feet of the surface. Potential tonnages outlined to date are listed below.

Location
    Acres
    Depth
    Thickness
    Potential TonnageZone
      A  Mine Area
    270
    3
      to 40
    37
    14.8M tonsZone
      B  (Holes S7B to S13B)
    555
    0
      to 100
    100
    68 M tons


Readers are cautioned that, although we believe that the
results of our exploration activities to date have been sufficiently positive to
proceed with the installation and operation of a pilot processing facility at

__________________________________________1Mineralized Intervals were determined using a 0.020 opt gold equivalent
cut-off. 2Au Equivalent calculated using: $900/oz Au, $12/oz
Ag

15

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the Columbus Project millsite, we have not yet established
any probable or proven reserves. Additional exploration work will be required
before probable or proven reserves can be established. There are no assurances
that the results of our pre-feasibility and technical programs will result in a
decision to enter into commercial production.

Current Exploration and Development Plans for the Columbus
Project

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

|1. | Pilot Production Module: The installation of our
      pilot production plant at the Columbus Project was completed in October
      2008 by Arrakis and the pilot production plant is currently in operation.
      The pilot production process consists of a full scale production and
      processing circuit that we are using to test the commercial viability of
      mining and extracting precious metals from the mineralized zones of the
      Columbus Project.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | If the operation of this pilot production facility proves
      to our satisfaction that the Columbus Project is economically viable, we
      will seek to expand the production process or construct additional
      production circuits within the mill site to increase production capacity.
      The production model for the Columbus Project is anticipated to be a low
      cost, high volume mining operation. A diagram and description outlining
      the pilot production process for the Columbus Project is attached as an
      exhibit to this Annual Report.                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | We currently have a production permit from the Bureau of
      Land Management (the BLM) for the Columbus Project. The production
      permit allows us to produce calcium carbonate and extract precious
      minerals on the 320 acre mine site and 60 acres of mill sites claims
      located at the Columbus Project at a mine rate of up to 792,000 tons per
      year. The mine site and mill sites are located on the northern edge of the
      5,000 acre area of interest identified by our surface sampling
    program.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | We are currently using a dredge mining method to extract
      minerals from the Columbus Project. The material is mined and handled as a
      slurry throughout the production process. Once the material has been
      slurried, we use a gravity concentration process to filter the minerals
      from the material. This production process has, to date, proven to be very
      successful and is our preferred method of mining as the cost per ton of
      material mined is low. The final extraction method is expected to involve
      leaching chemicals to recover the minerals from the materials.                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | We are continuing to make adjustments to the processing
      circuit in an effort to optimize precious metals recovery and to determine
      the economics of this process. Bench and bulk leach tests are being
      conducted at off site facilities by independent consultants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | We anticipate that we will continue to operate our pilot
      production plant on an ongoing basis unless our production process is
      proven to be commercially unviable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Readers are cautioned that, although we believe that
      the results of our exploration activities to date are sufficiently
      positive to proceed with the installation and operation of a pilot
      production circuit for the Columbus Project, we have not yet established
      any probable or proven reserves. There is no assurance that we will be
      able to establish that any commercially extractable ore reserves exist on
      the Columbus Project or that we will enter into commercial
      production.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|2. | Drilling Exploration Program: Drilling on our
      39-hole drilling program for the Columbus Project has been completed. The
      goal of this drilling program is to determine whether there are sufficient
      reserves on the Columbus Project for economic viability. The holes were
      drilled to depths ranging from 200 feet to 400 feet in depth. The
      objective of the program is to determine the three dimensional extent and
      economic potential of the gold mineralization within the anomalous area of
      interest that had previously been discovered by our surface sampling
      program. We have completed drilling on all 39 holes and, in the first
      quarter of 2009, we received the results from 7 holes drilled in Zone B,
      the results of which are reported above. We expect to receive the results
      from the remaining holes drilled, including 7 additional holes drilled
      adjacent to Zone B and 25 holes in Zone A, within the next few
    months.

16

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We anticipate spending approximately $2,795,000 on our
exploration and development program for the Columbus Project in 2009.

THE RED MOUNTAIN PROJECT

The Red Mountain Project is a potential gold, silver and
tungsten project that consists of 60 mineral claims covering approximately 7,500
acres, all located in San Bernardino County and Kern County, California. Title
to these mineral claims is currently recorded in the names of a number of
individuals who, together, make up a mining syndicate known as Red Mountain
Mining (RMM). We have been notified that some of the claims making up the Red
Mountain Project may conflict with other existing mineral claims and other
property rights covering the location of the project. We intend to work with RMM
to in order to resolve these issues.

Rights to the Red Mountain Project

We acquired our rights to the Red Mountain Project on August
14, 2007, pursuant to an assignment to us by Nanominerals of its rights and
interests under the Red Mountain Letter Agreement between it and RMM. For a
description of the consideration paid by us to Nanominerals in exchange for the
assignment of its rights under the Red Mountain Letter Agreement, as well as its
rights under the Columbus Letter Agreement, please see our description of the
Columbus Project, provided above, and below at Item 13. Certain Relationships
and Related Transactions, and Director Independence.

The Red Mountain Letter Agreement provides that we are to:

| | (a) | pay $5,000 per month to RMM until December 31,
    2011;                                                                                                                
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                         
| | (b) | spend a total of $200,000 by December 31, 2008 on
      examining, testing, exploring or developing the Red Mountain Project (the
      RMP Phase 1 Expenditures); and
| |     |                                                                                                                                                                         
| | (c) | spend a total of $1,000,000 by December 31, 2011 on
      examining, testing, exploring or developing the Red Mountain Project (the
      RMP Phase 2 Expenditures).  

For each $100,000 spent by us on the RMP Phase 1 or RMP Phase 2
Expenditures, we will earn a 5% interest in the Red Mountain Project (or a
proportionate fractional interest for expenditures in denominations of less than
$100,000). We will earn a maximum 60% interest in the Red Mountain Project if we
spend the full $1,200,000 of the RMP Phase 1 and RMP Phase 2 Expenditures by the
deadlines set out above.

In addition, at anytime, we may acquire a 100% interest in the
Red Mountain Project (the RM Acquisition Rights) by:

| | (a) | paying and issuing to RMM the following
    consideration:                                                                               
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                          
| |     | (i)                                                                                                                                      
| |     |                                                                                                                                          
| |     | (ii)                                                                                                                                     
| |     |                                                                                                                                          
| |     | (iii)                                                                                                                                    
| |     |                                                                                                                                          
| | (b) | if the Red Mountain Project achieves commercial
      production, paying and issuing to RMM the following additional
      consideration:
| |     |                                                                                                                                          
| |     | (i)                                                                                                                                      

17

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| | (ii)  | between 480,000 and 9,600,000 additional shares of our
      common stock, with the actual number of additional shares to be issued to
      be determined by dividing $2,400,000 by the Acquisition Price;
  and                                                                   
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                     
| | (iii) | for every 4 additional shares issued under (b)(ii), we
      will be required to issue one additional share purchase warrant to acquire
      one additional share of our common stock at a price per share equal to
      125% of the Acquisition Price, for a period of two
years.

The Acquisition Price to be used to calculate the aggregate
number of shares and share purchase warrants to be issued to RMM under the terms
of the Red Mountain Letter Agreement will be the average closing price of our
common stock during the 60 days prior to the acquisition date, provided,
however, that the Acquisition Price shall not be lower than $0.25 and shall not
be greater than $5.00.

As of December 31, 2008, the date of our most recently
available financial statements, we had spent $512,677 on the Red Mountain
Project, meaning that, as of December 31, 2008, we owned a 25.6% interest in the
project.

Location and Access

The Red Mountain Project is located at the base of Red
Mountain, which is 27 miles south of Ridgecrest in San Bernardino County and
Kern County, California, approximately 75 miles northeast of Los Angeles. The
Red Mountain Project can be accessed by using a gravel road that bisects the
project from northwest to southeast.

The Red Mountain Project does not contain any useable
infrastructure other than a water well.

Figure 3. Location of the Red Mountain Project



History

The Red Mountain Project is east of and adjacent to the Rand
Mining District, initially discovered in 1894. The Rand Mining District was
mined off and on until just recently for gold, silver and tungsten. The majority
of the mines in the area consisted of small independent operations. There is
currently no commercial mining occurring on the Red Mountain Project site.

18

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Geology

The area surrounding the Red Mountain Project is highly
mineralized with recorded production of gold, silver and tungsten.

Nanominerals had Arrakis review the Red Mountain Project,
including the existing reports on work previously done by RMM. RMM has excavated
over 100 test pits at the project site and has gravity concentrated the bulk
samples taken from these pits. The results of RMMs tests show values ranging
from less than 0.01 troy ounces of gold per ton to over 1.00 troy ounces of gold
per ton. Those test results reportedly show an average of 0.06 o.p.t. Arrakis
reported that the grades were similar to other grades that have been reported in
the area on similar mine sites.

Based on their review of the existing reports and a field visit
to the Red Mountain Project site, Arrakis has recommended that we proceed with
an exploration program to verify the reported gold grades in RMMs studies and
to test the recoverability in order to assess the economic viability of the Red
Mountain Project.

Current Exploration

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

|1. | Comprehensive Project Report: A comprehensive
      project report on the Red Mountain Project has been prepared for us by an
      independent geological consultant. This report includes a review, summary
      and analysis of the mining history of the area and previous exploration
      work done on the project area. Based on the previous exploration work done
      on the region and on the specific project area, the consulting geologist
      recommended that additional exploration work be conducted on the Red
      Mountain Project. We expect the project report to be updated once our
      sampling program has been completed and the results of that program have
      been analyzed.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|2. | Sampling and Drilling Program: We have initiated a
      surface sampling program on the Red Mountain Project. We have postponed
      the drilling program on the Red Mountain Project until we obtain
      additional financing. See Financing
Requirements.                                                                                                                                                                                                                                                                                                                                                                                                                                                     

We anticipate that we will spend approximately $200,000 on our
exploration program for the Red Mountain Project in 2009.

THE IRELAND CLAIM

Location and Access to the Ireland Claim

The Ireland Claim consists of one unpatented mineral lode claim
situated in the Yellow Pine Mining District in Clark County, Nevada, Section 24
of Township 25 south, range 58 east.

The Ireland Claim is located approximately 30 miles southwest
of Las Vegas, Nevada, and approximately 4 miles south of Goodsprings, Nevada on
the eastern slope of the Spring Mountains. Access to the Ireland Claim may be
obtained by traveling southwest along Interstate Highway No. 15 from Las Vegas
to the town of Jean, Nevada. Goodsprings is accessible from Jean by paved road
at a distance of approximately seven miles to the northeast. The Ireland Claim
is approximately four miles south of Goodsprings and may be accessed from
Goodsprings by gravel road.

Ownership Interest

We acquired ownership of the Ireland Claim from Multi Metal
Mining Corp. effective as of November 30, 2004 in exchange for the sum of
$6,000. The full purchase price has been paid to Multi Metal Mining Corp. and,
as such, we are the sole legal and beneficial owners of the Ireland Claim. A
copy of the purchase agreement was filed as an exhibit to our Annual Report for
the fiscal year ended December 31, 2004.

19

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Geology of the Ireland Claim

The regional geography of the Spring Mountain Range consists
primarily of Paleozoic sediments that have undergone intense folding accompanied
by faulting. The Yellow Pine Mining District is underlain by a series of
Carboniferous sediments (i.e. relating to the Carboniferous Period) consisting
of limestone, pure crystalline limestone, and dolomite, with occasional
intercalated beds of fine-grained sandstone. These strata have a general west to
southwest dip from 15 to 45 degrees occasionally disturbed by local folds.
Igneous rocks (i.e. rocks formed by solidified magma) are scarce in this region
and are represented chiefly by quartz-monzonite porphyry dikes and sills.

History and Previous Operations on the Ireland Claim

The Ireland Claim is situated in an area that has historically
been known as a well mineralized region.

The history of the area surrounding the Ireland Claim dates
back to 1856 following the investigation of lead ore by Mormon missionaries. The
first ore was smelted in 1857 and a mill was built north of Goodsprings in 1898.
The completion of the San Pedro, Los Angeles and Salt Lake railroad in 1905 and
the recognition of oxidized zinc minerals in the ore found around this location
stimulated the development of mines in this region. The region was the subject
of intermittent mining activity up to around 1964. The area has remained
primarily dormant since 1964. A report on the area from 1931 indicated that
several cars of copper-bearing lead ore had been previously mined from the area.
To our knowledge, no recent work has been recorded on the Ireland Claim.

The Yellow Pine Mining District has been mined primarily for
lead, zinc and silver. However, an estimated 91,000 ounces of gold has also been
recovered in the region.

Current State of Exploration on the Ireland Claim

Our exploration program for the Ireland Claim has been
deprioritized by our management based on the progress and potential of our
Columbus Project. As a result, our exploration program for the Ireland Claim is
expected to be delayed, and may be delayed indefinitely. We do not expect to
make significant progress on exploration of the Ireland Claim in 2009.

ITEM
3.                LEGAL
PROCEEDINGS.

We are not a party to any other legal proceedings and, to our
knowledge; no other legal proceedings are pending, threatened or
contemplated.

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

None.

20

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PART II

|ITEM 5. | MARKET FOR REGISTRANTS COMMON EQUITY, RELATED
      STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
|------- | -------------------------------------------------------------------------------------------------------------------

MARKET INFORMATION

Quotations for our common stock were entered on the OTC
Bulletin Board under the symbol "IREL" beginning on May 8, 2006. Our symbol was
changed to IRLD on April 25, 2007 upon completion of our 4-for-1 stock split.
The following is the high and low bid information for our common stock during
each fiscal quarter of our last two fiscal years.

2008
      2007High
      Low
      High
      LowFirst Quarter ended March 31
      $ 2.05
      $ 1.35
      $ 0.05
      $ 0.00Second Quarter ended June 30
      $ 1.45
      $ 0.60
      $ 2.30
      $ 0.00Third Quarter ended September 30
      $ 0.98
      $ 0.31
      $ 2.05
      $ 1.40Fourth Quarter ended December 31
      $ 0.495
      $ 0.10
      $ 2.10
      $ 1.60


The above quotations have been adjusted to reflect our 4-for-1
  stock split effective April 25, 2007. Quotations entered on the OTC Bulletin
  Board reflect inter-dealer prices, without retail mark-up, markdown or commission
  and may not represent actual transactions.

PENNY STOCK RULES

The SEC has adopted rules that regulate broker-dealer practices
in connection with transactions in penny stocks. Penny stocks are generally
equity securities with a price of less than $5.00, other than securities
registered on certain national securities exchanges or quoted on the NASDAQ
system, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or system. The penny
stock rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from those rules, to deliver a standardized risk disclosure
document prepared by the SEC, which:

| | (a) | contains a description of the nature and level of risk in
      the market for penny stocks in both public offerings and secondary
      trading;                                                                                        
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | contains a description of the broker's or dealer's duties
      to the customer and of the rights and remedies available to the customer
      with respect to a violation of such duties or other requirements of
      securities laws;
| | (c) | contains a brief, clear, narrative description of a
      dealer market, including bid and ask prices for penny stocks and the
      significance of the spread between the bid and ask price;                                           
| | (d) | contains a toll-free telephone number for inquiries on
      disciplinary actions;                                                                                                                                                       
| | (e) | defines significant terms in the disclosure document or
      in the conduct of trading in penny stocks; and                                                                                                                             
| | (f) | contains such other information and in such form as the
      SEC shall require by rule or regulation.                                                                                                                                   

The broker-dealer also must, prior to effecting any transaction
in a penny stock, provide the customer with:

| | (a) | bid and offer quotations for the penny stock;                                                                                                                                 
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | the compensation of the broker-dealer and its salesperson
      in the transaction;                                                                                           
| | (c) | the number of shares to which such bid and ask prices
      apply, or other comparable information relating to the depth and liquidity
      of the market for such stock; and
| | (d) | monthly account statements showing the market value of
      each penny stock held in the customer's account.                                                                 

In addition, the penny stock rules require that, prior to a
transaction in a penny stock that is not otherwise exempt from those rules, the
broker-dealer must:

| | (a) | make a special written determination that the penny stock
      is a suitable investment for the purchaser; and
| | --- | ---------------------------------------------------------------------------------------------------------------

21

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| | (b) | receive from the purchaser his or her written
      acknowledgement of receipt of the determination and a written agreement to
      the transaction.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------

These disclosure requirements may have the effect of reducing
the trading activity in the secondary market for our common stock and therefore
stockholders may have difficulty selling those securities.

REGISTERED HOLDERS OF OUR COMMON STOCK

As of March 20, 2009, there were 181 registered holders of
record of our common stock. We believe that a large number of stockholders hold
stock on deposit with their brokers or investment bankers registered in the name
of stock depositories.

DIVIDENDS

We have not declared any dividends on our common stock since
our inception. There are no dividend restrictions that limit our ability to pay
dividends on our common stock in our Articles of Incorporation or bylaws.
Chapter 78 of the Nevada Revised Statutes (the NRS), does provide certain
limitations on our ability to declare dividends. Section 78.288 of Chapter 78 of
the NRS prohibits us from declaring dividends where, after giving effect to the
distribution of the dividend:

| | (a) | we would not be able to pay our debts as they become due
      in the usual course of business; or                                                                                                                                                                                                                                                                                                                                                        
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | (b) | except as may be allowed by our Articles of
      Incorporation, our total assets would be less than the sum of our total
      liabilities plus the amount that would be needed, if we were to be
      dissolved at the time of the distribution, to satisfy the preferential
      rights upon dissolution of stockholders who may have preferential rights
      and whose preferential rights are superior to those receiving the
      distribution.

RECENT SALES OF UNREGISTERED SECURITIES

None.

ITEM
7.               
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.

PLAN OF OPERATION

During our 2009 fiscal year, we intend to proceed with our
exploration and development programs for the Columbus Project and the Red
Mountain Project. To provide Ireland with maximum financial flexibility, we have
adjusted our capital expenditure budget for 2009. Accordingly, we have elected
to postpone the drilling program at the Red Mountain Project. We continue to
believe that the Red Mountain Project is an excellent prospect for us.

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

The Columbus Project

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

22

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|1. | Pilot Production Module: The installation of our
      pilot production plant at the Columbus Project was completed in October
      2008 and the pilot production plant is currently in operation. The pilot
      production process consists of a full scale production and processing
      circuit that we are using to test the commercial viability of mining and
      extracting precious metals from the mineralized zones of the Columbus
      Project.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | If the operation of this pilot production facility proves
      to our satisfaction that the Columbus Project is economically viable, we
      will seek to expand the production process or construct additional
      production circuits within the mill site to increase production capacity.
      The production model for the Columbus Project is anticipated to be a low
      cost, high volume mining operation. A diagram and description outlining
      the pilot production process for the Columbus Project is attached as an
      exhibit to this Annual Report.                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | We currently have a production permit from the Bureau of
      Land Management (the BLM) for the Columbus Project. The production
      permit allows us to produce calcium carbonate and extract precious
      minerals on the 320 acre mine site and 60 acres of mill sites claims
      located at the Columbus Project at a mine rate of up to 792,000 tons per
      year. The mine site and mill sites are located in Zone A on the northern
      edge of the 5,000 acre area of interest identified by our surface sampling
      program.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | We are currently using a dredge mining method to extract
      minerals from the Columbus Project. The material is mined and handled as a
      slurry throughout the production process. Once the material has been
      slurried, we use a gravity concentration process to filter the minerals
      from the material. This production process has, to date, proven to be very
      successful and is our preferred method of mining as the cost per ton of
      material mined is low. The final extraction method is expected to involve
      acid leaching to recover the minerals from the materials.                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | We are continuing to make adjustments to the processing
      circuit in an effort to optimize precious metals recovery and to determine
      the economics of this process. Bench and bulk leach tests are being
      conducted at off site facilities by independent consultants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | We anticipate that we will continue to operate our pilot
      production plant on an ongoing basis unless our production process is
      proven to be commercially unviable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Readers are cautioned that, although we believe that
      the results of our exploration activities to date are sufficiently
      positive to proceed with the installation and operation of a pilot
      production circuit for the Columbus Project, we have not yet established
      any probable or proven reserves. There is no assurance that we will be
      able to establish that any commercially extractable ore reserves exist on
      the Columbus Project or that we will enter into commercial
      production.                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|2. | Drilling Exploration Program: Drilling on our
      39-hole drilling program for the Columbus Project has been completed. The
      goal of this drilling program is to determine whether there are sufficient
      reserves on the Columbus Project for economic viability. The holes were
      drilled to depths ranging from 200 feet to 400 feet in depth. The
      objective of the program is to determine the three dimensional extent and
      economic potential of the gold mineralization within the area of interest
      that had previously been discovered by our surface sampling program. We
      have completed drilling on all 39 holes and, in the first quarter of 2009,
      we received the results from 7 holes drilled in Zone B, the results of
      which are reported above. We expect to receive the results from the
      remaining holes drilled, including 7 additional holes drilled adjacent to
      Zone B and 25 holes in Zone A, within the next few
  months.

We anticipate spending approximately $2,795,000 on our
exploration and development program for the Columbus Project in 2009.

The Red Mountain Project

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

|1. | Comprehensive Project Report: A comprehensive
      project report on the Red Mountain Project has been prepared for us by an
      independent geological consultant. This report includes a review, summary
      and analysis of the mining history of the area and previous exploration
      work done on the project area. Based
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23

---

|   | on the previous exploration work done on the region and
      on the specific project area, the consulting geologist recommended that
      additional exploration work be conducted on the Red Mountain Project. We
      expect the project report to be updated once our sampling program has been
      completed and the results of that program have been analyzed.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                          
|2. | Sampling and Drilling Program: We have initiated a
      surface sampling program on the Red Mountain Project. We have postponed
      the drilling program on the Red Mountain Project until we obtain
      additional financing. See Financing
Requirements.                                                                                                        

We anticipate that we will spend approximately $200,000 on our
exploration program for the Red Mountain Project in 2009.

Cash Requirements

We have budgeted for the following expenditures in 2009:

Columbus Project•    Drilling Exploration Program and
        Obtaining Reserve Estimates
    $            
      750,000•    Pre-feasibility
        and Feasibility Program
    1,915,000•    Property Maintenance Costs
    130,0002,795,000•    Contingency (@ 10%)
    279,500Total for Columbus Project
    $        
      3,074,500Red Mountain Project•    Property Acquisition
        and Maintenance Costs
    $                22,500•    Sampling Exploration Program
    177,500200,000•    Contingency (@ 10%)
    20,000Total for Red Mountain Project
    $            220,000General and Administration•    General and Administration
    739,000•    Contingency (@ 10%)
    73,900Total for General and
      Administration
    $            812,900TOTAL Expenses
    $        
      4,107,400Capital Expenditures
    $            200,000Total Cash Expenditures
    $        
      4,307,400


As of December 31, 2008, we had cash in the amount of
$2,565,823 and a working capital surplus of $2,559,503. This amount is
substantially less than the total expenditures that we have budgeted for our
2009 fiscal year. We estimate that our current financial resources are
sufficient to allow us to meet the anticipated costs of our exploration and
development programs for the first half of our 2009 fiscal year. However, actual
costs could be greater than we have anticipated. We will require additional
financing in order to fully complete our exploration and development plans for
2009. We do not currently have any financing arrangements in place, and there
are no assurances that we will be able to obtain additional financing in an
amount sufficient to meet our needs or on terms that are acceptable to us.

24

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RESULTS OF OPERATIONS

|Summary of Year End Results |   |                   |   |   |                   |   |  |                       | 
|--------------------------- | - | ----------------- | - | - | ----------------- | - |  | --------------------- | 
|                            |   | Year Ended        |   |   | Year Ended        |   |  | Percentage            | 
|                            |   | December 31, 2008 |   |   | December 31, 2007 |   |  | Increase / (Decrease) | 
|Revenue                     | $ | -                 |   | $ | -                 |   |  | n/a                   | 
|Operating Expenses          |   | (5,455,629        | ) |   | (2,363,460        | ) |  | 130.8%                | 
|Interest Income             |   | 145,108           |   |   | 120,189           |   |  | 20.7%                 | 
|Income Tax Benefit          |   | 1,194,594         |   |   | -                 |   |  | n/a                   | 
|Net Loss                    | $ | (4,115,927        | ) | $ | (2,243,271        | ) |  | 83.5%                 | 

Revenue

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

Expenses

The major components of our expenses for the years ended
December 31, 2008 and 2007 are outlined in the table below:

|                                         |   | Year
      Ended  |  |   | Year
      Ended  |  |  | Percentage            | 
|---------------------------------------- | - | ----------------- |  | - | ----------------- |  |  | --------------------- | 
|                                         |   | December 31, 2008 |  |   | December 31, 2007 |  |  | Increase / (Decrease) | 
|Mineral exploration and
      evaluation | $ | 3,229,212         |  | $ | 336,042           |  |  | 861.0%                | 
|expenses                                 |   |                   |  |   |                   |  |  |                       | 
|Mineral exploration and
      evaluation |   | 550,000           |  |   | 976,314           |  |  | (43.7)%               | 
|expenses  related party                 |   |                   |  |   |                   |  |  |                       | 
|General and administrative               |   | 1,575,730         |  |   | 485,932           |  |  | 224.3%                | 
|Depreciation                             |   | 19,687            |  |   | 672               |  |  | 2829.6%               | 
|Mineral and property holding
      costs |   | 81,000            |  |   | 269,500           |  |  | (69.9)%               | 
|Mineral and property holding costs      |   | -                 |  |   | 295,000           |  |  | (100)%                | 
|reimbursed to related party              |   |                   |  |   |                   |  |  |                       | 
|Total Expenses                           | $ | 5,455,629         |  | $ | 2,363,460         |  |  | 130.8%                | 

Our operating expenses for the year ended December 31, 2008
increased substantially as compared to our December 31, 2007 fiscal year. The
additional operating expenses for our third fiscal quarter of 2008 are primarily
expenses related to the exploration and development of the Columbus Project and
the exploration of the Red Mountain Project.

The item Mineral exploration and evaluation expenses  related
party represents (a) amounts paid or reimbursed to Nanominerals for exploration
work conducted on the Columbus and Red Mountain Projects; and (b) amounts paid
in respect of the DDB Claims to the DDB Syndicate, an entity owned by related
parties.

During our 2008 fiscal year, we incurred fees payable to
Nanominerals of $420,000 for technical and financing related services relating
primarily to the Columbus and Red Mountain Projects. In addition, we incurred
$33,354 in respect to reimbursable expenses paid for by Nanominerals. At
December 31, 2008, we were indebted to Nanominerals in the amount of $42,733 for
unpaid fees and reimbursable expenses.

During our 2008 fiscal year, we made $130,000 in rental
payments to the DDB Syndicate under the terms of our lease agreement for the DDB
Claims. The DDB Syndicate is a mining syndicate made up of a limited liability

25

---

company controlled by Douglas D.G. Birnie (our President and
Chief Executive Officer and a member of our Board of Directors), Lawrence E.
Chizmar, a former member of our Board of Directors (and a former director of
CBI), three former officers, directors and affiliates of CBI, and three
companies affiliated with Nanominerals. The $130,000 in rental payments made to
the DDB Syndicate consisted of $13,416 paid to each member of the DDB Syndicate,
plus an additional $22,670 paid to a company controlled by Mr. Birnie for the
reimbursement of expenses related to exploration work done on the DDB Claims.

We also had an outstanding balance for accrued compensation due
to Douglas D.G. Birnie (our President and Chief Executive Officer and a member
of our Board of Directors) in the amount of $7,684, payable to a company
controlled by Mr. Birnie.

The increase in general and administrative expenses is primarily
  attributable to: (i) increases in the amounts paid as executive compensation;
  (ii) an increase in legal and accounting expenses incurred by us; (iii) increased
  professional and administrative expenses associated with the administration
  of the Columbus Project; and (iv) an overall increase in company activity.

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

LIQUIDITY AND CAPITAL RESOURCES

|Working Capital                               |   |                   |   |   |                   |   |   |                       |  
|--------------------------------------------- | - | ----------------- | - | - | ----------------- | - | - | --------------------- | -
|                                              |   | At                |   |   | At                |   |   | Percentage            |  
|                                              |   | December 31, 2008 |   |   | December 31, 2007 |   |   | Increase / (Decrease) |  
|Current Assets                                | $ | 2,734,552         |   | $ | 8,909,628         |   |   | (69.3)%               |  
|Current Liabilities                           |   | (175,049          | ) |   | (288,452          | ) |   | (39.3)%               |  
|Working Capital Surplus                       | $ | 2,559,503         |   | $ | 8,621,176         |   |   | (70.3)%               |  
|                                              |   |                   |   |   |                   |   |   |                       |  
|Cash Flows                                    |   |                   |   |   |                   |   |   |                       |  
|                                              |   |                   |   |   | Year Ended        |   |   | Year Ended            |  
|                                              |   |                   |   |   | December 31, 2008 |   |   | December 31, 2007     |  
|Cash Flows used in Operating
      Activities |   |                   |   | $ | (4,165,066        | ) | $ | (3,790,103            | )
|Cash Flows used in Investing Activities       |   |                   |   |   | (2,029,716        | ) |   | (219,772              | )
|Cash Flows from Financing
      Activities    |   |                   |   |   | 1,000             |   |   | 12,757,847            |  
|Net Change in Cash During Period              |   |                   |   | $ | (6,193,782        | ) | $ | 8,747,972             |  

At December 31, 2008 we had a working capital surplus of
$2,559,503 as compared to a working capital surplus of $8,621,176 at December
31, 2007. The decrease in our working capital surplus is primarily attributable
to the fact that: (i) we had no sources of revenue and only nominal financing
during the period; and (ii) we incurred substantial expenses in the acquisition,
exploration and development of the Columbus Project and the exploration of the
Red Mountain Project.

The increase in cash flows used for investing activities is due
to purchases of plant and equipment for our pilot production plant during our
2008 fiscal year.

Financing Requirements

We anticipate that we will require additional financing by the
second half of our 2009 fiscal year if we are to complete our proposed
exploration and development programs for 2009. We do not currently have any
financing arrangements in place. There is no assurance that we will be able to
obtain additional financing when need or in an amount sufficient to meet our
needs or that such financings will be offered on terms that are acceptable to
our management. Our ability to obtain additional financing will be subject to a
number of factors, including the variability of market prices for gold and
silver, investor interest in our mineral projects, and the performance of equity
markets in general. These factors may make the timing, amount, terms or
conditions of

26

---

additional financing unavailable to us. If we are not able to
obtain financing when needed or in an amount sufficient to enable us to complete
our programs, we may be required to adjust our exploration and development plans
depending upon our existing capital resources.

OFF-BALANCE SHEET ARRANGEMENTS

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

CRITICAL ACCOUNTING POLICIES

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

We have identified certain accounting policies, described
below, that are most important to the portrayal of our current financial
condition and results of operations. Our significant accounting policies are
disclosed in the notes to our audited financial statements included under Item 8
of this Annual Report.

Mineral Rights

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

Exploration Costs

Mineral exploration costs are expensed as incurred.

Mineral Property Acquisition Costs

Costs of acquiring mining properties are capitalized upon
acquisition. Mine development costs incurred either to develop new ore deposits,
expand the capacity of mines, or to develop mine areas substantially in advance
of current production are also capitalized once proven and probable reserves
exist and the property is a commercially mineable property. Costs incurred to
maintain current production or to maintain assets on a standby basis are charged
to operations. Costs of abandoned projects are charged to operations upon
abandonment. We evaluate the carrying value of capitalized mining costs and
related property and equipment costs, to determine if these costs are in excess
of their recoverable amount whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable. The periodic evaluation of
carrying value of capitalized costs and any related property and equipment costs
are based upon expected future cash flows and/or estimated salvage value in
accordance with Statement of Financial Accounting Standards (SFAS) No. 144,
Accounting for Impairment or Disposal of Long-Lived Assets.

Reclamation and Remediation Costs (Asset Retirement
Obligation)

We accrued costs associated with environmental remediation
obligations in accordance with Statement of Financial Accounting Standards
(SFAS) No. 143, Accounting for Asset Retirement Obligations. In accordance
with SFAS No. 143, we record a liability for the present value of the estimated
environmental remediation costs in the period in which the liability is incurred
and becomes determinable, with an offsetting increase in the

27

---

carrying amount of the associated asset. The liability will be
accreted and the asset will be depreciated over the life of the related assets.
Adjustments for changes resulting from the passage of time and changes to either
the timing or amount of the original present value estimate underlying the
obligation will be made. As reclamation work is performed or liabilities are
otherwise settled, the recorded amount of the liability is reduced.

We accrue costs associated with environmental remediation
obligation when it is probable that such costs will be incurred and they are
reasonably estimable. Estimates for reclamation and other closure costs are
prepared in accordance with SFAS No. 5 Accounting for Contingencies, or
Statement of Position 96-1 Environmental Remediation Liabilities. Costs of
future expenditures for environmental remediation are not discounted to their
present value unless subject to a contractually obligated fixed payment
schedule. Such costs are based on managements current estimate of amounts to be
incurred when the remediation work is performed, within current laws and
regulations.

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

Accruals for reclamation and environmental matters totaled
$275,338 and $0 at December 31, 2008 and 2007, respectively. We are in
exploration stage and are unable to determine the estimated timing of these
expenditures relating to these accruals at this time. It is reasonably possible
the ultimate cost of reclamation and remediation could change in the future, and
that changes to these estimates could have a material effect on future operating
results as new information becomes known. For additional information, see Note
12 of the financial statements included with this Annual Report.

28

---

ITEM
8.                FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA.

Index to Financial Statements:

Audited financial statements for the year ended December 31,
2008, including:

|1. | Report of Independent Registered Accounting Firm (Brown
        Armstrong Paulden McCown Starbuck Thornburgh & Keeter Accountancy
        Corporation);                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                   
|2. | Consolidated Balance Sheets as of December 31, 2008 and
        2007;                                                                                                             
|   |                                                                                                                                                                                   
|3. | Consolidated Statements of Operations for the years ended
        December 31, 2008 and 2007 and the period on February 20, 2001 (date of
        inception) to December 31, 2008;
|   |                                                                                                                                                                                   
|4. | Consolidated Statement of Stockholders Equity for
        the period from February 20, 2001 (date of inception) through December
        31, 2008; and                           
|   |                                                                                                                                                                                   
|5. | Consolidated Statements of Cash Flows for the years ended
        December 31, 2008 and 2007and the period on February 20, 2001 (date of
        inception) to December 31, 2008; 
|   |                                                                                                                                                                                   
|6. | Notes to Consolidated Financial Statements.                                                                                                                                       

29

---

BROWN ARMSTRONG PAULDEN 
  McCOWN STARBUCK THORNBURGH &
KEETER

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and 
  Stockholders of Ireland, Inc.

We have audited the accompanying balance sheets of Ireland,
  Inc. (An Exploration Stage Company) as of December 31, 2008 and 2007, and the
  related statements of income, stockholders equity and comprehensive income, and
  cash flows for each of the years in the two-year period ended December 31, 2008.
  Ireland Inc.s management is responsible for these financial statements. Our
  responsibility is to express an opinion on these financial statements based on
  our audits.

We conducted our audits in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform the audit to obtain reasonable assurance about
  whether the financial statements are free of material misstatement. The company
  is not required to have, nor were we engaged to perform, an audit of its
  internal control over financial reporting. Our audit included consideration of
  internal control over financial reporting as a basis for designing audit
  procedures that are appropriate in the circumstances, but not for the purpose of
  expressing an opinion on the effectiveness of the companys internal control
  over financial reporting. Accordingly, we express no such opinion. An audit also
  includes examining, on a test basis, evidence supporting the amounts and
  disclosures in the financial statements, assessing the accounting principles
  used and significant estimates made by management, as well as evaluating the
  overall financial statement presentation. We believe that our audits provide a
  reasonable basis for our opinion.

In our opinion, the financial statements referred to above
  present fairly, in all material respects, the financial position of Ireland,
  Inc. (An Exploration Stage Company) as of December 31, 2008 and 2007, and the
  results of its operations and its cash flows for each of the years in the
  two-year period ended December 31, 2008 in conformity with accounting principles
  generally accepted in the United States of America.

The accompanying financial statements have been prepared
  assuming the Company will continue as a going concern. As described in Note 1 to
  the financial statements, the Companys operating losses raise substantial doubt
  about its ability to continue as a going concern, unless the Company attains
  future profitable operations and/or obtains additional financing. The financial
  statements do not include any adjustments that might result from the outcome of
  this uncertainty.

BROWN ARMSTRONG PAULDEN 
  McCOWN
  STARBUCK THORNBURGH & KEETER 
  ACCOUNTANCY CORPORATION



March 26, 2009 
  Bakersfield, California

F-1

---

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

|                                                         |   | December 31, 2008 |   |   | December 31, 2007 |  
|-------------------------------------------------------- | - | ----------------- | - | - | ----------------- | -
|                                                         |   |                   |   |   |                   |  
|ASSETS                                                   |  
|                                                         |   |                   |   |   |                   |  
|Current assets                                           |   |                   |   |   |                   |  
|Cash                                                     | $ | 2,565,823         |   | $ | 8,759,605         |  
|Refunds receivable                                       |   | 27,394            |   |   | -                 |  
|Prepaid expenses                                         |   | 141,335           |   |   | 150,023           |  
|                                                         |   |                   |   |   |                   |  
|Total current assets                                     |   | 2,734,552         |   |   | 8,909,628         |  
|                                                         |   |                   |   |   |                   |  
|Property and equipment, net                              |   | 3,378,177         |   |   | 290,718           |  
|Mineral properties                                       |   | 31,948,053        |   |   | -                 |  
|Mineral property acquisition costs                       |   | -                 |   |   | 1,058,872         |  
|Reclamation bonds                                        |   | 933,088           |   |   | 807,000           |  
|Deposits                                                 |   | 22,200            |   |   | 2,200             |  
|                                                         |   |                   |   |   |                   |  
|Total non-current assets                                 |   | 36,281,518        |   |   | 2,158,790         |  
|                                                         |   |                   |   |   |                   |  
|Total assets                                             | $ | 39,016,070        |   | $ | 11,068,418        |  
|                                                         |   |                   |   |   |                   |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                     |  
|                                                         |   |                   |   |   |                   |  
|Current liabilities                                      |   |                   |   |   |                   |  
|Accounts payable                                         | $ | 89,543            |   | $ | 144,280           |  
|Accounts payable - related party                         |   | 50,417            |   |   | 82,128            |  
|Accrued payroll and related
      taxes                  |   | 11,799            |   |   | 38,754            |  
|Due to related party                                     |   | 23,290            |   |   | 23,290            |  
|                                                         |   |                   |   |   |                   |  
|Total current liabilities                                |   | 175,049           |   |   | 288,452           |  
|                                                         |   |                   |   |   |                   |  
|Long-term liabilities                                    |   |                   |   |   |                   |  
|Accrued reclamation and
      remediation costs          |   | 275,338           |   |   | -                 |  
|Deferred tax liability                                   |   | 9,066,600         |   |   | -                 |  
|                                                         |   |                   |   |   |                   |  
|Total long-term liabilities                              |   | 9,341,938         |   |   | -                 |  
|                                                         |   |                   |   |   |                   |  
|Total liabilities                                        |   | 9,516,987         |   |   | 288,452           |  
|                                                         |   |                   |   |   |                   |  
|Stockholders' equity                                     |   |                   |   |   |                   |  
|Common stock, $0.001 par
      value; 400,000,000 shares |   |                   |   |   |                   |  
|authorized, 97,010,087 and
      86,550,000 shares,      |   |                   |   |   |                   |  
|respectively,
      issued and outstanding               |   | 97,010            |   |   | 86,550            |  
|Additional paid-in capital                               |   | 36,059,449        |   |   | 13,234,865        |  
|Accumulated deficit during
      exploration stage       |   | (6,657,376        | ) |   | (2,541,449        | )
|                                                         |   |                   |   |   |                   |  
|Total
      stockholders' equity                         |   | 29,499,083        |   |   | 10,779,966        |  
|                                                         |   |                   |   |   |                   |  
|Total liabilities and stockholders' equity               | $ | 39,016,070        |   | $ | 11,068,418        |  

See Accompanying Notes to these Consolidated Financial
  Statements 
  F-2

---

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

|                                             |   |                          |   |   |                   |   |   | For the period from |  
|-------------------------------------------- | - | ------------------------ | - | - | ----------------- | - | - | ------------------- | -
|                                             |   |                          |   |   |                   |   |   | February 20, 2001   |  
|                                             |   |                          |   |   |                   |   |   | (Date of Inception) |  
|                                             |   | For
      the Year Ended |   |   | Through           |  
|                                             |   | December 31, 2008        |   |   | December 31, 2007 |   |   | December 31, 2008   |  
|                                             |   |                          |   |   |                   |   |   |                     |  
|                                             |   |                          |   |   |                   |   |   |                     |  
|Revenue                                      | $ | -                        |   | $ | -                 |   | $ | -                   |  
|                                             |   |                          |   |   |                   |   |   |                     |  
|Operating expenses                           |   |                          |   |   |                   |   |   |                     |  
|Mineral exploration and evaluation expenses  |   | 3,229,212                |   |   | 336,042           |   |   | 3,576,110           |  
|Mineral exploration and evaluation           |   |                          |   |   |                   |   |   |                     |  
|expenses - related party                     |   | 550,000                  |   |   | 976,314           |   |   | 1,526,314           |  
|General and administrative                   |   | 1,575,730                |   |   | 485,932           |   |   | 2,334,984           |  
|Depreciation                                 |   | 19,687                   |   |   | 672               |   |   | 20,359              |  
|Mineral and property holding costs           |   | 81,000                   |   |   | 269,500           |   |   | 350,500             |  
|Mineral and property holding costs -         |   |                          |   |   |                   |   |   |                     |  
|reimbursed to related
      party            |   | -                        |   |   | 295,000           |   |   | 295,000             |  
|Write-off of mineral rights                  |   | -                        |   |   | -                 |   |   | 14,000              |  
|                                             |   |                          |   |   |                   |   |   |                     |  
|Total operating expenses                     |   | 5,455,629                |   |   | 2,363,460         |   |   | 8,117,267           |  
|                                             |   |                          |   |   |                   |   |   |                     |  
|Loss from operations                         |   | (5,455,629               | ) |   | (2,363,460        | ) |   | (8,117,267          | )
|                                             |   |                          |   |   |                   |   |   |                     |  
|Other income:                                |   |                          |   |   |                   |   |   |                     |  
|Interest income                              |   | 145,108                  |   |   | 120,189           |   |   | 265,297             |  
|                                             |   |                          |   |   |                   |   |   |                     |  
|Total other income                           |   | 145,108                  |   |   | 120,189           |   |   | 265,297             |  
|                                             |   |                          |   |   |                   |   |   |                     |  
|Loss before income taxes                     |   | (5,310,521               | ) |   | (2,243,271        | ) |   | (7,851,970          | )
|                                             |   |                          |   |   |                   |   |   |                     |  
|Income tax benefit                           |   | 1,194,594                |   |   | -                 |   |   | 1,194,594           |  
|                                             |   |                          |   |   |                   |   |   |                     |  
|Net loss                                     | $ | (4,115,927               | ) | $ | (2,243,271        | ) | $ | (6,657,376          | )
|                                             |   |                          |   |   |                   |   |   |                     |  
|                                             |   |                          |   |   |                   |   |   |                     |  
|Loss per common share - basic and diluted    | $ | (0.04                    | ) | $ | (0.04             | ) |   |                     |  
|                                             |   |                          |   |   |                   |   |   |                     |  
|Weighted average common shares outstanding - |   |                          |   |   |                   |   |   |                     |  
|Basic and diluted                            |   | 95,553,791               |   |   | 55,535,612        |   |   |                     |  

See Accompanying Notes to these Consolidated Financial
  Statements 
  F-3

---

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

AccumulatedDeficit During
        
        
        TotalCommon
          Stock
        
        
        Additional
        
        
        Exploration
        
        
        Stockholders'Shares
        
        
        Amount
        
        
        Paid-in Capital
        
        
        Stage
        
        
        EquityBalance, February 20, 2001
        
        -
        
        $
        -
        
        $
        -
        
        $
        -
        
        $
        -Issuance of common stock for cash,$0.001 per share
        
        20,000,000
        
        
        20,000
        
        
        (15,000
        )
        
        -
        
        
        5,000Issuance of common stock for cash,$0.0025 per share
        
        8,000,000
        
        
        8,000
        
        
        12,000
        
        
        -
        
        
        20,000Issuance of common stock for cash,$0.025 per share
        
        1,750,000
        
        
        1,750
        
        
        42,000
        
        
        -
        
        
        43,750Net loss
        
        -
        
        
        -
        
        
        -
        
        
        (16,045
        )
        
        (16,045
        )Balance, December 31, 2001
        
        29,750,000
        
        
        29,750
        
        
        39,000
        
        
        (16,045
        )
        
        52,705Net loss
        
        -
        
        
        -
        
        
        -
        
        
        (49,313
        )
        
        (49,313
        )Balance, December 31, 2002
        
        29,750,000
        
        
        29,750
        
        
        39,000
        
        
        (65,358
        )
        
        3,392Net loss
        
        -
        
        
        -
        
        
        -
        
        
        (32,516
        )
        
        (32,516
        )Balance, December 31, 2003
        
        29,750,000
        
        
        29,750
        
        
        39,000
        
        
        (97,874
        )
        
        (29,124
        )Net loss
        
        -
        
        
        -
        
        
        -
        
        
        (51,000
        )
        
        (51,000
        )Balance, December 31, 2004
        
        29,750,000
        
        
        29,750
        
        
        39,000
        
        
        (148,874
        )
        
        (80,124
        )Issuance of common stock for cash,$0.025 per share
        
        6,800,000
        
        
        6,800
        
        
        163,200
        
        
        -
        
        
        170,000Net loss
        
        -
        
        
        -
        
        
        -
        
        
        (54,025
        )
        
        (54,025
        )Balance, December 31, 2005
        
        36,550,000
        
        
        36,550
        
        
        202,200
        
        
        (202,899
        )
        
        35,851Net loss
        
        -
        
        
        -
        
        
        -
        
        
        (95,279
        )
        
        (95,279
        )Balance, December 31, 2006
        
        36,550,000
        
        
        36,550
        
        
        202,200
        
        
        (298,178
        )
        
        (59,428
        )Issue of common stock toNanominerals Corp. for a deed ofassignment to the option interestsin the Columbus and the Red Mountainprojects
        
        30,000,000
        
        
        30,000
        
        
        195,000
        
        
        -
        
        
        225,000Issuance of stock options for3,720,000 shares of common stockto officers and consultants
        
        -
        
        
        -
        
        
        6,817
        
        
        -
        
        
        6,817Issuance of common stock for cashReg. S - Private Placement,$0.65 per share
        
        2,016,000
        
        
        2,016
        
        
        1,308,384
        
        
        -
        
        
        1,310,400
 See Accompanying Notes to these Consolidated Financial
    Statements 
    F-4   IRELAND INC.
    (AN EXPLORATION STAGE ENTERPRISE) 
    CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY 
    (UNAUDITED) AccumulatedDeficit During
        
        
        TotalCommon
          Stock
        
        
        Additional
        
        
        Exploration
        
        
        Stockholders'Shares
        
        
        Amount
        
        
        Paid-in Capital
        
        
        Stage
        
        
        EquityIssuance of common stock for cashReg. D - Private Placement,$0.65 per share, net of $34,125commission
        
        2,250,000
        
        
        2,250
        
        
        1,426,125
        
        
        -
        
        
        1,428,375Issuance of common stock for cashReg. D - Private Placement,$0.65 per share, net of $98,053commission
        
        3,962,000
        
        
        3,962
        
        
        2,473,285
        
        
        -
        
        
        2,477,247Issuance of common stock for cashReg. S - Private Placement,$0.65 per share, net of $29,575commission
        
        3,150,500
        
        
        3,151
        
        
        2,015,100
        
        
        -
        
        
        2,018,251Issuance of common stock for cashReg. D - Private Placement,$0.65 per share
        
        2,000,000
        
        
        2,000
        
        
        1,298,000
        
        
        -
        
        
        1,300,000Issuance of common stock for cashReg. S - Private Placement,$0.65 per share, net of $39,358commission
        
        1,895,000
        
        
        1,895
        
        
        1,190,497
        
        
        -
        
        
        1,192,392Issuance of stock options for75,000 shares of common stockto employee amortized overvesting period
        
        -
        
        
        -
        
        
        9,876
        
        
        -
        
        
        9,876Issuance of common stock for cashReg. D - Private Placement,$0.65 per share, net of $4,550commission
        
        3,600,000
        
        
        3,600
        
        
        2,331,850
        
        
        -
        
        
        2,335,450Issuance of common stock for cashReg. S - Private Placement,$0.65 per share, net of $37,992commission
        
        1,126,500
        
        
        1,126
        
        
        693,107
        
        
        -
        
        
        694,233Issuance of stock options for100,000 shares of common stockto consultant
        
        -
        
        
        -
        
        
        84,624
        
        
        -
        
        
        84,624Net loss
        
        -
        
        
        -
        
        
        -
        
        
        (2,243,271
        )
        
        (2,243,271
        )Balance, December 31, 2007
        
        86,550,000
        
        
        86,550
        
        
        13,234,865
        
        
        (2,541,449
        )
        
        10,779,966Issuance of common stockfor cash, $0.05 per sharefrom exercise of options
        
        20,000
        
        
        20
        
        
        980
        
        
        -
        
        
        1,000Issuance of common stock inconnection with the acquisitionto the former shareholders of CBI,$1.92 per share
        
        10,440,087
        
        
        10,440
        
        
        19,989,560
        
        
        -
        
        
        20,000,000
 See Accompanying Notes to these Consolidated Financial
    Statements 
    F-5   IRELAND INC.
    (AN EXPLORATION STAGE ENTERPRISE) 
    CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY 
    (UNAUDITED) AccumulatedDeficit During
        
        
        TotalCommon
          Stock
        
        
        Additional
        
        
        Exploration
        
        
        Stockholders'Shares
        
        
        Amount
        
        
        Paid-in Capital
        
        
        Stage
        
        
        EquityFair value of share purchase warrantsissued in connection with theacquisition of CBI
        
        -
        
        
        -
        
        
        1,359,351
        
        
        -
        
        
        1,359,351Amortization of stock optionsissued to employee overvesting period
        
        -
        
        
        -
        
        
        41,978
        
        
        -
        
        
        41,978Effect of modification of stockoptions issued to a nonemployeeformer shareholder of CBI
        
        -
        
        
        -
        
        
        19,935
        
        
        -
        
        
        19,935Amortization of stock optionsissued to director overvesting period
        
        -
        
        
        -
        
        
        16,307
        
        
        -
        
        
        16,307Effect of stock option forfeiture
        
        -
        
        
        -
        
        
        (21,012
        )
        
        -
        
        
        (21,012
        )Effect of modification of stockoptions issued to officers, director,and consultant
        
        -
        
        
        -
        
        
        1,417,485
        
        
        -
        
        
        1,417,485Net loss, December 31, 2008
        
        -
        
        
        -
        
        
        -
        
        
        (4,115,927
        )
        
        (4,115,927
        )97,010,087
        
        $
        97,010
        
        $
        36,059,449
        
        $
        (6,657,376
        )
        $
        29,499,083


See Accompanying Notes to these Consolidated Financial
  Statements
  F-6

---

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

|                                                     |   |                          |   |   |                   |   |   | For the period from |  
|---------------------------------------------------- | - | ------------------------ | - | - | ----------------- | - | - | ------------------- | -
|                                                     |   |                          |   |   |                   |   |   | February 20, 2001   |  
|                                                     |   |                          |   |   |                   |   |   | (Date of inception) |  
|                                                     |   | For
      the Year Ended |   |   | through           |  
|                                                     |   | December 31, 2008        |   |   | December 31, 2007 |   |   | December 31, 2008   |  
|CASH FLOWS FROM OPERATING ACTIVITIES                 |   |                          |   |   |                   |   |   |                     |  
|Net loss                                             | $ | (4,115,927               | ) | $ | (2,243,271        | ) | $ | (6,657,376          | )
|Adjustments to reconcile loss from operating         |   |                          |   |   |                   |   |   |                     |  
|to net cash used in operating activities:            |   |                          |   |   |                   |   |   |                     |  
|Depreciation                                         |   | 19,687                   |   |   | 672               |   |   | 20,359              |  
|Write-off of mineral rights                          |   | -                        |   |   | -                 |   |   | 14,000              |  
|Consulting
      accrual                             |   | -                        |   |   | -                 |   |   | 15,000              |  
|Stock based expenses                                 |   | 1,454,758                |   |   | 101,317           |   |   | 1,556,075           |  
|Changes in operating assets and liabilities:         |   |                          |   |   |                   |   |   |                     |  
|Prepaid expenses                                     |   | (141,387                 | ) |   | (150,023          | ) |   | (291,410            | )
|Other assets                                         |   | -                        |   |   | (2,200            | ) |   | (2,200              | )
|Reclamation deposit                                  |   | (128,762                 | ) |   | (807,000          | ) |   | (949,762            | )
|Mineral property
      acquisition costs             |   | (188,791                 | ) |   | (833,872          | ) |   | (1,022,663          | )
|Accounts payable and accrued
      liabilities       |   | (145,388                 | ) |   | 144,274           |   |   | 48,157              |  
|Deferred
      income taxes                          |   | (1,194,594               | ) |   | -                 |   |   | (1,194,594          | )
|Accrued reclamation and remediation
      costs      |   | 275,338                  |   |   | -                 |   |   | 275,338             |  
|                                                     |   |                          |   |   |                   |   |   |                     |  
|Net cash used in operating activities                |   | (4,165,066               | ) |   | (3,790,103        | ) |   | (8,189,076          | )
|                                                     |   |                          |   |   |                   |   |   |                     |  
|CASH FLOW FROM INVESTING ACTIVITIES                  |   |                          |   |   |                   |   |   |                     |  
|Purchase of property and equipment                   |   | (2,029,716               | ) |   | (219,772          | ) |   | (2,249,488          | )
|                                                     |   |                          |   |   |                   |   |   |                     |  
|Net cash used in investing activities                |   | (2,029,716               | ) |   | (219,772          | ) |   | (2,249,488          | )
|                                                     |   |                          |   |   |                   |   |   |                     |  
|CASH FLOW FROM FINANCING ACTIVITIES                  |   |                          |   |   |                   |   |   |                     |  
|Proceeds from stock issuance                         |   | 1,000                    |   |   | 13,000,000        |   |   | 13,239,750          |  
|Stock issuance costs                                 |   | -                        |   |   | (243,653          | ) |   | (243,653            | )
|Proceeds from borrowings from related party          |   | -                        |   |   | 1,500             |   |   | 8,290               |  
|                                                     |   |                          |   |   |                   |   |   |                     |  
|Net cash provided by financing activities            |   | 1,000                    |   |   | 12,757,847        |   |   | 13,004,387          |  
|                                                     |   |                          |   |   |                   |   |   |                     |  
|NET CHANGE IN CASH                                   |   | (6,193,782               | ) |   | 8,747,972         |   |   | 2,565,823           |  
|                                                     |   |                          |   |   |                   |   |   |                     |  
|CASH AT BEGINNING OF PERIOD                          |   | 8,759,605                |   |   | 11,633            |   |   | -                   |  
|                                                     |   |                          |   |   |                   |   |   |                     |  
|CASH AT END OF PERIOD                                | $ | 2,565,823                |   | $ | 8,759,605         |   | $ | 2,565,823           |  
|                                                     |   | -                        |   |   |                   |   |   |                     |  
|                                                     |   | -                        |   |   |                   |   |   |                     |  
|                                                     |   |                          |   |   |                   |   |   |                     |  
|SUPPLEMENTAL INFORMATION                             |   |                          |   |   |                   |   |   |                     |  
|                                                     |   |                          |   |   |                   |   |   |                     |  
|Interest Paid                                        | $ | -                        |   | $ | -                 |   | $ | -                   |  
|                                                     |   |                          |   |   |                   |   |   |                     |  
|Income Taxes Paid                                    | $ | -                        |   | $ | -                 |   | $ | -                   |  
|                                                     |   |                          |   |   |                   |   |   |                     |  
|Non-cash investing and financing activities:         |   |                          |   |   |                   |   |   |                     |  
|                                                     |   |                          |   |   |                   |   |   |                     |  
|Assets acquired for common stock and warrants issued |   |                          |   |   |                   |   |   |                     |  
|for mineral properties                               | $ | 21,359,351               |   | $ | 225,000           |   | $ | 21,584,351          |  
|                                                     |   |                          |   |   |                   |   |   |                     |  
|Net deferred tax liability assumed                   | $ | 10,261,194               |   | $ | -                 |   | $ | 10,261,194          |  

See Accompanying Notes to these Consolidated Financial
  Statements 
  F-7

---

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

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF
      SIGNIFICANT POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Basis of presentation These financial statements
      and related notes are presented in accordance with accounting principles
      generally accepted in the United States. The Companys fiscal year-end is
      December 31.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Description of business The Company is
      considered an exploration stage company since its formation and the
      Company has not yet realized any revenues from its planned operations. The
      Company is primarily focused on the acquisition and exploration of mining
      properties. Upon identification of commercially minable reserves, the
      Company expects to actively prepare the site for its extraction and enter
      the development stage.                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | History The Company was incorporated on February
      20, 2001 under the laws of the State of Nevada under the name Merritt
      Ventures Corp. On December 19, 2005, the Company changed its name to
      Ireland Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Going concern- The accompanying financial
      statements have been prepared assuming the Company will continue as a
      going concern.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company incurred cumulative net losses of $6,657,376
      from operations as of December 31, 2008, and has no revenue. The future of
      the Company is dependent upon its ability to obtain financing and upon
      future profitable operations from the development of its mineral
      properties. Management has plans to seek additional capital through
      private placements and public offerings of its common stock. The financial
      statements do not include any adjustments relating to the recoverability
      and classification of recorded assets, or the amounts of and
      classification of liabilities that might be necessary if the Company is
      unable to continue as a going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Principles of consolidation The consolidated
      financial statements include the accounts of the Company and its
      wholly-owned subsidiary incorporated for the sole purpose of completing an
      acquisition, CBI Acquisition, Inc. (CBIA). CBIA was formed on December 19,
      2007. CBIA has a wholly-owned single-member LLC subsidiary Columbus Salt
      Marsh LLC (CSM). Rand Metals LLC (Rand) was formed by the Company on May
      1, 2008 for purposes of potential future acquisitions and has activity
      related to exploration of the Red Mountain
      Project.                                                                                                                                    

F-8

---

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

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF
      SIGNIFICANT POLICIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Exploration costs- Mineral exploration costs are
      expensed as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Mineral rights- The Company capitalizes
      acquisition and option costs of mineral property rights. The amount
      capitalized represents fair value at the time the mineral rights were
      acquired.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company capitalizes acquisition and option costs of
      mineral rights as tangible assets in accordance with Emerging Issues Task
      Force abstract 04-02 (EITF 04-02), Whether Mineral Rights are Tangible
      or Intangible Assets and Related Issues. Upon commencement of production,
      the mineral rights will be amortized using the unit-of-production method
      over the life of the mineral rights. If the Company does not continue with
      exploration after the completion of the feasibility study, the mineral
      rights will be expensed at that time.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Mineral property acquisition costs Costs of
      acquiring mining properties are capitalized upon acquisition. Mine
      development costs incurred either to develop new ore deposits, to expand
      the capacity of mines, or to develop mine areas substantially in advance
      of current production are also capitalized once proven and probable
      reserves exist and the property is a commercially mineable property. Costs
      incurred to maintain current production or to maintain assets on a standby
      basis are charged to operations. Costs of abandoned projects are charged
      to operations upon abandonment. The Company evaluates the carrying value
      of capitalized mining costs and related property and equipment costs, to
      determine if these costs are in excess of their recoverable amount
      whenever events or changes in circumstances indicate that their carrying
      amounts may not be recoverable. The periodic evaluation of carrying value
      of capitalized costs and any related property and equipment costs are
      based upon expected future cash flows and/or estimated salvage value in
      accordance with Statement of Financial Accounting Standards (SFAS) No.
      144, Accounting for Impairment or Disposal of Long-Lived
      Assets.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Property and equipment Property and equipment is
      stated at cost less accumulated depreciation. Depreciation is provided on
      the straight-line or unit-of-production methods, as applicable, over the
      estimated useful lives of the assets, which are generally 3 to 39 years.
      The cost of repairs and maintenance is charged to expense as incurred.
      Expenditures for property betterments and renewals are capitalized. Upon
      sale or other disposition of a depreciable asset, cost and accumulated
      depreciation are removed from the accounts and any gain or loss is
      reflected in other income (expense).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company periodically evaluates whether events and
      circumstances have occurred that may warrant revision of the estimated
      useful life of property and equipment or whether the remaining balance of
      property and equipment should be evaluated for possible impairment. If
      events and circumstances warrant evaluation, the Company uses an estimate
      of the related undiscounted cash flows over the remaining life of the
      property and equipment in measuring their recoverability.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Impairment of long-lived assets The Company
      reviews and evaluates long-lived assets for impairment when events or
      changes in circumstances indicate the related carrying amounts may not be
      recoverable. The assets are subject to impairment consideration under SFAS
      No. 144 if events or circumstances indicate that their carrying amount
      might not be recoverable. As of December 31, 2008 exploration progress on
      these properties is on target with the Companys exploration and
      evaluation plan and no events or circumstances have happened to indicate
      the related carrying values of the properties may not be recoverable. When
      the Company determines a SFAS 144 impairment analysis should be done, the
      analysis will be performed using the rules of EITF 04-03, Mining Assets:
      Impairment and Business Combinations.                                                                                                                                                                                                                                                                                                                                                                                                                                

F-9

---

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

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF
      SIGNIFICANT POLICIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Various factors could impact the Companys ability to
      achieve forecasted production schedules. Additionally, commodity prices,
      capital expenditure requirements and reclamation costs could differ from
      the assumptions the Company may use in cash flow models used to assess
      impairment. The ability to achieve the estimated quantities of recoverable
      minerals from exploration stage mineral interests involves further risks
      in addition to those factors applicable to mineral interests where proven
      and probable reserves have been identified, due to the lower level of
      confidence that the identified mineralized material can ultimately be
      mined economically.                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Material changes to any of these factors or assumptions
      discussed above could result in future impairment charges to
      operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Reclamation and Remediation Costs (Asset Retirement
      Obligation)- The Company accrued costs associated with environmental
      remediation obligations in accordance with Statement of Financial
      Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement
      Obligations. In accordance with SFAS No. 143, the Company records a
      liability for the present value of the estimated environmental remediation
      costs in the period in which the liability is incurred and becomes
      determinable, with an offsetting increase in the carrying amount of the
      associated asset. The liability will be accreted and the asset will be
      depreciated over the life of the related assets. Adjustments for changes
      resulting from the passage of time and changes to either the timing or
      amount of the original present value estimate underlying the obligation
      will be made. As reclamation work is performed or liabilities are
      otherwise settled, the recorded amount of the liability is
      reduced.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company accrues costs associated with environmental
      remediation obligation when it is probable that such costs will be
      incurred and they are reasonably estimable. Estimates for reclamation and
      other closure costs are prepared in accordance with SFAS No. 5 Accounting
      for Contingencies, or Statement of Position 96-1 Environmental
      Remediation Liabilities. Costs of future expenditures for environmental
      remediation are not discounted to their present value unless subject to a
      contractually obligated fixed payment schedule. Such costs are based on
      managements current estimate of amounts to be incurred when the
      remediation work is performed, within current laws and
      regulations.                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Future reclamation and environmental-related expenditures
      are difficult to estimate, in many circumstances, due to the early stage
      nature of investigations, and uncertainties associated with defining the
      nature and extent of environmental contamination and the application of
      laws and regulations by regulatory authorities and changes in reclamation
      or remediation technology. The Company periodically reviews accrued
      liabilities for such reclamation and remediation costs as evidence becomes
      available indicating that the liabilities have potentially changed.
      Changes in estimates are reflected in the statement of operations in the
      period an estimate is revised.                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Accruals for reclamation and environmental matters
      totaled $275,338 and $0 at December 31, 2008 and 2007, respectively. The
      Company is in the exploration stage and is unable to determine the
      estimated timing of these expenditures relating to these accruals at this
      time. It is reasonably possible the ultimate cost of reclamation and
      remediation could change in the future, and that changes to these
      estimates could have a material effect on future operating results as new
      information becomes known. For additional information, see Note
      12.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

F-10

---

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

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF
      SIGNIFICANT POLICIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Fair value of financial instruments The
      Companys financial instruments consist of accounts payable and accrued
      liabilities. The carrying value of these financial instruments
      approximates their fair value based on their liquidity or their short-term
      nature. The Company is not exposed to significant interest or credit risk
      arising from these financial instruments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Revenue recognition- Revenues are recognized
      during the period in which the revenues are earned. Costs and expenses are
      recognized during the period in which they are incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Use of estimates- The preparation of financial
      statements in conformity with generally accepted accounting principles
      requires management to make estimates and assumptions that affect the
      reported amounts of assets and liabilities, and disclosure of contingent
      assets and liabilities at the date of the financial statements, and the
      reported amounts of revenues and expenses for the reporting period. Actual
      results could differ from these estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Earnings (loss) per share- The Company follows
      SFAS No. 128, Earnings Per Share and SFAS No. 150, Accounting for
      Certain Financial Instruments with Characteristics of Both Liabilities and
      Equity, which establish standards for the computation, presentation and
      disclosure requirements for basic and diluted earnings per share for
      entities with publicly-held common shares and potential common stock
      issuances. Basic earnings (loss) per share are computed by dividing net
      income by the weighted average number of common shares outstanding. In
      computing diluted earnings per share, the weighted average number of
      shares outstanding is adjusted to reflect the effect of potentially
      dilutive securities, such as stock options and warrants. Common stock
      equivalent shares are excluded from the computation if their effect is
      antidilutive. Weighted average of common stock equivalents, which include
      stock options and warrants to purchase common stock, on December 31, 2008
      and 2007 that were not included in the computation of diluted EPS, because
      the effect would be antidilutive, were 18,626,459 and 6,694,521,
      respectively.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Expenses of offering- The Company accounts for
      specific incremental costs directly to a proposed or actual offering of
      securities as a direct charge against the gross proceeds of the
      offering.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Income taxes The Company accounts for income
      taxes under SFAS No. 109, Accounting for Income Taxes using the
      liability method, recognizing certain temporary differences between the
      financial reporting basis of the Companys liabilities and assets and the
      related income tax basis for such liabilities and assets. This method
      generates either a net deferred income tax liability or asset for the
      Company, as measured by the statutory tax rates in effect. The Company
      derives its deferred income tax provision or benefit by recording the
      change in either the net deferred income tax liability or asset balance
      for the year. The Company records a valuation allowance against any
      portion of those deferred income tax assets when it believes, based on the
      weight of available evidence, it is more likely than not that some portion
      or all of the deferred income tax will not be
      realized.                                                                                                                                                                                                                                                                  

F-11

---

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

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF
      SIGNIFICANT POLICIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | On July 13, 2006, the FASB issued interpretation No. 48,
      Accounting for Uncertainty in Income Taxes  An Interpretation of FASB
      Statement No. 109 (FIN 48). FIN 48 clarifies the accounting for
      uncertainty in income taxes recognized in an entitys financial statements
      in accordance with SFAS No. 109, and prescribes a recognition threshold
      and measurement attributes for financial statement disclosure of tax
      positions taken or expected to be taken on a tax return. Under FIN 48, the
      impact of an uncertain income tax position on the income tax return must
      be recognized at the largest amount that is more-likely-than-not to be
      sustained upon audit by the relevant taxing authority. An uncertain income
      tax position will not be recognized if it has less than 50% likelihood of
      being sustained. Additionally, FIN 48 provides guidance on de-recognition,
      classification, interest and penalties, accounting in interim periods, and
      disclosure and transition. The Company adopted the provision of FIN 48 on
      January 1, 2007, which did not have any impact on the consolidated
      financial statements.                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | For acquired properties, that do not constitute a
      business as defined in EITF 98-03 Determining Whether a Nonmonetary
      Transaction Involves Receipt of Productive Assets or of a Business,
      deferred income tax liability is recorded on GAAP basis over income tax
      basis using statutory federal and state rates. The resulting estimated
      future federal and state income tax liability associated with the
      temporary difference between the acquisition consideration and the tax
      basis is computed in accordance with EITF 98-11 and SFAS 109, and is
      reflected as an increase to the total purchase price which is then applied
      to the underlying acquired assets in the absence of there being a goodwill
      component associated with the acquisition transactions in accordance with
      EITF 98-11 and SFAS 109.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Stock-based compensation- On December 16, 2004,
      the FASB issued SFAS No. 123R, Share- Based Payment, which replaces SFAS
      No. 123, Accounting for Stock-Based Compensation and supersedes APB
      Opinion No. 25, Accounting for Stock Issued to Employees. SFAS No. 123R
      requires all share-based payments to employees, including grants of
      employee stock options, to be recognized in the financial statements based
      on the grant date fair value of the award. Under SFAS No. 123R, the
      Company must determine the appropriate fair value model to be used for
      valuing share-based payments, the amortization method for compensation
      cost and the transition method to be used at date of adoption. The
      transition methods include prospective and retroactive adoption options.
      Under the retroactive option, prior periods may be restated either as of
      the beginning of the year of adoption or for all periods presented. The
      prospective method requires that compensation expense be recorded for all
      unvested stock options and restricted stock at the beginning of the first
      quarter of adoption of SFAS No. 123R, while the retroactive methods would
      record compensation expense for all unvested stock options and restricted
      stock beginning with the first period restated. The Company adopted the
      requirements of SFAS No. 123R for the fiscal year beginning after December
      31, 2004.

F-12

---

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

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF
      SIGNIFICANT POLICIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | New accounting pronouncements In December 2008,
      the FASB issued FSP No. FAS 132(R)-1, Employers Disclosures about
      Post-Retirement Benefit Plan Assets (FSP FAS 132(R)-1), which amends
      FASB Statement No. 132 Employers Disclosures about Pensions and Other
      Post- Retirement Benefits (FAS 132), to provide guidance on an
      employers disclosures about plan assets of a defined benefit pension or
      other post-retirement plan. The objective of FSP FAS 132(R)-1 is to
      require more detailed disclosures about employers plan assets, including
      employers investment strategies, major categories of plan assets,
      concentrations of risk within plan assets, and valuation techniques used
      to measure the fair value of plan assets. FSP FAS 132(R)-1 is effective
      for the Companys fiscal year beginning January 1, 2009. Upon initial
      application, the provisions of this FSP are not required for earlier
      periods that are presented for comparative purposes. The Company does not
      currently have a benefit pension or any post-retirement benefit plans and
      the Company has determined that the adoption of this statement will have
      little or no effect on the Companys consolidated financial position,
      results of operations, and disclosures.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | In November 2008, the EITF reached consensus on Issue No.
      08-6, Equity Method Investment Accounting Considerations (EITF 08-6),
      which clarifies the accounting for certain transactions and impairment
      considerations involving equity method investments. The intent of EITF
      08-6 is to provide guidance on (i) determining the initial carrying value
      of an equity method investment, (ii) performing an impairment assessment
      of an underlying indefinite-lived intangible asset of an equity method
      investment, (iii) accounting for an equity method investees issuance of
      shares, and (iv) accounting for a change in an investment from the equity
      method to the cost method. EITF 08-6 is effective for the Companys fiscal
      year beginning January 1, 2009 and is to be applied prospectively. The
      Company is currently evaluating the potential impact of adopting this
      statement on the Companys consolidated financial position or results of
      operations.                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | In June 2008, the EITF reached consensus on Issue No.
      07-5, Determining Whether an Instrument (or Embedded Feature) Is Indexed
      to an Entitys Own Stock (EITF 07-5). EITF 07-5 clarifies the
      determination of whether an instrument (or an embedded feature) is indexed
      to an entitys own stock, which would qualify as a scope exception under
      FASB Statement No. 133, Accounting for Derivative Instruments and Hedging
      Activities (FAS 133). EITF 07-5 is effective for the Companys fiscal
      years beginning January 1, 2009. Early adoption for an existing instrument
      is not permitted. The Company does not expect the adoption of EITF 07-5 to
      have a material impact on the Companys consolidated financial position or
      results of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

F-13

---

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

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF
      SIGNIFICANT POLICIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | In May 2008, the FASB issued FSP No. APB 14-1,
      Accounting for Convertible Debt Instruments That May Be Settled in Cash
      upon Conversion (Including Partial Cash Settlement) (FSP APB 14-1). FSP
      APB 14-1 applies to convertible debt instruments that, by their stated
      terms, may be settled in cash (or other assets) upon conversion, including
      partial cash settlement, unless the embedded conversion option is required
      to be separately accounted for as a derivative under FAS 133. Convertible
      debt instruments within the scope of FSP APB 14-1 are not addressed by the
      existing APB 14. FSP APB 14-1 requires that the liability and equity
      components of convertible debt instruments within the scope of FSP APB
      14-1 be separately accounted for in a manner that reflects the entitys
      nonconvertible debt borrowing rate. This requires an allocation of the
      convertible debt proceeds between the liability component and the embedded
      conversion option (i.e., the equity component). The difference between the
      principal amount of the debt and the amount of the proceeds allocated to
      the liability component will be reported as a debt discount and
      subsequently amortized to earnings over the instruments expected life
      using the effective interest method. FSP APB 14-1 is effective for the
      Companys fiscal year beginning January 1, 2009 and will be applied
      retrospectively to all periods presented. The Company does not currently
      have convertible debt instruments and the Company has determined that the
      adoption of this statement will have little or no effect on the Companys
      consolidated financial position, results of operations, and
      disclosures.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | In April 2008, the FASB issued FSP No. FAS 142-3,
      Determination of the Useful Life of Intangible Assets (FSP 142-3)
      which amends the factors that should be considered in developing renewal
      or extension assumptions used to determine the useful life of a recognized
      intangible asset under FASB Statement No. 142, Goodwill and Other
      Intangible Assets (FAS 142). The intent of this FSP is to improve the
      consistency between the useful life of a recognized intangible asset under
      FAS 142 and the period of expected cash flows used to measure the fair
      value of the asset under FASB Statement No. 141, Business Combinations
      (FAS 141). FSP 142-3 is effective for the Companys fiscal year
      beginning January 1, 2009 and will be applied prospectively to intangible
      assets acquired after the effective date. The Company does not expect the
      adoption of FSP 142-3 to have an impact on the Companys consolidated
      financial position, results of operations or cash flows.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The FASB issued FASB Staff Position (FSP) FAS 157-3,
      Determining the Fair Value of a Financial Asset When the Market for that
      Asset Is Not Active. The FSP clarifies the application of FASB Statement
      No. 157, Fair Value Measurements, in a market that is not active and
      provides an example to illustrate key considerations in determining the
      fair value of a financial asset when the market for that financial asset
      is not active. The FSP is effective October 10, 2008, and for prior
      periods for which financial statements have not been issued. Revisions
      resulting from a change in the valuation technique or its application
      should be accounted for as a change in accounting estimate following the
      guidance in FASB Statement No. 154, Accounting Changes and Error
      Corrections. However, the disclosure provisions in Statement 154 for a
      change in accounting estimate are not required for revisions resulting
      from a change in valuation techniques or its application. The Company has
      determined that the adoption of this statement will have little or no
      effect on the Companys consolidated financial position, results of
      operations, and disclosures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

F-14

---

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

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF
      SIGNIFICANT POLICIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In May 2008, the FASB issued SFAS No. 162, Hierarchy of
      Generally Accepted Accounting Principles. This statement is intended to
      improve financial reporting by identifying a consistent framework, or
      hierarchy, for selecting accounting principles to be used in preparing
      financial statements of nongovernmental entities that are presented in
      conformity with GAAP. This statement will be effective 60 days following
      the U.S. Securities and Exchange Commissions approval of the Public
      Company Accounting Oversight Board amendment to AU Section 411, The
      Meaning of Present Fairly in Conformity with Generally Accepted Accounting
      Principles. The Company is currently evaluating the potential impact, if
      any, of the adoption of SFAS 162 on its consolidated financial
      statements.                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | On March 19, 2008, the FASB issued SFAS No. 161,
      Disclosures About Derivative Instruments and Hedging Activities. This
      statement is intended to improve financial reporting about derivative
      instruments and hedging activities by requiring enhanced disclosures. This
      statement is effective for financial statements issued for fiscal years
      and interim periods beginning after November 15, 2008, with early
      application encouraged. The Company is currently evaluating the impact
      that SFAS 161 will have on the consolidated financial
      statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In February 2008, the FASB staff issued Staff Position
      No. 157-2 Effective Date of FASB Statement No. 157 (FSP FAS 157-2).
      FSP FAS 157-2 delayed the effective date of SFAS 157 for nonfinancial
      assets and nonfinancial liabilities, except for items that are recognized
      or disclosed at fair value in the financial statements on a recurring
      basis (at least annually). The provisions of FSP FAS 157-2 are effective
      for the Companys fiscal year beginning January 1, 2009. SFAS 157 defines
      fair value, establishes a framework for measuring fair value in generally
      accepted accounting principles, and expands disclosures about fair value
      measurements.                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In December 2007, the FASB issued SFAS No. 141(R),
      Business Combinations, which amends SFAS No. 141, and provides revised
      guidance for recognizing and measuring identifiable assets and goodwill
      acquired, liabilities assumed, and any noncontrolling interest in the
      acquiree. It also provides disclosure requirements to enable users of the
      financial statements to evaluate the nature and financial effects of the
      business combination. SFAS No. 141(R) is effective for the Companys
      fiscal year beginning January 1, 2009 and is to be applied prospectively.
      The Company is currently evaluating the potential impact of adopting this
      statement on the Companys consolidated financial position, results of
      operations or cash flows.                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In December 2007, the FASB issued SFAS No. 160,
      Noncontrolling Interests in Consolidated Financial Statements - an
      amendment of ARB No. 51 which establishes accounting and reporting
      standards pertaining to ownership interests in subsidiaries held by
      parties other than the parent, the amount of net income attributable to
      the parent and to the noncontrolling interest, changes in a parents
      ownership interest, and the valuation of any retained noncontrolling
      equity investment when a subsidiary is deconsolidated. SFAS No. 160 also
      establishes disclosure requirements that clearly identify and distinguish
      between the interests of the parent and the interests of the
      noncontrolling owners. SFAS No. 160 is effective for the Companys fiscal
      year beginning January 1, 2009. The Company is currently evaluating the
      potential impact of adopting this statement on the Companys consolidated
      financial position, results of operations or cash
      flows.

F-15

---

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

|1. | DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF
      SIGNIFICANT POLICIES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | In February 2007, the Financial Accounting Standards
      Board (FASB) issued SFAS No. 159, The Fair Value Option For Financial
      Assets And Financial Liabilities  Including An Amendment Of FASB
      Statement No. 115. This pronouncement permits entities to use the fair
      value method to measure certain financial assets and liabilities by
      electing an irrevocable option to use the fair value method at specified
      election dates. After election of the option, subsequent changes in fair
      value would result in the recognition of unrealized gains or losses as
      period costs during the period the change occurred. SFAS No. 159 becomes
      effective as of the beginning of the first fiscal year that begins after
      November 15, 2007, with early adoption permitted. However, entities may
      not retroactively apply the provisions of SFAS No. 159 to fiscal years
      preceding the date of adoption. The adoption of this statement had little
      or no effect on the Companys consolidated financial position, results of
      operations, and disclosures.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|2. | PROPERTY AND EQUIPMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Property and equipment consisted of the following as of
      December 31, 2008 and 2007:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

| |                               |   | December 31, |  |   | December 31, | 
| | ----------------------------- | - | ------------ |  | - | ------------ | 
| |                               |   | 2008         |  |   | 2007         | 
| |                               |   |              |  |   |              | 
| | Furniture and fixtures        | $ | 8,921        |  | $ | 2,698        | 
| | Computers and equipment       |   | 33,591       |  |   | 21,178       | 
| | Land                          |   | 30,000       |  |   | --           | 
| | Site improvements             |   | 99,631       |  |   | --           | 
| | Site equipment                |   | 99,997       |  |   | 7,500        | 
| | Vehicles                      |   | 23,595       |  |   | --           | 
| | Construction in progress:     |   |              |  |   |              | 
| | Building                      |   | 500,000      |  |   | --           | 
| | Site
      improvements       |   | 2,034,167    |  |   | 260,014      | 
| | Site equipment                |   | 568,634      |  |   | --           | 
| |                               |   |              |  |   |              | 
| |                               |   | 3,398,536    |  |   | 291,390      | 
| | Less accumulated depreciation |   | 20,359       |  |   | 672          | 
| |                               |   |              |  |   |              | 
| |                               | $ | 3,378,177    |  | $ | 290,718      | 

Depreciation expense was $19,687 and
  $672 for the years ended December 31, 2008 and 2007, respectively.

F-16

---

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

|3. | RECLAMATION BONDS                                                                   
|-- | ------------------------------------------------------------------------------------
|   |                                                                                     
|   | Reclamation bonds consisted of the following as of
      December 31, 2008 and 2007:

| |                   |   | December 31, |  |   | December 31, | 
| | ----------------- | - | ------------ |  | - | ------------ | 
| |                   |   | 2008         |  |   | 2007         | 
| |                   |   |              |  |   |              | 
| | Reclamation bonds | $ | 933,088      |  | $ | 807,000      | 

|   | During the year ended December 31, 2008, the Company
      acquired a reclamation bond of $24,720 in connection with the acquisition
      of CBI, a bond of $100,000 to provide surface reclamation coverage for
      operations, and $28,762 for financial guarantee. On December 29, 2008, the
      Bureau of Land Management authorized a partial refund, in the amount of
      $27,394, of the $807,000 reclamation bond acquired during 2007. At
      December 31, 2008, the authorized refund was recorded as a refund
      receivable and a reduction to the reclamation bond.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|4. | MINERAL EXPLORATION PROPERTIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Ireland claim- On November 30, 2004, the Company
      entered into a mineral property purchase agreement to acquire a 100%
      undivided interest in one mineral claim located in the Yellow Pine Mining
      District in Clark County, Nevada, known as the Ireland Claim, for a total
      consideration of $6,000.                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company has not determined whether the mineral claim
      contains mineralized material and has consequently written off all mineral
      rights acquisition costs to operations during the previous financial
      periods.                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Columbus and Red Mountain projects- On March
      30, 2007, as amended August 8, 2007, the Company entered into an
      Assignment Agreement with Nanominerals Corp. (NMC) a Nevada corporation,
      to acquire two mineral property option interests, the first located in
      Esmeralda County, Nevada (the Columbus project) and the second located
      in San Bernardino County, California (the Red Mountain project). The
      assignments were completed on August 14, 2007.                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Pursuant to the above assignment agreement, the Company
      issued 30,000,000 common shares to NMC and, in return, received a deed of
      assignment to the option interests in the Columbus Project and to the Red
      Mountain Project. The Company granted a 5% net smelter return royalty and
      has reimbursed $1,162,125 in documented fees and expenses to
      NMC.                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Upon assignment of the option rights, the Company assumed
      the terms of the underlying agreements to earn the respective interests in
      both properties.                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The mineral property options have been capitalized as
      tangible assets in accordance with Emerging Issues Task Force abstract
      04-02 and allocated in accordance with EITF 98-11. Valuation of $225,000
      is based on issuance of 30,000,000 shares at $0.0075 which was the share
      price at the time of the option assignment agreement.                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | At such time an option transaction is completed the
      option cost will continue to be included in the overall acquisition cost
      of the underlying mineral properties. If the Company does not complete an
      option transaction or the underlying mineral properties are considered
      impaired, the acquisition cost will be either written down or expensed at
      that time.                                                                                                                                                                                           

F-17

---

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

|5. | COLUMBUS PROJECT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | On June 26, 2007, the Company paid $807,000 to the Bureau
      of Land Management as a bond for future reclamation work on the proposed
      Columbus Project. This payment was made pursuant to the underlying option
      agreement in anticipation of the completion of the transaction.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Columbus project was subject to an underlying option
      agreement dated July 22, 2006. Under the terms of this agreement, to earn
      a 15% interest, the Company was required to pay $24,000 per month until
      December 31, 2007 and spend $3,000,000 on qualifying expenses by December
      31, 2007. These expenditures were satisfied as of December 31,
      2007.                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | As of December 31, 2007, the Company had earned a 15%
      operating interest in the Columbus project by satisfying the above terms
      of the agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | To earn a 100% interest in the Columbus project, the
      Company, after earning 15%, had the right to merge with the corporation
      holding the remaining 85% interest. To exercise the merger right, the
      Company issued shares of common stock with an aggregate value of
      $20,000,000 and issued share purchase warrants to purchase up to a further
      50% of the number of shares of common stock to be issued.                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | On February 20, 2008, the Company, through its
      wholly-owned subsidiary CBIA, acquired a 100% interest in the Columbus
      Project, including an option for additional mining claims, by way of
      merger with the owner of the Columbus Project, Columbus Brine Inc. (CBI).
      Under the terms of the Merger Agreement, the Company issued an aggregate
      of 10,440,087 shares of its common stock, and 5,220,059 share purchase
      warrants to the former shareholders of CBI. Each share purchase warrant
      issued by the Company entitles the holder to purchase one additional share
      of the Companys common stock at a price of $2.39 per share for a period
      of 5 years. This acquisition supersedes the option agreement.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The following table reflects the recorded purchase
      consideration for the Columbus Project:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

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


In accordance with EITF 04-03 paragraph
  2 and EITF 98-11 the purchase price of $32 million was allocated to the assets
  acquired and liabilities assumed, based on their respective fair values at the
  date of acquisition. The purchase price allocated to the real properties was
  based on fair market values determined using an independent real estate
  appraisal firm (Arden Salvage Company) and the fair value of the remaining
  assets acquired and liabilities assumed were based on managements best
  estimates taking into account all available information at the time.

F-18

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

|5. | COLUMBUS PROJECT(continued)                                               
|-- | --------------------------------------------------------------------------
|   |                                                                           
|   | The following table reflects the components of the
      Columbus Project:

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


Pursuant to the terms of the
  acquisition of CBI, the Company issued an aggregate of 10,440,087 shares of
  common stock and 5,220,059 share purchase warrants to the former shareholders of
  CBI. Each share purchase warrant issued by the Company entitles the holder to
  purchase one additional share of the Companys common stock at a price of $2.39
  per share for a period of 5 years. Each warrant provides the holder with a
  cashless right of exercise. If the holder chooses to utilize this cashless
  exercise right, the total number of shares that the holder will be entitled to
  exercise will be determined by the following formula: [(A B )C] ÷ Awhere:

A = the average closing price of the
  Companys common stock during the five trading days prior to exercise.

B = the exercise price of $2.39.

C = the maximum number of shares of the
  Companys common stock issuable upon exercise of the warrants.

If the holder chooses to utilize the
  cashless exercise right, the holder must do so with respect to all of the
  unexercised warrants held by him.

The Company will have the right to
  accelerate the expiration date of the warrants at any time after August 19, 2010
  if the average closing price of the Companys common stock over any 20
  consecutive trading days is equal to or greater than 150% of the exercise price.
  If the Company exercises this acceleration right, the expiration date for the
  warrants will be accelerated to 30 days after the Company sends out notice that
  it is exercising the acceleration right.

The Company estimated the fair value of
  warrants issued in connection with the acquisition of CBI using the Binomial
  lattice pricing model as further discussed in Note 7.

The Company applied EITF 98-03 with
  regard to the acquisition of the Columbus Project. The Company determined that
  the acquisition of the Columbus Project did not constitute an acquisition of a
  business, as that term is defined in EITF 98-03, and the Company recorded the
  acquisition as a purchase of assets.

F-19

---

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

|5. | COLUMBUS PROJECT(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company believes the acquisition of the Columbus
      Project was beneficial because it provides for 100% ownership of the
      properties and fosters greater opportunity to finance and further develop
      the project.                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | This merger was treated as a statutory merger for tax
      purposes whereby, CBIA was the surviving merger entity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|6. | RED MOUNTAIN PROJECT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Red Mountain project is subject to an underlying
      option agreement dated March 15, 2007. Under the terms of this agreement,
      to earn a 60% interest, the Company is required to pay $5,000 per month
      until December 31, 2011 and spend an aggregate of $1,200,000 in additional
      qualifying expenditures by December 31, 2011.                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company may at any time during the life of the Red
      Mountain project, earn a 100% interest, by paying $100,000, issuing shares
      of common stock with an aggregate value of $1,400,000 and issuing share
      purchase warrants to purchase up to an additional 25% of the number of
      shares of common stock to be issued. If the project achieves commercial
      production, the Company will be required to pay an additional $100,000,
      issue shares of common stock with an aggregate value of $2,400,000 and
      issue share purchase warrants to purchase up to an additional 25% of the
      number of shares of common stock to be issued.

F-20

---

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

|7. | STOCKHOLDERS EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | During the year ended December 31, 2008, the Companys
      stockholders equity activity consisted of the following:                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Warrants associated with the 2008 equity issuances do not
      constitute a registration payment arrangement.                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The value of the warrants issued in connection with the
      CBI acquisition option contain a cashless exercise provision and are
      callable by the Company based upon certain conditions which are defined in
      Note 5 related to the acquisition. The fair market valuation of the
      warrants was computed using the binomial lattice method and were allocated
      to the acquisition cost of the project. The fair market value of the
      warrants was computed based on the following
      assumptions:

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


On April 24, 2007, the Company approved
  a US private placement offering pursuant to Rule 506 of Regulation D of the
  Securities Act of up to 10,000,000 units at a price of $0.65 per unit. Each unit
  consists of one share of common stock and one half of one share purchase
  warrant. Each whole warrant entitles the holder to purchase one additional share
  of common stock for a period of 12 months at a price of $1.00 per share.
  Warrants associated with the 2007 equity issuances do not constitute a
  registration payment arrangement and are considered part of the overall equity
  offering. On September 20, 2007, the Company amended the terms of the warrants
  issued under the US and foreign private placements by extending the terms of the
  warrants to two years from the date the units were issued.

Also effective on April 24, 2007, the
  Company approved a foreign private placement offering of up to 10,000,000 units
  to persons who are not U.S. Persons as defined in Regulation S of the
  Securities Act of 1933. The units are identical to those offered to US
  investors.

Units issued under the US offering
  resulted in over allotment of 1,812,000 units. To account for over allotment the
  Company decreased the number of units available under the foreign offering by an
  equal number of units. Total units of 20,000,000 for the entire offering were
  unchanged.

F-21

---

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

|7. | STOCKHOLDERS EQUITY(continued)                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------
|   |                                                                                                                  
|   | During the year ended December 31, 2007, the Companys
      stockholders activities consisted of the following:
|   |                                                                                                                  
|   | a)                                                                                                               
|   |                                                                                                                  
|   | b)                                                                                                               
|   |                                                                                                                  
|   | c)                                                                                                               
|   |                                                                                                                  
|   | d)                                                                                                               

F-22

---

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

|7. | STOCKHOLDERS EQUITY(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | e)                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | f)                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|8. | STOCK OPTION PLAN AND WARRANTS                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | On March 27, 2007, the Board of Directors adopted the
      2007 Stock Incentive Plan (the Plan). Under the terms of the Plan,
      options to purchase up to 6,000,000 shares of the common stock of the
      Company, subject to an increase each quarter equal to 15% of the increase
      in the total number of outstanding shares during the previous quarter, may
      be granted to officers, directors, employees and eligible
      consultants.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | During the year ended December 31, 2008, the Company
      granted stock options as follows:                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | During the year ended December 31, 2007, the Company
      granted stock options as follows:                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                              

F-23

---

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

|8. | STOCK OPTION PLAN AND WARRANTS(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Expenses for the years ended December 31, 2008 and 2007
      related to the granting and vesting of stock options were $1,454,758 and
      $101,317, respectively and are included in general and administrative
      expense and mineral exploration and evaluation expense. During the year
      ended December 31, 2008, the Company recorded $1,417,485 in stock option
      modification expense for two officers, director and a consultant. No such
      stock option modifications occurred before.

Stock options  During the year
  ended December 31, 2008, the Company granted stock options to a director
  totaling 100,000 with a weighted average exercise price of $1.60 per share. As
  of December 31, 2008 stock options outstanding totaled 3,954,719 with a weighted
  average exercise price of $0.15 per share.

On November 4, 2008, a director of the
  Company provided a notice of immediate resignation. As a result of the
  resignation, the options granted to the director that were unvested as of the
  date of resignation were forfeited. The Company accounted for the impact of the
  forfeiture under SFAS 123R. As a result of forfeiture, the Company reduced the
  expense recognized related to vesting of stock options by $21,012.

On October 31, 2008, the Company
  extended the term of stock options previously issued to two officers, director
  and a consultant for 3,700,000 shares of common stock for an additional 3 years.
  The Company accounted for the impact of the amended stock option grants as a
  stock option modification under SFAS 123R. As a result of the modification, the
  Company recognized $1,417,485 of additional stock-based compensation expense due
  to the increase in the fair market value of these stock option grants that was
  recorded in general and administrative expense and mineral exploration and
  evaluation expense.

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

During the year ended December 31,
  2007, the Company granted stock options to officers, consultants and employee
  totaling 3,895,000 with a weighted average exercise price of $0.13 per share. As
  of December 31, 2007, stock options outstanding totaled 3,895,000 with a
  weighted average exercise price of $0.13 per share.

F-24

---

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

|8. | STOCK OPTION PLAN AND WARRANTS(continued)
|-- | -----------------------------------------

The following table summarizes the
  Companys stock option activity for the years ended December 31, 2008 and 2007:

| |                             |  | Number of |   |   | Weighted       | 
| | --------------------------- |  | --------- | - | - | -------------- | 
| |                             |  | Shares    |   |   | Average        | 
| |                             |  |           |   |   | Exercise Price | 
| | Balance, December 31, 2006  |  | --        |   | $ | --             | 
| | Options granted and assumed |  | 3,895,000 |   |   | 0.13           | 
| | Options expired             |  | --        |   |   | --             | 
| | Options forfeited           |  | --        |   |   | --             | 
| | Options exercised           |  | --        |   |   | --             | 
| |                             |  |           |   |   |                | 
| | Balance, December 31, 2007  |  | 3,895,000 |   |   | 0.13           | 
| | Options granted and assumed |  | 179,719   |   |   | 1.49           | 
| | Options expired             |  | (25,000   | ) |   | 1.60           | 
| | Options forfeitures         |  | (75,000   | ) |   | 1.60           | 
| | Options exercised           |  | (20,000   | ) |   | 0.05           | 
| |                             |  |           |   |   |                | 
| | Balance, December 31, 2008  |  | 3,954,719 |   | $ | 0.15           | 

The Company estimated the fair value of
  options granted prior to March 31, 2007 using the Black-Scholes option pricing
  model. The Company now utilizes the Binomial lattice pricing model to estimate
  the fair value of options granted. The Company believes this model provides the
  best estimate of fair value due to its ability to incorporate inputs that change
  over time, such as volatility and interest rates, and to allow for actual
  exercise behavior of option holders. The Company has used the same assumptions
  within each of the pricing models utilized to estimated the fair value of the
  options granted as follows:

2008
      2007Dividend yield
      --
      --Expected volatility
      56.13% to 61.08%
      56.13% to 120.24%Risk-free interest rate
      1.80% to 2.95%
      3.62% to 4.05%Expected life (years)
      2 to 6 years
      2 to 10


The Company estimates expected
  volatility using a representative peer group average, because of the limited
  historical equity transactions of the Company. The risk-free interest rate is
  based on the implied yield available on U.S. Treasury zero-coupon issues over
  equivalent lives of the options.

F-25

---

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

|8. | STOCK OPTION PLAN AND WARRANTS(continued)                                                                                                                                    
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                              
|   | The following table summarizes the status of the
      Companys unvested shares as of December 31, 2008 and changes during the
      years ended December 31, 2008 and 2007:

| |                             |  | Number of |   |   | Weighted Average | 
| | --------------------------- |  | --------- | - | - | ---------------- | 
| |                             |  | Shares    |   |   | Grant Date       | 
| |                             |  |           |   |   | Fair
      Value | 
| | Unvested, January 1, 2007   |  | --        |   | $ | --               | 
| | Options granted             |  | 75,000    |   |   | 0.52             | 
| | Options vested              |  | --        |   |   | --               | 
| | Options forfeited           |  | --        |   |   | --               | 
| |                             |  |           |   |   |                  | 
| | Unvested, December 31, 2007 |  | 75,000    |   |   | 0.52             | 
| | Options granted             |  | 75,000    |   |   | 0.56             | 
| | Options vested              |  | (37,500   | ) |   | 0.52             | 
| | Options forfeited           |  | (75,000   | ) |   | 0.56             | 
| |                             |  |           |   |   |                  | 
| | Unvested, December 31, 2008 |  | 37,500    |   | $ | 0.52             | 

As of December 31, 2008, there was
  $6,837 of total unrecognized compensation cost related to unvested stock
  options. This cost is expected to be fully recognized in 2009.

The following table summarizes
  information about options granted during the year ended December 31, 2008:

Exercise PriceEquals, ExceedsOr
      WeightedNumber of Options
      Is Less than Mkt.
      Average
      Range of
      WeightedGranted
      Price of Stock
      Exercise
      Exercise
      Average FairDuring 2008
      On Grant Date
      Price
      Price
      Value--
      Equals
      $        
              --
      $           --
        to $          --
      $               --179,719
      Exceeds
      $           1.49
      $      1.36 to $     
        1.60
      $          
        0.31--
      Less Than
      $               --
      $          -- 
        to $          --
      $               --179,719
      Exceeds
      $           1.49
      $      1.36 to $     
        1.60
      $          
        0.31


The following table summarizes
  information about options granted during the year ended December 31, 2007:

Exercise PriceEquals, ExceedsOr
      WeightedNumber of Options
      Is Less than Mkt.
      Average
      Range of
      WeightedGranted
      Price of Stock
      Exercise
      Exercise
      Average FairDuring 2007
      On Grant Date
      Price
      Price
      Value3, 895,000
      Equals
      $           0.13
      $       0.05 to $     
        1.88
      $          
        0.034--
      Exceeds
      $               --
      $          -- 
        to $          --
      $               ----
      Less Than
      $               --
      $          -- 
        to $          --
      $               --3,895,000
      Equals
      $           0.13
      $       0.05 to $     
        1.88
      $          
        0.034


F-26

---

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

|8. | STOCK OPTION PLAN AND WARRANTS(continued)                                                                                                                                                                                                                                                                                                                                                 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                           
|   | Stock options/warrants During the year ended
      December 31, 2008 the Company granted stock warrants related to common
      stock issued in connection with the CBI acquisition totaling 5,220,059
      with an exercise price of $2.39 per share for a period of 5 years. These
      share purchase warrants also contain additional material terms, as
      described in Note 5.
|   |                                                                                                                                                                                                                                                                                                                                                                                           
|   | Stock options/warrants During the year ended
      December 31, 2007 the Company granted stock warrants related to common
      stock issued through a private placement totaling 10,160,650 with an
      exercise price of $1.00 per share.                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company may accelerate the expiry date (call
      provision) for the warrants issued during 2007 after one year from the
      date of issuance of common stock if the common stock trades at a weighted
      average price over $3.50 for 20 consecutive trading days.                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                           
|   | The following table summarizes information about
      options/warrants granted during the years ended December 31, 2008 and
      2007:                                                                                                                                                                                                                                                  

| |                                      |  | Number of  |   |   | Weighted       | 
| | ------------------------------------ |  | ---------- | - | - | -------------- | 
| |                                      |  | Shares     |   |   | Average        | 
| |                                      |  |            |   |   | Exercise Price | 
| | Balance, December 31, 2006           |  | --         |   | $ | --             | 
| | Options/warrants granted and assumed |  | 14,055,650 |   |   | 0.76           | 
| | Options/warrants expired             |  | --         |   |   | --             | 
| | Options/warrants cancelled           |  | --         |   |   | --             | 
| | Options/warrants exercised           |  | --         |   |   | --             | 
| |                                      |  |            |   |   |                | 
| | Balance, December 31, 2007           |  | 14,055,650 |   |   | 0.76           | 
| | Options/warrants granted and assumed |  | 5,399,778  |   |   | 2.36           | 
| | Options/warrants expired             |  | (25,000    | ) |   | 1.60           | 
| | Options/warrants forfeitures         |  | (75,000    | ) |   | 1.60           | 
| | Options/warrants exercised           |  | (20,000    | ) |   | 0.05           | 
| |                                      |  |            |   |   |                | 
| | Balance, December 31, 2008           |  | 19,335,428 |   | $ | 1.20           | 

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

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


The Company estimates expected
  volatility using a representative peer group average, because of the limited
  historical equity transactions of the Company. The risk-free interest rate is
  based on the implied yield available on U.S. Treasury zero-coupon issues over
  equivalent lives of the options.

F-27

---

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

|9. | INCOME TAXES                                                                                                                          
|-- | --------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                       
|   | The Company is a Nevada corporation and is subject to
      federal income taxes. Nevada does not impose a corporate income
      tax.
|   |                                                                                                                                       
|   | The income tax benefit consisted of the following at
      December 31, 2008 and 2007,                                                

| |                                                             |   | December 31, |   |   | December 31, |  
| | ----------------------------------------------------------- | - | ------------ | - | - | ------------ | -
| |                                                             |   | 2008         |   |   | 2007         |  
| |                                                             |   |              |   |   |              |  
| | Income tax benefit based on statutory tax
      rate        | $ | (1,858,683   | ) | $ | (762,713     | )
| | Non-deductible and other                                    |   | 3,572        |   |   | 473          |  
| | Change in valuation allowance                               |   | (123,061     | ) |   | 762,240      |  
| | Rate change                                                 |   | (22,419      | ) |   | --           |  
| | Release of valuation allowance related to
      acquisition |   | 805,997      |   |   | --           |  
| |                                                             |   |              |   |   |              |  
| | Income tax benefit                                          | $ | (1,194,594   | ) | $ | --           |  

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

| |                                   |   | December 31, |   |   | December 31, |  
| | --------------------------------- | - | ------------ | - | - | ------------ | -
| |                                   |   | 2008         |   |   | 2007         |  
| | Deferred income tax assets:       |   |              |   |   |              |  
| |                                   |   |              |   |   |              |  
| | Net operating loss carryforward   | $ | 2,000,591    |   | $ | 727,864      |  
| | Option compensation               |   | 544,626      |   |   | 34,448       |  
| | Reclamation and remediation costs |   | 96,368       |   |   | --           |  
| |                                   |   |              |   |   |              |  
| | Gross deferred income tax asset   |   | 2,641,585    |   |   | 762,312      |  
| | Valuation allowance               |   | (639,179     | ) |   | (762,240     | )
| |                                   |   |              |   |   |              |  
| |                                   |   | 2,002,406    |   |   | 72           |  
| | Deferred income tax liabilities:  |   |              |   |   |              |  
| |                                   |   |              |   |   |              |  
| | Property, plant & equipment       |   | 1,815        |   |   | 72           |  
| | Acquisition related liabilities   |   | 11,067,191   |   |   | --           |  
| |                                   |   |              |   |   |              |  
| | Net deferred income tax liability | $ | 9,066,600    |   | $ | --           |  

A valuation allowance for deferred tax
  related to option compensation was established for net deferred tax assets not
  allocated to offset acquisition related deferred tax liabilities due to the
  uncertainty of realizing these deferred tax assets based on conditions existing
  at December 31, 2008 and 2007.

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

The resulting estimated future federal
  income tax liability associated with the temporary difference between the
  acquisition consideration and the tax basis as computed in accordance with EITF
  98-11 and SFAS 109, is reflected as an increase to the total purchase price
  which has been applied to the underlying mineral and Columbus project assets in
  the absence of there being a goodwill component associated with the acquisition
  transactions in accordance with EITF 98-11 and SFAS 109.

F-28

---

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

|9. | INCOME TAXES(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company had cumulative net operating losses of
      approximately $5,715,972 and $2,140,776 as of December 31, 2008 and 2007,
      respectively for federal income tax purposes. Cumulative net operating
      losses from December 31, 2006 and previous years are effectively nil due
      to the annual limitation imposed by the Internal Revenue Code of 1986 as a
      result of the ownership percentage change limitations. The net operating
      loss carryforwards will be expiring between 2027 and 2028.                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | As of January 1, 2007, the Company did not have any
      unrecognized tax benefits. The adoption of FIN 48 did not result in any
      cumulative effect adjustment to the January 1, 2007 balance of the
      Companys accumulated deficit. Upon adoption of FIN 48, the Company did
      not accrue for interest and penalties as there were no unrecognized tax
      benefits. If interest and penalties were to be assessed, we would charge
      interest to interest expense, and penalties to general and administrative
      expense. It is not anticipated that unrecognized tax benefits would
      significantly increase or decrease within 12 months of the reporting
      date.                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The Company and its subsidiary file income tax returns in
      the United States. These tax returns are subject to examination by
      taxation authorities provided the years remain open under the relevant
      statues of limitations, which may result in the payment of income taxes
      and/or decrease its net operating losses available for carryforwards. The
      Company is no longer subject to income tax examinations by US federal tax
      authorities for years prior to 2005. While the Company believes its tax
      filings do not include uncertain tax positions, the results of potential
      examinations or the effect of changes in tax law cannot be ascertained at
      this time. The Company currently has no tax years under
      examination.

F-29

---

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

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

June 30, 2009
      $
      30,000June 30, 2010
      
      30,000June 30, 2011
      
      30,000$
      90,000


|    | The Company has made $130,000 in rental payments during
      the year ended December 31, 2008, which consists of $13,416 in payments to
      each of the eight owners of DDB Syndicate including reimbursement of
      expenses of $22,670 to a company controlled by Douglas D.G.
      Birnie.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                    
|11. | COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                    
|    | Lease obligations The Company rents office space
      in Henderson, Nevada. The lease terms expired on September 1, 2008 and the
      Company continues to rent the existing space under month-to-month terms
      for $4,625 per month.                                                       
|    |                                                                                                                                                                                                                                                                                                    
|    | Rental expense, resulting from this operating lease
      agreement, was $46,125 and $8,800 for the years ended December 31, 2008
      and 2007, respectively.                                                                                                                                    

F-30

---

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

|12. | ENVIRONMENTAL AND RECLAMATION ACTIVITIES                                                                                     
|--- | -----------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                              
|    | The liabilities accrued for the reclamation and
      remediation costs at December 31, 2008 and 2007, were as
      follows:

| |                                              |   | 2008    |  |   | 2007 | 
| | -------------------------------------------- | - | ------- |  | - | ---- | 
| | Exploration properties:                      |   |         |  |   |      | 
| | Columbus                                     | $ | 275,338 |  | $ | --   | 
| |                                              |   |         |  |   |      | 
| | Reclamation and remediation costs, long-term | $ | 275,338 |  | $ | --   | 

The activity in the accrued reclamation
  and remediation cost liability for the years ended December 31, 2008 and 2007,
  was as follows:

Balance, December 31, 2007
      $
      --Accruals for estimated costs
      
      275,338Balance, December 31, 2008
      $
      275,338


|13. | CONCENTRATION OF CREDIT RISK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company maintains its cash accounts in three
      financial institutions. Cash accounts at these financial institutions are
      insured by the Federal Deposit Insurance Corporation (FDIC) for up to
      $250,000 per financial institution. To date, the Company has not
      experienced a material loss or lack of access to its cash accounts;
      however, no assurance can be provided that access to the Companys cash
      accounts will not be impacted by adverse conditions in the financial
      markets. At December 31, 2008, the Company had deposits in excess of FDIC
      insured limits in the amount of $1,871,021.

F-31

---

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

|14. | CONCENTRATION OF ACTIVITY                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | For the year ended December 31, 2008, the Company
      purchased services from two major vendors Arrakis, Inc. and Boart Longyear
      that exceeded more than 10% of total purchases and amounted to
      approximately $1,453,845 and $702,314, respectively.                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | For the year ended December 31, 2007, the Company
      purchased services from two major vendors Arrakis, Inc. and NMC that
      exceeded more than 10% of total purchases and amounted to approximately
      $309,725 and $645,000, respectively. NMC is considered a related party and
      is more fully discussed in the related party note that follows.                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|15. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | During the years ended December 31, 2008 and 2007, the
      Company utilized the services of NMC to provide technical and financing
      related activities. These services related primarily to the Columbus
      project and the Red Mountain project.                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | In addition to the above fees, NMC provided dedicated use
      of its laboratory, instrumentation, milling equipment and research
      facilities. NMC provided invoices for these fees plus expenses.                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | For the year ended December 31, 2008, the Company
      incurred total fees and reimbursements of expenses to NMC of $420,000 and
      $33,354, respectively, for a total of $453,354.                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | At December 31, 2008, the Company had an outstanding
      balance due to NMC of $42,733. The Company also had an outstanding balance
      for accrued compensation to Mr. Birnie, its executive officer of $7,684
      payable to a company wholly owned by Mr. Birnie. Accounts payable 
      related party totaled $50,417 as of December 31, 2008.                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | For the year ended December 31, 2007, the Company
      incurred total fees and reimbursements of expenses to NMC of $645,000 and
      $626,314, respectively, for a total of $1,271,314. These expenses are
      presented in the financial statements as mineral exploration and
      evaluation expenses  related party of $976,314 and mineral and property
      holding costs  reimbursed to related party of $295,000.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | At December 31, 2007, the Company had an outstanding
      balance due to NMC of $37,128. The Company also had an outstanding balance
      for accrued compensation to Mr. Birnie, its executive officer of $45,000,
      payable to a company wholly owned by Mr. Birnie. Accounts payable 
      related party totaled $82,128 as of December 31, 2007.                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The company has the mining claim lease for the DDB Claims
      as further discussed in Note 10.                                                                                                                                                                                                                                                                                                                                  

F-32

---

ITEM
9.                CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

On October 6, 2007, we received notice that Telford Sadovnick,
P.L.L.C. (Telford Sadovnick) had resigned as our independent public
accountants.

Telford Sadovnick stated that they were resigning as our
independent auditor due to the fact that Telford Sadovnick had withdrawn its
registration with the Public Company Accountability Oversight Board (PCAOB)
and is no longer able to audit US issuers.

Telford Sadovnicks reports on the financial statements of us
for the past two fiscal years ended December 31, 2006 and December 31, 2005 did
not contain an adverse opinion or disclaimer of opinion, nor were they modified
or qualified as to uncertainty, audit scope or accounting principles with the
exception of a statement regarding the uncertainty of our ability to continue as
a going concern.

There were no disagreements between us and Telford Sadovnick on
any matter of accounting principles or practices, financial statement disclosure
or auditing scope or procedure, which, if not resolved to the satisfaction of
Telford Sadovnick, would have caused them to make reference to the subject
matter of the disagreement in connection with their report for the financial
statements for the past year.

On October 15, 2007, our Board of Directors appointed Brown
Armstrong Paulden McCown Starbuck Thornburgh & Keeter Accountancy
Corporation (Brown Armstrong) as our new independent registered public
accounting firm.

ITEM
9A(T).           CONTROLS
AND PROCEDURES.

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of our
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) as of December 31, 2008 (the Evaluation Date). This evaluation
was carried out under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer. Based upon that evaluation, our
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures were effective as of the Evaluation Date.

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

Management's Annual Report on Internal Control Over
Financial Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting, as such term is defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.

Our internal control over financial reporting includes those
policies and procedures that: (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of our assets; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that our receipts
and expenditures are being made only in accordance with authorizations of our
management and directors; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use or disposition
of our assets that could have a material effect on the financial statements.

Under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, management conducted an
evaluation of the effectiveness of our internal control over financial
reporting, as of the Evaluation Date, based on the framework set forth in
Internal Control-Integrated Framework issued by the

30

---

Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Based on its evaluation under this framework, management
concluded that our internal control over financial reporting was effective as of
the Evaluation Date.

This annual report does not include an attestation report of
our registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to attestation by our registered
public accounting firm pursuant to temporary rules of the SEC that permit us to
provide only management's report in this annual report.

Changes in Internal Control Over Financial Reporting

As of the Evaluation Date, there were no changes in our
internal control over financial reporting that occurred during the fiscal
quarter ended December 31, 2008 that have materially affected, or that are
reasonably likely to materially affect, our internal control over financial
reporting.

Limitations on the Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer and the
Chief Financial Officer, do not expect that the our controls and procedures will
prevent all potential error and fraud. A control system, no matter how well
conceived and operated, can provide only reasonable, not absolute, assurance
that the objectives of the control system are met.

ITEM
9B.              OTHER
INFORMATION.

None.

31

---

PART III

ITEM
10.              DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Directors and Executive Officers

|Name                | Age | Positions                                                       
|------------------- | --- | ----------------------------------------------------------------
|                    |     |                                                                 
|Douglas D.G. Birnie | 38  | President, Chief
      Executive Officer, Secretary and Director
|                    |     |                                                                 
|Robert D. McDougal  | 76  | Chief Financial
      Officer, Treasurer and Director           
|                    |     |                                                                 
|Michael A. Steele   | 51  | Director                                                        

Douglas D.G. Birnie.Mr. Birnie was appointed as our
Chief Executive Officer, President and a member of our Board of Directors on
June 29, 2007. Mr. Birnie was also appointed as our Secretary on March 30, 2007.
Mr. Birnie was appointed as our President and Secretary, and as one of our
directors pursuant to the terms of our assignment agreement with Nanominerals.
Mr. Birnie graduated with a Bachelor of Commerce degree from the University of
British Columbia in 1994. In 1995, Mr. Birnie was a founder of Columbus Group
Communications Inc., a privately held internet solutions company. In 1998, Mr.
Birnie received the Ernst and Young Entrepreneur of the Year award and the
Business Development Bank of Canada Young Entrepreneur of the Year Award. During
his tenure at Columbus Group, Mr. Birnie held the positions of CFO and COO until
the company was acquired by TELUS Corp. in 2001. Mr. Birnie continued to work
for TELUS Corp. as Director  Strategic Planning with the e.Solutions department
until 2003.

Robert D. McDougal.Mr. McDougal was appointed as our
Chief Financial Officer on March 30, 2007 and has served as a member of our
Board of Directors since December 14, 2007. Mr. McDougal was also appointed as
our Treasurer on January 23, 2008. Mr. McDougal was appointed as our Chief
Financial Officer pursuant to the terms of our assignment agreement with
Nanominerals. Mr. McDougal is a Certified Public Accountant. He began practicing
public accounting in 1973 and established his own practice in 1981. The majority
of his practice is focused on mining and mining related clients including public
companies, private companies partnerships and individuals. Mr. McDougal was a
Director and Officer of GEXA Gold Corporation, a publicly traded mining company,
from 1985 to 2001. Mr. McDougal was one of the founders of Millennium Mining
Corporation, which was subsequently merged into Gold Summit Corporation, a
publicly traded company. He is the managing partner of GM Squared, LLC, which
holds numerous mining claims. He served on the Nevada Society of Certified
Public Accountants Committee on Natural Resources for seven years, four years as
chairman. Prior to this time Mr. McDougal spent 20 years in the United States
Air Force, retiring with the rank of Major. Mr. McDougal is currently a member
of the Board of Directors of Searchlight Minerals Corp.

Michael A. Steele.Mr. Steele was appointed as a member
of our Board of Directors on December 14, 2007. For the past 15 years, Mr.
Steele has been the president and director of Avonlea Investments Ltd., a
private company. From 1998 to 2000, Mr. Steele acted as the president of
International Menu Solutions Corp., a company formerly quoted on the OTC
Bulletin Board.

TERMS OF OFFICE

Our directors are appointed for a one-year term to hold office
until the next annual general meeting of our stockholders or until removed from
office in accordance with our bylaws. Our officers are appointed by our Board of
Directors and hold office until removed by the Board.

SIGNIFICANT EMPLOYEES

We have no significant employees other than the officers and
directors described above.

32

---

AUDIT COMMITTEE

Our audit committee is composed of Robert D. McDougal and Michael
  A. Steele. Mr. McDougal is our audit committee financial expert
  as defined by the applicable rules of the SEC. Mr. McDougal is not independent
  as he also acts as our Chief Financial Officer and Treasurer. Mr. Steele is
  an independent member of our Board of Directors.

CODE OF ETHICS

We adopted a Code of Ethics applicable to our officers and
directors which is a "code of ethics" as defined by applicable rules of the SEC.
If we make any amendments to our Code of Ethics other than technical,
administrative, or other non-substantive amendments, or grant any waivers,
including implicit waivers, from a provision of our Code of Ethics to our Chief
Executive Officer, Chief Financial Officer, or certain other finance executives,
we will disclose the nature of the amendment or waiver, its effective date and
to whom it applies in a current report on Form 8-K filed with the SEC. A copy of
our Code of Ethics was attached as an exhibit to our Annual Report filed with
the SEC on September 28, 2004.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our executive
officers and directors, and persons who beneficially own more than 10% of our
equity securities (collectively, the Reporting Persons), to file reports of
ownership and changes in ownership with the SEC. Reporting Persons are required
by SEC regulation to furnish us with copies of all forms they file pursuant to
Section 16(a). Based on our review of the copies of such forms received by us,
other than as described below, no other reports were required for those
persons.

The following persons have failed to file, on a timely basis,
the identified reports required by Section 16(a) of the Exchange Act:

|                                  | Number
      of Late | Transactions Not | Known
      Failures to File
|--------------------------------- | -------------------- | ---------------- | ----------------------------
|Name and Principal
      Position | Reports              | Timely Reported  | a
      Required Form       
|Lawrence E. Chizmar, Jr.,         | Two                  | Two              | None                        
|Former Director                   |                      |                  |                             

ITEM
11.              EXECUTIVE
COMPENSATION.

COMPENSATION TO EXECUTIVE OFFICERS

The following table sets forth the total compensation paid or
accrued to our named executive officers, as that term is defined in Item
402(m)(2) of Regulation S-K during our last two completed fiscal years.

SUMMARY COMPENSATION TABLEName & Principal 
        Position
      Year
      Salary 
        ($)
      Bonus 
        ($)
      Stock 
        Awards 
        ($)
      Option 
        Awards 
        ($)
      Non- 
        Equity 
        Incentive 
        Plan 
        Compen- 
        sation ($)
      Nonqualified 
        Deferred 
        Compen- 
        sation 
        Earnings 
        ($)
      All Other 
        Compen- 
        sation 
        ($)
      Total 
        ($)Douglas D.G. Birnie, 
        CEO, President, 
        Secretary, 
        Director
      2008 
        2007
      $108,000(1)
        $81,000
      $0 
        $0
      $0 
        $0
      $842,829 
        $4,032
      $0 
        $0
      $0 
        $0
      $0 
        $0
      $950,829 
        $85,032Robert D. 
        McDougal, 
        CFO, Treasurer, 
        Director
      2008 
        2007
      $48,000 
        $36,000
      $0 
        $0
      $0 
        $0
      $191,552 
        $916
      $0 
        $0
      $0 
        $0
      $0 
        $0
      $239,552 
        $36,916


|(1) | Represents consulting fees paid or accrued to a limited
      liability company of which Mr. Birnie is the sole member for services
      provided by Mr. Birnie as an executive officer and director of
    Ireland.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

33

---

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

The following table provides information concerning unexercised
options for each our named executive officers, as that term is defined in Item
402(m)(2) of Regulation S-K as of our fiscal year end of December 31, 2008.

Name and Principal
      Position
    Number of
      Securities Underlying Unexercised
      Options (#) Exercisable
    Number of
      Securities Underlying Unexercised
      Options (#) Unexercisable
    Equity Incentive Plan
      Awards: Number of Securities
      Underlying Unexercised Unearned
      Options
    Option
      Exercise Price
    Option
      Expiration DateDouglas D.G. Birnie CEO, President, Secretary
      & Director
    2,200,000
    --
    --
    $0.05
    March 30, 2012Robert D. McDougal CFO, Treasurer & Director
    500,000
    --
    --
    $0.05
    March 30, 2012


DIRECTOR COMPENSATION

The following table sets forth the compensation paid to our
directors during our December 31, 2008 fiscal year, other than directors who
were also named executive officers as that term is defined in Item 402(m)(2).
Compensation paid to directors who were also named executive officers during our
December 31, 2008 fiscal year is set out in the tables above.

Name
    Fees Earned or
      Paid in Cash(1) ($)
    Stock Awards
      ($)
    Option Awards
      ($)
    Non-Equity Incentive
      Plan Compensation ($)
    Nonqualified Deferred
      Compensation Earnings ($)
    All Other
      Compensation ($)
    Total ($)Michael A. Steele
    $9,500
    $0
    $191,552
    $0
    $0
    $0
    $201,052Lawrence E. Chizmar Jr.(2)
    $8,000
    $0
    $14,090
    $0
    $0
    $0
    $22,090


|(1) | We pay our independent directors $1,000 per day for Board
      of Director meetings attended in person, and $500 per day for Board of
      Director meetings attended by conference call.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Mr. Chizmar resigned as a member of our Board of
      Directors on November 4, 2008.                                                                                                      

EMPLOYMENT CONTRACTS

We have no employment contracts, termination of employment or
change-in-control arrangements with any of our executive officers or
directors.

ITEM
12.              SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.

EQUITY COMPENSATION PLANS

The following table sets forth certain information concerning
all equity compensation plans previously approved by stockholders and all
previous equity compensation plans not previously approved by stockholders, as
of the most recently completed fiscal year.

34

---

Equity Compensation Plan Information

Plan Category
    Number of Securities to be Issued
      Upon Exercise of Outstanding Options, Warrants and Rights
      (a)
    Weighted-Average Exercise Price
      of Outstanding Options, Warrants and Rights (b)
    Number of Securities Remaining Available
      for Future Issuance Under Equity Compensation Plans (Excluding
      Securities Reflected in column (a)) (c)Equity Compensation Plans Approved By
      Security Holders
    None
    Not Applicable
    NoneEquity Compensation Plans Not Approved By
      Security Holders
    3,875,000(1)
    $0.13
    5,276,513


|(1) | Includes an option to purchase 100,000 shares of our
      common stock at a price of $1.75 per share expiring August 15, 2017
      granted to a consultant outside of our 2007 Stock Incentive
  Plan.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2007 Stock Incentive Plan

On March 27, 2007, we established our 2007 Stock Incentive Plan
(the 2007 Plan). The purpose of the 2007 Plan is to enhance the long-term
stockholder value of the Company by offering opportunities to our directors,
officers, employees and eligible consultants and any entity that directly or
indirectly is in control of or is controlled by the Company (a Related
Company) to acquire and maintain stock ownership in the Company in order to
give these persons the opportunity to participate in our growth and success, and
to encourage them to remain in our service or in the service of a Related
Company.

The 2007 Plan is administered by our Board of Directors or by a
committee of two or more directors appointed by our Board of Directors (the
"Plan Administrator"). Subject to the provisions of the 2007 Plan, the Plan
Administrator has full and final authority to grant the awards of stock options
and to determine the terms and conditions of the awards and the number of shares
to be issued pursuant thereto. The 2007 Plan authorizes the grant of options
that are intended to qualify as incentive stock options under the Internal
Revenue Code of 1986 or nonqualified stock options.

All of our employees and members of our Board of Directors are
eligible to be granted options. Individuals who have rendered or are expected to
render advisory or consulting services to us are also eligible to receive
options so long as they do not provide capital raising services or promote or
maintain a market for our securities. Upon adoption, the maximum number of
shares of our Common Stock with respect to which options or rights could be
granted under the 2007 Plan to any participant was 6,000,000 shares. The 2007
Plan contains an automatic adjustment provision where the number of authorized
shares authorized to be subjected to option grants increases on the first day of
each quarter beginning with the fiscal quarter commencing July 1, 2007 by the
lesser of the following amounts: (1) 15% of the total number of outstanding
shares of the Companys Common Stock, less any shares that were previously
available under the 2007 Plan an any shares available under any other stock
option plan that we may adopt; or (2) a lesser number of shares of Common Stock
as may be determined by our Board of Directors, subject to certain adjustments
to prevent dilution.

The exact terms of the option granted are contained in an
option agreement between us and the person to whom such option is granted.
Eligible employees are not required to pay anything to receive options. The
exercise price for options intending to qualify as incentive stock options must
be no less than 100% of the fair market value of our common stock on the date of
grant. The exercise price for nonqualified stock options is determined by the
Plan Administrator but may not be less than 75% of the fair market value of our
common stock on the date of the grant. Fair market value for purposes of the
2007 Plan is calculated based on the price of our common stock during the 10
trading days prior to the grant date. An option holder may exercise options from
time to time, subject to vesting. Options will vest immediately upon death or
disability of a participant and upon certain change of control events.

The Plan Administrator may amend the 2007 Plan at any time and
in any manner, however no recipient of any award may, without his or her
consent, be deprived thereof or of any of his or her rights thereunder or with
respect thereto as a result of such amendment or termination.

35

---

The 2007 Plan terminates on March 27, 2017 unless sooner
terminated by action of our Board of Directors. No option is exercisable by any
person after such expiration. If an award expires, terminates or is canceled,
the shares of our Common Stock not purchased thereunder may again be made
available for issuance under the 2007 Plan.

We have not yet filed a registration statement under the
Securities Act of 1933 to register the shares of our Common Stock reserved for
issuance under the 2007 Plan.

Options Granted to Consultant

In accordance with the terms of the Consulting Agreement dated
November 5, 2007 between us and RJ Falkner & Company, Inc., we granted an
option to R. Jerry Falkner to purchase 100,000 shares of our common stock. The
option granted is exercisable at a price of $1.75 per share and expires on
August 15, 2017. The option granted to Mr. Falkner was not granted under our
2007 Plan.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The following table sets forth certain information concerning
the number of shares of our common stock owned beneficially as of March 20,
2009by: (i) each person (including any group) known to us to own more
than five percent (5%) of any class of our voting securities, (ii) each of our
directors and each of our named executive officers (as defined under Item
402(m)(2) of Regulation S-K), and (iii) officers and directors as a group.
Unless otherwise indicated, the shareholders listed possess sole voting and
investment power with respect to the shares shown.

Title of Class
      Name and Address of Beneficial
        Owner
      Number of Shares of Common Stock
      Percentage of Common Stock(1)DIRECTORS
        AND OFFICERSCommon Stock
      Douglas D.G. Birnie 
        Chief Executive Officer, President, Secretary 
        and Director
      4,200,000(2)
        (direct)
      4.2%Common Stock
      Robert D. McDougal 
        Chief Financial Officer, Treasurer and Director
      1,700,000(3)
        (direct)
      1.7%Common Stock
      Michael Steele 
        Director
      1,100,000(4)
        (direct and indirect)
      1.1%Common Stock
      All Officers and Directors 
        as a Group (3 persons)
      7,000,000
      6.9%%5%
        STOCKHOLDERSCommon Stock
      Nanominerals Corp. 
        3500 Lakeside Court, Suite 206 
        Reno, NV 89509
      40,150,000(5)
        (direct)
      41.4%


|(1) | Under Rule 13d-3, a beneficial owner of a security
      includes any person who, directly or indirectly, through any contract,
      arrangement, understanding, relationship, or otherwise has or shares: (i)
      voting power, which includes the power to vote, or to direct the voting of
      shares; and (ii) investment power, which includes the power to dispose or
      direct the disposition of shares. Certain shares may be deemed to be
      beneficially owned by more than one person (if, for example, persons share
      the power to vote or the power to dispose of the shares). In addition,
      shares are deemed to be beneficially owned by a person if the person has
      the right to acquire the shares (for example, upon exercise of an option)
      within 60 days of the date as of which the information is provided. In
      computing the percentage ownership of any person, the amount of shares
      outstanding is deemed to include the amount of shares beneficially owned
      by such person (and only such person) by reason of these acquisition
      rights. As a result, the percentage of outstanding shares of any person as
      shown in this table does not necessarily reflect the
  persons
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

36

---

|    | actual ownership or voting power with respect to the
      number of shares of common stock actually outstanding. As of March 20,
      2009, there were 97,010,087 shares of our common stock issued and
      outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(2) | The shares listed as beneficially owned by Mr. Birnie
      consists of: (i) 1,900,000 shares of our common stock held by Mr. Birnie;
      (ii) warrants to acquire 100,000 shares of our common stock at an exercise
      price of $1.00 per share until June 20, 2009; and (iii) options to acquire
      2,200,000 shares of our common stock at an exercise price of $0.05 per
      share until March 30, 2012. Mr. Birnie also owns a 3.5% interest in
      Nanominerals Corp. The shares listed as beneficially owned by Mr. Birnie
      do not include any part of the shares of our common stock owned by
      Nanominerals as Mr. Birnie does not have any voting or investment power
      over the shares owned by Nanominerals.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(3) | The shares listed as beneficially owned by Mr. McDougal
      consists of: (i) 1,200,000 shares of our common stock held by Mr.
      McDougal; and (ii) options to acquire 500,000 shares of our common stock
      at an exercise price of $0.05 per share until March 30, 2012.                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(4) | The shares listed as beneficially owned by Mr. Steele
      consists of: (i) options to acquire 500,000 shares of our common stock at
      an exercise price of $0.05 per share until March 30, 2012; and (ii)
      400,000 shares and warrants to acquire an additional 200,000 shares at a
      price of $1.00 per share owned by Avonlea Ventures #2 Inc. Mr. Steele owns
      a 50% interest in Avonlea Ventures #2 Inc.                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|(5) | The sole officer and director of Nanominerals is Dr.
      Charles A. Ager. Together with his wife, Carol Ager, Dr. Ager owns a 35%
      interest in Nanominerals. Individually, Dr. Ager owns 2,100,000 shares of
      our common stock and Mrs. Ager owns 300,000 shares of our common stock.
      The shares owned by Dr. Ager and Mrs. Ager have not been included in the
      shares beneficially owned by Nanominerals. Mr. Birnie also owns a 3.5%
      interest in Nanominerals Corp. The shares listed as beneficially owned by
      Mr. Birnie have not been included in the shares beneficially owned by
      Nanominerals.                                                                                                    

CHANGES IN CONTROL

We are not aware of any arrangement which may result in a
change in control in the future.

ITEM
13.             
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.

Except as disclosed below, none of the following parties has,
during our December 31, 2008 fiscal year, had any material interest, direct or
indirect, in any transaction with us or in any presently proposed transaction
that has or will materially affect us:

| | (a) | Any of our directors or officers;                                                                                                                                                                                                                                                                                                         
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (b) | Any person proposed as a nominee for election as a
      director;                                                                                                                                                                                                                                                                        
| | (c) | Any person who beneficially owns, directly or indirectly,
      more than 5% of our outstanding common stock; or                                                                                                                                                                                                                          
| | (d) | Any child, stepchild, parent, stepparent, spouse,
      sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
      brother-in-law, sister-in-law of any person listed in (a) to (c), above,
      or any person (other than a tenant or employee) who shares the household
      of any person listed in (a) to (c), above.

Acquisition of the Columbus Project

On February 20, 2008, we completed the acquisition of Columbus
Brine Inc. (CBI). The acquisition of CBI was completed pursuant to the
Agreement and Plan of Merger entered into by us, our wholly owned subsidiary
incorporated for the sole purpose of completing the acquisition, CBI
Acquisition, Inc. (Ireland Sub), CBI, and CBIs directors and officers, John
T. Arkoosh, William Maghan and Lawrence E. Chizmar, Jr. (collectively referred
to as the CBI Principals) on December 14, 2007, and as amended on January 31,
2008 (the Agreement and Plan of Merger, as amended, is referred to as the
Merger Agreement).

In connection with our acquisition of CBI, we issued Mr.
Chizmar 202,099 shares of our common stock and share purchase warrants entitling
Mr. Chizmar to purchase 100,900 additional shares of our common stock at a price
of $2.39 per share. Mr. Chizmar was a member of our Board of Directors from
February 20, 2008 until November 4, 2008. The warrants issued to Mr. Chizmar
expire February 19, 2013 and contain a cashless right

37

---

of exercise. We may accelerate the expiration date for these
warrants after August 19, 2010 if the average price of our common stock over any
20 consecutive trading days is greater than or equal to 150% of the exercise
price. Mr. Chizmar was appointed to our Board of Directors pursuant to the terms
of the Merger Agreements, and resigned from our Board of Directors due to
personal health reasons.

DDB Claims

Mr. Chizmar, a former member of our Board of Directors, and a
limited liability company controlled by Douglas D.G. Birnie, our CEO, President
and Secretary, and a member of our Board of Directors, are each the owners of a
1/8 interest in the mining syndicate known as the DDB Syndicate. The former
officers and directors of CBI (other than Mr. Chizmar), and an affiliate of one
of those former officers and directors of CBI, collectively own a 3/8 interest
in the DDB Syndicate. The remaining 3/8 interest in the DDB Syndicate is
collectively owned by affiliates of Nanominerals Corp. (Nanominerals). Mr.
Birnie is also the owner of a 3.5% interest in Nanominerals. Mr. Birnie,
Nanominerals and Nanominerals affiliates acquired their respective interests in
the DDB Syndicate and the DDB Claims prior to his and their involvement with the
Company. Mr. Birnie acquired his interest in Nanominerals prior to their
involvement with the Company. On November 30, 2007, the DDB Syndicate leased the
DDB Claims to Columbus S.M. LLC (CSM), formerly a wholly owned subsidiary of
CBI, and now a wholly owned subsidiary of the Company. The mining lease
agreement (the DDB Agreement) between the DDB Syndicate and CSM provides CSM
with a lease, extending for approximately 5 years, with an option to purchase
the DDB Claims at any time during the lease period. In order to maintain its
lease rights, CSM must pay the DDB Syndicate $130,000 by June 30, 2008, with
annual rental payments thereafter of $30,000 per year, payable on June 30, 2009,
2010 and 2011 respectively. CSM may exercise its option to purchase the DDB
Claims by:

| | (a) | paying the DDB Syndicate a purchase price of $400,000,
      less any rental payments made by CSM prior to exercising the option;
    or
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                         
| | (b) | paying the DDB Syndicate $10, plus the grant of a 2%
      royalty of net smelter returns on the DDB Claims.                            

As the owners of a 1/8 interest each in the DDB Syndicate, Mr.
Chizmar and a limited liability company controlled by Mr. Birnie are each
entitled to 1/8 of any amounts paid by us under the DDB Agreement. During the
year ended December 31, 2008, we paid a total of $130,000 to the DDB Syndicate
under the terms of the DDB Agreement.

Nanominerals Corp.

Nanominerals Corp. (Nanominerals) is the owner of 40,150,000
shares, or 41.4%, of our Common Stock. Nanominerals acts as a consultant to us
on technical exploration and financial matters. Mr. Birnie is the owner of a
3.5% interest in Nanominerals. Mr. Birnie acquired his interest in Nanominerals
prior to his and their involvement with our Company. During the year ended
December 31, 2008, we incurred fees totaling $420,000 due to Nanominerals for
services provided. In addition, during the year ended December 31, 2008, we
reimbursed Nanominerals a total of $33,354 in respect of expenses incurred by
Nanominerals in relation to our exploration and development activities on the
Columbus Project and the Red Mountain Project.

Affiliates of Nanominerals are also the owners of a 3/8
interest in the DDB Syndicate, which owns the DDB Claims as described above.

DIRECTOR INDEPENDENCE

Our common stock is quoted on the OTC Bulletin Board
interdealer quotation system, which does not have director independence
requirements. In determining whether any of our directors are independent
directors, we have applied the definition for independence set out in NASDAQ
Rule 4200(a)(15). In applying this definition, we have determined that Michael
A. Steele is our sole independent director. Neither of Douglas D.G. Birnie nor
Robert D. McDougal qualifies as an independent member of our Board of
Directors.

38

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ITEM
14.              PRINCIPAL
ACCOUNTING FEES AND SERVICES.

The aggregate fees billed for the two most recently completed
fiscal years for professional services rendered by the principal accountant for
the audit of our annual financial statements and review of the financial
statements included in our Quarterly Reports on Form 10-Q and services that are
normally provided by the accountant in connection with statutory and regulatory
filings or engagements for those fiscal periods were as follows:

|                   | Year Ended December 31, 2008 | Year Ended December 31, 2007
|------------------ | ---------------------------- | ----------------------------
|Audit Fees         | $62,123                      | $46,725                     
|Audit-Related Fees | Nil                          | 13,131                      
|Tax Fees           | Nil                          | Nil                         
|All Other Fees     | $21,572                      | Nil                         
|Total              | $83,695                      | $59,856                     

$21,572 in fees was billed by our principal accountant during
the year ended December 31, 2008 for the audit of Columbus Brine Inc. in
connection with our acquisition of that company.

Our audit committee reviewed the qualifications of Brown
Armstrong Paulden McCown Starbuck Thornburgh & Keeter Accountancy
Corporation, prior to engaging them as our auditors in accordance with Rule
2-01(c)(7)(i)(A).

ITEM
15.             
EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

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

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

39

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|Exhibit |  |                                                                                                                                                                   
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  |  | Description of Exhibit                                                                                                                                            
|        |  |                                                                                                                                                                   
|14.1    |  | Code of Ethics.(10)                                                                                                                                               
|        |  |                                                                                                                                                                   
|21.1    |  | List of Subsidiaries.                                                                                                                                             
|        |  |                                                                                                                                                                   
|31.1    |  | Certification of Principal
      Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                     
|        |  |                                                                                                                                                                   
|31.2    |  | Certification of Principal
      Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                     
|        |  |                                                                                                                                                                   
|32.1    |  | Certification of Principal
      Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002.
|        |  |                                                                                                                                                                   
|32.2    |  | Certification of Principal
      Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
      to Section 906 of the Sarbanes-Oxley Act of 2002.
|        |  |                                                                                                                                                                   
|99.1    |  | Diagram of Columbus
      Project Pilot Production Process.                                                                                                       

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

40

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

|      | IRELAND INC.                                          
|----- | ------------------------------------------------------
|      |                                                       
|      |                                                       
|      |                                                       
|By:   | /s/
      Douglas D.G. Birnie                         
|      | DOUGLAS D.G. BIRNIE                                   
|      | Chief Executive Officer, President and
      Secretary
|      | (Principal Executive Officer)                         
|      |                                                       
|Date: | March
      26, 2009                                  
|      |                                                       
|      |                                                       
|      |                                                       
|By:   | /s/
      Robert D. McDougal                          
|      | ROBERT D. MCDOUGAL                                    
|      | Chief Financial Officer and Treasurer                 
|      | (Principal Financial Officer)                         
|      |                                                       
|Date: | March
      26, 2009                                  

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.

|By:   | /s/
      Douglas D.G. Birnie                         
|----- | ------------------------------------------------------
|      | DOUGLAS D.G. BIRNIE                                   
|      | Chief Executive Officer, President and
      Secretary
|      | Director                                              
|      |                                                       
|Date: | March
      26, 2009                                  
|      |                                                       
|      |                                                       
|      |                                                       
|By:   | /s/
      Robert D. McDougal                          
|      | ROBERT D. MCDOUGAL                                    
|      | Chief Financial Officer and Treasurer                 
|      | Director                                              
|      |                                                       
|Date: | March
      26, 2009                                  
|      |                                                       
|      |                                                       
|      |                                                       
|By:   | /s/
      Michael A. Steele                           
|      | MICHAEL A. STEELE                                     
|      | Director                                              
|      |                                                       
|Date: | March
      24, 2009                                  

---