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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB

(Mark One)

[X] Annual Report Under Section 13 Or 15(d) Of The
Securities Exchange Act Of 1934

For the fiscal year ended December 31, 2006

[   ] Transition Report Under Section 13 Or 15(d) Of
The Securities Exchange Act Of 1934

For the transition period from __________ to __________

COMMISSION FILE NUMBER **000-50033**

IRELAND INC.

(Name of small business issuer in its charter)

|NEVADA                                                               | 91-2147049                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|810 Peace Portal Drive, Suite 201                                    |                                     
|Blaine, Washington                                                   | 98230                               
|(Address of principal executive offices)                             | (Zip Code)                          
|                                                                     |                                     
|(360) 318-3020                                                       |                                     
|Issuer's telephone number                                            |                                     

|Securities registered under Section 12(b) of the Exchange
      Act: | NONE.                                          
|-------------------------------------------------------------------- | -----------------------------------------------
|                                                                     |                                                
|Securities registered under Section 12(g) of the Exchange
      Act: | Common Stock, $0.001 Par Value Per
      Share.

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

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B contained in this form, and no disclosure will
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-KSB or any amendment to this Form 10-KSB. [   ]

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

State issuers revenues for its most recent fiscal year:
NIL.

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 sold, or the average bid and asked price of such
common equity, as of a specified date within the past 60 days:
$416,250 based on a price of $0.10per share,
being the last price at which shares of common stock were sold by the
issuer.(Although our common stock was eligible for quotation on the
OTC Bulletin Board beginning May 8, 2006, historical bid and ask information
was not available from the OTC Bulletin Board and no trades of our common
stock occurred on the OTC Bulletin Board during the year ended December 31,
2006.)

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date. As of
April 2, 2007, the issuer had 9,137,500 shares of common stock
outstanding.

Transitional Small Business Disclosure Format (Check one): Yes
[   ] No [X]

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TABLE OF CONTENTS

|           |                                                                                                                                                    | PAGE
|---------- | -------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|           |                                                                                                                                                    |     
|PART I     |                                                                                                                                                    | 3   
|           |                                                                                                                                                    |     
|ITEM 1.    | DESCRIPTION OF BUSINESS.                                                                                                                           | 3   
|           |                                                                                                                                                    |     
|ITEM 2.    | DESCRIPTION OF PROPERTY                                                                                                                            | 8   
|           |                                                                                                                                                    |     
|ITEM 3.    | LEGAL PROCEEDINGS                                                                                                                                  | 9   
|           |                                                                                                                                                    |     
|ITEM 4.    | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                                                | 9   
|           |                                                                                                                                                    |     
|PART II    |                                                                                                                                                    | 10  
|           |                                                                                                                                                    |     
|ITEM 5.    | MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS                                                                                           | 10  
|           |                                                                                                                                                    |     
|ITEM 6.    | MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.                                                                                         | 11  
|           |                                                                                                                                                    |     
|ITEM 7.    | FINANCIAL STATEMENTS.                                                                                                                              | 18  
|           |                                                                                                                                                    |     
|ITEM 8.    | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
      AND FINANCIAL DISCLOSURE                                                         | 19  
|           |                                                                                                                                                    |     
|ITEM 8A.   | CONTROLS AND PROCEDURES                                                                                                                            | 19  
|           |                                                                                                                                                    |     
|ITEM 8B.   | OTHER INFORMATION.                                                                                                                                 | 19  
|           |                                                                                                                                                    |     
|PART III   |                                                                                                                                                    | 21  
|           |                                                                                                                                                    |     
|ITEM 9.    | DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS
      AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
      ACT. | 21  
|           |                                                                                                                                                    |     
|ITEM 10.   | EXECUTIVE COMPENSATION.                                                                                                                            | 23  
|           |                                                                                                                                                    |     
|ITEM 11.   | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
      AND RELATED STOCKHOLDER MATTERS                                               | 24  
|           |                                                                                                                                                    |     
|ITEM 12.   | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE                                                                    | 25  
|           |                                                                                                                                                    |     
|ITEM 13.   | EXHIBITS                                                                                                                                           | 27  
|           |                                                                                                                                                    |     
|ITEM 14.   | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                                                             | 28  
|           |                                                                                                                                                    |     
|SIGNATURES | 29                                                                                                                                                

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PART I

Certain statements contained in this Annual Report on Form
10-KSB constitute "forward-looking statements. These statements, identified by
words such as plan, "anticipate, "believe, "estimate, "should," "expect"
and similar expressions include our expectations and objectives regarding our
future financial position, operating results and business strategy. These
statements reflect the current views of management with respect to future events
and are subject to risks, uncertainties and other factors that may cause our
actual results, performance or achievements, or industry results, to be
materially different from those described in the forward-looking statements.
Such risks and uncertainties include those set forth under the caption
"Management's Discussion and Analysis or Plan of Operation" and elsewhere in
this Annual Report. We advise you to carefully review the reports and documents
we file from time to time with the Securities and Exchange Commission (the
SEC), particularly our quarterly reports on Form 10-QSB and our current
reports on Form 8-K.

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

ITEM
1.           DESCRIPTION OF
BUSINESS.

GENERAL

We were incorporated on February 20, 2001 under the laws of the
State of Nevada under the name Merritt Ventures Corp. On December 19, 2005, we
changed our name to Ireland Inc. We are an exploration stage company engaged in
the acquisition, exploration and development of mineral properties.

We currently own a 100% interest in a mineral claim located in
the Yellow Pine Mining District in Clark County, Nevada that we refer to as the
Ireland Claim. Our plan of operation for the next twelve months primarily
involves continuing to conduct preliminary exploration and development work on
this property in order to ascertain whether it possesses commercially
exploitable mineral deposits. To date, no commercially viable mineral deposits
have been identified on the Ireland Claim and there is no assurance that any
commercially viable mineral deposits exist on the property.

The Columbus and Red Mountain Projects

In addition to the Ireland Claim, on March 30, 2007, we
executed an agreement (the Nano Agreement) dated for reference as of March 29,
2007, with Nanominerals Corp. (Nano), pursuant to which Nano agreed to assign
to us the following option rights:

| | (a) | an option to acquire up to a 15% interest in a calcium
      carbonate and silver brine mineral project located in Esmeralda County,
      Nevada (the Columbus Project);         
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                     
| | (b) | an option to acquire 100% of the Columbus Project by way
      of a merger with the owners of the Columbus Project, Columbus S.M. LLC
      (CSM) and Columbus Brine Inc. (CBI);
| |     |                                                                                                                                                                                     
| | (c) | an option to acquire up to a 60% interest in a certain
      mineral claims located in San Bernardino County, California (the Red
      Mountain Project); and                    
| |     |                                                                                                                                                                                     
| | (d) | an option to acquire 100% of the Red Mountain Project for
      approximately $4,000,000 in cash and stock.                                                                         

The option rights to be assigned by Nano are discussed below.
In exchange for Nanos agreement to assign the above option rights to us, we
have agreed to, upon closing:

| | (a) | issue an aggregate of 7,500,000 shares of our common
      stock to Nano and to certain business associates of Nano (including
      300,000 shares to Robert D. McDougal, currently our Chief Financial
      Officer);
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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| | (b) | grant a royalty to Nano of 5% of net smelter returns, if
      any, from the Columbus and Red Mountain Projects;                                                            
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                             
| | (c) | issue promissory notes totaling $5,000,000, payable as
      follows:                                                                                                       
| |     |                                                                                                                                                                             
| |     | (i)                                                                                                                                                                         
| |     | (ii)                                                                                                                                                                        
| |     | (iii)                                                                                                                                                                       
| |     |                                                                                                                                                                             
| | (d) | assume the obligations of Nano under the terms of the
      Columbus and Red Mountain Option Agreements (as defined below);
  and                                           
| |     |                                                                                                                                                                             
| | (e) | reimburse Nano for expenditures made by it on the
      Columbus Project from January 1, 2007, and on the Red Mountain Project
      from April 1, 2007, both until closing.

In addition to the consideration paid by us, Lorrie Ann
Archibald, our sole director and our President, Treasurer and Chief Executive
Officer, agreed to, upon closing, sell 4,550,000 shares of our common stock to
Nano at a price of $0.01 per share. These shares represent all of the shares of
our common stock owned by Ms. Archibald. On March 30, 2007, as provided for
under the Nano Agreement, Ms. Archibald agreed to resign as our Chief Financial
Officer and Christian Adolf Rommel agreed to resign as our Secretary. In their
places, Robert D. McDougal was appointed as our Chief Financial Officer, and
Douglas D.G. Birnie was appointed as our Secretary. Ms. Archibald continues to
act as our President, Treasurer and Chief Executive Officer, and as our sole
director. Closing of the transactions provided for under the Nano Agreement is
expected to occur on or about June 30, 2007, and is subject to a number of terms
and conditions, including confirmation from Nano that it has received all
corporate and third-party approvals necessary to permit the assignment.

The Columbus Project Option Agreement

The Columbus Project is a calcium carbonate and silver brine
project consisting of approximately 19,800 acres located in Esmeralda County,
Nevada. Nano currently has an exclusive right to examine, test, explore, develop
and acquire an interest in the Columbus Project pursuant to an agreement (the
Columbus Option Agreement) with the propertys owners, Columbus S.M. LLC
(CSM) and Columbus Brine Inc. (CBI). Under the terms of its agreement with
CSM and CBI, in order to maintain and exercise its option, Nano is required to
do the following:

| | (a) | pay $10,000 per month to CSM until December 31, 2007, in
      order to maintain its option rights;                                                                                               
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                   
| | (b) | spend a total of $500,000 on examining, testing,
      exploring or developing the Columbus Project by December 31, 2006 (the CP
      Phase 1 Expenditures) (which Nano has already spent); and
| |     |                                                                                                                                                                                                   
| | (c) | spend a total of $2,500,000 on examining, testing,
      exploring or developing the Columbus Project by December 31, 2007 (the CP
      Phase 2 Expenditures).                                 

For every $1,000,000 spent by Nano on the CP Phase 1 and CP
Phase 2 Expenditures, Nano will earn a 5% interest undivided interest in the
Columbus Project (or a proportionate fractional interest for expenditures in
denominations of less than $1,000,000). Nano will earn a maximum 15% undivided
interest in the Columbus Project if it spends the full $3,000,000 of the CP
Phase 1 and CP Phase 2 Expenditures by the deadlines set out above. In addition,
if Nano spends the full amount of the CP Phase 1 and CP Phase 2 Expenditures, it
will have the right to acquire CSM and CBI by way of a statutory merger (and
thus a 100% undivided interest in the Columbus Project) (the CP Merger
Rights). In order to exercise the CP Merger Rights, Nano must issue the
following consideration:

| | (a) | shares of voting common stock with an aggregate market
      value of $20,000,000 (the CP Merger Shares); and
| | --- | ---------------------------------------------------------------------------------------------------------------

4

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| | (b) | warrants to acquire one additional share for every four
      shares issued under (a), at a price per share equal to 125% of the share
      price used to determine the number of shares to be issued under (a), for a
      period of two years.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The number of shares to be issued will be determined based upon
the average closing price of Nanos shares over the 60 days prior to closing,
with a minimum per share price of $0.25 per share and a maximum per share price
of $2.00 per share. In addition, upon completion of the merger, John T. Arkoosh,
the principal of CSM and CBI, will have the right to nominate one person as a
director of Nano. Nano will be required to file a registration statement with
the SEC in respect of the resale of the Merger Shares, within 60 days after the
completion of the merger. The option to acquire CSM and CBI expires on January
31, 2008. If Nano assigns its rights to the Columbus Project to us as
contemplated, we will assume all of Nanos rights and obligations under the
Columbus Option Agreement.

The Red Mountain Project Option Agreement

The Red Mountain Project consists of 60 mineral claims, all
located in San Bernardino County, California. Nano currently has an exclusive
right to examine, test, explore, develop and acquire an up to 60% interest in
the Red Mountain Project pursuant to an option agreement the (Red Mountain
Option Agreement) with the projects owner, Red Mountain Mining (RMM). In
order to maintain and exercise this option, Nano is required to do the
following:

| | (a) | pay $5,000 per month to RMM, until December 31, 2011, in
      order to maintain its option rights;                                                                     
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                         
| | (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 Nano on the RMP Phase 1 or RMP Phase
2 Expenditures, Nano will earn a 5% undivided interest in the Red Mountain
Project (or a proportionate fractional interest for expenditures in
denominations of less than $100,000). Nano will earn a maximum 60% undivided
interest in the Red Mountain Project if it spends the full $1,200,000 of the RMP
Phase 1 and RMP Phase 2 Expenditures by the deadlines set out above. In
addition, at any time, Nano may acquire a 100% interest in the Red Mountain
Project 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)                                                                                                                                      
| |     |                                                                                                                                          
| |     | (ii)                                                                                                                                     
| |     |                                                                                                                                          
| |     | (iii)                                                                                                                                    

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The number of shares to be issued will be determined based upon
the average closing price of Nanos shares over the 60 days prior to closing,
with a minimum per share price of $0.25 per share and a maximum per share price
of $5.00 per share. If Nano assigns its rights to the Red Mountain Project to us
as contemplated, we will assume all of Nanos rights and obligations under the
Red Mountain Option Agreement.

RECENT DEVELOPMENTS

The following significant corporate developments occurred
during our fiscal year ended December 31, 2006:

|1. | On March 27, 2007, we adopted our 2007 Stock Incentive
      Plan (the 2007 Stock Plan). A summary of the 2007 Stock Plan is provided
      at Part II, Item 8B, Other Information. A copy of the 2007 Stock Plan is
      attached as an exhibit to this Annual Report.                                                                                                                                                                                                                                                 
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|2. | On March 28, 2007, we granted options to purchase 5,000
      shares of our common stock under our 2007 Stock Plan to Lorrie Ann
      Archibald, our sole director and our Chief Executive Officer, President
      and Treasurer. The options granted to Ms. Archibald have an exercise price
      of $0.20 per share, are fully vested and expire on March 28, 2009. A copy
      of the option agreement between us and Ms. Archibald is attached as an
      exhibit to this Annual Report.                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3. | On March 30, 2007, we entered into the Nano Agreement,
      pursuant to which Nano has agreed to assign to us its rights to certain
      mineral properties located in Esmeralda County, Nevada and San Bernardino
      County, California. A description of the terms of the Nano Agreement and
      the mineral property rights to be assigned to us is provided
  above.                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4. | Pursuant to the terms of the Nano Agreement, on March 30,
      2007, Ms. Archibald resigned as our Chief Financial Officer and Christian
      Adolf Rommel resigned as our Secretary. In their places, Robert D.
      McDougal was appointed as our Chief Financial Officer, and Douglas Birnie
      was appointed as our Secretary. Ms. Archibald continues to act as our
      President, Treasurer and Chief Executive Officer, and as our sole
      director.                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|5. | Upon their appointment, we granted options to purchase
      125,000 shares of our common stock to Mr. McDougal and options to purchase
      550,000 shares of our common stock to Mr. Birnie. The options granted to
      Mr. McDougal and Mr. Birnie were granted under our 2007 Stock Plan, have
      an exercise price of $0.20 per share, are fully vested and expire on March
      30, 2009. Copies of our option agreements with Mr. McDougal and Mr. Birnie
      are attached as exhibits to this Annual Report.

COMPETITION

We are a mineral resource exploration and development company.
We compete with other mineral resource exploration and development companies for
financing and for the acquisition of new mineral properties. Many of the mineral
resource exploration and development companies with whom we compete have greater
financial and technical 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 competition could
result in competitors having mineral properties of greater quality and interest
to prospective investors who may finance additional exploration and development.
This competition could adversely impact our ability to finance further
exploration and to achieve the financing necessary for us to develop our mineral
properties.

GOVERNMENT REGULATIONS

The mining industry in the United States is highly regulated.
We intend to secure all necessary permits for the exploration of the Ireland
Claim and, if development is warranted on the property, 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 Ireland Claim. We are not able to
estimate the full costs of complying with environmental laws at this time

6

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since the full nature and extent of our proposed mining
activities cannot be determined until we complete our exploration program.

We will have to sustain the cost of reclamation and
environmental remediation for all exploration work undertaken. We do not expect
Phases I through III of our current exploration program on the Ireland Claim to
require any reclamation or environmental remediation work.

If we enter into the development or production stages of any
mineral deposits found on 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 an impact report of the work on the
      local fauna and flora.                                             

Phase IV of our exploration program calls for the diamond
drilling of selected sites on the Ireland Claim. If we decide to proceed to
Phase IV of our exploration program, of which there are no assurances, we will
require the prior permission of the Bureau of Land Management (the BLM). The
permit required is a "Notice of Intent" which fully describes the intended
program including location of drill sites, proposed access roads, type of
equipment to be used, duration, reclamation plan, etc. Once a decision is made
to proceed with exploration drilling activities, a Notice of Intent will need to
be submitted for BLM approval. BLM staff will then schedule a field visit with a
company representative. The BLM may call for adjustments, for example, in access
or location of drilling sites, or may approve the plan as is. The BLM will call
upon wildlife, biology, archaeological and other experts as needed to mitigate
any expected impact. Before any physical disturbance may occur, the BLM will
determine the amount of the disturbance and may require a reclamation bond. Only
after these steps are completed will a permit for exploration drilling be
issued. It typically requires approximately 90 days to acquire drilling
permits.

EMPLOYEES

We have no employees as of the date of this Annual Report on
Form 10-KSB other than our executive officers. We conduct our business largely
through agreements with consultants and arms-length third parties.

RESEARCH AND DEVELOPMENT EXPENDITURES

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

SUBSIDIARIES

We do not have any subsidiaries.

PATENTS AND TRADEMARKS

We do not own, either legally or beneficially, any patent or
trademark.

7

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ITEM
2.           DESCRIPTION OF
PROPERTY.

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.

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.

Present Condition and Current State of Exploration on the
Ireland Claim

Our proposed program for the Ireland Claim is exploratory in
nature. No mineral reserves have been identified on the Ireland Claim and there
is no assurance that any such reserves will be identified in the future.

Upon our acquisition of the Ireland Claim, we retained the
services of a geologist to review the available data on the property, to provide
an assessment of the property based on that data and, if warranted, to recommend
an exploration program for the property. A copy of his report was attached as an
exhibit to our

8

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Annual Report for the year ended December 31, 2004. In his
report, our consulting geologist recommended the following four-phased
exploration program for the Ireland Claim:

|1. | Phase I:Phase I of the exploration program is to
      consist of a VLF electromagnetic survey that traces geological fracture
      and breccia zones of the Ireland Claim. VLF electromagnetic surveying
      employs electromagnetic waves that are generated at the surface and
      directed into the earth. When these waves encounter electrically
      conductive mineral formations or ore bodies located underground, they
      induce currents in the conducting minerals which generate new
      electromagnetic waves that are then detected by instruments located at the
      surface. Using this method, we can detect the presence of underground
      mineral formations and ore bodies. The estimated cost of completing Phase
      I is $5,500.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2. | Phase II:Phase II of the exploration program,
      which has been completed, consisted of conducting a trench sampling survey
      of the Ireland Claim. Trench sampling involves dragging a shovel along the
      surface in a single direction to create a channel. Material for the sample
      is then taken at regular intervals along the channel. This procedure is
      repeated with several other channels in different directions until a
      suitable sample size has been procured. The cost of completing Phase II
      was $8,500.                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3. | Phase III:Phase III of the exploration program is
      expected to involve the conducting of a detailed geological mapping
      program of the Ireland Claim. The purpose of this phase of the exploration
      program would be to identify the geological environment underling the
      mineral claim and to produce a detailed mineralization map. The estimated
      cost of completing Phase III is $10,000.                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|4. | Phase IV:Phase IV of the exploration program is
      expected to consist of diamond drilling the Ireland Claim in order to
      obtain core samples of the underground mineralization. The estimated cost
      of completing Phase IV is $91,200.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       

During the winter and fall of 2005, work was conducted on the
Ireland Claim based upon the initial recommendations of our consulting
geologist. Phase I of our exploration program was to initially have consisted of
a VLF electromagnetic survey of the geological fracture and breccia zones of the
Ireland Claim. However, we were unable to secure the equipment necessary to
conduct this phase of the recommended exploration program. As a result, it was
decided that we would conduct the trench sampling phase of the recommended
exploration program first. The report of our consulting geologist on the results
of the trench sampling portion of our exploration program was received at the
end of January, 2006.

Based upon these results, our consulting geologist has
recommended that we proceed with what was originally planned as Phase I of the
exploration program, the VLF electromagnetic surveying of the Ireland Claim. We
had intended to complete Phase I of our exploration program during our 2006
fiscal year. However, due to the unavailability of the necessary equipment and
consultants, we were not able to completed Phase I. Subject to the availability
of the required equipment and consultants, we hope to have Phase I completed
before the end of our second fiscal quarter in 2007. Once this phase of our
exploration program has been completed, our Board of Directors will make a
determination whether to proceed with Phase III of the exploration program. In
making this determination, our Board of Directors will assess the results of the
VLF electromagnetic survey and will rely upon the recommendations of our
consulting geologist.

ITEM
3.           LEGAL
PROCEEDINGS.

We are not currently a party to any material legal proceedings
and, to our knowledge, no such proceedings are threatened or contemplated.

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

None.

9

---

PART II

ITEM
5.           MARKET FOR COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS.

Quotations for our common stock were entered on the OTC
Bulletin Board under the symbol IREL beginning on May 8, 2006. As our common
stock did not become eligible for quotation on the OTCBB prior to May 8, 2006,
no information is available for periods prior to that date. In addition, the OTC
Bulletin Board did not report any trading activity on our common stock during
the second, third or fourth quarters of 2006 and the high and low bid
information for our common stock was not available from the OTC Bulletin Board
for those quarters. Quotations entered on the OTC Bulletin Board reflect
inter-dealer prices, without retail mark-up, markdown or commission and may not
represent actual transactions.

2006High
      
      
      LowFirst Quarter ended March 31
      $
      n/a
      
      $
      n/aSecond Quarter ended June 30
      $
      n/a
      
      $
      n/aThird Quarter ended September 30
      $
      n/a
      
      $
      n/aFourth Quarter ended December 31
      $
      n/a
      
      $
      n/a


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

10

---

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.

Holders of Common Stock

As of April 2, 2007, there were 99 stockholders of record of
our common stock. In addition, we believe that a number of stockholders hold
shares of our common stock on deposit with their brokers or investment bankers
and 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.

ITEM
6.           MANAGEMENT'S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

PLAN OF OPERATION

During the next twelve months, we intend to proceed with our
exploration program on the Ireland Claim and to acquire Nanos rights to the
Columbus and Red Mountain Projects pursuant to the terms of the Nano
Agreement.

Our exploration program for the Ireland Claim consists of the
following:

|1. | Phase I: Phase I of the exploration program
      involves conducting a VLF electromagnetic survey that traces geological
      fracture and breccia zones. VLF electromagnetic surveying employs
      electromagnetic waves that are generated at the surface and directed into
      the earth. When these waves encounter electrically conductive mineral
      formations or ore bodies located underground, they induce currents in the
      conducting minerals which generate new electromagnetic waves that are then
      detected by instruments located at the surface. Using this method, we can
      detect the presence of underground mineral formations and ore bodies. The
      estimated cost of completing Phase I is $5,500.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|2. | Phase II: Phase II of the exploration program,
      which has been completed, involved conducting a trench sampling survey of
      the Ireland Claim. Trench sampling involves dragging a shovel along the
      surface in a single direction to create a channel. Material for the sample
      is then taken at regular intervals along the channel. This procedure is
      repeated with several other channels in different directions until a
      suitable sample size has been procured. The cost of completing Phase II
      was $8,500.                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|3. | Phase III: Phase III of the exploration program
      was completed in January, 2006. Phase II involved conducting a detailed
      geological mapping program of the Ireland Claim. The purpose of this phase
      of the exploration program would be to identify the geological environment
      underling the mineral claims and to produce a detailed mineralization map.
      The estimated cost of completing Phase III is
$10,000.                                                                                                                                                                                                                                                                                                       

11

---

|4. | Phase IV: Phase IV of the exploration program will
      involve diamond drilling the Ireland Claim in order to obtain core samples
      of the underground mineralization. The estimated cost of completing Phase
      IV is $91,200.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As discussed at Part I, Item 2 of this Annual Report, Phase II
of our exploration program was completed before Phase I due to the
unavailability of the equipment necessary to conduct a VLF electromagnetic
survey. Based upon the results of Phase II, our consulting geologist has
recommended that we proceed with the VLF electromagnetic survey that was
originally recommended for Phase I. We were not able to complete Phase I of our
exploration program on the Ireland Claim in 2006 due to the unavailability of
the necessary equipment and consultants. Subject to the availability of the
necessary consultants and equipment, we hope to complete Phase I before the end
of our second fiscal quarter in 2007. Once Phase I is completed, our Board of
Directors will make a determination whether to proceed with Phase III of the
exploration program. Upon the completion of each phase of our exploration
program, our Board of Directors will make an assessment to determine whether the
results of that phase are sufficiently favorable to justify proceeding.

In order to complete the acquisition of Nanos rights to the
Columbus and Red Mountain Projects, we will be required to grant the following
consideration to Nano upon closing:

| | (a) | an aggregate of 7,500,000 shares of our common stock, to
      be issued to Nano and to certain business associates of Nano (including
      300,000 shares to Robert D. McDougal, our Chief Financial
  Officer);
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                   
| | (b) | a royalty for 5% of all net smelter returns, if any, from
        the Columbus and Red Mountain Projects;                                                                                                         
| |     |                                                                                                                                                                                                                   
| | (c) | issue promissory notes totaling $5,000,000, payable as
      follows:                                                                                                                                             
| |     |                                                                                                                                                                                                                   
| |     | (i)                                                                                                                                                                                                               
| |     | (ii)                                                                                                                                                                                                              
| |     | (iii)                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                   
| | (d) | assume the obligations of Nano under the terms of the
      Columbus and Red Mountain Option Agreements; and                                                                                                      
| |     |                                                                                                                                                                                                                   
| | (e) | reimburse Nano for expenditures made by it on the
      Columbus Project from January 1, 2007, and on the Red Mountain Project
      from April 1, 2007, both until closing.                                      

We anticipate closing the transactions called for under the
Nano Agreement on or about June 30, 2007. However, closing is conditional upon
Nano obtaining the necessary corporate and third-party approvals required to
permit the assignment of its rights to the Columbus and Red Mountain Projects.
If we complete the acquisition of Nanos rights to the Columbus and Red Mountain
Projects, of which there is no assurance, we anticipate that we will spend
approximately $2,500,000 on the CP Phase 2 Expenditures by December 31, 2007 in
order to fully exercise the option on the Columbus Project.

As of our fiscal year ended December 31, 2006, we had cash in
the amount of approximately $11,633 and a working capital deficit of $59,428. As
a result, we will need to obtain additional financing in order to meet the
anticipated costs of completing our plan of operation for the next twelve
months. There are no assurances that we will be able to obtain sufficient
financing on terms acceptable to us, or at all. We do not currently have any
arrangements in place for additional financing

RESULTS OF OPERATIONS

Summary of Year End Results

|        | Year Ended December 31
|------- | ----------------------
|        |                       
|        | 2006                  
|Revenue | $ Nil                 

---

|Expenses | (95,279)  | (54,025)  | 76.4%
|-------- | --------- | --------- | -----
|Net Loss | $(95,279) | $(54,025) | 76.4%

Revenue

We have not earned any revenues since our inception and we do
not anticipate earning revenues until such time as we have entered into
commercial production of our mineral properties. We are currently in the
exploration stage of our business and we can provide no assurances that we will
discover commercially exploitable levels of mineral resources on our properties,
or if such resources are discovered, that we will be able to enter into
commercial production of our mineral property.

Expenses

The major components of our operating expenses are outlined in
the table below:

|                                     | Year Ended December 31
|------------------------------------ | ----------------------
|                                     |                       
|                                     | 2006                  
|Administrative fees                  | $ --                  
|Exploration expenses                 | --                    
|Mineral property and option payments | --                    
|Office and sundry                    | 820                   
|Professional fees                    | 41,258                
|Regulatory fees                      | 5,747                 
|Rent                                 | 1,200                 
|Travel                               | 6,254                 
|Consulting Fees                      | 40,000                
|Total                                | $95,279               

The majority of our expenses for the year ended December 31,
2006 consisted of professional fees incurred by us in meeting our ongoing
reporting obligations under federal securities laws and consulting fees paid to
Lorrie Ann Archibald for acting as our Chief Executive Officer, President, Chief
Financial Officer and Treasurer during our 2006 fiscal year. Amounts spent on
travel during our 2006 fiscal year were amounts spent to visit the Columbus
Project and the Red Mountain Project.

We anticipate that our operating expenses will increase
significantly as we pursue our exploration program for the Ireland Claim, and if
we complete the acquisition of Nanos rights to the Columbus and Red Mountain
Projects. Our expenses will continue to increase if our Board of Directors
decides to proceed beyond Phase I of our exploration program for the Ireland
Claim to Phase III. However, there are no assurances that such a determination
will be made.

LIQUIDITY AND CAPITAL RESOURCES

|Working Capital                   |                 |                 |                      
|--------------------------------- | --------------- | --------------- | ---------------------
|                                  | At December 31, | At December 31, | Percentage           
|                                  | 2006            | 2005            | Increase / (Decrease)
|Current Assets                    | $11,633         | $63,242         | (81.6)%              
|Current Liabilities               | (71,061)        | (27,391)        | 159.4%               
|Working Capital Surplus (Deficit) | $(59,428)       | $35,851         | (265.8)%             

|Cash Flows                                  |                        |            | 
|------------------------------------------- | ---------------------- | ---------- | 
|                                            | Year Ended December 31 |           
|                                            | 2006                   | 2005       | 
|Net Cash Used In Operating
      Activities | $(51,609)              | $(102,423) | 

13

---

|Net Cash from Financing Activities          | --        | 171,650 | 
|------------------------------------------- | --------- | ------- | 
|Net Cash Used in Investing
      Activities | --        | (6,000) | 
|Net Decrease In Cash During Period          | $(51,609) | $63,227 | 

During the fiscal year ended December 31, 2006, we had no
revenues and no sources of financing. Included in our current liabilities at
December 31, 2006 is $15,000 due to Ms. Archibald on account of unpaid
consulting fees for the year ended December 31, 2006.

We currently do not have sufficient working capital to meet the
anticipated costs of completing our exploration program for the Ireland Claim.
In addition, if we complete the acquisition of Nanos rights to the Columbus and
Red Mountain Projects, we will not have sufficient capital to exercise the
options on those projects if we do not obtain additional financing. There is no
assurance that we will be able to acquire such additional financing on terms
that are acceptable to us, or at all.

Off-Balance Sheet Arrangements

We have no 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.

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 Note 2 to the audited financial statements included in this Annual
Report.

Exploration Stage Enterprise

Our financial statements are prepared using the accrual method
of accounting and according to the provisions of Statement of Financial
Accounting Standards No. 7 (SFAS 7), Accounting and Reporting for Development
Stage Enterprises, as we devote substantially all of our efforts to acquiring
and exploring mineral properties. Until such properties are acquired and
developed, we will continue to prepare our financial statements and related
disclosures in accordance with entities in the exploration stage.

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. The accumulated costs of acquisition for properties that
are developed to the stage of commercial production will be amortized using the
unit-of-production method.

Exploration Costs

Mineral exploration costs are expensed as incurred.

Regulatory Matters

The Company and our mineral property interests are subject to a
variety of federal and state regulations governing land use, health, safety and
environmental matters. Our management believes we have been in substantial
compliance with all such regulations, and is unaware of any pending action or
proceeding relating to regulatory matters that would affect our financial
position.

14

---

Environmental Protection and Reclamation Costs

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

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

RISKS AND UNCERTAINTIES

If we do not obtain additional financing, our business will
fail.

Our current operating funds are inadequate to complete our
planned exploration of the Ireland Claim. In addition, we do not have sufficient
funds to exercise the options on the Columbus and Red Mountain Projects if we
acquire Nanos rights to the Columbus and Red Mountain Projects. We will also
require additional financing if the costs of exploring our properties are
greater than anticipated and to sustain our business operations if we are not
successful in earning revenues once exploration is complete.

Obtaining additional financing would be subject to a number of
factors, the known material factors being market prices for gold and silver,
investor acceptance of our mineral claims, and investor sentiment. These factors
may make the timing, amount, terms or conditions of additional financing
unavailable to us.

If we complete a financing through the sale of additional
shares of our common stock, 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, we will be required to issue a significant number of shares of our
common stock in order to complete the acquisition of Nanos rights to the
Columbus and Red Mountain Projects. If we acquire those rights, and if our
management decides to exercise the right to acquire a 100% interest in those
projects, 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 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 the Ireland Claim.

In order to maintain our rights to the 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 Ireland Claim. A failure by us to
meet the annual maintenance requirements under federal and state laws could
cause our rights to the 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 Annual 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,

15

---

unanticipated problems relating to exploration, and additional
costs and expenses that may exceed current estimates.

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

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

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

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

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

As noted in the financial statements that are included with
this Annual Report, we are an exploration stage company that has incurred net
losses since inception, we have not attained profitable operations and we are
dependent upon obtaining adequate financing to complete our exploration
activities. These conditions, as indicated in the audit report of Telford
Sadovnick, P.L.L.C., raise substantial doubt as to our ability to continue as a
going concern. The success of our business operations will depend upon our
ability to obtain further financing to complete our planned exploration program
and to attain profitable operations. If we are not able to complete a successful
exploration program and attain sustainable profitable operations, then our
business will fail.

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

16

---

lose such employees after they are hired. Currently, we have
not hired any key personnel. Our failure to hire key personnel when needed could
have a significant negative effect on our business.

Because our executive officers have only agreed to provide
their services on a part-time basis, they may not be able or willing to devote a
sufficient amount of time to our business operations, causing our business to
fail.

Our executive officers provide their services on a part-time
basis. Our officers may pursue other business activities, provided that these
other activities do not interfere with their obligations to us. Ms. Archibald,
Mr. McDougal and Mr. Birnie devote their full-time attention to other business
pursuits. It is therefore possible that, over time, Ms. Archibald, Mr. McDougal
and Mr. Birnie may not be able to devote sufficient time to the management of
our business, as and when needed.

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.

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.

17

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ITEM
7.           FINANCIAL
STATEMENTS.

|   | **Index to Financial Statements:**                                                                                                                                     | Page
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|   |                                                                                                                                                                        |     
|   | Audited financial statements as of December 31, 2006, including:                                                                                                       |     
|   |                                                                                                                                                                        |     
|1. | Report of Independent Registered Accounting Firm;                                                                                                                      | F-2 
|   |                                                                                                                                                                        |     
|2. | Balance Sheets as of December 31, 2006 and 2005;                                                                                                                       | F-3 
|   |                                                                                                                                                                        |     
|3. | Statements of Operations for the years ended December 31,
        2006, 2005 and 2004 and the period from inception on February 20, 2001
        to December 31, 2006; | F-4 
|   |                                                                                                                                                                        |     
|4. | Statements of Cash Flows for the years ended December 31,
        2006, 2005 and 2004 and the period from inception on February 20, 2001
        to December 31, 2006; | F-5 
|   |                                                                                                                                                                        |     
|5. | Statements of Stockholders Equity (Deficiency) for
        the period from February 20, 2001 (date of inception) through December
        31, 2006; and               | F-6 
|   |                                                                                                                                                                        |     
|6. | Notes to the Financial Statements.                                                                                                                                     | F-7 

18

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IRELAND INC.(An Exploration Stage Company)

Financial Statements

December 31, 2006 and 2005
  (Stated In U.S. Dollars)

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
  Ireland Inc.
  (An Exploration Stage Company)

We have audited the accompanying balance sheets of Ireland Inc. (An Exploration
  Stage Company) as at December 31, 2006 and 2005, the related statements of operations
  and cash flows for each of the years then ended and for the period from inception
  on February 20, 2001 to December 31, 2006 and the related statement of stockholders’
  equity (deficiency) for the period from inception on February 20, 2001 to December
  31, 2006. These financial statements are the responsibility of the Company’s
  management. Our responsibility is to express an opinion on these financial statements
  based on our audits.

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

In our opinion, based on our audits, such financial statements
  present fairly, in all material respects, the financial position of Ireland
  Inc. (An Exploration Stage Company) as at December 31, 2006 and 2005, and the
  results of its operations and its cash flows for each of the years then ended
  and for the period from inception on February 20, 2001 to December 31, 2006,
  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.



/s/ TELFORD SADOVNICK, P.L.L.C.
  CERTIFIED PUBLIC ACCOUNTANTS

Bellingham, Washington
  April 4, 2007

F-2

---

|IRELAND INC.                  
|------------------------------
|(An Exploration Stage Company)
|                              
|BALANCE SHEETS                
|(Stated in U.S. Dollars)      

|                                                           |   | December 31 |  
|---------------------------------------------------------- | - | ----------- | -
|                                                           |   | 2006        |  
|ASSETS                                                     |   |             |  
|Current                                                    |   |             |  
|Cash                                                       | $ | 11,633      |  
|LIABILITIES                                                |   |             |  
|Current                                                    |   |             |  
|Accounts payable and accrued liabilities                   | $ | 49,271      |  
|Due to related parties                                     |   | 21,790      |  
|                                                           |   | 71,061      |  
|STOCKHOLDERS EQUITY (DEFICIENCY)                          |   |             |  
|Share Capital                                              |   |             |  
|Authorized:                                                |   |             |  
|100,000,000 common voting stock with a par value of $0.001 |   |             |  
|per share                                                  |   |             |  
|Issued:                                                    |   |             |  
|9,137,500
      common stock (2006 and 2005)               |   | 9,138       |  
|Additional paid-in capital                                 |   | 229,612     |  
|Deficit Accumulated During The Exploration
      Stage     |   | (298,178    | )
|                                                           |   | (59,428     | )
|                                                           | $ | 11,633      |  

The accompanying notes are an integral part of these financial
  statements.

F-3

---

|IRELAND INC.                  
|------------------------------
|(An Exploration Stage Company)
|                              
|STATEMENTS OF OPERATIONS      
|(Stated in U.S. Dollars)      

|                                  |   |           |  |   |             |  |   |           |  |   | Cumulative  | 
|--------------------------------- | - | --------- |  | - | ----------- |  | - | --------- |  | - | ----------- | 
|                                  |   |           |  |   |             |  |   |           |  |   | Period From | 
|                                  |   |           |  |   |             |  |   |           |  |   | February 20 | 
|                                  |   |           |  |   |             |  |   |           |  |   | 2001        | 
|                                  |   |           |  |   |             |  |   |           |  |   | (Inception) | 
|                                  |   |           |  |   | Year Ended  |  |   |           |  |   | To          | 
|                                  |   |           |  |   | December 31 |  |   |           |  |   | December 31 | 
|                                  |   | 2006      |  |   | 2005        |  |   | 2004      |  |   | 2006        | 
|                                  |   |           |  |   |             |  |   |           |  |   |             | 
|Revenue                           | $ | -         |  | $ | -           |  | $ | -         |  | $ | -           | 
|                                  |   |           |  |   |             |  |   |           |  |   |             | 
|Expenses                          |   |           |  |   |             |  |   |           |  |   |             | 
|Administrative fees               |   | -         |  |   | 900         |  |   | 6,000     |  |   | 19,468      | 
|Consulting fees                   |   | 40,000    |  |   | -           |  |   | -         |  |   | 40,000      | 
|Exploration expenses              |   | -         |  |   | 3,000       |  |   | -         |  |   | 10,856      | 
|Write-off of mineral
      rights |   | -         |  |   | 6,000       |  |   | 6,000     |  |   | 14,000      | 
|Office and sundry                 |   | 820       |  |   | 270         |  |   | 274       |  |   | 4,463       | 
|Professional fees                 |   | 41,258    |  |   | 35,383      |  |   | 34,776    |  |   | 174,419     | 
|Regulatory fees                   |   | 5,747     |  |   | 5,722       |  |   | 950       |  |   | 14,618      | 
|Rent                              |   | 1,200     |  |   | 2,750       |  |   | 3,000     |  |   | 14,100      | 
|Travel                            |   | 6,254     |  |   | -           |  |   | -         |  |   | 6,254       | 
|                                  |   |           |  |   |             |  |   |           |  |   |             | 
|Net Loss                          | $ | 95,279    |  | $ | 54,025      |  | $ | 51,000    |  | $ | 298,178     | 
|                                  |   |           |  |   |             |  |   |           |  |   |             | 
|                                  |   |           |  |   |             |  |   |           |  |   |             | 
|Basic And Diluted Loss Per Share  | $ | 0.01      |  | $ | 0.01        |  | $ | 0.01      |  |   |             | 
|                                  |   |           |  |   |             |  |   |           |  |   |             | 
|                                  |   |           |  |   |             |  |   |           |  |   |             | 
|Weighted Average Number Of Shares |   |           |  |   |             |  |   |           |  |   |             | 
|Outstanding                       |   | 9,137,500 |  |   | 7,971,966   |  |   | 7,437,500 |  |   |             | 

The accompanying notes are an integral part of these financial
  statements.

F-4

---

|IRELAND INC.                  
|------------------------------
|(An Exploration Stage Company)
|                              
|STATEMENTS OF CASH FLOWS      
|(Stated in U.S. Dollars)      

|                                                    |   |         |   |   |             |   |   |         |   |   | Cumulative  |  
|--------------------------------------------------- | - | ------- | - | - | ----------- | - | - | ------- | - | - | ----------- | -
|                                                    |   |         |   |   |             |   |   |         |   |   | Period From |  
|                                                    |   |         |   |   |             |   |   |         |   |   | February 20 |  
|                                                    |   |         |   |   |             |   |   |         |   |   | 2001        |  
|                                                    |   |         |   |   |             |   |   |         |   |   | (Inception) |  
|                                                    |   |         |   |   | Year Ended  |   |   |         |   |   | To          |  
|                                                    |   |         |   |   | December 31 |   |   |         |   |   | December 31 |  
|                                                    |   | 2006    |   |   | 2005        |   |   | 2004    |   |   | 2006        |  
|                                                    |   |         |   |   |             |   |   |         |   |   |             |  
|Cash provided by (used in):                         |   |         |   |   |             |   |   |         |   |   |             |  
|Operating Activities                                |   |         |   |   |             |   |   |         |   |   |             |  
|Net loss                                            | $ | (95,279 | ) | $ | (54,025     | ) | $ | (51,000 | ) | $ | (298,178    | )
|Items not involving cash:                           |   |         |   |   |             |   |   |         |   |   |             |  
|Write-off of mineral rights                         |   | -       |   |   | 6,000       |   |   | 6,000   |   |   | 14,000      |  
|Consulting                                          |   | 15,000  |   |   | -           |   |   | -       |   |   | 15,000      |  
|Changes in non-cash
      operating working capital |   |         |   |   |             |   |   |         |   |   |             |  
|items:                                              |   |         |   |   |             |   |   |         |   |   |             |  
|Accounts payable and accrued liabilities            |   | 28,670  |   |   | (54,398     | ) |   | 49,070  |   |   | 49,271      |  
|                                                    |   |         |   |   |             |   |   |         |   |   |             |  
|                                                    |   | (51,609 | ) |   | (102,423    | ) |   | 4,070   |   |   | (219,907    | )
|                                                    |   |         |   |   |             |   |   |         |   |   |             |  
|Financing Activities                                |   |         |   |   |             |   |   |         |   |   |             |  
|Issuance of common stock                            |   | -       |   |   | 170,000     |   |   | -       |   |   | 238,750     |  
|Due to related parties                              |   | -       |   |   | 1,650       |   |   | 1,000   |   |   | 6,790       |  
|                                                    |   | -       |   |   | 171,650     |   |   | 1,000   |   |   | 245,540     |  
|                                                    |   |         |   |   |             |   |   |         |   |   |             |  
|Investing Activity                                  |   |         |   |   |             |   |   |         |   |   |             |  
|Mineral rights payments                             |   | -       |   |   | (6,000      | ) |   | (6,000  | ) |   | (14,000     | )
|                                                    |   |         |   |   |             |   |   |         |   |   |             |  
|Increase (Decrease) In Cash                         |   | (51,609 | ) |   | 63,227      |   |   | (930    | ) |   | 11,633      |  
|                                                    |   |         |   |   |             |   |   |         |   |   |             |  
|Cash, Beginning Of Year                             |   | 63,242  |   |   | 15          |   |   | 945     |   |   | -           |  
|                                                    |   |         |   |   |             |   |   |         |   |   |             |  
|Cash, End Of Year                                   | $ | 11,633  |   | $ | 63,242      |   | $ | 15      |   | $ | 11,633      |  
|                                                    |   |         |   |   |             |   |   |         |   |   |             |  
|                                                    |   |         |   |   |             |   |   |         |   |   |             |  
|Supplemental Disclosure Of Cash Flow Information    |  
|Cash paid during the period for:                    |   |         |   |   |             |   |   |         |   |   |             |  
|Interest paid                                       | $ | -       |   | $ | -           |   | $ | -       |   | $ | -           |  
|Income taxes paid                                   | $ | -       |   | $ | -           |   | $ | -       |   | $ | -           |  

The accompanying notes are an integral part of these financial
  statements.

F-5

---

|IRELAND INC.                                                        
|--------------------------------------------------------------------
|(An Exploration Stage Company)                                      
|                                                                    
|STATEMENT OF STOCKHOLDERS EQUITY (DEFICIENCY)                      
|(Stated in U.S. Dollars)                                            
|                                                                    
|PERIOD FROM FEBRUARY 20, 2001 (INCEPTION) TO DECEMBER
      31, 2006

|                                 |  |              |  |   |             |  |   |            |  |   | Deficit     |   |   |         |  
|-------------------------------- |  | ------------ |  | - | ----------- |  | - | ---------- |  | - | ----------- | - | - | ------- | -
|                                 |  | Common Stock |  |   | Accumulated |  |   |            | 
|                                 |  |              |  |   |             |  |   | Additional |  |   | During The  |   |   |         |  
|                                 |  |              |  |   |             |  |   | Paid-In    |  |   | Exploration |   |   |         |  
|                                 |  | Shares       |  |   | Amount      |  |   | Capital    |  |   | Stage       |   |   | Total   |  
|                                 |  |              |  |   |             |  |   |            |  |   |             |   |   |         |  
|Stock issued for cash at $0.001  |  | 5,000,000    |  | $ | 5,000       |  | $ | -          |  | $ | -           |   | $ | 5,000   |  
|Stock issued for cash at $0.01   |  | 2,000,000    |  |   | 2,000       |  |   | 18,000     |  |   | -           |   |   | 20,000  |  
|Stock issued for cash at $0.10   |  | 437,500      |  |   | 438         |  |   | 43,312     |  |   | -           |   |   | 43,750  |  
|Net loss                         |  | -            |  |   | -           |  |   | -          |  |   | (16,045     | ) |   | (16,045 | )
|Balance, December 31, 2001       |  | 7,437,500    |  |   | 7,438       |  |   | 61,312     |  |   | (16,045     | ) |   | 52,705  |  
|Net loss                         |  | -            |  |   | -           |  |   | -          |  |   | (49,313     | ) |   | (49,313 | )
|Balance, December 31, 2002       |  | 7,437,500    |  |   | 7,438       |  |   | 61,312     |  |   | (65,358     | ) |   | 3,392   |  
|Net loss                         |  | -            |  |   | -           |  |   | -          |  |   | (32,516     | ) |   | (32,516 | )
|Balance, December 31, 2003       |  | 7,437,500    |  |   | 7,438       |  |   | 61,312     |  |   | (97,874     | ) |   | (29,124 | )
|Net loss                         |  | -            |  |   | -           |  |   | -          |  |   | (51,000     | ) |   | (51,000 | )
|Balance, December 31, 2004       |  | 7,437,500    |  |   | 7,438       |  |   | 61,312     |  |   | (148,874    | ) |   | (80,124 | )
|Stock issued for cash at $0.10   |  | 1,700,000    |  |   | 1,700       |  |   | 168,300    |  |   | -           |   |   | 170,000 |  
|Net loss                         |  | -            |  |   | -           |  |   | -          |  |   | (54,025     | ) |   | (54,025 | )
|Balance, December 31, 2005       |  | 9,137,500    |  |   | 9,138       |  |   | 229,612    |  |   | (202,899    | ) |   | 35,851  |  
|Net loss                         |  | -            |  |   | -           |  |   | -          |  |   | (95,279     | ) |   | (95,279 | )
|Balance, December
      31, 2006 |  | 9,137,500    |  | $ | 9,138       |  | $ | 229,612    |  | $ | (298,178    | ) | $ | (59,428 | )

The accompanying notes are an integral part of these financial
  statements.

F-6

---

|IRELAND INC.                  
|------------------------------
|(An Exploration Stage Company)
|                              
|NOTES TO FINANCIAL STATEMENTS 
|(Stated in U.S. Dollars)      
|                              
|DECEMBER 31, 2006             

|1. | OPERATIONS
|-- | ----------

Organization

Ireland Inc. (the Company)
  was incorporated in the State of Nevada, U.S.A., on February 20, 2001.

Exploration Stage Activities

The Company has been in the exploration
  stage since its formation and has not yet realized any revenues from its planned
  operations. It is primarily engaged in the acquisition and exploration of mining
  properties. Upon location of a commercial minable reserve, the Company expects
  to actively prepare the site for its extraction and enter a development stage.

Going Concern

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

As shown in the accompanying financial
  statements, the Company has incurred a net loss of $298,178 for the period from
  February 20, 2001 (inception) to December 31, 2006, 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 a private placement
  and public offering of its common stock. The financial statements do not include
  any adjustments relating to the recoverability and classification of recorded
  assets, or the amounts of and classification of liabilities that might be necessary
  in the event the Company cannot continue in existence.

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------

The financial statements of the Company
  have been prepared in accordance with generally accepted accounting principles
  in the United States. Because a precise determination of many assets and liabilities
  is dependent upon future events, the preparation of financial statements for
  a period necessarily involves the use of estimates which have been made using
  careful judgement.

The financial statements have, in managements
  opinion, been properly prepared within reasonable limits of materiality and
  within the framework of the significant accounting policies summarized below:

Exploration Stage Enterprise

The Companys financial statements
  are prepared using the accrual method of accounting and according to the provisions
  of Statement of Financial Accounting Standards No. 7 (SFAS 7), Accounting
  and Reporting for Development Stage Enterprises, as it devotes substantially
  all of its efforts to acquiring and exploring mineral properties. Until such
  properties are acquired and developed, the Company will continue to prepare
  its financial statements and related disclosures in accordance with entities
  in the exploration stage.

F-7

---

|IRELAND INC.                  
|------------------------------
|(An Exploration Stage Company)
|                              
|NOTES TO FINANCIAL STATEMENTS 
|(Stated in U.S. Dollars)      
|                              
|DECEMBER 31, 2006             

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | -----------------------------------------------------

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 accumulated costs of
  acquisition for properties that are developed to the stage of commercial production
  will be amortized using the unit-of-production method.

Exploration Costs

Mineral exploration costs are expenses
  as incurred.

Regulatory Matters

The Company and its mineral property
  interest is subject to a variety of federal and state regulations governing
  land use, health, safety and environmental matters. The Companys management
  believes it has been in substantial compliance with all such regulations, and
  is unaware of any pending action or proceeding relating to regulatory matters
  that would affect the financial position of the Company.

Asset Impairment

Long-lived assets are tested for recoverability
  whenever events or changes in circumstances indicate the carrying amount may
  not be recoverable, pursuant to guidance established in Statement of Financial
  Accounting Standards No. 144 (SFAS 144), Accounting for the
  Impairment or Disposal of Long-lived Assets. The Company determines impairment
  by comparing the undiscounted future cash flows estimated to be generated by
  its assets to their respective carrying amounts. If impairment is deemed to
  exist, the assets will be written down to fair value.

Cash

Cash consists of cash on deposit with
  high quality major financial institutions, and to date has not experienced losses
  on any of its balances. The carrying amounts approximated fair market value
  due to the liquidity of these deposits.

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.

F-8

---

|IRELAND INC.                  
|------------------------------
|(An Exploration Stage Company)
|                              
|NOTES TO FINANCIAL STATEMENTS 
|(Stated in U.S. Dollars)      
|                              
|DECEMBER 31, 2006             

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | -----------------------------------------------------

Foreign Currency Translation

The Companys functional currency
  is the U.S. dollar. Transactions in foreign currency are translated into U.S.
  dollars as follows:

| | i)   | monetary items at the rate prevailing at the balance
        sheet date;                          
| | ---- | --------------------------------------------------------------------------------------------------
| | ii)  | non-monetary items at the historical exchange rate;                                               
| | iii) | revenue and expense at the average rate in effect during
        the applicable accounting period.

Income Taxes

The Company has adopted Statement of
  Financial Accounting Standards No. 109 (SFAS 109), Accounting
  for Income Taxes. This standard requires the use of an asset and liability
  approach for financial accounting, and reporting on income taxes. If it is more
  likely than not that some portion or all of a deferred tax asset will not be
  realized, a valuation allowance is recognized.

Basic and Diluted Loss Per Share

In accordance with Financial Accounting
  Standards Board (FASB) Statement of Financial Accounting Standard
  No. 128 (SFAS 128), Earnings Per Share, the basic loss
  per common share is computed by dividing net loss available to common stockholders
  by the weighted average number of common shares outstanding. Diluted loss per
  common share is computed similar to basic loss per common share except that
  the denominator is increased to include the number of additional common shares
  that would have been outstanding if the potential common shares had been issued
  and if the additional common shares were dilutive. At December 31, 2006 and
  2005, the Company has no stock equivalents that were anti-dilutive and excluded
  in the earnings per share computation.

Revenue Recognition

Revenue from the sale of minerals is
  recognized when the risks and rewards of ownership pass to the purchaser, including
  delivery of the product the selling price is fixed or determinable and collectibility
  is reasonably assured. Settlement adjustments, if any, are reflected in revenue
  when the amounts are known.

Financial Instruments

The Companys financial instruments
  consist of cash and accounts payable and accrued liabilities and amounts due
  to related parties.

Management of the Company does not believe
  that the Company is subject to significant interest, currency or credit risks
  arising from these financial instruments. The respective carrying values of
  financial instruments approximate their fair values. Fair values were assumed
  to approximate carrying values since they are short-term in nature or they are
  receivable or payable on demand.

F-9

---

|IRELAND INC.                  
|------------------------------
|(An Exploration Stage Company)
|                              
|NOTES TO FINANCIAL STATEMENTS 
|(Stated in U.S. Dollars)      
|                              
|DECEMBER 31, 2006             

|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | -----------------------------------------------------

Comprehensive Income

The Company has adopted Statement of
  Financial Accounting Standards No. 130 (SFAS 130), Reporting
  Comprehensive Income, which establishes standards for reporting and display
  of comprehensive income, its components and accumulated balances. When applicable,
  the Company would disclose this information on its Statement of Stockholders
  Equity (Deficiency). Comprehensive income comprises equity except those resulting
  from investments by owners and distributions to owners. The Company has not
  had any significant transactions that are required to be reported in other comprehensive
  income.

Asset Retirement Obligations

The Company has adopted Statement of
  Financial Accounting Standards No. 143 (SFAS 143), Accounting
  for Asset Retirement Obligations, which requires that an asset retirement
  obligation (ARO) associated with the retirement of a tangible long-lived
  asset be recognized as a liability in the period in which it is incurred and
  becomes determinable, with an offsetting increase in the carrying amount of
  the associated asset. The cost of the tangible asset, including the initially
  recognized ARO, is depleted, such that the cost of the ARO is recognized over
  the useful life of the asset. The ARO is recorded at fair value, and accretion
  expense is recognized over time as the discounted liability is accreted to its
  expected settlement value. The fair value of the ARO is measured using expected
  future cash flow, discounted at the Companys credit-adjusted risk-free
  interest rate. To date, no significant asset retirement obligation exists due
  to the early stage of exploration. Accordingly, no liability has been recorded.

Environmental Protection and Reclamation
  Costs

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

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

F-10

---

|IRELAND INC.                  
|------------------------------
|(An Exploration Stage Company)
|                              
|NOTES TO FINANCIAL STATEMENTS 
|(Stated in U.S. Dollars)      
|                              
|DECEMBER 31, 2006             

|3. | RECENT ACCOUNTING PRONOUNCEMENTS
|-- | --------------------------------

In March 2006, the Financial Accounting
  Standards Board issued Statement of Financial Accounting Standards No. 156,
  Accounting for Servicing of Financial Assetsan Amendment of FASB
  Statement No. 140.This statement requires an entity to recognize
  a servicing asset or servicing liability each time it undertakes an obligation
  to service a financial asset by entering into a servicing contract in any of
  the following situations: a transfer of the servicers financial assets
  that meets the requirements for sale accounting; a transfer of the servicers
  financial assets to a qualifying special-purpose entity in a guaranteed mortgage
  securitization in which the transferor retains all of the resulting securities
  and classifies them as either available-for-sale securities or trading securities
  in accordance with FASB Statement No. 115; or an acquisition or assumption of
  an obligation to service a financial asset that does not relate to financial
  assets of the servicer or its consolidated affiliates. The statement also requires
  all separately recognized servicing assets and servicing liabilities to be initially
  measured at fair value, if practicable and permits an entity to choose either
  the amortization or fair value method for subsequent measurement of each class
  of servicing assets and liabilities. This statement is effective for fiscal
  years beginning after September 15, 2006, with early adoption permitted as of
  the beginning of an entitys fiscal year. Management believes the adoption
  of this statement will have no immediate impact on the Companys financial
  condition or results of operations.

In February 2006, the Financial Accounting
  Standards Board issued Statement of Financial Accounting Standards No. 155,
  Accounting for Certain Hybrid Financial Instruments, and
  established the accounting for certain derivatives embedded in other instruments.
  It simplifies amendment of FASB Standards No. 133 and 140 (hereinafter
  SFAS No. 155). This statementaccounting for certain
  hybrid financial instruments by permitting fair value remeasurement for any
  hybrid instrument that contains an embedded derivative that otherwise would
  require bifurcation under SFAS No. 133 as well as eliminating a restriction
  on the passive derivative instruments that a qualifying special-purpose entity
  (SPE) may hold under SFAS No. 140. This statement allows
  a public entity to irrevocably elect to initially and subsequently measure a
  hybrid instrument that would be required to be separated into a host contract
  and derivative in its entirety at fair value (with changes in fair value recognized
  in earnings) so long as that instrument is not designated as a hedging instrument
  pursuant to the statement. SFAS No. 140 previously prohibited a qualifying special-purpose
  entity from holding a derivative financial instrument that pertains to a beneficial
  interest other than another derivative financial instrument. This statement
  is effective for fiscal years beginning after September 15, 2006, with early
  adoption permitted as of the beginning of an entitys fiscal year. Management
  believes the adoption of this statement will have no immediate impact on the
  Companys financial condition or results of operations.

F-11

---

|IRELAND INC.                  
|------------------------------
|(An Exploration Stage Company)
|                              
|NOTES TO FINANCIAL STATEMENTS 
|(Stated in U.S. Dollars)      
|                              
|DECEMBER 31, 2006             

|3. | RECENT ACCOUNTING PRONOUNCEMENTS(Continued)
|-- | -------------------------------------------

In June 2006, FASB issued FASB Interpretation
  No. 48, “Accounting for Uncertainty in Income Taxes - an interpretation
  of FASB Statement No. 109”, which prescribes a recognition threshold and
  measurement attribute for the financial statement recognition and measurement
  of a tax position taken or expected to be taken in a tax return. FIN 48 also
  provides guidance on de-recognition, classification, interest and penalties,
  accounting in interim periods, disclosure and transition. FIN 48 is effective
  for fiscal years beginning after December 15, 2006. The Company does not expect
  the adoption of FIN 48 to have a material effect on its financial condition
  or results of operations.

In September 2006, FASB issued SFAS No.
  157, “Fair Value Measurements” which defines fair value, establishes
  a framework for measuring fair value in generally accepted accounting principles
  (GAAP), and expands disclosures about fair value measurements. Where applicable,
  SFAS No. 157 simplifies and codifies related guidance within GAAP and does not
  require any new fair value measurements. SFAS No. 157 is effective for financial
  statements issued for fiscal years beginning after November 15, 2007, and interim
  periods within those fiscal years. Earlier adoption is encouraged. The Company
  does not expect the adoption of SFAS No. 157 to have a material effect on its
  financial condition or results of operations.

In September 2006, the SEC announced
  Staff Accounting Bulletin No. 108 (“SAB 108”). SAB 108 addresses
  how to quantify financial statement errors that arose in prior periods for purposes
  of assessing their materiality in the current period. It requires analysis of
  misstatements using both an income statement (rollover) approach and a balance
  sheet (iron curtain) approach in assessing materiality. It clarifies that immaterial
  financial statement errors in a prior SEC filing can be corrected in subsequent
  filings without the need to amend the prior filing. In addition, SAB 108 provides
  transitional relief for correcting errors that would have been considered immaterial
  before its issuance. The Company does not expect the adoption of SAB 108 to
  have a material effect on its financial condition or results of operations.

|4. | MINERAL EXPLORATION PROPERTY
|-- | ----------------------------

| | 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 years.                                                                                      

---

|IRELAND INC.                  
|------------------------------
|(An Exploration Stage Company)
|                              
|NOTES TO FINANCIAL STATEMENTS 
|(Stated in U.S. Dollars)      
|                              
|DECEMBER 31, 2006             

|   |             
|-- | ------------
|5. | INCOME TAXES

| | a) | Income tax provision                                                                                                                                                                                                                                
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                     
| |    | The provision for income taxes differs from the result
        which would be obtained by applying the statutory income tax rate of 34%
        (2005  34%) to income before income taxes. The difference results
        from the following items:

| |                                             |   | 2006    |   |   | 2005    |  
| | ------------------------------------------- | - | ------- | - | - | ------- | -
| | Computed expected (benefit of) income taxes | $ | (32,395 | ) | $ | (18,369 | )
| | Increase in valuation
      allowance       |   | 32,395  |   |   | 18,369  |  
| |                                             | $ | -       |   | $ | -       |  

| | b) | Significant components of the Companys deferred
        income tax assets are as follows:
| | -- | ------------------------------------------------------------------------------------------

| |                              |   | 2006     |   |   | 2005    |  
| | ---------------------------- | - | -------- | - | - | ------- | -
| | Operating loss carry forward | $ | 273,322  |   | $ | 178,043 |  
| | Mineral property expenses    |   | 14,000   |   |   | 14,000  |  
| | Exploration expenses         |   | 10,856   |   |   | 10,856  |  
| |                              |   | 298,178  |   |   | 202,899 |  
| | Statutory tax rate           |   | 34%      |   |   | 34%     |  
| | Deferred income tax asset    |   | 101,381  |   |   | 68,986  |  
| | Valuation allowance          |   | (101,381 | ) |   | (68,986 | )
| |                              | $ | -        |   | $ | -       |  

| | c) | The Company has incurred operating losses and approximately
        $270,075, which, if unutilized, will expire through to 2026. Subject to
        certain restrictions, the Company has mineral property and exploration
        expenditures of $28,103 available to reduce future taxable income. Future
        tax benefits, which may arise as a result of these losses, have not been
        recognized in these financial statements, and have been offset by a valuation
        allowance. The following table lists the fiscal year in which the loss
        was incurred and the expiration date of the operating loss carry forwards:
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                     |   | Income Tax Operating Loss Carry Forward | 
| | --------------------------------------------------- | - | --------------------------------------- | 
| |                                                     |   | Amount                                  | 
| |                                                     |   |                                         | 
| | 2001                                                | $ | 11,935                                  | 
| | 2002                                                |   | 44,567                                  | 
| | 2003                                                |   | 31,516                                  | 
| | 2004                                                |   | 45,000                                  | 
| | 2005                                                |   | 45,025                                  | 
| | 2006                                                |   | 92,032                                  | 
| |                                                     |   |                                         | 
| | Total income tax
      operating loss carry forward | $ | 270,075                                 | 

F-13

---

|IRELAND INC.                  
|------------------------------
|(An Exploration Stage Company)
|                              
|NOTES TO FINANCIAL STATEMENTS 
|(Stated in U.S. Dollars)      
|                              
|DECEMBER 31, 2006             

|   |                                        
|-- | ---------------------------------------
|6. | COMMITMENTS AND CONTRACTUAL OBLIGATIONS

The Company has no significant commitments
  or contractual obligations with any parties respecting executive compensation,
  consulting arrangements or other matters. Rental of premises is on a month-to-month
  basis.

|7. | RELATED PARTY TRANSACTIONS
|-- | --------------------------

Amounts due to related parties for advances
  to the Company are unsecured, without interest and are due on demand.

During the year ended December 31, 2006
  the Company paid or accrued $40,000 (2005-$Nil) to a director for consulting
  fees. At December 31, 2006, $15,000 (2005 - $Nil) is outstanding.

During the year ended December 31, 2006,
  the Company carried out a number of transactions with related parties in the
  normal course of business. These transactions were recorded at their exchange
  amount, which is the amount of consideration established and agreed to by the
  related parties.

|8. | SUBSEQUENT EVENTS
|-- | -----------------

| | a) | On March 29, 2007, the Company entered into
        an Assignment Agreement with Nanominerals Corp, (the assignor) 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 Bernadino County, California (the Red Mountain
        project). The closing of the assignment agreement is subject to
        corporate and other approvals to permit the assignment.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | To earn the option rights, the Company will
        pay $500,000 within 60 days of closing, $1,500,000 by July 31, 2008 and
        $3,000,000 by July 31, 2009, issue 7,500,000 shares of common stock and
        grant a 5% net smelter returns royalty to the assignor.                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | Upon assignment of the option rights, the
        Company will assume the terms of the underlying agreements to earn the
        respective interests in both properties.                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    | ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F-14

---

|IRELAND INC.                  
|------------------------------
|(An Exploration Stage Company)
|                              
|NOTES TO FINANCIAL STATEMENTS 
|(Stated in U.S. Dollars)      
|                              
|DECEMBER 31, 2006             

|8. | SUBSEQUENT EVENTS(Continued)
|-- | ----------------------------

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.

| | b) | Pursuant to the 2007 Stock Incentive Plan adopted March
        27, 2007, on March 28 through 30, 2007, the Company granted stock options
        to directors and officers to acquire 930,000 shares of common stock at
        a price of $0.20 per share for a period of two years. All options vest
        immediately.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-15

---

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

None.

ITEM
8A.        CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer,
we have evaluated the effectiveness of our disclosure controls and procedures as
required by Exchange Act Rule 13a-15(b) as of the end of the period covered by
this report. Based on that evaluation, our Chief Executive Officer and Chief
Financial Officer have concluded that these disclosure controls and procedures
are effective.

There were no changes in our internal control over financial
reporting during the quarter ended December 31, 2006 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

ITEM
8B.        OTHER INFORMATION.

Compensatory Arrangements of Certain Officers

On March 27, 2007, we adopted our 2007 Stock Incentive Plan
(the 2007 Stock Plan). Under the terms of the 2007 Stock Plan, options may be
granted for a maximum of 1,500,000 shares of our common stock. The maximum
number of shares that may be optioned under the 2007 Stock Plan will increase
each fiscal quarter, beginning with the fiscal quarter commencing July 1, 2007,
by:

| | (a) | 15% of the total number of shares of our common stock
      outstanding, less the number of shares previously authorized under the
      2007 Stock Plan or any other stock compensation plan adopted by the
      Company; or
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                               
| | (b) | any lesser number of shares that our Board of Directors
      determines to be appropriate.                                                                                                                                   

Options may be granted under the 2007 Stock Plan to any of our
  officers, directors or employees or any officer, director or employee of a Related
  Company, as defined under the 2007 Stock Plan. Options may also be granted to
  consultants who provide services to the Company or a Related Company, so long
  as the consultant is a natural person, renders bona fide services to the Company
  not in connection with the offer and sale of the Companys securities in
  capital raising transactions, and does not directly or indirectly promote or
  maintain a market for the Companys securities.

The minimum exercise price at which options may be granted
under the 2007 Stock Plan is 75% of the fair market value of the Companys
common stock as of the grant date. For purposes of the 2007 Stock Plan, fair
market value is equal to the average price of the Companys common stock over
the previous 10 trading days.

A copy of the 2007 Stock Plan is attached as an exhibit to this
Annual Report.

On March 28, 2007, we granted options to acquire a total of
5,000 shares under the 2007 Stock Plan to Lorrie Ann Archibald, our sole
director and our Chief Executive Officer, President and Treasurer. The options
granted to Ms. Archibald are exercisable at a price of $0.20 per share and
expire on March 28, 2009. A copy of Ms. Archibalds option agreement is attached
as an exhibit to this Annual Report.

On March 30, 2007, upon their appointment as executive officers
of our Company (see below), we granted options to acquire 125,000 shares of our
common stock to Robert D. McDougal and options to acquire 550,000 shares of our
common stock to Douglas D.G. Birnie. The options granted to Mr. McDougal and Mr.

19

---

Birnie have an exercise price of $0.20 per share, are fully
vested, and expire on March 30, 2009. Copies of Mr. McDougals and Mr. Birnies
option agreements are attached as exhibits to this Annual Report.

Entry Into Material Definitive Agreement

On March 30, 2007, we executed an agreement (the Nano
Agreement) dated for reference March 29, 2007, with Nanominerals Corp.
(Nano), pursuant to which we agreed to purchase from Nano its rights to a
calcium carbonate and silver brine mineral project located in Esmeralda County,
Nevada called the Columbus Project, and certain additional mineral claims
located in San Bernardino County, California called the Red Mountain Project.
Descriptions of the Nano Agreement and the mineral property rights that we are
purchasing under that agreement are provided at Part I, Item 1 Description of
Business: General.

Departure of Certain Officers; Appointment of Certain
Officers

Pursuant to the terms of the Nano Agreement, on March 30, 2007,
Ms. Archibald resigned as our Chief Financial Officer and Christian Adolf Rommel
resigned as our Secretary. In place of Ms. Archibald and Mr. Rommel,
respectively, were appointed Robert D. McDougal as our Chief Financial Officer,
and Douglas Birnie as our Secretary. Ms. Archibald continues to act as our
President, Treasurer and Chief Executive Officer, and as our sole director.

Biographical information for Mr. McDougal and Mr. Birnie is
provided at Part III, Item 9. Directors, Executive Officers, Promoters, Control
Persons And Corporate Governance; Compliance With Section 16(A) Of The Exchange
Act.

20

---

PART III

ITEM
9.           DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE GOVERNANCE;
COMPLIANCE WITH SECTION 16(A) OF THEEXCHANGE ACT.

The following table sets forth the names and positions of our
officers and directors as of the filing of this Annual Report:

|Name                 | Age | Positions                                                       
|-------------------- | --- | ----------------------------------------------------------------
|                     |     |                                                                 
|Lorrie Ann Archibald | 40  | President, Treasurer, Chief
      Executive Officer and Director
|                     |     |                                                                 
|Robert D. McDougal   | 74  | Chief Financial Officer                                         
|                     |     |                                                                 
|Douglas D.G. Birnie  | 37  | Secretary                                                       

Lorrie Ann Archibald: Ms. Archibald is our President,
Treasurer, Chief Executive Officer and is a member of our Board of Directors.
Ms. Archibald was appointed to our Board of Directors and as our President,
Treasurer and Chief Executive Officer on February 20, 2001. Ms. Archibald also
acted as our Chief Financial Officer from January 10, 2006 to March 30, 2007.

Ms. Archibald served as a stockbrokers sales assistant at
Continental Securities (which later became Yorkton Securities) from December of
1988 to September of 1992. From September of 1992 to February of 1999, Ms.
Archibald was a registered representative with Canaccord Capital Corp.
(Investment Dealers). During the period from January 1997 to October 1998, she
was also licensed with First Securities, a member of the NASD. During the period
from December 1998 to her current employment with the Company, she was a
self-employed investor. From July 2001 to May 2005, she served as President and
a Director of Nubio Ventures Inc., a non-reporting mineral exploration company
that trades on the pink sheets. In June of 2001, she obtained a free miners
license in the Province of British Columbia, Canada and since that date has been
involved in the acquisition and disposition of mineral claims in British
Columbia.

Robert D. McDougal:Mr. McDougal was appointed as our
Chief Financial Officer on March 30, 2007.

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.

Douglas D.G. Birnie: Mr. Birnie was appointed as our
Secretary on March 30, 2007.

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.

21

---

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.

AUDIT COMMITTEE

We are not a listed issuer and as such our Board of Directors
  is not required to maintain a separately-designated standing audit committee.
  As a result, our entire Board of Directors acts as our audit committee as set
  out in section 3(a)(58)(B) of the Exchange Act. We currently have only one director,
  Lorrie Ann Archibald. Ms. Archibald does not meet the definition of an audit
  committee financial expert. We believe that the cost related to appointing
  a financial expert to our Board of Directors at this time is prohibitive.

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.

COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT

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 Securities Exchange Act
of 1934:

|                                  | Number
      of Late | Transactions Not | Known
      Failures to File
|--------------------------------- | -------------------- | ---------------- | ----------------------------
|Name and Principal
      Position | Reports              | Timely Reported  | a
      Required Form       
|                                  |                      |                  |                             
|                                  |                      |                  |                             
|Lorrie Ann Archibald,             |                      |                  |                             
|Chief Executive Officer,          | One                  | One              | None                        
|President, Treasurer and          |                      |                  |                             
|Director                          |                      |                  |                             

22

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ITEM
10.           EXECUTIVE
COMPENSATION.

COMPENSATION TO EXECUTIVE OFFICERS AND DIRECTORS

The following table sets forth the total compensation paid or
accrued to our named executive officers, as that term is defined in Item
402(a)(2) of Regulation S-B , and to our sole director, during the fiscal year
ended December 31, 2006.

SUMMARY COMPENSATION
        TABLEName & Principal 
        Position
      Year
      Salary 
        ($)
      Bonus 
        ($)
      Stock 
        Awards 
        ($)
      Option 
        Awards 
        ($)
      Non-Equity 
        Incentive 
        Plan 
        Compen- 
        sation ($)
      Nonqualified 
        Deferred 
        Compensation 
        Earnings 
        ($)
      All Other 
        Compen- 
        sation 
        ($)
      Total 
        ($)Lorrie Ann 
        Archibald, 
        CEO, President, 
        Treasurer, 
        Director 
        Former CFO
      2006
      $40,000(1)
      $0
      $0
      $0
      $0
      $0
      $0
      $40,000Christian Adolf 
        Rommel 
        Former Secretary
      2006
      $0
      $0
      $0
      $0
      $0
      $0
      $0
      $0


|(1) | We paid consulting fees of $5,000 per month to Ms.
      Archibald for the period from May 1, 2006 to December 31, 2006 in
      consideration for her services as Chief Executive Officer, President,
      Chief Financial Officer and Treasurer of our Company. No compensation was
      paid to Ms. Archibald for her services as our sole
  director.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Subsequent to our December 31, 2006 year end, we issued the
following options under our 2007 Stock Incentive Plan:

| | (a) | options to acquire 5,000 shares of our common stock to
      Lorrie Ann Archibald, our Chief Executive Officer, President, Treasurer
      and sole director, exercisable at a price of $0.20 per share and expiring
      on March 28, 2009;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                              
| | (b) | options to acquire 550,000 shares of our common stock to
      Douglas D.G. Birnie, our Secretary, exercisable at a price of $0.20 per
      share and expiring on March 30, 2009; and                                                       
| |     |                                                                                                                                                                                                                                              
| | (c) | options to acquire 125,000 shares of our common stock to
      Robert D. McDougal, our Chief Financial Officer, exercisable at a price of
      $0.20 per share and expiring on March 30, 2009.                                              

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

From our inception on February 20, 2001 to the end of our
fiscal year-ended December 31, 2006, we did not grant any stock options awards,
stock awards or any other equity incentive plan awards to any of our named
executive officers, as that term is defined under Item 402(a)(2) of Regulation
S-B, or to our sole director. As such, there were no outstanding equity awards
as at December 31, 2006.

EMPLOYMENT CONTRACTS

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

Copies of our 2007 Stock Incentive Plan and our option
agreements with Ms. Archibald, Mr. Birnie and Mr. McDougal are attached as
exhibits to this Annual Report. A description of our 2007 Stock Incentive Plan
and

23

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the stock option awards granted to Ms. Archibald, Mr. Birnie
and Mr. McDougal are included at Part II, Item 8B. Other Information.

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

EQUITY COMPENSATION PLANS

As at our fiscal year-end of December 31, 2006, we did not have
any equity compensation plans (including individual compensation arrangements)
under which our equity securities are authorized for issuance.

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
    Not Applicable
    Not Applicable
    Not ApplicableEquity Compensation Plans Not Approved By Security
      Holders
    Not Applicable
    Not Applicable
    Not Applicable


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 April 2, 2007
by: (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 officers
and directors, and (iii) officers and directors as a group. Unless otherwise
indicated, the stockholders 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
      Lorrie Ann Archibald 
        Chief Executive Officer, President, Treasurer, 
        Director and Former Chief Financial Officer 
        1745 Larkhall Crescent 
        North Vancouver, BC V7H 2Z3
      4,555,000(2)
        (direct)
      49.8%Common Stock
      Douglas D.G. Birnie 
        Secretary 
        2441 West Horizon Ridge Pkwy, Suite 120 
        Henderson, NV 89052
      975,000(3)
        (direct)
      10.1%Common Stock
      Robert D. McDougal 
        Chief Financial Officer 
        3500 Lakeside Ct., Suite 206 
        Reno, NV 89509
      125,000(4)
        (direct)
      1.3%Common Stock
      Christian Adolf Rommel 
        Former Secretary 
        823 East Keith Road 
        North Vancouver, BC V7L 1W8
      None
      Nil.


24

---

Title of Class
      Name and Address of Beneficial
        Owner
      Number of Shares of Common Stock
      Percentage of Common Stock(1)Common Stock
      All Officers and Directors as a Group (3 persons)
      5,655,000
      57.6%5% STOCKHOLDERSCommon Stock
      Lorrie Ann Archibald 
        1745 Larkhall Crescent 
        North Vancouver, BC V7H 2Z3
      4,555,000 
        (direct)
      49.8%


|(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 actual
      ownership or voting power with respect to the number of shares of common
      stock actually outstanding. As of April 2, 2007, there were 9,137,500
      shares of our common stock issued and outstanding.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(2) | The shares listed as beneficially owned by Ms. Archibald
      include options to acquire 5,000 shares of our common stock at an exercise
      price of $0.20 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(3) | The shares listed as beneficially owned by Mr. Birnie
      include options to acquire 550,000 shares of our common stock at an
      exercise price of $0.20 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|(4) | The shares listed as beneficially owned by Mr. McDougal
      consist of options to acquire 125,000 shares of our common stock at an
      exercise price of $0.20 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

CHANGES IN CONTROL

On March 29, 2007, we entered into an agreement (the Nano
Agreement) with Nanominerals Corp. (Nano), pursuant to which Nano agreed to
assign certain mineral property rights to us. As part of the consideration to be
paid to Nano for the mineral property rights to be assigned to us under the Nano
Agreement, we have agreed to issue 7,500,000 shares of our common stock to Nano
and certain business associates of Nano. The transactions contemplated under the
Nano Agreement are expected to close on or about July 30, 2007. The issuance of
these shares will result in a change in control of our Company. In addition, as
contemplated under the Nano Agreement, on March 30, 2007, we appointed Robert D.
McDougal as our new Chief Financial Officer and Douglas D.G. Birnie as our new
Secretary. A description of the Nano Agreement and the mineral property rights
to be assigned by Nano is provided at Part I, Item 1. Description of Business,
General of this Annual Report. A copy of the Nano Agreement is attached as an
exhibit to this Annual Report.

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

RELATED TRANSACTIONS

Except as disclosed below, none of the following parties has,
since the beginning of our last 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;

25

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| | (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.

On March 29, 2007, we entered into an agreement (the Nano
Agreement) with Nanominerals Corp. (Nano), pursuant to which Nano agreed to
assign certain mineral property rights to us. Under the terms of the Nano
Agreement, as further consideration for Nanos agreement to enter into the Nano
Agreement and for completing the assignment of the mineral property rights,
Lorrie Ann Archibald, our Chief Executive Officer, President, Treasurer and sole
director, agreed to sell all 4,550,000 shares of our common stock owned by her
to Nano at a price of $0.01 per share.

Under the terms of the Nano Agreement, Robert D. McDougal, our
Chief Financial Officer, will receive 300,000 of the total 7,500,000 shares of
our common stock to be issued to Nano and certain business associates of Nano
upon closing.

In addition, the Nano Agreement called for us to grant options
  to acquire 550,000 shares of our common stock to Douglas D.G. Birnie and options
  to acquire 125,000 shares of our common stock to Mr. McDougal. These options
  were granted to Mr. Birnie and Mr. McDougal on March 30, 2007 with an exercise
  price of $0.20 per share and expire on March 30, 2009. A description of the
  Nano Agreement and the mineral property rights to be assigned by Nano is provided
  at Part I, Item 1. Description of Business, General. Copies of the
  Nano Agreement and our option agreements with Mr. Birnie and Mr. McDougal are
  attached as exhibits to this Annual Report.

DIRECTOR INDEPENDENCE

Our common stock is quoted on the OTC Bulletin Board
interdealer quotation system, which does not have director independence
requirements. Under NASDAQ Rule 4200(a)(15), a director is not considered to be
independent if he or she is also an executive officer or employee of the
corporation. Our sole director, Lorrie Ann Archibald, is also our Chief
Executive Officer, President and Treasurer. As a result, we do not have any
independent directors.

As a result of our limited operating history and limited
resources, our management believes that we will have difficulty in attracting
independent directors. In addition, we would be likely be required to obtain
directors and officers insurance coverage in order to attract and retain
independent directors. Our management believes that the costs associated with
maintaining such insurance is prohibitive at this time.

26

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|ITEM 13. |  | EXHIBITS.                                                                                                                                                             
|-------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |  |                                                                                                                                                                       
|Exhibit  |  |                                                                                                                                                                       
|Number   |  | Description of Exhibit                                                                                                                                                
|         |  |                                                                                                                                                                       
|3.1      |  | Articles of
        Incorporation.(1)                                                                                                                                 
|         |  |                                                                                                                                                                       
|3.2      |  | Certificate
        of Amendment to Articles  Name Change from Merritt Ventures Corp.
        to Ireland Inc.(5)                                                     
|         |  |                                                                                                                                                                       
|3.3      |  | Bylaws.(1)                                                                                                                                                            
|         |  |                                                                                                                                                                       
|10.1     |  | 2007
        Stock Incentive Plan.                                                                                                                                    
|         |  |                                                                                                                                                                       
|10.2     |  | Non-Qualified
        Stock Option Agreement dated effective as of March 28, 2007, between the
        Company and Lorrie Ann Archibald.                              
|         |  |                                                                                                                                                                       
|10.3     |  | Assignment
        Agreement dated for reference as of March 29, 2007, among Nano Minerals
        Corp., Ireland Inc. and Lorrie Archibald.                          
|         |  |                                                                                                                                                                       
|10.4     |  | Non-Qualified
        Stock Option Agreement dated effective as of March 30, 2007 between the
        Company and Douglas D.G. Birnie.                                
|         |  |                                                                                                                                                                       
|10.5     |  | Non-Qualified
        Stock Option Agreement dated effective as of March 30, 2007 between the
        Company and Robert D. McDougal.                                 
|         |  |                                                                                                                                                                       
|14.1     |  | Code of Ethics.(3)                                                                                                                                                    
|         |  |                                                                                                                                                                       
|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     |  | Certificate
        of Location for the Ireland Claim.(4)                                                                                                             
|         |  |                                                                                                                                                                       
|99.2     |  | Report on the
        Ireland Property by W.G. Timmins, P.Eng, dated February 1, 2005.(4)                                                                             

|    |                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                   
|(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 Current Report on Form 8-K
      filed on May 21, 2004.                                                
|(3) | Filed as an exhibit to our Annual Report on Form 10-KSB
      for the year ended December 31, 2003, filed on September 28,
  2004.
|(4) | Filed as an exhibit to our Annual Report on Form 10-KSB
      for the year ended December 31, 2004, filed on October 21, 2005.    
|(5) | Filed as an exhibit to our Annual Report on Form 10-KSB
      for the year ended December 31, 2005 filed on April 12, 2006.       
|    |                                                                                                                                   

27

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ITEM
14.           PRINCIPAL
ACCOUNTANT FEES AND SERVICES.

The aggregate fees billed for the two most recently completed
  fiscal years ended December 31, 2006 and 2005 for professional services rendered
  by the principal accountant for the audit of the Corporations annual financial
  statements and review of the financial statements included our quarterly reports
  on Form 10-QSB and services that are normally provided by the accountant in
  connection with statutory and regulatory filings or engagements for these fiscal
  periods were as follows:

Year Ended December 31, 2006
    Year Ended December 31, 2005Audit Fees
      $10,000
    $16,850Audit Related Fees
    Nil
    NilTax Fees
    Nil
    NilAll Other Fees
    Nil
    NilTotal
      $10,000
    $16,850


28

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

|      |               |  | IRELAND INC.
|----- | ------------- |  | ------------
|      |               |  |             
|      |               |  |             
|Date: | April 4, 2007 |  | By:         
|      |               |  |             
|      |               |  |             
|      |               |  |             
|      |               |  |             

In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

|Date: | April 4, 2007 |  | By: | /s/ Lorrie Ann Archibald                              
|----- | ------------- |  | --- | ------------------------------------------------------
|      |               |  |     | LORRIE ANN ARCHIBALD                                  
|      |               |  |     | Chief Executive Officer,
      President and Treasurer
|      |               |  |     | (Principal Executive Officer)                         
|      |               |  |     | Director                                              
|      |               |  |     |                                                       
|      |               |  |     |                                                       
|      |               |  |     |                                                       
|      |               |  |     |                                                       
|Date: | April 4, 2007 |  | By: | /s/ Robert D. McDougal                                
|      |               |  |     | ROBERT D. MCDOUGAL                                    
|      |               |  |     | Chief Financial Officer                               
|      |               |  |     | (Principal Financial Officer)                         

---