**EXHIBIT
      99.1**










**MERIDIAN
      GOLD INC.**











1
      First Canadian
      Place


39th
      Floor


100
      King Street
      West


Toronto,
      Ontario


M5X
      1B2

















**ANNUAL
      INFORMATION FORM**








**FOR
      THE YEAR ENDED DECEMBER 31, 2006**





**DATED
      MARCH 28, 2007**































**MERIDIAN
      GOLD INC.**


**ANNUAL
      INFORMATION FORM**


**TABLE
      OF CONTENTS**











ITEM
                1: COVER PAGE
            1ITEM
                2: TABLE OF CONTENTS
            2Glossary
                of Terms
            3Cautionary
                Statement
            5ITEM
                3: CORPORATE STRUCTUREName
                and Incorporation
            5Intercorporate
                Relationships
            5ITEM
                4: GENERAL DEVELOPMENT OF THE BUSINESS
            6ITEM
                5: NARRATIVE DESCRIPTION OF THE BUSINESSMineral
                Reserves and Resources
            7Exploration
            9Uses
                of Gold and Silver.
            9Refining
                and Marketing
            10Hedging
                Program
            10Risk
                Factors
            11Property
                Interests
            15Employees
            17Description
                of Properties
            17El
                Peñón
            17Esquel
            22Rossi
            25Beartrack
            27Minera
                Florida
            27Jeronimo
            30Mercedes.
            31ITEM
                6: DIVIDENDS
            31ITEM
                7: DESCRIPTION OF CAPITAL STRUCTURE
            31ITEM
                8: MARKET FOR SECURITIES
            32ITEM
                9: ESCROWED SECURITIES
            32ITEM
                10: DIRECTORS AND OFFICERS
            32ITEM
                11: PROMOTERS
            39ITEM
                12: LEGAL PROCEEDINGS
            39ITEM
                  13: INTEREST OF MANAGEMENT AND OTHERSIN
                  MATERIAL TRANSACTIONS
            40ITEM
                14: TRANSFER AGENTS
            41ITEM
                15: MATERIAL CONTRACTS
            41ITEM
                16: INTEREST OF EXPERTS
            41ITEM
                17: ADDITIONAL INFORMATION
            41





-
          2
          -





**GLOSSARY**




The
      following mining terms have the following meanings in this Annual Information
      Form:





"cash
                  cost of production"
            Includes
                site costs for all mining (except deferred mining and deferred stripping
                costs), processing, administration, resource taxes and royalties
                but does
                not include capital, exploration, depreciation and financing costs.
                Total
                cash costs are reduced by by-product silver credits and zinc, where
                applicable, and are then divided by payable gold ounces to arrive
                at net
                cash cost of production per ounce. Cash cost of production is not
                a GAAP
                measure




"deposit"
            A
                mineralized body which has been physically delineated by sufficient
                drilling, trenching, and/or underground work, and found to contain
                a
                sufficient average grade of metal or metals to warrant further exploration
                and/or development expenditures. Such a deposit does not qualify
                as
                commercially mineable tons or as containing material reserves, until
                final
                technical and economic factors have been
                resolved.




"development"
            The
                preparation of a known commercially mineable deposit for
                mining.




"doré"
            Unrefined
                gold and silver bullion bars usually consisting of approximately
                90%
                precious metals which will be further refined to almost pure
                metal.




"exploration"
            The
                search for mineral deposits (reserves) which are not in development
                or
                production.


"Merrill-Crowe"
              A
                  process whereby precious metals contained in a mineral-bearing
                  cyanide
                  solution are precipitated by the addition of powdered
                  zinc.


"mill"
            A
                plant where ore is ground, usually to fine powder, and the metals
                are
                extracted by physical and/or chemical
                processes.




"mineral
                reserve"
            The
                economically mineable part of a measured or indicated mineral resource
                demonstrated by at least a preliminary feasibility study. This study
                must
                include adequate information on mining, processing, metallurgical,
                economic and other relevant factors that demonstrate, at the time
                of
                reporting, that economic extraction can be justified. A mineral reserve
                includes diluting materials and allowances for losses that may occur
                when
                the material is mined. Mineral reserves are subdivided in order of
                increasing confidence into probable mineral reserves and proven mineral
                reserves. A probable mineral reserve has a lower level of confidence
                than
                a proven mineral reserve.




"mineral
                resource"
            A
                concentration or occurrence of natural, solid, inorganic or fossilized
                organic material in or on the earth's crust in such form and quantity
                and
                of such a grade or quality that it has reasonable prospects for economic
                extraction. The location, quantity, grade, geological characteristics
                and
                continuity of a mineral resource are known, estimated or interpreted
                from
                specific geological evidence and knowledge. Mineral resources which
                are
                not mineral reserves do not have demonstrated economic
                viability.




"mineralization"
            Mineral-bearing
                rock; the minerals may have been either a part of the original rock
                unit
                or injected at a later time.




"ore"
            A
                metal or mineral bearing rock or a combination of these of sufficient
                value as to quality and quantity to enable it to be mined at a
                profit.




"ounces"
            Troy
                ounces.




-
          3
          -




“open
                pit mine”
            A
                mining operation whereby ore is removed from the surface of an ore
                body.




"probable
                  mineral reserve"
            A
                probable mineral reserve is the economically mineable part of an
                indicated, and in some circumstances, a measured mineral resource,
                demonstrated by at least a preliminary feasibility study. This study
                must
                include adequate information on mining, processing, metallurgical,
                economic and other relevant factors that demonstrate, at the time
                of
                reporting, that economic extraction can be
                justified.




"production"
            The
                exploitation of a mineral deposit or reserve.




"provenmineral reserve"
            A
                proven mineral reserve is the economically mineable part of a measured
                mineral resource demonstrated by at least a preliminary feasibility
                study.
                This study must include adequate information on mining, processing,
                metallurgical, economic and other relevant factors that demonstrate,
                at
                the time of reporting that economic extraction can be
                justified.




"sub-level
                  stoping"
            An
                underground mining method used in large, steeply dipping orebodies
                where
                the wall rock is of a competent nature. Drives are developed in the
                ore on
                equally spaced levels, on retreat. The ore is extracted at the bottom
                of
                the stope on a haulage level.


"total
                      cost of
                    production"
              Total production costs are comprised of cash cost
                of
                production plus depreciation/depletion and amortization, and reclamation
                provision. Total cost of production is not a GAAP
                measure.
   -
            4
            -


The
      dollar amounts in the Annual Information Form are expressed in United States
      dollars except where otherwise indicated. The information set forth in this
      Annual Information Form is as of December 31, 2006 unless an earlier or later
      date is indicated.




**CAUTIONARY
      STATEMENT**




Certain
      statements in this Annual Information Form constitute "forward-looking
      statements" within the meaning of the U.S. Private Securities Litigation Reform
      Act of 1995 and Canadian securities legislation. Such forward-looking statements
      involve known and unknown risks, uncertainties and other factors which may
      cause
      the actual results, performance or achievements of the Company, or other future
      events, including forecast production, earnings and cash flows, to be materially
      different from any future results, performances or achievements or other events
      expressly predicted or implied by such forward-looking statements. Such risks,
      uncertainties and other factors are set forth in "Item 5: Narrative Description
      of the Business - Risk Factors" and elsewhere in this Annual Information
      Form.




**ITEM** **3:
      CORPORATE STRUCTURE**





**Name
      and Incorporation**





Meridian
      Gold Inc. ("Meridian" or the "Company") is a Canadian corporation that was
      incorporated on February 28, 1996 as 3232701 Canada Inc. under the *Canada
      Business Corporations Act* .
      By articles of amendment, the Company subsequently changed its name to Vulcan
      Gold Inc. (April 30, 1996), and Meridian Gold Inc. (June 5, 1996). On July
      22,
      1996, Meridian Gold Inc. and Meridian Canada Inc. amalgamated under section
      185
      of the *Canada
      Business Corporations Act* .
      On December 31, 1999, Meridian Gold Inc. and a former subsidiary of the Company,
      Meridian Gold Canada Inc., amalgamated under section 185 of the *Canada
      Business Corporations Act* ,
      becoming Meridian Gold Inc. Unless otherwise indicated or the context otherwise
      requires, references to Meridian or the Company herein include Meridian Gold
      Inc., or where appropriate, its predecessor and its subsidiaries.




Meridian’s
      predecessor, FMC Gold Company ("FMC Gold"), was formed as a Delaware corporation
      in 1987 through a combination of FMC Corporation’s North American Precious
      Metals interests. In June 1987, FMC Gold issued 7.5 million shares of common
      stock to the public and FMC Corporation held the remaining shares. In May 1990,
      FMC Gold issued 8.0 million shares of common stock to acquire the original
      Meridian Gold Company, a wholly-owned subsidiary of Burlington Resources. FMC
      Corporation held the remaining 58.8 million shares of common stock, or 80%
      of
      the outstanding shares of FMC Gold, at that time. Meridian acquired FMC Gold
      in
      July 1996 (the “Acquisition”). In connection with this acquisition, FMC Gold
      shareholders received one share of Meridian common stock ("Common Shares")
      and a
      $0.02 per share return of capital, totaling approximately $1.5 million, in
      exchange for each share of FMC Gold common stock. FMC Corporation sold its
      80%
      interest in Meridian, which it acquired in the Acquisition, through a public
      offering in Canada of Meridian’s Common Shares in July 1996. Concurrent with FMC
      Corporation selling its interest in Meridian, FMC Corporation made a capital
      contribution to Meridian totaling approximately $3.7 million.




The
      Company's registered office is located at 1 First Canadian Place, 39 th Floor, 100 King Street West, Toronto Ontario, Canada, M5X 1B2, and the executive
      office is located at 9670 Gateway Drive, Suite 200, Reno, Nevada, U.S.A.
      89521-3952.




**Intercorporate
      Relationships**





A
      significant portion of Meridian’s business is carried on through subsidiaries. A
      chart showing the names of these subsidiaries and their respective jurisdictions
      of incorporation is set out below. All subsidiaries in the chart are 100% owned
      unless otherwise noted.





-
          5
          -






Meridian
                  Gold Company
              
              DelawareMeridian
                  Beartrack Company
              MontanaMeridian
                  Jerritt Canyon Corporation
              DelawareMeridian
                  Minerals Corporation
              DelawareMeridian
                  Rossi Corporation
              DelawareMeridian
                  Gold Holdings (Cayman) Limited
              Cayman
                  IslandsMeridian
                  Subco I Limited
              Cayman
                  IslandsMeridian
                  Subco II Limited
              Cayman
                  IslandsMinera
                  Meridian Limitada
              ChileAgua
                  de La Falda (56.7% owned)
              ChileMinera
                  Florida Limitada
              ChileAgua
                  Frias S.A. (50% owned)
              ChileInversiones
                  Florida S.A.
              ChileAgricola
                  y Forestal El Aseinto Limitada
              ChileMeridian
                  Subco V (Argentina) Limited
              Cayman
                  IslandsBrancote
                  Holdings PLC
              United
                  KingdomScarabee
                  Investments Ltd.
              Cayman
                  IslandsEmerald
                  Limited
              Cayman
                  IslandsVillagarden
                  S.A.
              UruguayMinera
                  Meridian Austral S.A.
              ArgentinaSubco
                  V Cayman Argentina
              Cayman
                  IslandsMeridian
                  Gold Holdings II (Cayman) Limited
              Cayman
                  IslandsSubco
                  III (Argentina) Limited
              Cayman
                  IslandsSubco
                  IV (Peru) Limited
              Cayman
                IslandsMinera
                  Meridian Peru S.A.C.
              PeruMeridian
                  Gold (Barbados) Limited
              BarbadosMeridian
                  Gold Holdings (Mexico) SADCV
              MexicoMinera
                  Meridian Minerales SRLCV
              MexicoMinera
                  Meridian Mexico SRLCV
              Mexico







**ITEM
      4: GENERAL DEVELOPMENT OF THE BUSINESS**





**Business
      of the Company**





The
      Company has been engaged in mining and the exploration of gold and other
      precious metals since 1981. During the past three completed fiscal years ended
      December 31, 2006. Meridian’s revenue producing properties were its El Peñón
      mine and Minera Florida mine in Chile.




The
      Company has advanced stage exploration programs in Chile, Mexico and the United
      States. Early stage exploration programs are being conducted primarily in Chile,
      Mexico, Nicaragua, Peru and the United States. The Company impaired the value
      of
      its advanced stage exploration project in Esquel, Argentina at December 31,
      2005
      to its fair market value of a non-mining property.




The
      Company has produced over 6.7 million ounces of gold from five mine sites since
      1981. Since 1986, the Company and its predecessors have continuously produced
      at
      least 150,000 ounces of gold annually from mining operations either directly
      or
      through joint ventures. In 2006, the Company produced the
      following:




Location
            Gold
                Ounces
            Silver
                Ounces
            Zinc
                TonnesEl
                Peñón
            230,145
            6,428,905
            -Minera
                Florida
            37,968
            135,463
            1,921







As
      of December 31, 2006, Meridian had total proven and probable reserves of
      approximately 2.0 million ounces of gold at the El Peñón mine and 0.4 million
      ounces of gold at Minera Florida.. The total balance mineral reserve and mineral
      resource are detailed below on pages 7 and 8.




-
          6
          -




The
      Company’s strategy is to expand its proven and probable reserves as well as its
      mining and processing operations by developing existing producing properties,
      pursuing advanced stage exploration properties, discovering new properties
      through its exploration program and making selective acquisitions.




During
      the past three fiscal years ended December 31, 2006, the major influences on
      the
      development of the Company's business have been:




•
            the
                purchase of Minera Florida S.A for $100.0 million from Minera Las
                Cenizas
                S.A. in July of 2006. In addition to the purchase price a royalty
                will be
                paid to Agua Frias, S.A., which is 50% owned by the Company, and
                to
                another party. The Company filed a Form 51-102F4 Business Acquisition
                Report and a NI 43-101 compliant Technical Report for Minera
                Florida.




•
            the
                purchase of 56.7% of Agua de la Falda S.A. for $20.0 million from
                the
                Corporación Nacional del Cobre de Chile (“CODELCO”). In addition the
                Company is required to prepare a feasibility study. Agua de la Falda’s
                properties are located approximately 50 kilometers southeast of El
                Salvador in the Third Region of Chile and include the Jeronimo
                Deposit.




•
            the
                signing of a purchase option agreement with Infogeo Servicios e Locacoes
                Ltda for the Bon Sucesso project located near Brazilia, Minas Gerais
                state, Brazil. An agreement was signed in November of 2006 and provides
                Company up to 3 years to exercise the purchase option for $1,000,000
                and a
                2% NSR. The Bon Sucesso project hosts gold mineralization with mesothermal
                shear zones hosted quartz veins which are exposed as float along
                a 7
                kilometer trend.




•
            the
                purchase of the Fortuna property in Chile for $7.5 million from Gold
                Fields Ltd. in March of 2005. In addition to the purchase price,
                a 2%
                royalty will be paid to Gold Fields Limited on all precious metals
                production at the Fortuna property. The property is located roughly
                10
                kilometers from the El Peñón mine, containing 78 sq. kilometers of land.




•
            the
                Company has seen the expansion of the El Peñón mine in Chile from a 2,000
                tonnes per day facility to over 2,500 tonnes per day and the addition
                of
                reserves and resources through an aggressive exploration program
                in the El
                Peñón and Fortuna mine claim blocks.




•
            the
                impairment of the Esquel property and subsequent reclassification
                of its
                reserves to a resource category in 2005.




•
            the
                Company spent $71.1 million in exploration in search of new economic
                gold
                properties and the expansion of resources on existing properties.










**ITEM
      5: NARRATIVE DESCRIPTION OF THE BUSINESS**





**Mineral
      Reserves and Resources**





Although
      the Company has carefully prepared and verified its calculations of the mineral
      reserves and mineral resources presented below and elsewhere in this document
      and believes that its methodology has been confirmed through mining experience,
      such figures are estimates and no assurance can be given that the indicated
      level of gold will be produced. Gold price fluctuations may subsequently render
      mineral reserves containing comparatively lower grades of gold mineralization
      uneconomic. Additionally, short-term operating factors relating to the mineral
      reserves, such as the need for orderly development of mineable bodies or the
      processing of new or different material types, may cause reserves to be modified
      in the future.





-
          7
          -




The
      Company’s internal estimates of proven and probable mineral reserves and mineral
      resources as of December 31, 2006 and December 31, 2005 are as
      follows:




**December
                  31, 2006**
              
              
              **Dece**mber
                  31, 2005*******Grade***
              
              
              *Contained
                  Ounces(3)*
              
              
              *Grade*
              
              
              *Contained**Ounces(3)***Tonnes**
              
              
              **Gol
                  d**
              
              
              **Silver**
              
              
              **Zinc**
              
              
              **Gold**
              
              
              **Silver**
              
              
              **Zinc**
              
              
              **Tonnes**
              
              
              **Gol
                  d**
              
              
              **Silver**
              
              
              **Gol
                  d**
              
              
              **Silver****(mils
                  )(2 )**
              
              
              **(g/t)**
              
              
              **(g/t)**
              
              
              **(%**
              **)**
              
              **(K
                  oz**
              **)**
              
              **(K
                  oz**
              **)**
              
              **(tonnes**
              **)**
              
              **(mils)(2)**
              
              
              **(g/t**
              **)**
              
              **(g/t**
              **)**
              
              **(K
                  oz**
              **)**
              
              **(K
                  oz**
              **)****El
                  Peñón**Proven
                  and probable reserves
              
              
              **9.3**
              
              
              **6.6**
              
              
              **275**
              
              
              **-**
              
              
              **1,967**
              
              
              **81,791**
              
              
              **-**
              
              
              **8.4**
              
              
              **7.8**
              
              
              **283**
              
              
              **2,109**
              
              
              **76,396**Mineral
                  resourcesMeasured
                  and indicated
              
              
              **3.6**
              
              
              **8.1**
              
              
              **208**
              
              
              **-**
              
              
              **935**
              
              
              **24,021**
              
              
              **-**
              
              
              **2.7**
              
              
              **8.5**
              
              
              **222**
              
              
              **741**
              
              
              **19,337**Inferred
              
              
              **2.5**
              
              
              **7.9**
              
              
              **263**
              
              
              **-**
              
              
              **626**
              
              
              **20,759**
              
              
              **-**
              
              
              **2.3**
              
              
              **8.2**
              
              
              **380**
              
              
              **595**
              
              
              **27,700****Minera
                  Florida**Proven
                  and probable reserves
              
              
              **2.2**
              
              
              **5.3**
              
              
              **27**
              
              
              **1.5**
              
              
              **369**
              
              
              **1,878**
              
              
              **31,252**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**Mineral
                  resourcesMeasured
                  and indicated
              
              
              **2.0**
              
              
              **4.6**
              
              
              **17**
              
              
              **1.2**
              
              
              **289**
              
              
              **1,080**
              
              
              **23,721**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**Inferred
              
              
              **2.9**
              
              
              **5.5**
              
              
              **30**
              
              
              **1.4**
              
              
              **504**
              
              
              **2,752**
              
              
              **39,348**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-****Rossi**(40%
                  share) (4 )Proven
                  and probable reserves
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**Mineral
                  resourcesMeasured
                  and indicated
              
              
              **0.2**
              
              
              **15.4**
              
              
              **-**
              
              
              **-**
              
              
              **109**
              
              
              **-**
              
              
              **-**
              
              
              **0.2**
              
              
              **15.4**
              
              
              **-**
              
              
              **109**
              
              
              **-**Inferred
              
              
              **0.3**
              
              
              **12.9**
              
              
              **-**
              
              
              **-**
              
              
              **133**
              
              
              **-**
              
              
              **-**
              
              
              **0.3**
              
              
              **12.9**
              
              
              **-**
              
              
              **133**
              
              
              **-****Esquel**Proven
                  and probable reserves
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**
              
              
              **-**Mineral
                  resourcesMeasured
                  and indicated
              
              
              **4.7**
              
              
              **15.0**
              
              
              **23**
              
              
              **-**
              
              
              **2,286**
              
              
              **3,523**
              
              
              **-**
              
              
              **4.7**
              
              
              **15.0**
              
              
              **23**
              
              
              **2,286**
              
              
              **3,523**Inferred
              
              
              **0.9**
              
              
              **9.9**
              
              
              **21**
              
              
              **-**
              
              
              **274**
              
              
              **575**
              
              
              **-**
              
              
              **0.9**
              
              
              **9.9**
              
              
              **21**
              
              
              **274**
              
              
              **575****Total
                  - Meridian’s Share**Proven
                  and probable reserves
              
              
              **11.5**
              
              
              **6.3**
              
              
              **226**
              
              
              **1.5**
              
              
              **2,336**
              
              
              **83,669**
              
              
              **31,252**
              
              
              **8.4**
              
              
              **7.8**
              
              
              **283**
              
              
              **2,109**
              
              
              **76,396**Mineral
                  resourcesMeasured
                  and indicated
              
              
              **10.5**
              
              
              **10.7**
              
              
              **85**
              
              
              **1.2**
              
              
              **3,619**
              
              
              **28,624**
              
              
              **23,721**
              
              
              **7.6**
              
              
              **12.8**
              
              
              **90**
              
              
              **3,136**
              
              
              **22,860**Inferred
              
              
              **6.6**
              
              
              **7.2**
              
              
              **114**
              
              
              **1.4**
              
              
              **1,537**
              
              
              **24,086**
              
              
              **39,348**
              
              
              **3.5**
              
              
              **8.9**
              
              
              **251**
              
              
              **1,001**
              
              
              **28,275**




2006
              
              
              
              2005(1)
                  Metal price assumptions:
              
              
              Gold
              
              
              Silver
              
              
              Zinc
              
              
              
              Gold
              
              
              SilverEl
                  Penon
              
              $
              470
              
              $
              7.50
              
              $
              -
              
              
              $
              350
              
              $
              6.00Minera
                  Florida
              
              $
              470
              
              $
              7.50
              
              $
              1,600
              
              
              $
              -
              
              $
              -Rossi
              
              $
              -
              
              $
              -
              
              $
              -
              
              
              $
              -
              
              $
              -Esquel
              
              $
              -
              
              $
              -
              
              $
              -
              
              
              $
              -
              
              $
              -




The
      total may not add due to rounding.





The
      December 31, 2006 models were prepared under the supervision of Greg Walker,
      P.
      Geo., an employee of Meridian Gold, and were audited by Dave Rennie, P. Eng.,
      and Jim Pearson, P. Eng., of Scott Wilson Roscoe Postle Associates Inc. (“RPA”),
      all of whom are qualified persons as defined in National Instrument 43-101
      of
      the Canadian Securities Administrators.





The
      June 30, 2006 Minera Florida models were prepared under the supervision of
      Greg
      Walker, P. Geo., an employee of Meridian Gold, and were audited by Hrayr
      Agnerian, P. Geo., and Jim Pearson, P. Eng., of Scott Wilson Roscoe Postle
      Associates Inc. (“RPA”), all of whom are qualified persons as defined in
      National Instrument 43-101 of the Canadian Securities
      Administrators.





The
      Rossi resources were prepared as of December 31, 2005 under the supervision
      of
      Robert Wheatley, P. Geo., an employee of Meridian Gold and a qualified person
      as
      defined in National Instrument 43-101 of the Canadian Securities
      Administrators. An independent resource and reserve audit of the Barrick
      Gold resource and reserve modeling will be conducted in 2007 and a NI 43-101
      Technical Report will be issued.





The
      Esquel resource models were prepared as of December 31, 2002 under the
      supervision of Greg Walker, P. Geo., an employee of Meridian Gold and a
      qualified person as defined in National Instrument 43-101 of the Canadian
      Securities Administrators. The reserves were removed from the reserve and
      resource schedule because of continuing delays in permitting the project.
      Resources were restated at a 5.0 g/t gold cutoff to reflect the probable change
      to an underground mining operation from a combination open pit and underground
      operation. The reported resources at a 5.0 g/t Au cutoff are taken from Tables
      1.1 and 1.2 of the March 2003 Technical Report.  These resources may be
      affected by negotiations




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          8
          -




to
      address the community’s objections to project development.  The change in
      reserve and resource reporting was approved by Robin Young, P.Geo., of Western
      Services Engineering Inc. as the independent Qualified Person as defined in
      National Instrument 43-101,  who prepared the March 2003 Technical
      Report




(1)      
          Based on optimized mine plans, which incorporate as necessary the impacts
          of
          dilution and access for Meridian’s operations.


(2)     
      Contained ounces exceed recoverable ounces due to metal losses experienced
      during the extraction process. Precious metal recoveries are dependent on the
      process used, grade of ore and metallurgy. Estimated gold recoveries for the
      El
      Peñón mill material are 96%. Estimated recoveries for Minera Florida are 81%.
      These estimated recoveries have not been reflected in the tables
      above.


(3) This
      data
      represents solely the Company’s 40% share of the mineral reserves / resources of
      the Rossi Joint Venture. Barrick Gold Corporation acquired a 60% ownership
      in
      the Rossi property during 2003.


(4) This
      section
      uses the terms “measured” and “indicated resources.” We advise U.S. investors
      that while those terms are recognized and required by Canadian regulations,
      the
      U.S. Securities and Exchange Commission does not recognize them. U.S. investors
      are cautioned not to assume that any part or all of mineral deposits in these
      categories will ever be converted into reserves. This section also uses the
      term
“inferred resources.” We advise U.S. investors that while this term is
      recognized and required by Canadian regulations, the U.S. Securities and
      Exchange Commission does not recognize it. “Inferred resources” have a great
      amount of uncertainty as to their existence, and great uncertainty as to their
      economic and legal feasibility. It cannot be assumed that all or any part of
      an
      Inferred Mineral Resource will ever be upgraded to a higher category. Under
      Canadian rules, estimates of Inferred Mineral Resources may not form the basis
      of feasibility or pre-feasibility studies, except in rare cases. U.S. investors
      are cautioned not to assume that part or all of an inferred resource exists,
      or
      is economically or legally mineable.





**Reconciliation
      of Mineral Reserves**


***(in
      millions)***





Dec.
                31, 2005 Reserves
            Ounces
                Produced in 2006
            Increase
                (Decrease)
            Dec.
                31, 2006Gold
                Ounces
            Silver
                Ounces
            Gold
                Ounces
            Silver
                Ounces
            Gold
                Ounces
            Silver
                Ounces
            Gold
                Ounces
            Silver
                OuncesEl
                Peñón
            2.1
            76.4
            0.2
            6.5
            0.1
            11.9
            2.0
            81.8Minera
                Florida
            -
            -
            0.1
            0.1
            0.5
            2.0
            0.4
            1.9Total
            2.1
            76.4
            0.3
            6.6
            0.6
            13.9
            2.4
            83.7




The
      increase in the reserves for the Minera Florida mine is due to the acquisition
      of Minera Florida S.A. and the exploration activities of the
      Company.





**Exploration**





The
      Company engages in exploration drilling to develop additional resources on
      its
      projects and to advance existing projects to development of mine status. In
      addition, it engages in grassroots exploration in order to evaluate the quality
      of projects in which it has an interest.




The
      following table presents the Company’s historical exploration expenditures for
      the years ended December 31, 2006 and 2005.




2006
            
            
            2005*(in
                millions)*Chile
            
            $
            15.0
            
            $
            15.7Argentina
            
            
            2.1
            
            
            2.7United
                States
            
            
            3.3
            
            
            2.4Nicaragua
            
            
            1.5
            
            
            2.4Peru
            
            
            1.9
            
            
            0.7Mexico
            
            
            1.9
            
            
            0.7Other
            
            
            0.9
            
            
            0.4Total
            
            $
            26.6
            
            $
            25.0





The
      amounts spent for Argentina represent general exploration activities in the
      country plus administrative and holding costs.





**Uses
      of Gold and Silver**





The
      principal uses of gold and silver worldwide are product fabrication and bullion
      investment. Product fabrication encompasses a broad spectrum of end uses, the
      most significant of which is the production of jewelry. Other fabrication uses
      include official coins, electronics, miscellaneous




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          9
          -




industrial
      and decorative uses, dentistry, medals and medallions.





**Refining
      and Marketing**





Gold
      and silver are traded as commodities and can be easily sold in numerous markets
      throughout the world at readily determinable prices. Due to the large number
      of
      potential gold and silver purchasers, the Company does not believe it is
      dependent upon any one customer for its sales. The Company’s gold and silver
      doré production is currently purchased by Standard Bank Limited, London and
      Auramet Trading, New York. The Company shipped to three refiners, Johnson
      Matthey, Canada, Argor-Haraeus, Switzerland, and ENAMI, Chile in 2006 and
      Johnson Matthey, England, Johnson Matthey, USA and Argor-Haraeus, Switzerland
      during 2005. Johnson Matthey, Canada, and Argor-Haraeus, Switzerland,
      represented 10% or more of consolidated sales during 2006 and 2005. In view
      of
      the size of the international bullion markets, the Company believes that several
      other refiners or banks would be willing to purchase the Company’s production if
      any of the current customers should discontinue buying from the
      Company.





**Hedging
      Program**





Pursuant
      to the requirements of a loan facility, the Company instituted an expanded
      hedge
      program in 2001, consisting of gold fixed forwards and silver forwards. Forward
      sales contracts establish a selling price for future production at the time
      they
      are entered into, thereby limiting the risk of declining prices. During 2002,
      upon the removal of the Company’s long-term credit facility with the Standard
      Bank syndicate, the Company was relieved of its requirement to maintain its
      gold
      forward hedge program. The Company closed its long-term gold forward contracts
      as of June 30, 2002. Under applicable accounting standards, the Company was
      required to defer recognition of the gains related to closing out these
      contracts in its financial statements until the expiry date of the contracts,
      which ended in 2004. During 2004 and 2003, the Company recognized $1.2 million
      and $1.9 million, respectively, of the deferred revenue on expiring gold forward
      contracts. This concludes the recognition of any deferred revenue arising out
      of
      this transaction.





At
      December 31, 2003, the Company had remaining forward sales commitments for
      2,000,000 ounces of silver at an average price of $5.34 per ounce for delivery
      during 2004 associated with the former Standard Bank loan. In addition, in
      2003,
      with the sharp rise in silver price, the Company entered into silver contracts
      for delivery during 2004. At December 31, 2003, the Company had remaining a
      commitment of 2,200,000 ounces of silver relating to these contracts at an
      average price of $5.05 per ounce for delivery during 2004. During the three
      months and twelve months ended December 31, 2004, 2.0 million and 4.2 million
      ounces, respectively, of silver production were delivered against these
      contracts and the remaining contracts were delivered into or settled during
      2004.





In
      the third quarter of 2005, the Company purchased European style put option
      contracts for 250,000 ounces of silver with a strike price of $7.00 and an
      expiration date of January 27, 2006.  These puts guaranteed the Company the
      right to sell the specified silver ounces for no less than the strike price
      on
      the expiration date.  The option premium paid of $62,000 has been expensed.





In
      the fourth quarter of 2006, the Company purchased European-style call option
      contracts for 310,000 ounces of silver with a strike price of $13.25 and an
      expiration date of December 2009.  These calls guaranteed the Company the
      right to sell the specified silver ounces for no more than the strike price
      on
      the expiration date.  The option premium paid of $729,500 is being
      allocated over the term of the contracts. In 2006, the Company also entered
      into
      forward sale contracts for 950,000 ounces of silver at an average price of
      $13.13 for delivery between March 2007 and December 2009. Subsequently the
      Company entered into a Master Purchase Contract (“MPC”) and transferred the
      silver call options and forward sale contract under the MPC and designated
      the
      contracts to be normal sale contracts. The Company adjusted the value of the
      derivative contract to market at the time they were placed under the MPC and
      recorded income.





Also
      in the fourth quarter of 2006, the Company entered into zinc forward sale
      contracts for 5,050 tonnes for delivery in 2007, 2008 and 2009 and will be
      marked to market during each period. During 2006, the Company recorded a loss
      of
      $2.2 million on these contracts as other income.




The
      nature and extent of future gold and silver hedging by the Company is dependent
      upon its




-
          10
          -




continuing
      assessment of gold market conditions and other factors. Due to changes in market
      conditions and other factors, there can be no assurance as to the future success
      of the Company’s hedge program. The Company may, in the future, utilize
      alternate hedging vehicles or discontinue its hedging program entirely, as
      circumstances warrant.





For
      a detailed discussion of the Company’s hedge position at December 31, 2006, see
      note 20 - Forward Contracts in the Company’s 2006 Annual Report, incorporated
      herein by reference.





**Risk
      Factors**




The
      following is a brief discussion of those distinctive or special characteristics
      of Meridian’s operations and industry which may have a material impact on, or
      constitute risk factors in respect of, Meridian’s future financial
      performance:




***Fluctuations
      in the Market Price of Precious Metals***




The
      profitability of the Company’s operations is directly related to the market
      price of gold and silver. The prices of gold and silver have fluctuated in
      the
      past, particularly in recent years, and are affected by numerous factors,
      including expectations of inflation, the relative exchange rate of the U.S.
      dollar, speculative activities, global and regional demand and production,
      political and economic conditions and production costs in major producing
      regions. The Company is unable to control the prices for these commodity metals.
      If the price for gold or silver were to decline significantly, the Company’s
      revenue or reserves could decrease. In addition if such a decline were to occur
      and the Company’s marginal revenues were to fall below and remain below the
      marginal costs of production at any particular mine for any significant period,
      the Company could experience losses at that mine and as a result may determine
      that it is not economically feasible to continue commercial production at that
      mine.




***Mining
      Industry Risks***




The
      exploration for and development of mineral deposits involves a high degree
      of
      risk. Few properties which are explored are ultimately developed into producing
      mines. Major expenses may be required to locate and establish material reserves,
      to develop metallurgical processes and to construct mining and processing
      facilities at a particular site. It is impossible to ensure that the exploration
      programs planned by the Company will result in a profitable commercial mining
      operation. If exploration results in few or no new mines, future revenues may
      decline.




Whether
      a mineral deposit will be commercially viable depends on a number of factors,
      including the particular attributes of the deposit, such as size, grade and
      proximity to infrastructure, precious metal prices which are highly cyclical,
      and government regulations, including regulations relating to prices, taxes,
      royalties, land tenure, land use, importing and exporting of minerals and
      environmental protection. Unusual or unexpected formations, formation pressures,
      fires, power outages, labor disruptions, flooding, explosions, cave-ins, land
      slides and the inability to obtain suitable or adequate machinery, equipment
      or
      labor are other risks involved in the operation of mines and the conduct of
      exploration programs.




***Uncertainty
      of Title to Properties***





The
      mining code of Chile provides for transfer of titled mineral rights to a
      claimant, domestic or foreign, upon completion of a specified process. In Chile,
      the law permits a corporation to hold title to their mining concessions in
      their
      names. However, under Chilean mining law, the beneficiary of a mining
      exploration concession is required to take legal measures to transform its
      mining exploration concession into a mining exploitation concession, in
      accordance with the mining code. If such measures are not taken by the Company,
      or if the annual fees for mining concessions are not paid each year, the Company
      can lose its title over its mining concessions, which could have a material
      adverse effect on the Company’s business, financial condition and results of
      operations.




In
      Chile, the Company maintains title in its name to its properties and believes
      that it has completed the requisite title processes. Although the Company
      believes it has taken reasonable




-
          11
          -




measures
      to ensure proper title to its mining concessions in Chile, there is no guarantee
      that title to any of its mining concessions could not be challenged by a third
      party, which may have valid claims underlying portions of the Company’s
      interests.




The
      validity of unpatented mining claims on U.S. public lands, which constitutes
      a
      portion of the Company's U.S. property holdings, is sometimes uncertain and
      may
      be contested. Due to the extensive requirements and associated expense required
      to obtain and maintain mining rights on U.S. public lands, the Company’s
      property interests are subject to various uncertainties which are common to
      the
      industry, with the attendant risk that some titles, particularly on undeveloped
      properties, may be defective. The Company may fail to obtain sufficient mining
      rights in a timely manner and may lose a valuable property.




The
      various properties comprising the Esquel gold project in Argentina are
      classified as either ‘‘claims’’ or ‘‘mines’’ and are either owned outright by
      Meridian’s wholly-owned indirect subsidiary Minera Meridian Austral S.A.
      (“MED”), or through option contracts between MED and the direct owners. Claims
      constitute exploratory rights for a period of time, after which the tenant
      must
      file a discovery manifestation *(Manifestacion
      de Descubrimiento)* with
      the provincial mining authority in order to change its status to a mine. A
      mining property permits the owner to extract the minerals once the corresponding
      environmental impact report has been filed. An annual mining fee must be paid
      in
      respect of all mines from the date of their registration. Some of the mining
      properties held by MED are currently pending registration with the provincial
      mining authority and are not yet required to pay the applicable annual mining
      fee.




***Risk
      Associated with Foreign Operations***




The
      Company currently has investments and exploration projects in Chile, Peru,
      Argentina, Nicaragua, and Mexico. These investments and projects, as well as
      any
      other investments or projects made or undertaken in the future in other
      developing nations, are subject to the risks normally associated with conducting
      business in such countries, including labor disputes and uncertain political
      and
      economic environments, as well as risks of war and civil disturbances or other
      risks which may limit or disrupt the projects, restrict the movement of funds
      or
      result in the deprivation of contract rights or the taking of property by
      nationalization or expropriation without fair compensation laws or policies
      of
      particular countries, foreign taxation, limitations on ownership and on
      repatriation of earnings, and foreign exchange controls and currency
      fluctuations. Foreign investments may also be adversely affected by changes
      in
      Canadian laws and regulations relating to foreign trade, investment and
      taxation. If the Company’s operations in a particular foreign country were
      halted, delayed or interfered with, the Company’s business could be adversely
      affected.




***Environmental
      Risks and Hazards***




All
      phases of the Company’s operations are subject to environmental regulation in
      the various jurisdictions in which they operate. Environmental legislation
      is
      evolving in a manner which may require stricter standards and enforcement,
      increased fines and penalties for non-compliance, more stringent environmental
      assessments of proposed projects and a heightened degree of responsibility
      for
      companies and their officers, directors and employees. Existing or future
      environmental regulation may materially adversely affect the Company’s business,
      financial condition and results of operations. Environmental hazards may exist
      on the properties on which the Company holds interests which are unknown to
      the
      Company at present and which have been caused by previous or existing owners
      or
      operators of the properties.




***Governmental
      Regulation of the Mining Industry***





Government
      approvals and permits are currently, or may in the future be, required in
      connection with the Company’s operations. To the extent such approvals are
      required and not obtained, the Company may be curtailed or prohibited from
      proceeding with planned exploration or development of properties.




The
      exploration activities of the Company are subject to various laws governing
      prospecting, development, production, taxes, labor standards and occupational
      health, mine safety, toxic substances and other matters. Mining and exploration
      activities are also subject to various laws and regulations relating to the
      protection of the environment.




-
          12
          -




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




Amendments
      to current laws, regulations and permits governing operations and activities
      of
      mining companies, or more stringent implementation thereof, could have a
      material adverse impact on the Company and cause increases in exploration
      expenses, capital expenditures or production costs or reduction in levels of
      production at producing properties or require abandonment or delays in
      development of new mining properties.




***Mining
      Related Taxes***




During
      2005, a specific tax on mining companies was adopted by the Chilean government.
      This law takes effect as of January 1, 2006. The mining tax is a sliding scale
      tax from 0 to 5% of earnings before interest and taxes. The rate is determined
      by a mining company’s equivalent revenues as compared to the revenues from a
      determined amount of tonnes of copper sales. The rate uses a sliding scale
      based
      on the value of 0 to 50,000 tonnes of fine copper sales. Below the 50,000 tonne
      limit a progressive scale is applied with a maximum effective rate of 1.93%
      on
      earnings before taxes. Above the 50,000 tonnes equivalent the maximum rate
      is
      applied with no sliding of the scale, or a 5% effective rate. The company
      started paying the mining tax on a monthly provisional basis starting February
      2006, according to Chilean tax law for the El Peñón production. Due to the
      volume of production at the Minera Florida property, it is not subject to the
      mining specific tax.




***Properties
      Without Known Mineable Reserves***




Certain
      of the Company’s properties are in the exploration stage and it has not yet been
      determined whether these properties contain ore reserves that are economically
      recoverable. The activities of the Company will continue to be directed towards
      the search for, evaluation and development of mineral deposits. There is no
      assurance that the expenditures of the Company will result in discoveries of
      commercial ore bodies. Furthermore, there can be no assurance that the Company’s
      estimates of future exploration expenditures will prove accurate and actual
      expenditures may be significantly higher than currently anticipated. If the
      Company incurs large expenditures without finding commercial ore bodies, its
      revenues and earnings could be adversely effected.




***Uncertainty
      as to Calculations of Mineral Reserves and Ore Grades***




There
      is a significant degree of uncertainty attributable to the calculation of
      mineral reserves, and corresponding ore grades. Until the material is actually
      mined and processed, mineral reserves, and ore grade must be considered as
      estimates only. Consequently, there can be no assurance that any mineral reserve
      or ore grade information contained in this Annual Information Form will prove
      accurate. In addition, the quantity of mineral reserves may vary depending
      on
      mineral prices and other factors. Any material change in mineral reserves,
      ore
      grades or stripping ratios may affect the economic viability of the Company’s
      projects. Furthermore, mineral reserve information should not be interpreted
      as
      any assurance of mine life or of the potential profitability of existing or
      future projects.




***Accounting
      for the Impairment of Long-lived Assets***




In
      determining whether or not the Company has an impairment, an analysis is
      undertaken of the expected future cash flows to be generated by the project
      to
      determine if such cash flows exceed the project’s current carrying value. The
      determination of future cash flows is dependent on a number of factors,
      including future prices for gold, the amount of reserves, the cost of bringing
      the project into production, production schedules, and estimates of production
      costs. Additionally, the analysis must take into account factors such as
      political, social, legal and environmental regulations. These factors may change
      due to changing economic conditions or the accuracy of certain assumptions
      which
      could result in the future recognition of an asset impairment.





-
          13
          -




Should
      a change in economic assumptions occur, causing the estimate of future cash
      flows to fall below the carrying value of the Company’s assets, the Company will
      first write down the net deferred tax liability associated with the assets
      rendering no impact to the consolidated statements of operations. Following
      this, should additional impairment be required, the Company will further write
      down the assets to the consolidated statement of operations under the heading
      of
      impairment of mineral properties.




***Union
      Collective Contract Negotiation***




The
      mining industry in Chile is highly unionized, and the labor force has formed
      unions at both of the Company’s properties in Chile. Collective bargaining
      agreements are entered into with the unions under the guidelines of the national
      labor law. Collective agreements range from 2 year to 4 year contracts. The
      company periodically negotiates a collective contract with its workforce. One
      of
      the negotiation mechanisms available to the unions is the ability to strike.
      There is uncertainty as to the probability of a strike and also to the duration,
      should one occur. A prolonged strike could affect production and therefore
      impact earnings and cash flow of the Company.




***Requirement
      of Additional Financing***




Future
      development of the Company’s properties or new properties may require additional
      financing. There can be no assurance that additional capital or other types
      of
      financing will be available when needed or that, if available, the terms of
      such
      financing will be favorable to the Company. This could potentially impact the
      growth plans for the Company.




***Uninsured
      Risks***




The
      Company carries insurance to protect against certain risks, in such amounts
      as
      it considers adequate. Risks not insured include environmental pollution, mine
      flooding or other hazards against which mining companies generally cannot insure
      or against which the Company may elect not to insure because of high premium
      costs or other reasons. Failure to have insurance coverage for any one or more
      of such risks or hazards could have a material adverse effect on the Company’s
      business, financial condition and results of operations if one of these risks
      were to occur.




***Risk
      of Hedging Strategies***




In
      order to mitigate some of the risks associated with downward fluctuations in
      metal prices, the Company has used, and may in the future use, various price
      hedging strategies, such as selling future contracts for the material produced,
      or purchasing put options. The Company continually evaluates the potential
      short- and long-term benefits of engaging in such price hedging strategies
      based
      upon current market conditions. No assurance can be given, however, that the
      use
      of price hedging strategies will always benefit the Company. There is a
      possibility that the Company could lock in forward deliveries at prices lower
      than the market price at the time of delivery. In addition, the Company could
      fail to produce enough gold, silver or zinc to satisfy its forward delivery
      obligations, causing the Company to purchase the metal in the spot market at
      higher prices to fulfill its delivery obligations. If the Company is locked
      into
      a lower than market price forward contract or has to buy additional quantities
      at higher prices, its profits could be adversely affected. See "Item 5:
      Narrative Description of the Business - Hedging Program" for further discussion
      of the Company’s hedging program.




***Competition***




The
      Company competes with other mining companies in connection with the search
      for
      and acquisition of properties producing or capable of producing gold, silver
      and
      other precious metals. Failure to acquire gold, silver and other precious metals
      properties could materially adversely affect the Company's prospects for success
      in the future.




-
          14
          -




***Dependence
      upon Key Management Personnel***




The
      Company is dependent upon a number of key management personnel. The loss of
      the
      services of one or more of such personnel could have a material adverse effect
      on the Company. The Company’s ability to manage its exploration and development
      activities, and hence its success, will depend in large part on the efforts
      of
      these individuals. The Company faces competition for qualified personnel, and
      there can be no assurance that the Company will be able to attract and retain
      such personnel.




***Potential
      Volatility of Market Price of Common Shares***




The
      market price of the Company’s common shares may be highly volatile. Factors such
      those discussed in this section as well as changes in stock market analyst
      recommendations regarding the Company, may have a significant effect on the
      market price of the common shares. In the past, securities class action
      litigation has often been initiated following periods of volatility in the
      market price of a company’s securities. Such litigation, if brought against the
      Company, could result in substantial costs and a diversion of management’s
      attention and resources, which could have a material adverse effect on the
      Company’s business, financial condition and results of operations.




***Dilution***




The
      Company’s Certificate and Articles of Amalgamation, as amended, provide that the
      Company has an unlimited number of authorized common chares and preference
      shares that may be issued. Under applicable Canadian law, shareholder approval
      is not generally required for the Company to issue shares of either class of
      capital stock. Moreover, the Company has various commitments that could require
      the issuance of a substantial number of additional common shares as follows:
      exercise of stock options outstanding under the Meridian Gold Inc. 1999 Share
      Incentive Plan, and issuance of common shares pursuant to a Shareholder Rights
      Plan, which is triggered by a "Take-over Bid" meeting certain criteria. For
      additional details, see Note 13: Share Capital of the Consolidated Financial
      Statements in the Company’s 2006 Annual Report to Shareholders, which is
      incorporated herein by reference.




***Certain
      Anti-Takeover Effects***




The
      Company has established a Shareholder Rights Plan, which may have the effect
      of
      making it more difficult for a third party to acquire, or of discouraging a
      third party from attempting to acquire, control of the Company. The Plan may
      result in holders of the common shares receiving a premium over the prevailing
      market price for their common shares in a change of control
      transaction.




For
      further discussion of the Plan, see Note 13: Share Capital of the Consolidated
      Financial Statements in the Company’s 2006 Annual Report to Shareholders, which
      is incorporated herein by reference. The 2006 Annual Report may also be found
      on
      SEDAR at www.sedar.com.




**Property
      Interests**




***Chile***




In
      Chile, mineral rights are granted by ordinary courts of justice in the form
      of
      mining concessions. Any person, whether a Chilean national or a foreigner,
      may
      apply for the granting of mining concessions subject to compliance with the
      requirements provided for under Chilean law. The holder of a mining concession
      is protected by the ownership right on such concession. The right over the
      concession, which is independent from the ownership right on the surface land,
      is transferable and may be subject to mortgage. The mining concession entitles
      its holder to dispose of all mineral resources contained within its
      boundaries.




Mining
      concessions are of two types:




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          15
          -




(i)
      An Exploration Concession, whereby the holder is legally entitled to explore
      for
      mineral substances in a certain area for a period of two years, at the
      expiration of which the concession may be extended for an additional two year
      period if the area covered by the concession is reduced by half and provided
      the
      applicable annual tax is paid.




(ii)
      An Exploitation Concession, whereby the holder is legally entitled to exploit
      mineral substances contained therein for an indefinite period of time subject
      to
      payment of the annual tax. The Company holds Exploitation Concessions for all
      of
      the land on which current El Peñón reserves are located.




The
      holder of an Exploration Concession has the exclusive right to initiate the
      procedure to obtain an Exploitation Concession within the boundaries and during
      the time period of the Exploration Concession. The holder of each type of mining
      concession is entitled by law to impose easements on the surface land in order
      to facilitate mining exploration or exploitation activities. Any compensation
      to
      be paid to the owner of the surface land for the easement is to be determined
      by
      mutual agreement or, failing such agreement, by the court. The acquisition
      of
      mineral interests in Chile is normally initiated either through the filing
      of an
      application to the courts to obtain the granting of new mining concessions
      or by
      acquiring existing mining concessions.




The
      legal procedure to obtain the granting of a new mining concession is regulated
      in detail in the Chilean Mining Code. A special characteristic of this judicial
      procedure is that the applicant is required to be active and to expedite the
      proceeding in order to comply with deadlines established in the Chilean Mining
      Code for the performance of certain tasks to be fulfilled in order to obtain
      the
      grant of the concession. The judge has an active role, and the proceeding may
      become contentious in some cases (i.e., in the event of third party opposition
      to the survey petition).





Parties
      that have already registered mining concessions may transfer these concessions
      in Chile. The execution of an option or promise purchase contract regarding
      existing mining concessions may enable an interested party to develop
      exploration or exploitation mining work in a given area already legally
      protected. Chilean law also enables the party interested in acquiring a mining
      concession to enter into a variety of different contractual arrangements (i.e.,
      deferred installment payments or undertaking to carry out exploration activities
      as payment of the purchase price) in contemplating the option to purchase or
      abandon the mining concession.





***United
      States***




Mineral
      interests in the United States are owned by U.S. federal and state governments
      and private parties. In order for the Company to explore or develop a
      prospective mineral property that is owned by a private party or by a state,
      it
      must enter into a property or mineral rights acquisition agreement. The Company
      may also acquire rights to explore for and produce minerals on U.S.
      federally-owned lands. This acquisition is accomplished through the location
      of
      unpatented mining claims upon unappropriated U.S. federal land pursuant to
      procedures established principally by the General Mining Law of 1872, as amended
      (the "General Mining Law") and the Federal Land Policy and Management Act of
      1976 (or the acquisition of previously located mining claims from a private
      party as described above). These laws and regulations generally provide that
      a
      citizen of the United States (including a U.S. corporation) may acquire a
      possessory right to develop and mine valuable mineral deposits discovered upon
      unappropriated U.S. federal lands, provided that such lands have not been
      withdrawn from mineral location (which would include, for example, lands
      included in national parks and military reservations and lands designated as
      part of the National Wilderness Preservation System). This right can be freely
      transferred and is protected against appropriation by the government without
      just compensation. Also, the claim locator acquires the right to obtain a patent
      (or deed) conveying fee title to his claim from the U.S. federal government
      upon
      compliance with certain additional procedures.





***Argentina***





Minerals
      are the property of the provinces in which they are located. Private persons
      can
      obtain from the respective provincial mining authorities the exclusive rights
      to
      explore and to exploit minerals via permits and concessions,
      respectively.





The
      Argentine Mining Code considers that both mining exploration and exploitation,
      and the




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          16
          -




concession
      of a mine and related acts, have higher priority than any other activity of
      the
      soil. Consistently, surface owners can not prevent the granting of mining rights
      and properties or commencement and/or continuity of mining activities thereon,
      without prejudice to their right to collect the corresponding indemnity, as
      a
      consequence of the use of their land by the miner and the damages derived from
      mining activities.





Claims
      constitute exploratory rights for a period of time, after which the tenant
      must
      file a discovery manifestation ( *Manifestacion
      de Descubrimiento* )
      with the provincial mining authority in order to change its status to a mine.
      A
      mining property permits the owner to extract the minerals once the corresponding
      environmental impact report has been filed. An annual mining fee must be paid
      in
      respect of all mines from the date of their registration. Some of the mining
      properties held by MED are currently pending registration with the provincial
      mining authority and payment of the applicable annual mining fee is not yet
      required.





**Employees**





As
      of December 31, 2006, the Company had approximately 543 employees worldwide.
      There are approximately 247 employees of Minera Meridian Limitada (“MML”) in
      Chile, a wholly-owned indirect subsidiary of the Company and operator of the
      El
      Peñón mine. MML signed a four-year collective employment contract with its
      workers at El Peñón in the fourth quarter of 2003. The employees are represented
      by an elected employee council. During 2006, a union was formed representing
      roughly 40% of the workforce. As a majority of the workforce is already under
      the collective contract from 2003, no collective bargaining agreement has been
      negotiated at this time. The current contract expires in 2007 and will be
      negotiated in due course before the expiration date. Minera Florida Limitada,
      (“MFL”) in Chile, a wholly-owned indirect subsidiary of the Company and operator
      of the Pedro Valencia mine has approximately 238 employees. There are two unions
      which represent the workforce. The union and the Company entered into a 2 year
      collective contract on January 1, 2006. There are approximately 8 employees
      in
      Argentina who are employees of a wholly-owned, indirect subsidiary of the
      Company. There are 4 employees working on site at the Beartrack property. The
      Company also employs approximately 33 people at its corporate headquarters
      in
      Reno, Nevada. The remainder of the Company’s employees are located at various
      exploration sites in North and South America. The Company believes its
      relationship with its employees is good.





**Description
      of Propert** **ies**





During
      2006, as well as in 2005, Meridian produced most of its gold and silver from
      the
      El Peñón property in Chile, which is identified as material to the Company under
      National Instrument 43-101 of the Canadian Securities Administrators. The
      remainder of the production came from Minera Florida in Chile. In addition,
      the
      Company has advanced stage exploration programs underway in Chile (at El Peñón
      and Minera La Florida) and in Nevada (at Rossi) and early stage exploration
      programs underway primarily in Chile, Peru, Argentina, Mexico and Nicaragua.
      In
      addition, the Company has determined that the value of its advanced stage
      exploration program in Argentina (at Esquel) has been impaired and written
      down
      the value to the fair market value of a non-mining property in
      2005.




Except
      as otherwise noted, the following descriptions and summaries of the Company’s
      projects are derived from the Technical Reports as well as, “Meridian Gold
      Secondary Offering”, “Esquel Gold Project Technical Report”, “Minera Florida
      Business Acquisition Report” or other subsequent press releases issued by the
      company and filed with the respective regulating bodies. Reference is made
      to
      the Technical Reports filed on SEDAR, including the Technical Report for Minera
      Florida, for a complete description of the Company’s properties and associated
      maps, photographs and references.







**El
      Peñón**





***History,
      Location, Size and Access***





The
      El Peñón property in Chile was the result of a grass-roots discovery made by
      Meridian geologists Chile in 1993.




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          17
          -




The
      El Peñón property is located in the Atacama Desert in northern Chile,
      approximately 160 kilometers southeast of Antofagasta. The main access to the
      property is via a 40 kilometer paved road connecting the property to the
      Escondida Highway, with alternative access via a 40 kilometer gravel road from
      the Pan American Highway. The original property is comprised of approximately
      750 square kilometers of contiguous mineral concessions situated at an elevation
      of about 1,800 meters. The El Peñón project is situated on concessions wholly
      owned by Minera Meridian Limitada (MML), a wholly-owned indirect subsidiary,
      and
      as detailed below purchased the 78 square kilometer Angelina property which
      was
      part of the joint venture with Gold Fields Chile Limitada (“Gold Fields”). An
      additional 191 square kilometers adjacent to the property are under an option
      agreement. MML has agreements for all surface lands required to facilitate
      its
      mining activities and has access to adequate water for its mine design.




In
      December 2003, Meridian signed a joint venture agreement with Gold Fields,
      to
      explore its Angelina property located 10 kilometers west of the El Peñón mine in
      Chile. Under the terms of the agreement, Meridian was to spend $1.25 million
      over four years to earn a 60% interest in the property. Meridian could increase
      its ownership to 80% by making a $1.0 million cash payment or by contributing
      some mining claims controlled by Meridian Company to the joint venture company,
      at Gold Fields’ election. During 2004, Meridian discovered the Fortuna vein
      system.





In
      March of 2005, MML, paid $7.5 million to Gold Fields Chile Ltda, a wholly-owned
      subsidiary of Gold Fields Ltd to become a 100% owner of the Angelina property
      including the Fortuna vein. In addition to the purchase price the Company will
      pay a 2% royalty on all precious metals production at the Fortuna Property.
      The
      property was further explored during 2005 to increase understanding and provide
      additional delineation of the Fortuna vein and other structures.




***Geology
      and Mining***




The
      El Peñón gold-silver deposit is located in the Longitudinal Valley of northern
      Chile, between the Mesozoic magmatic arc exposed in the Coast Range to the
      west
      and the Domeyko Cordillera to the east. The Domeyko Cordillera exposes a
      structurally complex sequence of Paleozoic to Tertiary volcanic and sedimentary
      rocks, which host the large late Eocene-early Oligocene porphyry copper deposits
      Escondida, Zaldívar, and Chuquicamata along a north-trending structural
      zone.




Volcanic
      and intrusive rocks located in the Longitudinal Valley are Late Cretaceous
      to
      Eocene in age. This north-trending volcanic belt, which includes the Augusta
      Victoria Formation, is characterized as an alkali-enriched, calc-alkaline
      volcanic suite that ranges from basaltic andesite to rhyolite. The bimodal
      character of this volcanic suite is inferred to have developed in relation
      to
      intra-arc or back-arc extension. The Paleocene to early Eocene volcanic belt
      hosts two other significant precious metal deposits, San Cristóbal and El
      Guanaco. In addition, the porphyry copper deposits at Cerro Colorado and Spence
      are located within this belt.




Volcanic
      rocks of the Augusta Victoria Formation underlie the El Peñón district. This
      formation consists of volcanic rocks that vary from basaltic andesite to
      high-silica rhyolite. The low-sulfidation epithermal vein deposit at El Peñón is
      spatially associated with a rhyolite dome complex that intrudes a sequence
      of
      pyroclastic and intermediate-composition flows. The dome complex is laterally
      extensive, extending a minimum of 3 kilometers from east to west and 5
      kilometers from north to south. The dome complex consists of multiple magma
      pulses from several high-angle, crosscutting vent features.





Economic
      concentrations of gold and silver at El Peñón occur within volcanic hosted
      epithermal quartz veins and breccias. Typically, the ore deposits exhibit long
      strike length and range up to 24 meters in thickness with near-vertical dip,
      however, most mining occurs in vein widths of 1 to 5 meters. The hanging and
      footwall rocks are tuffs, rhyolites and andesites.




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          18
          -




The
      Fortuna vein system lies within the same basic geographic structure and geology
      age as the El Peñón vein system.





***Exploration
      and Drilling***




Initial
      drilling on the property by the Company started in November 1993 and has
      continued through the present time. In 2006, 158,993 meters were drilled from
      surface. A large percentage of these meters concentrated on the definition
      and
      extension drill program of the Providencia vein system, located south of the
      Dorada structure. The Providencia vein was first identified in 2005, and the
      extensive drill campaign indicates the Providencia vein may be associated with
      the Dorada structure. During 2006, the structure was further drill tested north
      and south as far as possible from the surface extending the vein a total of
      1.2
      km length and adding to a total known depth of nearly 400 meters. 203 holes
      totaling 59,013 meters were drilled during 2006. The vein remains open to the
      south and at depth. The southern and deeper portions of the vein will be best
      tested from underground drill platforms. Two drifts are being driven to access
      the vein and allow the underground drilling program to commence. These drifts
      are expected to be completed during the first half of 2007. One of the drifts
      will connect the Providencia structure to the Dorada infrastructure. The second
      drift is being driven from the southern end of Quebrada Colorada. The
      Providencia vein was discovered early in 2005 and is located to the South of
      the
      Dorada vein.





As
      previously mentioned, the Fortuna vein was discovered in 2004. 258 holes were
      drilled, totaling 51,000 meters during 2006. Additional drilling on the Fortuna
      vein was performed to better define the structure that was extended to a strike
      length to more than 2 kilometers and the depth to more than 200 meters during
      2005. In addition, the Dominador vein was identified in 2005 and was further
      delineated to extend its strike length to nearly 1 kilometer. The Dominador
      vein
      is located 300 meters west of the Fortuna vein. In addition, the Al Este and
      Angosta veins were identified and drilled during the latter half of 2006.
      Initial drill holes have returned some economical grades and widths. These
      structures will continue to be drilled in the first half of 2007, as limited
      work was completed





Exploration
      efforts have incorporated reverse circulation rotary and diamond core drilling
      from both surface and underground platforms. Reverse circulation rotary drilling
      is the primary method to test surface exploration targets. The bulk of the
      reverse circulation rotary surface drilling has been completed by Harris y
      CIA,
      Ltda. of Antofagasta, Chile and Terra Services Ltda of Chile. Diamond drill
      core
      is used for underground delineation in-fill drilling in various zones of the
      claim block, and to confirm and delineate deposits from surface when underground
      access is lacking. During 2006 and 2005, Terra Services Ltda.. also executed
      the
      underground diamond core drill contracts.





Reverse
      circulation rotary drilling employs face-sampling hammers or tricone roller
      bits. In both cases, the sample is collected or interchanged directly at the
      bit
      face. The drill steel consists of three or six meter dual walled reverse
      circulation rods. Drill holes are started using casing hammers to a depth of
      three to twelve meters. Samples are collected in a conventional rotary fashion.
      Once the casing is set, a drill collar is installed and discharge hoses
      connected so that cave material is discharged away from the rig and sampling
      site. To reduce the possibility of contamination at rod changes, the drill
      operator closely monitors the amount of waste material discharged. Another
      drill
      hose is connected from the drill head to the sampling cyclone. Sample lengths
      vary from 0.5, 1.0, and 2.0 meters depending on the purpose of the drill hole.
      Splitting techniques vary from wet to dry drilling and by sample length. In
      general, a 3/16 split of the total interval volume is captured by passing the
      total recovered material through a Jones or hydraulic splitter. Two splits
      per
      interval are kept for the surface exploration drill holes. The duplicate samples
      are used for quality control procedures (blind field doubles), bulk
      metallurgical samples and standards, or a physical record of the mineralized
      zones. The sample splits are bagged in 30 by 50 centimeter 0.30 millimeter
      polyethylene bags. A sample tag with the printed bar code is applied to the
      bags
      for identification purposes.





The
      core rigs are capable of drilling at all angles and to depths exceeding 500
      meters with HQ core. The dominant core size drilled is HQ (2.4” diameter). The
      core rigs use 10 foot long drill steel and 5 foot triple tube core barrels.
      When
      necessary due to extensive overburden, the holes are pre-collared using reverse
      circulation drill rigs. Company surveyors lay out drill locations and
      orientations for rig set-up. The final drill hole location is resurveyed upon
      completion and after the rig has vacated the drill site. The down-hole deviation
      of all surface drill holes is measured by a digital gyroscopic method. Core,
      for
      both the surface and underground core holes, is placed in wooden core boxes
      that
      are




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          19
          -




labeled
      and the down-hole depths recorded on wooden blocks at core run boundaries.
      The
      core is transported to the geology logging area where the core is cleaned and
      logged. Core recovery is calculated by dividing length of the core per run
      by
      the run length. Rock Quality Designation (“RQD”) was defined by dividing the
      combined length of greater than 10 centimeter core pieces with natural breaks
      per drill run by the length of the drill run. Exploration surface and
      underground core holes are photographed using a digital camera. Sample intervals
      for assaying are defined using both geological contacts and the end of a drill
      run, whichever is shorter. Sample intervals do not exceed two meters in
      length.




***Sampling
      and Analysis***




ACME
      Analytical Laboratories (ACME) performs sample analysis for underground and
      surface exploration drill holes. Once the drill holes are completed, the samples
      are immediately transported to the ACME preparation facility that is maintained
      on site. Pulps are prepared and shipped by ACME to their laboratory in Santiago,
      Chile. The Company uses a systematic quality control process that inserts
      standards, blanks, and blind field doubles into each drill hole sequence.
      Standard and blank locations are determined by the logged geology. Five
      different standards with variable grades have been prepared from El Peñón
      mineralized material and statistically certified. Quality analysis is an
      on-going process on a monthly basis. Geoanalytica Ltda., of La Serena, Chile
      performed geochemical analysis on an as-needed basis to maintain a less than
      two
      week turn-around for assay results.





The
      main additions of mineral reserves in 2006 took place in the Providencia vein,
      the Fortuna vein systems including Dominador and the Martillo Flats vein. Due
      to
      the acquisition of the Minera Florida mine and exploration work performed on
      the
      property, the Company increased the mineral reserves for this
      property.





Exploration
      in 2007 is expected to concentrate on further drill testing of the Fortuna,
      Providencia, Dominador, Al Este and Angosta and other vein targets, exploring
      to
      outer boundaries of the known veins using underground platform diamond drill
      techniques, surface reverse circulation drilling, and collecting district scale
      geophysics.





***Mineralization***




Mineralization
      is dominated by gold and silver. Other deleterious elements and heavy metals
      rarely occur in concentrations above background levels for epithermal deposits.
      Mercury and arsenic are present only at very low concentrations. Gangue minerals
      within the ore are predominantly quartz, adularia and iron sulfides. Gold is
      present as free electrum or in association with pyrite. Visible gold is not
      uncommon. Silver occurs as electrum, silver sulfides and silver
      sulfosalts.




The
      depth of oxidation is variable, but generally extends 250 to 300 meters below
      ground level. The majority of the ore is oxidized with the exception of the
      southern, deeper extensions of the Quebrada Orito system.




The
      structurally controlled veins at Quebrada Orito have experienced
      post-mineralization movement, resulting in a tectonized fabric within the ore
      zones that locally affects the footwall rocks. Continuity of the ore zones
      has
      not been significantly disrupted by the post-mineral movement.




Mining
      of the ore bodies at El Peñón has historically been by open pit and underground
      methods. During 2005, all currently defined open pit ore bodies have been mined
      and mining during 2007 will be from underground. Exploration work may define
      other ore bodies that may be exploitable through the use of open pit
      mining.




Mechanized
      underground mining began late in the fourth quarter of 1999. Future underground
      mining will utilize a variety of methods dependent upon the geometry of the
      ore
      zone. Access to the mining areas is via four declines. Extraction of ore is
      accomplished by drift and fill and bench and fill methods. Backfill is placed
      to
      facilitate mining of subsequent stopes; cemented backfill is used in mining
      areas adjacent to existing stopes. Cemented backfill is prepared on the surface
      with a dedicated batch plant.




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          20
          -




Ground
      conditions are generally good, with many of the access openings requiring no
      support. Within the stopes, ground support is predominantly shotcrete. In
      fractured ground, support will be provided by a combination of cemented rebar
      and fiberglass bolts, mesh and shotcrete, depending upon the degree of
      fracturing.




The
      underground production design capacity was 2,000 tonnes per day and the company
      is currently expanding the mine to extract 2,800 tonnes per day. During the
      last
      quarter of 2006, the average extraction rate was 2,339 tonnes per day.
      Underground mining in the core area of El Peñón is by contract with Constructora
      Gardilcic S.A., who supplied contract services for construction of the
      underground development. The mining contract was renewed in January, 2005 for
      a
      5 year term. Under the terms and conditions of the contract, Meridian will
      perform all mine engineering functions as well as providing additional
      front-line supervision, for quality control purposes. Meridian provides power
      and water; all other costs of production are included in the contract cost
      structure. Payment is based upon volume and includes provisions for quality.
      The
      current contract with Constructora Gardilcic S.A. expires at the end of 2009.
      The underground mining at Fortuna will be performed by contract with Proyecta
      S.A. who is currently providing services in construction of the portal and
      principal ramp at Fortuna. A 5 year contract was signed during the third quarter
      of 2006. The terms, conditions and operational aspects of the contract are
      similar to those in the Gardilcic contract.




Current
      life of mine plans call for exploitation of remaining proven and probable
      mineral reserves. Additional mineralization has been identified, at similar
      or
      higher grades, which is expected to be converted to mineral reserves and
      consequently add significant mine life.




***Milling***




Processing
      of the ore at El Peñón involves primary jaw crushing, SAG milling, thickening,
      cyanide leach, counter current decantation, tails thickening and filtration,
      Merrill-Crowe precipitation and smelting to produce gold and silver doré.
      Filtered tailings are stacked in compacted lifts, where proprietary cyanide
      destruction technology is employed to reduce cyanide levels to below permitted
      levels.




Average
      gold and silver recoveries are expected to be approximately 96% and 92%,
      respectively.




The
      milling circuit is designed to process 2,000 tonnes per day at a target grind
      size of 105 microns. By year end 2006, Meridian was grinding at over 2,500
      tonnes per day, at 85% passing 112 microns. Operational flexibility is enhanced
      by a crushing capacity which is nearly double that of the mill. Meridian
      personnel operate and maintain the process area. Projects are currently under
      way to expand the processing capabilities of the plant to 2,800 tonnes per
      day.
      These projects mainly involve a secondary crushing circuit, expansion of the
      filtration capacities, and the construction of additional leach tanks. These
      projects are largely completed and any unfinished work is expected to be
      completed during the first quarter of 2007.




Construction
      of the process facility took approximately ten months and was completed in
      September, 1999. Fluor Daniel Chile S.A. provided engineering, procurement
      and
      construction management for the project.




Following
      a construction period of ten months, the El Peñón mine began pre-commercial
      production on September 1, 1999. Commercial production began January 1, 2000,
      following a startup phase that went very well and required no capital
      modifications to reach designed throughput levels.




Electrical
      power is supplied by a line connected to the national grid. Back-up diesel
      fired
      power generation for the operation of critical mill equipment and mine
      ventilation is in place and operational. Long-term contracts for major
      consumables are in place, as are long-term refining contracts for the doré.




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          21
          -




***Recent
      Operations***




During
      2006, the Company sourced ore feed exclusively underground mining. In 2006,
      underground ore production was comprised of Quebrada Orito Veins (36%), Quebrada
      Colorada Veins (26%) and Cerro Martillo/Dorada Veins (38%).




**Esquel**




***Current
      Status***




On
      July 3, 2002, the Company completed an unconditional share purchase offer for
      Brancote, owner of the Esquel gold project. Permitting for the project and
      a
      feasibility study began in the third quarter of 2002. In March of 2003, with
      the
      feasibility study substantially complete, the project was put on hold after
      local opposition to the mine led to a non-binding referendum wherein a majority
      of Esquel’s citizens voted against the mine. The Company recognized that changes
      were necessary and has since changed the project management and enlisted the
      services of BSR, as well as others, to assist in understanding the community’s
      issues and needs. The Company operates an office in Esquel and is currently
      focused on addressing the concerns of the community and government authorities
      before it proceeds with final permitting and construction of the
      mine.




Management
      has regularly reviewed the status of the project and has reviewed the Esquel
      property for impairment on a quarterly basis since 2003, updating certain
      assumptions to reflect the latest information.  For the year ended December
      31, 2004 the Company performed an impairment assessment using the following
      assumptions:




•
            The
                impairment analysis assumed an open-pit and underground mine instead
                of
                the all open-pit mine.





•
            We
                assumed current metal price as of each year end. As at December 31,
                2004
                the gold price was $436 and the silver price was $6.77. Additionally,
                we
                performed sensitivity analysis reflecting the effect of using lower
                metal
                prices, e.g. the three year average prices and a scenario with pricing
                at
                $300 per ounce.





•
            We
                assumed production grades to be less than the grades reported in
                our
                mineral reserve and resource tables presented in the annual report,
                Form
                40-F and technical report. This was done in an effort to find a
                conservative cut-off grade appropriate for the mine. We performed
                sensitivity analysis of grades rising and falling between 1-5%.





•
            We
                assumed gold recoveries of 85% and silver recoveries of 71%. We performed
                sensitivity analysis using variations from
                1-3%.





•
            We
                assumed contained gold of 3.4 million ounces and gold production
                after
                recoveries of 2.9 million ounces. This reflects all known reserves
                and
                resources and a change in the economic cut off of the mine block
                model
                from $325 gold and $5 silver price per ounce to $350 gold and $6
                silver.
                We have not included existing mineral deposits where drilling has
                occurred
                but not in a sufficient quantity to classify as a resource nor the
                potential discovery of new deposits.





•
            We
                assumed a cost per tonne of $25. Our models are based on third party
                consultants’ studies plus contingencies and are within 3% of the amounts
                reported in the Technical Report.





•
            We
                assumed life of mine capital for equipment, mine development and
                processing plant of $187 million for 2003 and 2004. Capital forecasts
                are
                based on independent consultant studies and contain contingencies
                up to
                30% for specific capital items.





•
            We
                assumed reclamation expenditures at December 31, 2003 and 2004 were
                $25
                million and $35 million respectively.





Our
      economic models showed positive undiscounted cash flow for the project greater
      than the carrying value of the project. The main issue surrounding a possible
      impairment of the Esquel property




-
          22
          -




is
      whether we will be able to obtain the permits. We believed we would ultimately
      obtain the permits to operate the mine and therefore no impairment was necessary
      at these dates.







Since
      this time, Meridian focused its efforts on identifying and addressing the
      community’s concerns. Activities have culminated in the development of a new
      underground mining plan and addressing the local concerns, which include social,
      environmental and technical aspects of the project. Meridian remains confident
      in the long-term economic, environmental and technical aspects of the Esquel
      project and is committed to building trust with the community of Esquel, Chubut
      and Argentina, through Meridian’s demonstrated history and current practice of
      responsible mining.





In
      March of 2003, the provincial government of Chubut enacted laws 5000 and 5001.
      These laws banned open-pit mining and the use of cyanide in the province. In
      the
      opinion of the Company and its local legal counsel, these laws were in conflict
      with the national laws and the national constitution. Therefore, the Company
      hoped a positive outcome could be achieved in relation to the changing or
      annulling of the provincial laws 5000 and 5001, before the three year time
      frame
      for measuring for the delay of a project occurred. However, no changes or
      rulings were made on these laws. We are unable to reasonably determine when
      or
      if this may occur. As of December 31, 2005, our development activities on the
      Esquel project have been interrupted and the delay in development activities
      has
      reached three years. Based on applicable accounting guidelines, there is a
      presumption that a write-down of capitalized costs, deferred development and
      pre-operating costs is necessary. Since the timing of the approval process
      for
      the project cannot be determined at this time, Meridian does not have persuasive
      evidence that a write-down should not be taken. Therefore, under applicable
      accounting guidelines, Meridian is required to write-down these long-lived
      assets to their estimated fair value. The carrying value of the Esquel mineral
      properties written down is approximately $542.8 million (see the following
      table). The remaining value of the property is estimated to be equal to the
      fair
      market commercial real-estate value of the land, comparable to similar land
      in
      this region.




TABLE
                  1
              (US$
                  Millions)Purchase
                  price
              310.0Capital
                  spending on project
              6.1Future
                  income tax liability 1
              149.1Currency
                  translation adjustment 2
              77.6Total
                  impairment
              542.8Income
                  tax benefit
              163.9Net
                  impairment
              378.9




Note:
 1  The
        future income tax liability is related to the future tax expense acquired
        as
        part of the purchase of the project.
 2  The
        currency translation adjustment is related to the balance sheet adjustments
        for
        the foreign exchange difference between the time of purchase and the time
        of the
        write-off.





This
      impairment was charged in the period ending December 31, 2005 and is a non-cash
      item. The company remains confident in this project, and is studying various
      alternatives to move forward, including understanding the community issues
      and
      reviewing different mining and processing scenarios, including plans for an
      underground mine.





On
      July 21, 2006, Governor Das Neves of Chubut, Argentina, officially ratified
      the
      legislation which suspends all metal mining activity with specified areas of
      the
      province for the next three years. The areas included in the mining suspension
      include Meridian’s Esquel property. This does not affect the title to the Esquel
      property and the company continues to work within the community to understand
      their concerns as they relate to the project.




***History,
      Location, Size and Access***





The
      contiguous properties that form the Esquel gold project are located in the
      Sierra de Esquel, 7 kilometers northeast of the town of Esquel (population:
      30,000) in southern Argentina and comprise




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          23
          -




an
      aggregate of 43,365 hectares of land. The geographic coordinates of these
      properties are centered at latitude 42 ̊ 43’S, longitude 71 ̊ 11’W. The properties
      are located at elevations between 1,200 and 1,400 meters.





Esquel
      is serviced 2 days a week by jet aircraft from Buenos Aires. The various
      properties comprising the Esquel gold project area may be accessed by traveling
      from Esquel via National Highways No. 259 (southeast) and No. 40 (northeast)
      for
      a total of 26 kilometers to the eastern boundary of the properties. The
      individual properties can be accessed from the eastern boundary of the project
      area via several dirt roads that require use of 4-wheel-drive
      vehicles.





In
      addition to the properties that form the Esquel gold project, the Company had
      an
      ownership interest in certain adjacent properties. During the year 2005, the
      Company entered into a transaction with Patagonia Gold S.A. in which we sold
      our
      60% share of 936 square kilometers, known as the Leleque, Nahuel Pan and
      Huemules properties located in the region around the Esquel project for $1.5
      million. These properties where previously held in a joint-venture with a
      subsidiary of Patagonia Gold S.A. These properties were deemed non-essential
      to
      the scope of the current project. There had not been any development activities
      on the Leleque, Nahuel Pan or Huemules properties.





***Ownership***





The
      various properties comprising the Esquel gold project are classified as either
      “permits”, ‘‘claims’’ or ‘‘mines’’ and are either owned outright by MED or
      through option contracts between MED and the direct owners. “Exploration permit”
means an exclusive exploration permit granted for a certain period of time,
      covering a specific area, by the Mining Authority. The term of a permit begins
      30 days after the date in which the granting resolution issued by the Mining
      Authority is notified to the applicant. During the 30-day period, the applicant
      must “begin” the work it has proposed in its application (as used here “begin”
implies physical occupation with equipment and people). The commencement date
      cannot be postponed nor interrupted without consent of the Mining Authority.
      During the winter a “holiday” is granted. Generally, the Mining Authority grants
      approximately 180 days per winter season.





In
      respect of those properties not owned directly by MED, MED has entered into
      option contracts with the direct owners. In all such cases, MED is required
      to
      make an agreed schedule of payments following which it will obtain outright
      ownership of the properties, which will be transferred into its name at the
      provincial mining authority. These option arrangements provide that the original
      owner will retain a form of net smelter returns royalty (usually around 2 per
      cent) once the mine becomes productive.





With
      respect to the Esquel gold project Meridian is a 100% owner through its indirect
      subsidiary MED. The Galadriel-Julia vein system, which constitutes the Esquel
      gold project and which is the current focus of development for the Company,
      is
      located on the Cordon de Esquel property.




***Geology***





The
      rock formations on the Esquel gold project properties consist mainly of
      sub-horizontal andesitic volcanic rocks of Jurassic age with minor insertions
      of
      marine and shallow lagoonal, carbonaceous sediments. The rocks are cut by vein
      systems that generally trend north-south, but range from N30°W to N30°E, and dip
      steeply to the west or east. The width of the veins typically ranges from less
      than 1.0 metre to 12 metres, and the veins have strike lengths of greater than
      2,000 metres. Veins are cut by steeply dipping faults that generally strike
      northeast or west-northwest. Displacement along these faults is generally less
      than 100 meters.





The
      veins contain quartz and chalcedony. Two types of quartz-chalcedony veins occur
      on the properties: one type is white to cream-colored, massive to banded veins;
      the other is dark gray to black veins containing an amorphous carbonaceous
      material that has been classified as pyrobitumen. Some intervals of the dark
      veins contain high gold grades. Both types contain ore-grade gold
      mineralization. Gold is commonly present in mineralized wall rock adjacent
      to
      the veins. Where mineralized, the wall rock contains pyrite. Gold grades are
      generally lower in the mineralized wall rock than in the veins, but some wall
      rock contains gold grades greater than 20 grams per tonne. Mineralization
      consists of a low-sulfur system containing gold (electrum containing
      approximately equal amounts of gold and silver),




-
          24
          -




hessite,
      pyrargyrite, pyrite, marcasite, and minor sphalerite, chalcopyrite and
      arsenopyrite. Overall gold to silver ratios range from 1-2 ounces of gold to
      silver.





The
      Esquel corridor is marked on the east and west by steeply dipping north trending
      veins whereas the transecting and most prominent Galadriel-Julia vein dominates
      the center of the corridor. The veins have undergone slip movement concurrent
      with mineralization as evidenced by the sigmoidal form of the Galadriel-Julia
      vein, which gave rise to the significant local widths of approximately 50
      meters. The Galadriel-Julia vein contains three major ore shoots. Galadriel
      Sur
      is the largest of the three, which centrally is 120 meters long by 25 meters
      wide averaging 24 grams of gold per tonne. The Galadriel-Julia vein is
      continuously mineralized over the entire 2.4 kilometer strike length.
      Multi-ounce assays in the core section are not uncommon.





***Exploration
      and Drilling***





The
      core area has been geologically mapped, channel sampled and drilled. A total
      of
      579 channel samples from 67 separate channels representing 523 meters of
      cumulative sample length have been taken thus far. Standard channel sampling
      practices were followed in sample collection.





Six
      stages of drilling have been completed to date for inclusion in the feasibility
      work. Approximately 87 percent of the drilling has been on the Galadriel-Julia
      vein. A total of 611 holes have been drilled totaling 77,645 meters, including
      32,414 meters of core. The majority of the core was HQ size and the core holes
      were also surveyed down-hole. The core was split and sampled based upon geologic
      boundaries. Reverse circulation drilling utilized face sampling bits with
      samples taken on 1-meter intervals.





Two
      geophysics surveys have been completed thus far utilizing Induced Polarization
      (“IP”) and Controlled Source Audiomagnetic Tellurics (“CSAMT”) techniques. The
      most recent survey was completed in December, 2002. Assaying was primarily
      performed by ALS Chemex and to a lesser extent by Alex Stewart Assayers. Gold
      assays were commonly completed using a 50-gram fire assay. A professional system
      of standards, duplicates, and blanks was used for assay quality
      control.





Efforts
      to identify additional economic resources have been focused in three areas.
      Firstly, the expansion of known ore bodies down-dip. Numerous sections in
      Galadriel Sur and Football Field have economic grades and widths in the deepest
      drill intercept. Secondly, further investigation of known veins that have
      received limited exploration drilling. Namely, these are Ungoliant, Antonio,
      Elena Sur and Elena Norte. The combined strike length of these veins is in
      excess of that of the principal Galadriel-Julia vein. And thirdly, the use
      of
      geophysical surveys to locate undiscovered hidden veins. The known veins have
      a
      geophysical fingerprint that can be used to identify highly prospective areas
      for exploration. Areas of particular interest lie to the west of Galadriel
      where
      IP indicates mineralization is deep seated and may be covered by younger
      volcanics.





During
      2006, as during 2004 and 2005, all exploration activities remained suspended.





**Rossi**





***Joint
      Venture Agreement***




The
      Rossi property is subject to a joint venture with Barrick Gold Exploration,
      Inc.
      (“Barrick”). The joint venture has rights to 100% of the precious metal bearing
      ores on the Rossi property. Prior to November 18, 2003, all work on the property
      was carried out and funded by Barrick, pursuant to a Mining Venture Agreement
      (the “Joint Venture Agreement”), effective as of September 9, 1998. The Joint
      Venture Agreement created an operating and exploration partnership on the Rossi
      property, with Barrick bringing substantial underground experience in similar
      rock and ground conditions and the constructed facilities necessary to process
      Rossi material. Barrick’s proven exploration results and thorough understanding
      of Carlin Trend geology should enhance the process of exploiting the gold
      potential of this 28 square kilometer claim block.




Barrick
      was granted the right to earn a 60% interest in the project subject to
      fulfilling its obligation to spend $15 million by December 31, 2003. By December
      31, 2003, Barrick met its initial contribution requirement of $15 million.
      Under
      the Joint Venture Agreement, if the joint venture mines




-
          25
          -




ore
      from Rossi, Barrick is required to process up to 1,000 tons (short tons) per
      day
      at its nearby facilities; if the joint venture is terminated, Meridian retains
      the right to process up to 500 tons per day of Rossi material at Barrick’s
      facilities, on a custom-milling basis.




During
      2006, exploration was
      completed with a total of 36 underground core holes drilled totaling 4,319
      meters, and 2 exploration holes were drilled from surface totaling 1,260 meters.
      Furthermore, Barrick completed engineering studies and permitting in preparation
      for project startup. Contractor mobilization and surface facility construction
      commenced in June 2006, and underground mine development commenced in July
      2006.
      The Dee Ramp was rehabilitated and extended with a total of 205 meters of new
      excavation. Additional underground development work was completed on the project
      bringing total new advance for 2006 to 354 meters (including the extension
      of
      the Dee Ramp).




We
      anticipate achieving commercial production by the second quarter of
      2007.





***Geology
      and Exploration***




The
      Rossi property is geographically situated between the Antelope and Boulder
      Creek
      drainages in the low rolling hills of the Sheep Creek Range, 26 miles northwest
      of Carlin, Nevada, and is part of the well-known Carlin Trend. Access to the
      property is by all-season gravel roads either through Boulder Valley or the
      Newmont Gold Company/Barrick Gold Corporation owned mining areas. The property
      is approximately 3.5 miles and 5 miles northwest of the Meikle (Barrick Gold
      Corporation) and Post/Betze (Barrick Gold Corporation/Newmont Gold Company)
      deposits, respectively, and immediately adjacent to the Dee gold mine (Glamis
      Gold Ltd.), currently in the closure process. The land position encompasses
      10.7
      square miles of unpatented mining claims as well as patented mining claims
      on
      U.S. federally owned ground.




Gold
      mineralization at Rossi is typical of the sediment-hosted mineralization on
      the
      Carlin Trend. Although the highest grade deposits occur in the lower plate
      carbonate rocks in the Roberts Mountains and Popovich Formations, lower grade
      mineralization also occurs in the siliciclastics of the upper plate. At Rossi,
      the focus of deep drilling at the STORM Resource has been the gold
      mineralization in the Popovich Formation. This mineralization occurs at depths
      from 200 meters to more than 600 meters. It is localized along the intersection
      of steeply dipping, high-angle northwest trending structures, a wide zone of
      shallow westward-dipping faults (Dee Fault), and the favorable Popovich
      lithologies of silty carbonates and carbonate breccias. Pyrite, strong
      silicification, and brecciation are all associated with the mineralization.
      This
      mineralization is the higher grade downward extension of the Dee deposit, which
      is an open pit mine immediately to the south.




Nearly
      all of the property is covered by upper plate rocks, which are poor ore hosts,
      above the Roberts Mountains Thrust. However, detailed mapping, sampling, and
      drilling have been successful in targeting and discovering high grade
      mineralization in the favorable lower plate carbonate horizons at depth. The
      Roberts Mountains Formation, which hosts a significant portion of the
      mineralization elsewhere on the Carlin Trend, has not yet been tested at
      Rossi.




The
      "STORM Resource Area," is located in the southern portion of the Company’s claim
      block adjacent to the Dee deposit. As part of the underground program, a 1,039
      meter decline was completed to access a portion of the STORM Resource for
      underground drilling. This decline was completed late in December 1999, along
      with 204 meters of additional ancillary underground development.




Utilizing
      the 1,039 meter STORM decline for access, 35 underground drill holes, totaling
      2,539 meters, were drilled into the "49er Zone" from January through April
      2000.
      The underground program, drilled on 30 meter spacing, validated the previously
      modeled, structurally controlled, distribution of high-grade material. No
      underground work was conducted in 2001 and 2002.




The
      focus of exploration in 2003 was to further delineate the 49er Zone where an
      underground ramp (STORM Decline) was completed in 1999 for confirmatory
      underground drilling in 2000. The 2003 program consisted of rehabilitation
      of
      the STORM Decline and 9,149 feet of combined reverse circulation and core
      drilling along the center of the 49er Zone.




Exploration
      and development work completed during 2004 includes (1) construction of 1,576
      feet of production and exploration drifts or cross-cuts to the End Zone and
      49er
      Zone;(2) completion of




-
          26
          -




73
      diamond drill holes totaling 19,227 feet from underground drill platforms;(3)
      initiation of an Environmental Assessment study for mining purposes, and (4)
      submittal of a Plan of Operation for the Storm deposit to the Bureau of Land
      Management and Nevada Division of Environmental Protection.





During
      2006 work at the project focused on completing the drilling of the End Zone
      and
      Discovery Zones to prepare a full feasibility study. This was completed during
      the third quarter of 2006 at which time design and development of the mine
      commenced.





For
      2007 we anticipate reaching commercial production during the second quarter
      of
      2007. Meridians share (40%) of the full year’s production for 2007 is expected
      to be approximately 25,000 ounces of gold.




**Beartrack**





***History,
      Location, Size and Access***





The
      100%-owned Beartrack mine was an open pit operation with a heap leach facility
      located approximately 11 miles west of Salmon, Idaho, near the historic mining
      town of Leesburg. The Beartrack property comprises approximately five square
      miles of patented and unpatented mining claims. The Company depleted the
      resource at the Beartrack mine in March of 2000. The operation is now in a
      reclamation phase, producing residual wash-down ounces from the heap leach
      pad.
      On going reclamation and monitoring work is being carried out during the spring,
      summer and fall months by the employees and supervised contractors. The work
      force is currently 4 employees working at the site.




***Recent
      Operations***




As
      of March 22, 2000, planned mining operations concluded at Beartrack with
      subsequent production coming solely from residual ounces on the heap leach
      pad.
      Gold production in 2006 was 209 ounces of gold, compared with 200 ounces
      produced at Beartrack in 2005. .
      The company continues to perform reclamation work and update its plans and
      forecasts for the remaining work to be performed. Upon the yearly review of
      future expenses, it was determined that the current Asset Retirement Obligation
      (ARO) liability was in excess of the cost needed to absorb the future expenses.
      Therefore, it was deemed necessary to decrease the company’s obligation by $1.0
      million. For additional information, refer to note 16 - Asset Retirement
      Obligation, assets of the Company’s 2006 Annual Report), which is incorporated
      herein by reference.




**Minera
      Florida**




*History,
      Location, Size and Access*




On
      August 5, 2005 Meridian signed an Option agreement to purchase Minera Florida
      for a set price of $100 million. On July 1, 2006 Meridian executed the option
      agreement by paying $100 million to acquire the Minera Florida operating
      company.




At
      Meridians 100% wholly owned Minera Florida Mine, regional mining and prospecting
      activities date back to the early eighteenth century, when placer gold deposits
      were mined along creeks and rivers. In 1886, Albion Mining Company constructed
      a
      cyanidation plant, the first of its kind in Chile, and produced gold ****** by ****** the
      cyanidation method. A few years later, Sociedad Aurífera de Alhué constructed a
      flotation plant and operated a mine and mill until 1944. From 1944 to 1986,
      little exploration or mining activities were carried out in the area. In 1986,
      Sociedad Minera Maipo S.A. (SMM), a predecessor company to Florida, commenced
      exploration and regional evaluation of the area. In 1987, SMM constructed a
      processing plant, developed the gold bearing veins of the deposit and started
      small scale mining operations at the Lo Toro and Pedro Valencia deposits
      (currently Pedro Valencia is also known as the Minera Florida Mine). The mine
      has been in production ever since. As of December 31, 2005, some 5.6 million
      tonnes of material at an average grade of 5.9 g/t Au and 55 g/t Ag have been
      mined from the underground mine over time.




The
      Minera Florida Gold Project is located 73 km southwest of Santiago, Chile.
      The
      property consists of 149 mineral licenses covering a total area of approximately
      10,200 ha. Mining Licenses in




-
          27
          -




and
      around the Mine area are contained within a rectangular block (2.5 km x1.5
      km)
      comprising 36 licenses. The property also includes some 113 Exploration Licenses
      in a large area around the Mining Licenses. These are lands adjacent to the
      north, east, and south of the Mining Licenses.




Access
      to the property is by paved road, along Route 78 to Melipilla, then south on
      highways No. 34 and 21, and then east on highway No. 29. Electric power is
      available through a 5km transmission line which is linked to the Chilean Power
      grid. Telephone and high speed internet service is available at the site. Water
      is available from small rivers and creeks within the property. Infrastructure
      for mining equipment and personnel is available at Melipilla, Rancagua, and
      Santiago in central Chile, where a number of underground deposits are in
      production. The mine is situated in an area with moderate to rugged topographic
      relief characterized by narrow valleys and high hills. The general area is
      characterized by a central valley 2 km to 3 km wide bounded by two mountain
      ranges, with approximately 500 m in topographic relief, of the coastal mountain
      range in central Chile.




*Geology
      & Mineralization*




The
      Minera Florida deposit is situated within the Coastal Cordillera of Central
      Chile. Gold and polymetallic mineralization is hosted by quartz veins and
      stockwork within andesitic tuffs and other volcaniclastic rocks of the Upper
      Cretaceous Lo Valle Formation. The veins and other structures in the area are
      commonly associated with hydrothermal (siliceous and propylitic) alteration
      and
      mineralization including gold, silver, zinc, and lead values. There are four
      major sets of mineralized structures that are recognized in the area. These
      are:




•
            Northwest
                trending structures (average orientation at Azimuth 282°) such as the
                steeply north or south dipping Pedro Valencia, Bertas, and Lisset
                structures.




•
            East-West
                structures, such as the vertical to steeply south dipping Millenium,
                Lo
                Prat, Lo Balta, Esmeralda and Quillayes structures and the steeply
                north
                dipping Marisol and Cantillana
                structures.





•
            Northeast
                trending structures (average orientation at Azimuth 042°), such as the
                steeply southeast dipping Farellón Tribuna
                structure.





•
            North
                trending structures, such as the steeply east dipping Pedro Valencia
                Occidental and Maqui Clavo I and II veins. These structures are parallel,
                or adjacent, to north trending normal faults which cut the earlier
                (east
                trending) veins.





Gold
      mineralization in the Alhué Mine area occurs as native gold and electrum (AuAg)
      associated with sulphide minerals, such as pyrite, chalcopyrite, sphalerite
      and
      galena, as well as magnetite. Mineralization is commonly associated with
      hydrothermal alteration including quartz, adularia, epidote, chlorite, and
      actinolite. Quartz occurs in four types; as grey siliceous zones, green quartz,
      translucent quartz, and white quartz. Some veins exhibit metal zoning, with
      a
      silver-rich zone in the upper part of the vein, a gold-rich zone in the central
      part, and a zinc-rich zone in the lower part of the vein.





In
      general, mineralized structures are comprised of different parts,
      including:





•
            An
                inner quartz vein (core) consisting of material exhibiting quartz
                flooding
                or massive quartz, surrounded by -


•
            Stockwork
                of quartz veinlets and/or hydrothermal breccia, both of which are
                mineralized.




***Exploration***




Previous
      exploration on the Alhué Property was carried out by SMM and Florida. From June
      2005 to June 2006, Florida has been exploring the Agua Fría vein system as part
      of the due diligence program funded by Meridian. To date, some 28,460 m of
      underground drilling has been completed in 94 diamond drill holes. The holes
      are
      collared along drill stations spaced 100 m apart, testing the Peumo, Espino,
      Sopresa, Litre, and Tribuna veins. All of the holes are inclined holes, with
      total length




-
          28
          -




of
      the holes ranging from 29 m to 510 m. The drill hole collar locations are
      surveyed based on the Universal Transverse Mercator (UTM) coordinate system.
      Down-hole surveys of the holes are also carried out to provide control
      information on the directional deviation (both azimuth and inclination) of
      each
      hole.





The
      mineralized veins of the deposit, excluding recent exploration in the Agua
      Fría
      area, have been explored by some 713 underground and surface diamond drill
      holes. Systematic testing of the gold bearing zones was started by SMM in 1986
      and continues to the present by Florida. To date, some 76,210 m of drilling
      has
      been completed.





During
      2006, Florida explored the Agua Fría vein system as part of the due diligence
      program funded by Meridian. To date, some 28,460 m of underground drilling
      has
      been completed in 94 diamond drill holes, as noted above.





For
      holes longer than 500 m initially, HQ size core is recovered and then reduced
      to
      NQ and BQ size core. For shorter holes, NQ or BQ size core is recovered. The
      procedures used during the diamond drilling programs are as
      follows:





•
            The
                collar locations of all drill holes are surveyed and marked by Florida
                crews.


•
            A
                Maxibor survey instrument is used to provide control information
                on the
                directional deviation (both azimuth and inclination) of each hole.


•
            Lithologic
                logging is done on drill core and geotechnical observations are made
                by
                company geologists, depicting all down-hole data including assay
                values.
                All information is recorded on handwritten logs.





***Sampling
      and Analysis***




Continuous
      sampling was carried out on all underground drill holes at intervals ranging
      from 30 cm to 1.5 m down the hole. The whole core was assayed, with only a
      small
      representative sample stored for future reference. All assays are stored in
      a
      central database used for resource estimates. Detailed laboratory certificates
      are included with all drill logs.





During
      the past several months, geologists from Meridian have been working with Florida
      geologists and sampling of drill core is done such that the core is cut by
      a
      diamond dill hydraulic cutter, half of the core is sampled and sent for assays,
      and the other half is stored at the site. Sampling is done at one-metre
      intervals for the whole mineralized intersection. In addition, face sampling
      of
      all underground workings is carried out by Florida personnel, with samples
      of
      the mineralized veins as well as the wall rocks. In total, 16,120 samples have
      been collected and sent for assays. This includes some 5,630 samples in 2005
      and
      10,490 samples from January to June 2006.





All
      assays used in the Mine are done at the laboratory located near the mill,
      warehouse, and office complex. Rock and core samples are crushed, pulverized,
      and fire assayed for gold and silver on-site at the mine laboratory. There
      are
      separate crushing and pulverizing circuits for the mine grade control samples
      and exploration samples (of muck or face samples). Quality control includes
      the
      use of blanks, duplicates, standards, and internal check assays by the Mine
      laboratory, and external check assays performed at ALS Chemex Laboratories
      (ALS
      Chemex) of Santiago, Chile.





Recently,
      since the beginning of the joint exploration efforts at the site, check assaying
      has been conducted independently by the Meridian exploration group. The mine
      laboratory currently uses a number of standard samples with the assay values
      certified by an external laboratory, Chile Laboratory in La Serena, Chile (SGS
      La Serena). The quality assurance procedures and assay protocols followed by
      Florida for underground sampling and drill core samples at the Mine are as
      follows:


•
            Samples
                are handled only by the Florida authorized personnel. Samples from
                the
                mining operation are delivered by the mine geologist or technician
                directly to the mine laboratory each day upon completion of the
                underground sampling. All drill core from underground drill holes
                is taken
                one or more times per shift from the drill rigs directly to a drill
                logging and sampling area within the secured and guarded mine property
                by
                authorized mine or exploration personnel. Within 48 hours, the material
                core intervals


-
            29
            -
  (e.g.,
                  potentially mineralized intervals) are photographed, logged and
                  sampled;
                  and the samples are delivered directly to the Acme Analytical Laboratories
                  S.A. (Acme) in Chile. Each sample is assigned a unique sample number
                  that
                  allows it to be traced through the sampling and analytical procedures
                  and
                  for validation against the original sample site. The second half
                  of the
                  split core is stored on-site as a control sample, available for
                  review and
                  resampling if required.
 In
        2005, 5,630
        samples were sent to ALS Chemex. In 2006, 1,926 were sent to ALS Chemex and
        8,564 samples were sent to the Acme laboratory **.**





Gold
      mineralization at Alhué occurs in at least nineteen mineralized veins and zones
      of hydrothermal breccia hosted by gently northeast dipping **** volcaniclastic
      rocks. The mineralized areas range from 50 m to 200 m in length, 0.8 m to 30
      m
      in thickness, and extend up to 500 m in depth.





***Mining
      and Milling Operations***




The
      Alhué Mine operates at the rate of approximately 1,200 tpd, 35,000 tonnes per
      month, 420,000 tonnes per year. The underground mining method is sublevel open
      stoping. Access to the underground workings is via a number of adits, ramps,
      cross-cuts and drifts. Trackless mining equipment is used exclusively
      underground. The ground is very competent, requiring little support in waste
      development, and minor rock bolting and meshing in ore development headings.
      Ore
      is hauled 8.2 km to the processing plant in 30-ton haul trucks and waste rock
      is
      hauled using 20-ton trucks.





At
      the process plant, the ore is crushed in three stages in closed circuit with
      vibrating screens. The crushed ore is fed to a ball mill where it is ground
      in
      closed circuit with a cyclone cluster. The cyclone overflow is then delivered
      to
      two identical flotation lines. The flotation plant tailings are the final plant
      tailings and are pumped to the tailings facility. The flotation bulk concentrate
      is thickened and leached with NaCN (sodium cyanide) solution. The leached slurry
      is then sent to a thickener with the overflow containing the leached gold and
      silver and the underflow containing the sulphidic solids. The products of the
      leaching circuit are a pregnant solution, containing Au and Ag, and a thickened
      pulp containing the zinc sulphides. The warmed pregnant solution is pumped
      to
      four electrowinning (EW) cells where a Au and Ag sludge is deposited on the
      cathodes. The sludge is washed off, filtered and dried prior to being smelted
      into doré metal in a furnace. The barren solution is sent to an INCO SO2/air
      cyanide destruction circuit. The filtered solids are fed to the zinc flotation
      circuit at a rate of 1,400 tonnes per month to produce a final zinc concentrate.
      The zinc concentrate is shipped to a refinery in Europe. Historical
      metallurgical recoveries are approximately 80% for gold, 65% for silver, and
      52%
      for zinc.





***Recent
      Operations***




Meridian
      is in the process of evaluating the optimal mine throughputs. Currently, test
      work and design criteria are being established to evaluate the feasibility
      of
      increasing production capacity from 1,200 tonnes per day to 2,100 tonnes per
      day. Meridian expects to conclude the feasibility of this project by the fourth
      quarter of 2007.




**Jeronimo**





***History,
      Location, Size and Access***





On
      September 15, 2006 Meridian signed an agreement to acquire the 56.7% controlling
      interest in Agua de la Falda S.A. (“ADLF”) that includes the Jeronimo Deposit
      from the Corporacion Nacional del Cobre de Chile (“Codelco”) for $20 million. On
      September 22, 2006 Meridian concluded the transaction with Codelco and acquired
      a 56.7% interest in the property by paying $20 million.





The
      ADLF’s property is located 50 kilometers southeast of El Salvador in the Third
      Region of Northern Chile. Access to the property is by paved highway from the
      town of Copiapo. The property encompass over 240 km2 and include the past El
      Hueso, Coya and Agua de la Falda mines that produced over 660,000 gold ounces
      for Homestake Mining Company between 1988 and 2002. The Jeronimo Deposit is
      the
      downdip extension of the ADLF deposit. Exploration and development work
      completed by previous owners, Homestake and Barrick, included at least 150
      diamond drill holes that




-
          30
          -




have
      delineated the manto that hosts the Jeronimo Deposit. A 3D geologic model
      completed with this drilling indicates potential for 12 to 18 million tonnes
      of
      mineralization with average grades of between 5 and 7 g/tonne gold.. The
      potential mineral body is largely unoxidized and will require further
      metallurgical testing to determine the proper processing techniques to liberate
      the gold in a production environment. There is an existing scoping study on
      the
      property and as part of the agreement; Meridian is required to prepare the
      feasibility study of the Jeronimo Deposit.





During
      2006, Meridian and Codelco formed the partnership and laid the foundation for
      future metallurgical test work and drilling to be completed in 2007. During
      2007
      Meridian plans to perform additional drilling to better define the orebody
      and
      collect a representative sample of the ore for metallurgical testing.
      Metallurgical testing will commence during the second quarter of 2007 with
      early
      results expected during the later half of the year. Meridian is currently
      completing an infill exploration program on behalf of the Joint Venture. As
      part
      of the program a NI 43-101 resource estimate will be completed.




**Mercedes**





***History,
      Location, Size and Access***





Mercedes
      is located approximately 50 km SE of Magdalena in the state of Sonora. Local
      people are available for work from Curcurpe, population of approximately 1,000,
      which is located roughly, 15km northwest of Mercedes, Magdalena, population
      of
      approximately, 25,000, or Hermosillo population of 600,000. The nearest power
      grid is located at Curcurpe. Water is available from local streams during the
      rainy season (February, July, August) and from wells on the property. The
      property has control over the surface rights which are under lease by
      Meridian.





Access
      to Mercedes is from a paved road from Curcurpe and ~ eight kilometers of dirt
      road through a locked gate. Four-wheel drive is required during the rainy season
      and access may be temporarily (< 1 day) curtailed due to high arroyo
      waters.





The
      area is within the Sonoran Desert with temperatures generally ranging from
      100 ̊F
      during summer days to 30 ̊F on winter evenings. Rainfall is probably averages
      10”-16” as is typical of nearby areas in the Sonoran Desert. Elevations within
      the mineralized areas range from 1100m to 1350m in an area ranging from rolling
      hills on the west to rugged terrain with deeply incised canyons to the east.





Vegetation
      ranges from grassland with cactus and brush to oaks and minor juniper. The
      area
      is known for it’s hunting including various birds, deer, javelina, and
      occasionally puma.





Geologically,
      the area is mostly Tertiary aged volcanic flows tuffs, and volcaniclastics
      and
      younger gravels derived from erosion of the volcanics.




**ITEM
      6: DIVIDENDS**





**Dividends** are payable to shareholders at the discretion of the Board of Directors; no
      dividends were declared in 2006, 2005 or 2004.





**ITEM
      7: DESCRIPTION OF CAPITAL STRUCTURE**





Reference
      is made to note 22 - Share Capital of the Company’s 2006 Annual Report, which is
      incorporated herein by reference.




-
          31
          -




**ITEM
      8: MARKET FOR SECURITIES**





Meridian’s
      common shares are listed on both the Toronto Stock Exchange (“TSX”) and the New
      York Stock Exchange (“NYSE”). The closing price of the Company’s common shares
      at December 31, 2006, was CDN$32.43 per share on the TSX and US$27.79 per share
      on the NYSE. The monthly trading history during 2006 on the TSX and NYSE are
      reported in the table below:


TSX
                  (CDN $ per share)
              
              
              NYSE
                  (US $ per share)Hi
                  gh
              
              
              Low
              
              
              Avg
                  Daily Volume
              
              
              High
              
              
              Low
              
              
              Avg
                  Daily VolumeJanuary
              
              $
              31.68
              
              $
              25.64
              
              
              480,600
              
              $
              27.75
              
              $
              22.04
              
              
              1,054,100February
              
              
              31.63
              
              
              26.10
              
              
              560,500
              
              
              27.63
              
              
              22.56
              
              
              946,200March
              
              
              35.46
              
              
              27.33
              
              
              417,900
              
              
              31.68
              
              
              23.50
              
              
              1,044,000April
              
              
              37.41
              
              
              33.05
              
              
              476,100
              
              
              32.97
              
              
              29.07
              
              
              844,900May
              
              
              42.30
              
              
              32.26
              
              
              467,500
              
              
              38.31
              
              
              28.57
              
              
              1,369,900June
              
              
              37.21
              
              
              28.77
              
              
              476,300
              
              
              33.79
              
              
              25.86
              
              
              1,159,100July
              
              
              35.75
              
              
              29.52
              
              
              407,300
              
              
              32.85
              
              
              25.93
              
              
              997,600August
              
              
              33.29
              
              
              29.48
              
              
              499,200
              
              
              30.08
              
              
              26.55
              
              
              907,400September
              
              
              35.94
              
              
              25.90
              
              
              559,700
              
              
              32.53
              
              
              23.17
              
              
              1,344,300Oct
                  ber
              
              
              28.49
              
              
              25.07
              
              
              460,300
              
              
              25.47
              
              
              22.12
              
              
              984,400November
              
              
              35.35
              
              
              28.16
              
              
              418,200
              
              
              30.93
              
              
              24.75
              
              
              1,245,100December
              
              
              35.49
              
              
              30.83
              
              
              282,300
              
              
              31.08
              
              
              26.62
              
              
              933,500





Stock
      trading history for each quarter of 2006 and 2005 can be found on the inside
      back cover of the Company’s 2006 Annual Report, which is available from the
      Company’s website, www.meridiangold.com.





**ITEM
      9: ESCROWED SECURITIES**





The
      directors and management of the Company are unaware of any securities held
      in
      escrow.








**ITEM
      10: DIRECTORS AND OFFICERS**





The
      Directors’ names, state or province of residence, term of office, security
      holdings and occupation are reported in the Management Information Circular
      and
      Proxy Statement dated March 1, 2007 under the section “Nominees for Election to
      the Board of Directors”. The committees of the board and the committee members
      are reported in the Management Information Circular and Proxy Statement dated
      March 1, 2007 under the section "Nominees for Election to the Board of
      Directors". The referenced sections and pages in the Management Information
      Circular and Proxy Statement dated March 1,, 2007 are incorporated herein by
      reference. The Management Information Circular and Proxy Statement are available
      on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov.




The
      officers of the Company are along with their title and ownership as follows:





-
          32
          -




**Officer**
              **Title**
              **Ownership
                  of**
                **Common
                  Shares as**
                **of
                  December 31, 2005**Edward
                  C. Dowling
              Chief
                  Executive Officer and President
              50,000Peter
                  C. Dougherty
              Vice
                  President, Finance, Chief Financial Officer and Secretary
              21,089Darcy
                  E. Marud
              Vice
                  President of Exploration
              26,345Darrin
                  L. Rohr
              Vice
                  President, Human Resources and Chief People Officer
              13,295Edgar
                  A. Smith
              Vice
                  President of Operations
              82,494





The
      preceding ownership information includes restricted shares, which have full
      voting and other rights apart from the right to sell or transfer the shares,
      which will be encumbered until the vesting date for such shares.





Each
      officer is a resident of the state of Nevada in the United States and has been
      employed by the Company, or one of its subsidiaries, for the preceding 5 years
      except Mr. Dowling and Mr. Rohr. Mr. Dowling was an executive for multiple
      mining companies before his employment with the Company in 2006. Mr. Rohr was
      a
      human resource professional with a brokerage firm before his employment with
      the
      Company in 2003.





Directors
      and officers of the Company own an aggregate of less than 1% of the outstanding
      common shares.





**Audit
      Committee**





The
      composition of the Audit Committee members are reported in the Management
      Information Circular and Proxy Statement dated March 1, 2007 under the section
      "Board Committees" and their experience is reported under the section “Nominees
      for Election to the Board of Directors”. The independent auditor fees are
      reported in the Management Information Circular and Proxy Statement dated March
      1, 2007 under the section "Appointment of Auditors". The referenced sections
      and
      pages in the Management Information Circular and Proxy Statement dated March
      1,
      2007 are incorporated herein by reference.





The
      following table discloses the composition of the audit committee and the
      member’s status:


Audit
                  Committe Member
              Chair
              Independent(1)
              Financially
                  Literate(2)
              
              Financial
                  Expert(3)Richard
                  P. Graff(3)
              X
              X
              X
              
              XChristopher
                  R. Lattanzi
              
              X
              XGerard
                  E. Munera
              
              X
              X


Notes:


(1)
            An
                audit committee member is independent if he or she has no direct
                or
                indirect material relationship with the issuer, meaning, a relationship
                which could be reasonably expected to interfere with the exercise
                of a
                member’s independent judgment.


(2)
            An
                individual is financially literate if he or she has the ability to
                read
                and understand a set of financial statements that present a breadth
                and
                level of complexity of accounting issues that are generally comparable
                to
                the breadth and complexity of the issues that can reasonably be expected
                to be raised by the issuer’s financial
                statements.


(3)
            An
                individual is a financial expert as determined by the Audit committee
                if
                he or she through education or experience has an understanding of
                financial statements and GAAP experience in 1) preparing, auditing,
                analyzing, or evaluating financial




-
          33
          -




statements of companies comparable to the company
              or
              experience in actively supervising one or more persons engaged in such
              activities, and 2) in applying GAAP to accounting for estimates, accruals
              and reserves; and an understanding of internal auditing controls,
              procedures for financial reporting, and the functioning of audit
              committees.




Mr.
      Richard P. Graff is a retired partner from PricewaterhouseCoopers LLP where
      he
      served as the audit leader in the United States for the mining industry. Since
      his retirement, Mr. Graff has been a consultant to the mining industry and,
      most
      recently, has served as a member of a Financial Accounting Standards Board
      task
      force for establishing accounting and financial reporting guidance in the mining
      industry. He currently serves on the board of directors of NewWest Gold
      Corporation.




Mr.
      Christopher R. Lattanzi is a mining engineer, an independent mining consultant
      and former President of Micon International Limited, mineral industry
      consultants. He currently does not serve on any other publicly traded company’s
      board.




Mr.
      Gerard E. Munera previously served as President and Chief Executive Officer
      of
      Minorco USA (an affiliate of Anglo American), Senior Vice President of Corporate
      Planning and Development and Member of the Executive Committee of Rio Tinto,
      and
      Chief Executive Officer of Union Miniere (Brussels). His 40 years of business
      experience include chairmanships and directorships of senior and junior, private
      and public companies in the U.S., Australia, Africa, Europe and South America.
      He currently serves on the boards of Dynamic Materials Corporation, Nevsun
      Resources Ltd., and Magindustries Corporation.





**External
      Auditor Service Fees**




KPMG
      LLP has been the auditor of the Corporation since July 1996.




Total
      fees charged to the Corporation by KPMG LLP in 2006 and 2005 are:


Service
                  Provided
              
              
              2006
              
              
              2005Audit
                  services
              
              
              835
              
              
              410Audit-related
                  services
              
              
              9
              
              
              65Tax
                  services
              
              
              336
              
              
              173Total
              
              
              1,180
              
              
              648




Charges
      for “Audit Fees” relate primarily to the annual audit and quarterly reviews of
      the Corporation’s financial statements; “Audit-Related Fees” include primarily
      consultation on matters related to acquisitions, reorganization and assistance
      with the implementation of Sarbanes-Oxley requirements. “Tax Fees” include
      providing guidance pertaining to the interpretation of applicable tax laws
      and
      regulations in the countries where the Corporation conducts business and the
      preparation or review of tax returns filed in Canada, the United States and
      other foreign jurisdictions. The Audit Committee of the Board of Directors
      has
      provided guidance to management pertaining to the appropriate contracting of
      services from KPMG LLP. The Audit Committee reviews and pre-approves the annual
      budget and scope of work provided by the external auditor. Deviations from
      pre-approved budgets or scope must be approved by the Audit Committee. No
      exceptions are granted for de minimis fees for non-audit related activities.




The
      Audit
      Committee charter, which was approved by the Board of Directors on February
      22,
      2007, is as follows:





-
          34
          -




**Audit
      Committee Charter**





The
      Board of Directors (the "Board") of Meridian Gold Inc. (the "Corporation")
      shall
      establish an Audit Committee (the "Committee") comprised of not fewer than
      three
      members of the Board, none of whom are executive officers or employees of the
      Corporation or any of its affiliates and at least one of whom shall be a
      resident Canadian. The membership qualifications, authority, responsibility,
      and
      specific duties of the Committee are set forth herein.





**PURPOSE**




The
      purpose of the Committee is to provide oversight of the Corporation in relation
      to:




(a) the
      accounting and financial reporting processes and audits of financial
      statements,




(b) the
      integrity of financial statements,




(c) compliance
      with legal and regulatory requirements,




(d) the
      qualifications and independence of independent auditors, and




(e) the
      performance of the independent auditors and the internal audit
      function.





The
      function of the Committee is oversight. In fulfilling their responsibilities
      under this Charter, it is recognized that members of the Committee are not
      full-time employees of the Corporation and are not, and do not represent
      themselves to be, performing the functions of auditors or accountants. As such,
      it is not the duty or responsibility of the Committee or its members to conduct
      "field work" or other types of auditing or accounting reviews or procedures
      or
      to set auditor independence standards.





The
      Committee is directly responsible for the appointment, compensation and
      oversight of the work of the independent auditors (including resolving
      disagreements between management and the independent auditors regarding
      financial reporting). The Committee has the authority and responsibility to
      appoint, retain and terminate the independent auditors (subject, if applicable,
      to shareholder approval).




Management
      is responsible for the preparation, presentation and integrity of the financial
      statements and any financial information filed with securities regulatory
      authorities or stock exchanges or otherwise publicly disseminated.





Management
      and the persons responsible for the internal audit function, whether employees
      of, or consultants to, the Corporation, are responsible for maintaining
      appropriate accounting and financial reporting principles and policies and
      internal controls and procedures that provide for compliance with accounting
      standards and applicable laws and regulations.




**MEMBERSHIP
      QUALIFICATIONS**





The
      Committee shall consist of three or more members of the Board of Directors,
      each
      of whom the Board of Directors has determined has no material relationship
      with
      the Corporation and each of whom is otherwise "unrelated" or "independent",
      as
      the case may be, under the applicable regulations or rules of (i) the provincial
      securities regulatory authorities in Canada and the Securities and Exchange
      Commission in the United States, and (ii) the Toronto Stock Exchange and the
      New
      York Stock Exchange, Inc. (collectively, the "Applicable Regulatory
      Authorities").




Members
      of the Committee shall be appointed by the Board of Directors based on
      nominations recommended by the Corporate Governance Committee. Members of the
      Committee shall serve at the pleasure of the Board of Directors and for such
      term or terms as the Board of Directors may determine.




The
      Board of Directors shall determine whether each member is "financially literate"
      and whether one member of the Committee is an "audit committee financial
      expert", or such other similar




-
          35
          -




qualifications,
      expertise or experience required by the Applicable Regulatory Authorities,
      in
      each case as interpreted by the Board of Directors in its business
      judgment.




No
      director may serve as a member of the Committee if such director serves on
      the
      audit committees of more than two other public companies, unless the Board
      of
      Directors determines that such simultaneous service would not impair the ability
      of such director to effectively serve on the Committee, and discloses this
      determination in the public disclosure documents.




The
      Board of Directors shall designate, based on the recommendation of the
      Committee, one member of the Committee as its chairperson. In the event of
      a tie
      vote on any issue, the chairperson's vote shall decide the issue.





**COMMITTEE
      MEETINGS**




Subject
      to the by-laws of the Corporation and any resolution of the Board, the Committee
      shall meet at a time and place determined by the chairperson of the Committee.
      A
      resolution in writing, signed by all of the Committee members shall be as valid
      as if it had been passed at a meeting of the Committee.





Members
      of the Committee may participate in a meeting of the Committee by means of
      such
      telephonic, electronic or other communication facility that permits all
      participants to communicate adequately with each other during the meeting.
      A
      Committee member participating in such a meeting by such means is deemed to
      be
      present at that meeting.





The
      Committee should meet separately at least quarterly with management, the persons
      responsible for the internal audit function and representatives of the
      independent auditors to discuss any matters that the Committee or any of these
      persons believe should be discussed privately. The Committee may request any
      officer or employee or outside legal counsel or independent auditors to attend
      a
      meeting of the Committee or to meet with any members of, or consultants to,
      the
      Committee.





The
      Committee shall follow the rules of procedure set forth in the by-laws of the
      Corporation or of the Board established by it from time to time to govern its
      activities.





**DUTIES
      AND RESPONSIBILITIES**




The
      role, duties and responsibility of the Committee shall be:





(a)
            to
                appoint, retain and terminate the independent auditors (subject,
                if
                applicable, to shareholder approval), including the sole authority
                to
                approve all audit engagement fees and terms, and to determine any
                other
                compensation to be paid to the independent
                auditors,




(b)
            to
                pre-approve, or adopt appropriate procedures to pre-approve, and
                to
                monitor all audit and non-audit services to be provided by the independent
                auditors,




(c)
            to
                ensure that the independent auditors prepare and deliver annually
                the
                Auditors' Statement relating to, among other things, the independent
                auditors' internal quality-control procedures (it being understood
                that
                the independent auditors are responsible for the accuracy and completeness
                of the Auditors' Statement),




(d)
            to
                obtain from the independent auditors annually a formal written statement
                of the fees billed in each of the last two fiscal years for the services
                rendered by the independent
                auditors,




(e)
            to
                obtain from the independent auditors in connection with any audit
                a timely
                report relating to the annual audited financial statements describing
                all
                critical accounting policies and practices used, all alternative
                treatments of financial information within generally accepted accounting
                principles that have been discussed with management, ramifications
                of the
                use of such alternative




-
          36
          -




disclosures and treatments, and the treatment preferred
              by the independent auditors, and any material written communications
              between the independent auditors and management, such as any "management"
              letter or schedule of unadjusted
              differences,




(f)
            to
                resolve any disagreements between management and the independent
                auditors
                regarding financial reporting by the
                Corporation,




(g)
            to
                review and evaluate the qualifications, performance and independence
                of
                the lead audit partner of the independent
                auditors,




(h)
            to
                discuss with management the timing and process for implementing the
                rotation of the lead audit partner, the concurring audit partner
                and any
                other active audit engagement team partner and consider whether there
                should be a regular rotation of the audit firm
                itself,




(i)
            to
                take into account the opinions of management and the persons responsible
                for the internal audit function in assessing the independent auditors'
                qualifications, performance and independence,
                and







(j)
            to
                instruct the independent auditors that the independent auditors are
                ultimately accountable to the Board of Directors and the Committee,
                as
                representatives of the
                shareholders.




With
                respect to the internal audit
                function,




(k)
            to
                review the appointment and replacement of the person with principal
                responsibility for the internal audit function,
                and




(l)
            to
                advise the person with principal responsibility for the internal
                audit
                function that he or she is expected to provide to the Committee summaries
                of and, as appropriate, the significant reports to management prepared
                in
                relation to the internal audit function,
                and




with
                respect to financial reporting principles and policies and internal
                audit
                controls and procedures,




(m)
            to
                advise management, the persons responsible for the internal audit
                function
                and the independent auditors that they are expected to provide to
                the
                Committee a timely analysis of significant financial reporting issues
                and
                practices,




(n)
            to
                meet with management, the persons responsible for the internal audit
                function and the independent auditors to discuss, and review before
                the
                public disclosure by the Corporation of, among other things, the
                annual
                audited financial statements and quarterly unaudited financial statements,
                including disclosures under "Management's Discussion and Analysis
                of
                Financial Condition and Results of
                Operations",




(o)
            to
                consider any reports or communications (and management's responses
                thereto) submitted to the Committee by the independent auditors required
                by applicable auditing standards,




(p)
            to
                discuss internal controls with the Corporation's chief executive
                officer
                and chief financial officer,




(q)
            to
                discuss guidelines and policies governing the process by which senior
                management and the relevant departments of the Corporation assess
                and
                manage exposure to risk, and to discuss major financial risk exposures
                and
                the steps management has taken to monitor and control such
                exposures,




-
          37
          -




(r)
            to
                undertake, from time to time, a review of any balance sheet or income
                statement item to gain understanding and comfort with accounting,
                cash,
                management, and policies of the
                Corporation,




(s)
            to
                obtain from the independent auditors assurance that the audit was
                conducted in a manner consistent with applicable generally accepted
                auditing standards,




(t)
            to
                discuss with the chief legal officer or outside legal counsel, or
                both,
                any significant legal, compliance or regulatory matters that may
                have a
                material effect on the financial statements or the business, operations
                or
                compliance policies of the Corporation, including material notices
                to or
                inquiries received from governmental
                agencies,







(u)
            to
                discuss and approve for release, in accordance with the Corporation’s
                Disclosure Policy, earnings press releases, the Management Information
                Circular, 40F / AIF, Annual Financial Statements, Management’s Discussion
                and Analysis, and any other such financial statements or financial
                information filed with securities, regulatory authorities or stock
                exchanges or otherwise publicly
                disseminated,




(v)
            to
                discuss the types of financial information and earnings guidance,
                if any,
                provided, and the types of presentations made, to analysts and rating
                agencies,




(w)
            to
                establish procedures for the receipt, retention and treatment of
                complaints received regarding accounting, internal accounting controls
                or
                auditing matters, and for the confidential, anonymous submission
                by
                employees of concerns regarding questionable accounting or auditing
                matters, in accordance with the Corporation’s Code of Ethics and Business
                Conduct Guidelines,




(x)
            to
                recommend to the Board of Directors candidates for appointment as,
                the
                Controller and Chief Accounting Officer, and Vice President, Finance
                and
                Chief Financial Officer,




(y)
            to
                establish hiring policies for employees or former employees of the
                independent auditors, and




(z)
            to
                review all related party
                transactions.




**COMMITTEE
      REPORTS**




The
      Committee shall produce or cause to be produced the following reports and
      provide them to the Board of Directors:




(a)
            any
                reports or other disclosures required to be prepared in relation
                to the
                Committee or its activities pursuant to applicable laws or stock
                exchange
                requirements in Canada or the United States for inclusion in the
                Corporation's public disclosure
                documents,




(b)
            an
                annual performance evaluation of the Committee, which evaluation
                shall
                compare the performance of the Committee with the requirements of
                this
                Charter. The performance evaluation should also recommend to the
                Board of
                Directors any improvements to this Charter deemed necessary or desirable
                by the Committee. The performance evaluation shall be conducted in
                such
                manner as the Committee deems appropriate. The report to the Board
                of
                Directors may take the form of an oral report by the chairperson
                of the
                Committee or any other member of the Committee designated by the
                Committee
                to make this report; and


(c)
              a summary of the actions taken at each Committee
                meeting,
                which shallbe
                presented to the Board of Directors at its next scheduled
                meeting.
  -
            38
            -




The
      Committee may, in its discretion, delegate all or a portion of its duties and
      responsibilities to a subcommittee of the Committee.




The
      Committee may, in its discretion, delegate to one or more of its members the
      authority to pre-approve any audit or non-audit services to be performed by
      the
      independent auditors, provided that any such approvals are presented to the
      Committee at its next scheduled meeting.




**RESOURCES
      AND AUTHORITY OF THE COMMITTEE**




The
      Committee shall have the resources and authority appropriate to discharge its
      duties and responsibilities, including the authority to select, retain,
      terminate and approve the fees and other retention terms of special legal
      counsel or other experts or consultants, as it deems appropriate, without
      seeking approval of the Board or management.





**ITEM
      11: PROMOTERS**





There
      has
      not been a person or company who acted as a promoter for the Company during
      the
      current financial year or within the three most recently completed financial
      years.





**ITEM
      12: LEGAL PROCEEDINGS**





**USA**





Since
      Meridian’s Royal Mountain King (“RMK”) mine ceased operations in July 1994,
      Meridian Beartrack Corporation (“Meridian Beartrack”) has focused its efforts at
      RMK on final closure of the mine in accordance with environmental requirements.
      In spite of compliance with the requirements of the permits and approvals issued
      by the California Regional Water Quality Control Board for the Central Valley
      Region (“RWQCB”), exceedances of ground and surface water quality limits have
      been detected. Based on these exceedances, in March 2001, the RWQCB issued
      a new
      Waste Discharge Order (the “New Waste Discharge Order”) which reclassified the
      mine’s overburden disposal sites (“ODS’s”) in such a manner as to impose
      significantly more stringent closure requirements, as well as imposed closure
      requirements involving other facilities. At the same time, the RWQCB issued
      a
      Cease and Desist Order (the “Order”) imposing a schedule of tasks for compliance
      with the New Waste Discharge Order, which Meridian Beartrack appealed to the
      State Water Resources Control Board (the “State Board”). Based on further
      extensive technical analysis, Meridian Beartrack and its consultants concluded
      that the detected exceedances are due to rising, naturally occurring poor
      quality groundwater. On May 20, 2004, the State Board issued its own Order
      vacating the RWQCB Order and remanding the matter to the RWQCB for further
      action consistent with the State Board’s findings and conclusions. The State
      Board suggested that the RWQCB consider less costly closure approaches. Meridian
      Beartrack was directed to consult with the RWQCB on a plan for establishment
      of
      expanded and enhanced wetland and riparian areas to further attenuate the runoff
      of contaminants in surface water from the mine site and to submit such plan
      to
      the RWQCB staff by December 1, 2004. (Meridian Beartrack submitted such a plan
      in a timely manner.) Since the time of the state Board Order, the Regional
      Board
      staff has agreed that the stringent closure requirements for the ODS ́s should
      not apply and not be included in a final order for the site. Meridian Beartrack
      has applied to the Regional Board for transfers of the seepage water at the
      toes
      of the Overburden Disposal Site (ODS ́s) to Skyrocket Pit Lake, where it will
      intermingle with inflowing groundwater and precipitation. In addition, Meridian
      Beartrack also has filed with the Regional Board a Federal Clean Water Act
      National Pollution Discharge Elimination System (NPDES) permit application
      for
      controlled rain season releases of water from the lake to surface drainage,
      where it would be blended with storm water to meet specified water quality
      Standards, in lieu of releases through constructed wetlands and riparian areas.
      Because Meridian Beartrack ́s NPDES permit application has not yet been fully
      processed by the Regional Board prior to the 2006-2007 rainy season, beginning
      in December, a “Time Schedule Order” has been implemented by the Executive
      Officer to cover the transfers and possible overflows from the lake during
      significant rain events on an interim basis. A citizen’s suit by the California
      Sportfishing Protection Alliance under the Clean Water Act seeking that Meridian
      obtain such an NPDES permit and other relief has been settled through a
      stipulated court order.





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**Chile**





On
      August 6, 2004, Cates Family LLP - a company incorporated according to the
      Laws
      of the state of Delaware, United Sates of America - filed a civil lawsuit in
      the
      16 th Civil Court of Santiago (file N°6929-2004) against Meridian Gold, Inc., Meridian
      Subco I Limited, Meridian Subco II Limited and Minera Meridian Limitada. The
      plaintiff claims that this lawsuit is grounded in certain actions undertaken
      by
      the defendants that prevented the plaintiff from collecting part of the
      US$11,785,772.15 that Messer. Raúl and Gustavo Pizarro Araya owed to Cates
      Family LLP, who acting together with the defendants would have taken out of
      the
      net worth of Messrs. Pizarro Araya goods in which the plaintiff otherwise would
      have had the right to foreclose according to general rules of Civil
      Law.





This
      lawsuit is for damages arising from extra-contractual responsibility in the
      amount of US$11,785,772.15.





On
      March 9, 2005 the plaintiff withdrew the lawsuit with respect to Meridian Subco
      I Limited and Meridian Subco II Limited.





Defendants
      (Meridian Gold Inc. and Minera Meridian Limitada) filed on July 14, 2005
      Preliminary Defenses (excepciones dilatorias) based on the lack of
      representation of the plaintiff and general lack of requisites of the
      demand.





On
      July 22, 2005 plaintiff responded to the preliminary defenses filed by the
      defendants and by resolution of July 22, 2005 the Court opened an evidentiary
      term with respect to the referred preliminary defenses.





To
      this date this special evidentiary term for these preliminary defenses is
      pending for testimonial evidence to be produced in the United Sates of
      America.





**Argentina**





On
      July 3, 2002, the Company completed an unconditional share purchase offer for
      Brancote, owner of the Esquel gold project. As part of this purchase, Meridian
      acquired the commitments held by the former Brancote. One of these commitments
      was related to a payment to Trendix S.A. related to certain claims included
      in
      the property package. The conditions of the payment include the option for
      a
      buy-out for $9 million dollars or a royalty fee of 3% of production for the
      specific claims in the land block. Meridian and Trendix tried to reach an
      agreement on an acceptable pay-out, but agreed upon conditions where never
      realized. A lawsuit was filed by Trendix S.A. in Argentinean, claiming that
      Meridian, through the negotiation process, committed to converting the royalty
      payment to a fixed amount pay-out. Meridian believes that Trendix is not
      entitled to the buyout because acceptable negotiated terms were never completed,
      nor were acceptable negotiated terms reached, therefore the royalty of 3%
      applies on future production. Subsequent to the filing of the lawsuit, Trendix
      has obtained a lien from a Judge on the specific claims related to this dispute
      pending resolution of this case.


The
      Company may have contingent liabilities, claims and commitments incident to
      the
      ordinary course of business. Management believes that the probable resolution
      of
      such contingencies will not materially affect the financial position or results
      of operations of the Company.







**ITEM
      13: INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL
      TRANSACTIONS**




No
      loan guarantee, financial assistance, or similar extension of credit will be
      made to officers of the Company without prior Board of Directors approval.
      It is
      the intent of the Company to make such loans only when business activity by
      the
      Company makes this necessary. In no case will the Company be permitted to hold
      shares of the Company as collateral security for a loan to an
      officer.






None
      of the directors or officers of the Company, nor any proposed nominees for
      election as directors, nor any associate or affiliate of any such person, had
      any direct or indirect material interest, during 2006 or 2005, in respect of
      any
      matter that has materially affected or is expected to materially affect the
      Company or any of its subsidiaries.





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          40
          -





**ITEM
      14: TRANSFER AGENTS**





The
      Company’s registrar and transfer agent is Computershare Investor Services Inc.,
      100 University Avenue, 9th Floor, Toronto, Ontario, Canada, M5J
      2Y1.





**ITEM
      15: MATERIAL CONTRACTS**





The
      Company, in the ordinary course of business, has engaged in several key
      contractual commitments. These contractual commitments are reported in the
      Company’s 2006 Annual Report under Contractual Commitments and Contingent
      Liabilities in note 21 - Commitments and Contingencies, which are incorporated
      herein by reference.





**ITEM
      16: INTEREST OF EXPERTS**





**Names
      of Experts:**


Robert
                R. Wheatley
            Geologist,
                Meridian Gold Inc.
            Certify
                mineral reserves & resourcesJames
                Pearson
            Mining
                Engineer, Scott Wilson Roscoe Postle Associates Inc.
            Certify
                mineral reserves & resourcesHrayr
                Agnerian
            Geologist,
                Scott Wilson Roscoe Postle Associates Inc.
            Certify
                mineral reserves & resourcesDavid
                W. Rennie, P. Eng.
            Geological
                Engineer, Roscoe Postle Associates Inc.
            Certify
                mineral reserves & resourcesRobin J.
                Young
            CEO,
                Western Services Engineering, Inc
            Certify
                mineral reserves & resources





**Interest
      of Experts:**





Each
      of
      the experts named above does not control or exercise control over more than
      1%
      of the Company’s securities.





**ITEM
      17: ADDITIONAL INFORMATION**




Additional
      information, including directors’ and named executive officers’ remuneration and
      indebtedness, principal holders of the Company’s securities and named executive
      officers’ options to purchase securities, is contained in the Company’s
      Management Information Circular and Proxy Statement dated March 1, 2007, and
      may
      be found on SEDAR at www.sedar.com. Outstanding and exercisable options as
      at
      the end of the most recently completed fiscal year are reported in note 22
      -
      Share Capital of the Company’s 2006 Annual Report, which are incorporated herein
      by reference.






The
      Company’s filings with the securities regulatory authorities in Canada,
      including the Company’s 2006 Annual Report,
      and additional financial information provided in Management’s Discussion and
      Analysis and Consolidated Financial Statements for the most recently completed
      financial year, are available on SEDAR at www.sedar.com and its filings with
      the
      U.S. Securities and Exchange Commission are available on EDGAR at www.sec.gov.




The
      Company’s Corporate Governance Guidelines, Board Mandate, Board Committee
      Charters and Code of Ethics and Business Conduct Guidelines are available on
      the
      Company’s website at www.meridiangold.com. References to information reported at
      the Company’s website are not incorporated in this document.









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