UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549



FORM 20F



£

ANNUAL REPORT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934



OR



T

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007



OR



£

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



OR



£

SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGEACT OF 1934



Date of event requiring this shell company report:

Not Applicable



For the transition period from

to



Commission File Number 0-22617



MINCO GOLD CORPORATION

(formerly Minco Mining & Metals Corporation)

(Exact name of registrant as specified in its charter)



A CORPORATION FORMED UNDER THE LAWS OF BRITISH COLUMBIA, CANADA

(Jurisdiction of incorporation or organization)



Suite #2772, 1055 West Georgia Street, PO Box 11176, Vancouver, British Columbia, Canada,V6E 3P3

(Address of principal executive offices)



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



Common SharesAmerican Stock ExchangeTitle of each className of each exchange on which registered




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



Common Shares, no par value

(Title of Class)



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



Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.



1





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Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report:  December 31, 2007:    42,928,385



Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.



Yes £

No  T



If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.



Yes T

No £



Note  Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



Yes T

No £



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



Large accelerated filer:   £

Accelerated file:   £

Non-accelerated filer:  T



Indicate by check mark which financial statement item the registrant has elected to follow:



Item 17 T

Item 18  £



If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



Yes £

No  T



(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)



Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.



Yes £

No £

Not Applicable





2





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TABLE OF CONTENTS





PAGE



INTRODUCTION AND USE OF CERTAIN TERMS

5



FORWARD-LOOKING STATEMENTS

5



GLOSSARY OF MINING TERMS

5



PART I



ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

9



ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

10



ITEM 3.

KEY INFORMATION

10



ITEM 4.

INFORMATION ON THE COMPANY

18



ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

50



ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

62



ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

72



ITEM 8.

FINANCIAL INFORMATION

74



ITEM 9.

THE OFFER AND LISTING

74



ITEM 10.

ADDITIONAL INFORMATION

75



ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT

MARKET RISK

87

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

88



PART II



ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

88



ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY



HOLDERS AND USE OF PROCEEDS

88



ITEM 15.

CONTROLS AND PROCEDURES

88



ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT

90



ITEM 16B.

CODE OF ETHICS

90



ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

91



ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS134

FOR AUDIT COMMITTEES

91





3





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ITEM 16E.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER

AND AFFILIATE PURCHASERS

91



ITEM 16F.

OTHER

91



PART III



ITEM 17.

FINANCIAL STATEMENTS MINCO GOLD

102



ITEM 18.

FINANCIAL STATEMENTS MINCO SILVER

143





SIGNATURES

170



ITEM 19.

EXHIBITS

171





4





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Introduction And Use of Certain Terms



Minco Gold Corporation (formerly Minco Mining & Metals Corporation) is incorporated under the laws of the province of British Columbia, Canada.  In this document, the term Company refers to Minco Gold Corporation and its consolidated subsidiaries. Where required, the term Minco Gold refers to Minco Gold Corporation as a standalone entity. The Companys consolidated financial statements are prepared in accordance with Canadian generally accepted accounting principles ("GAAP") and are presented in Canadian dollars.  Unless otherwise indicated, references to dollar amounts in this Annual Report relate to Canadian dollars.  Minco Gold Corporation files reports and other information with the Securities and Exchange Commission ("SEC") located at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.   Copies of the Companys filings with the SEC may be obtained by accessing the SECs website located at www.sec.gov.   Further, the Company also files reports under Canadian regulatory requirements on SEDAR.  Copies of the Companys reports filed on SEDAR can be obtained by accessing SEDARs website at www.sedar.com. The principal executive office of the Company is located at Suite #2772, 1055 West Georgia Street, PO Box 11176, Vancouver, British Columbia, Canada,V6E 3P3, Tel: 604-688-8002, Fax: 604-688-8030, email address info@mincomining.ca  and website www.mincomining.ca.



FORWARD-LOOKING STATEMENTS



The following discussion contains forward-looking statements regarding events and financial trends which may affect the Companys future operating results and financial position.  Such statements are subject to risks and uncertainties that could cause the Companys actual results and financial position to differ materially from those anticipated in forward looking statements.  These factors include, but are not limited to, the fact that the Company is in the exploration stage, will need additional financing to develop its properties and will be subject to certain risks since its prospects are located in China, all of which factors are set forth in more detail in the section entitled Risk Factors in Item 3.D. and Operating and Financial Review and Prospects at Item 5.



GLOSSARY OF TERMS



|                         |                                                                                                                                                                                                                                                                                                                                                                                                
|------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|757 Team               | means the No. 757 Geo-Exploration Team of the Guangdong Geological Exploration Bureau, an entity owned and controlled by the Guangdong Geological Bureau of the PRC government.                                                                                                                                                                                                                
|757 Transfer Agreement | means the agreement dated November 19, 2004 between 757 Team and Minco China pursuant to which 757 Team agreed to transfer and sell to Minco China the Original Fuwan Silver Permit.                                                                                                                                                                                                           
|Additional Permits     | means, collectively the Luoke-Jilinggang Permit, the Guyegang-Sanyatang Permit, the Guanhuatang Permitand the Dadinggang Property.                                                                                                                                                                                                                                                             
|alteration             | chemical and mineralogical changes in a rock mass resulting from reaction with hydrothermal fluids or changes in pressure and temperature.                                                                                                                                                                                                                                                     
|Amending Contract      | means the contract dated January 10, 2006 between Minco Silver Corporation and GGEDC.                                                                                                                                                                                                                                                                                                          
|anomalous              | adjective describing a sample, location or area at which either (i) the concentration of an element(s) or (ii) a geophysical measurement is significantly different from (generally higher than) the average background concentrations in an area.  Though it may not constitute mineralization, an anomalous sample or area may be used as a guide to the possible location of mineralization.
|anomaly                | an area defined by one or more anomalous points.                                                                                                                                                                                                                                                                                                                                               
|antimony               | A trivalent and pentavalent metalloid element that is commonly metallic silvery white, crystalline, and brittle yet rather soft.                                                                                                                                                                                                                                                               
|assay                  | an analysis of the contents of metals in mineralized rocks.                                                                                                                                                                                                                                                                                                                                    



5





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|                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Assignment Agreement         | means the assignment agreement dated August 20, 2004 between the Minco Gold, Minco Silver Corporation, Minco China and Minco BVI.                                                                                                                                                                                                                                                                                                                                                
|Au                           | Gold.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|Baojiang                     | means Foshan Baojiang Nonferrous Metals Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                             
|breccia                      | a coarse grained rock composed of large, >2mm angular rock fragments that have been cemented together in a fine grained matrix.                                                                                                                                                                                                                                                                                                                                                  
|Changkeng JV Agreement       | means the formal joint venture agreement dated September 28, 2004 between the Company, GGEDC, Zhenjie, Baojiang and GD Gold.                                                                                                                                                                                                                                                                                                                                                     
|Changkeng Permit             | means the reconnaissance survey exploration permit (#T01120080102000011) which expires on September 10, 2009 in respect of the 1.19 km2Changkeng gold property in Gaoyao City of Guangdong Province in southern China.                                                                                                                                                                                                                                                           
|Changkeng Property           | means the 1.19 km2Changkeng gold property in Gaoyao City of Guangdong Province in southern China which adjoins the property underlying the Fuwan Silver Permit.                                                                                                                                                                                                                                                                                                                  
|CIM                          | Canadian Institute of Mining, Metallurgy and Petroleum.                                                                                                                                                                                                                                                                                                                                                                                                                          
|Company or Minco           | means Minco Gold Corporation (formerly Minco Mining &
Metals Corporation).                                                                                                                                                                                                                                                                                                                                                                                                     
|concentrates                 | to separate ore or metal from its containing rock or earth.                                                                                                                                                                                                                                                                                                                                                                                                                      
|Dadinggang Property          | means the small area within the Luoke-Jilinggang Permit, about 0.395 km2. This area was extended from the original Luoke-Jilinggang Permit in late 2006.                                                                                                                                                                                                                                                                                                                         
|deposit                      | a mineralized body which has been physically delineated by drilling, trenching and/or underground work and may contain a sufficient average grade of metal or metals to warrant further exploration and/or development expenditures; such a deposit does not qualify as a commercially mineable ore body until final technical, legal and economic factors have been resolved.                                                                                                   
|diamond drill holes          | a drilling method whereby rock is drilled with a diamond impregnated, hollow drilling bit which produces a continuous, in-situ record of the rock mass intersected in the form of solid cylinders of rock which are referred to as core.                                                                                                                                                                                                                                         
|fault or block fault       | a fracture in a rock across which there has been displacement.  Block faults are usually steep, and break the earths crust into blocks that are displaced vertically and/or laterally relative to each other.                                                                                                                                                                                                                                                                 
|First Confirmation Agreement | means the confirmation agreement dated May 2, 2005 between the Company, Minco China and Minco Silver Corporation.                                                                                                                                                                                                                                                                                                                                                                
|Fuwan JV Agreement           | means the formal joint venture agreement dated September 28, 2004 between Minco Silver Corporation and GGEDC.                                                                                                                                                                                                                                                                                                                                                                    
|Fuwan Permits                | means, collectively, the Fuwan Silver Permit and the Additional Permits.                                                                                                                                                                                                                                                                                                                                                                                                         
|Fuwan Property               | means the Fuwan silver property which is located in Guangdong Province in southern China beside the Xijiang River consisting of the following three components: (i) the properties which are the subject of the Fuwan Silver Permit; (ii) the properties which are the subject of the Luoke-Jilinggang Permit and the Guyegang-Sanyatang Permit; (iii) the Guanhuatang

permit

; and (iv) Minco Golds interests in the silver mineralization located on the Changkeng Property.



6





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|                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Fuwan Silver Permit       | means the reconnaissance survey exploration permit (# 0100000730293) in respect of the 0.79 km2Fuwan silver property in Gaomong Region, Foshan City of Guangdong Province issued to Minco China and having validity from August 20, 2007 to July 20, 2009.                                                                                                                                                                                                                             
|g/t                       | unit of grade expressed in grams/tonne.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|gangue                    | the non economic portion of ore.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|GD Gold                   | means Guangdong Gold Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|geophysical               | the use of geophysical instruments and methods to determine subsurface conditions by analysis of such properties as specific gravity, electrical conductivity, and magnetic susceptibility.                                                                                                                                                                                                                                                                                            
|GGEDC                     | means Guangdong Geological Exploration and Development Corp., an entity owned and controlled by the Guangdong Geological Bureau of the PRC government.                                                                                                                                                                                                                                                                                                                                 
|gouge                     | a thin layer of soft earthy putty-like rock material along the containing wall of a mineral vein.                                                                                                                                                                                                                                                                                                                                                                                      
|grade                     | the amount of valuable mineral in each tone of ore, expressed as ounces per ton or grams per tonne for precious metal and as a percentage by weight for other metals.                                                                                                                                                                                                                                                                                                                  
|Guanhuatang Permit        | means the reconnaissance survey exploration permit (# 0100000510045) in respect of the 37.38 km2Guanhuatang silver and multi-metals property in Foshan City of Guangdong Province issued to Minco China and having validity from April 7, 2005 to April 7, 2008.                                                                                                                                                                                                                       
|Guyegang-Sanyatang Permit | means the reconnaissance survey exploration permit (# 0100000510047) in respect of the 91.91 km2Guyegang-Sanyatang silver and multi-metals property in Gaoming Region, Foshan City of Guangdong Province issued to Minco China and having validity from April 7, 2005 to April 7, 2008.                                                                                                                                                                                                
|hydrothermal              | of or pertaining to heated water, to the action of heated water, or to the products of the action of heated water.                                                                                                                                                                                                                                                                                                                                                                     
|limestone                 | A sedimentary rock consisting of chiefly >50% calcium carbonate.                                                                                                                                                                                                                                                                                                                                                                                                                       
|Luoke-Jilinggang Permit   | means the reconnaissance survey exploration permit (# 0100000620526) in respect of the 75.76 km2Luoke-Jilinggang silver and multi-metals property in Gaoyao City, Zhaoqing City of Guangdong Province issued to Minco China and having validity from December 31, 2006 to April 7, 2008.                                                                                                                                                                                               
|Minco Base Metals         | means Minco Base Metals Corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Minco BVI                 | means Minco Silver Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Minco China               | means Minco Mining (China) Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Minco Gold                | means Minco Gold Corporation (formerly Minco Mining & Metals Corporation).                                                                                                                                                                                                                                                                                                                                                                                                           
|Minco Silver              | means Minco Silver Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|mineral reserve           | the economically mineable part of a measured mineral resource 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 minerals and allowances for losses that may occur when the material is mined.



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|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                             
|------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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.
|mineralization                     | the process or processes by which a mineral or minerals are introduced into a rock, resulting in an economically valuable or potentially valuable deposit.                                                                                                                                                                                                                                                                  
|Original Fuwan Silver Permit       | means the reconnaissance survey exploration permit (# 440000040093) in respect of the 0.79 km2Fuwan silver property in Gaoming Region, Foshan City of Guangdong Province, legally conferred to 757 Team by Guangdong Department of Land and Resources on September 12, 2003.                                                                                                                                                
|outcrop                            | an exposure on the surface of the underlying rock.                                                                                                                                                                                                                                                                                                                                                                          
|oz                                 | Troy ounce consisting of 31.1035 grams.                                                                                                                                                                                                                                                                                                                                                                                     
|Pb                                 | Lead.                                                                                                                                                                                                                                                                                                                                                                                                                       
|Preliminary Changkeng JV Agreement | means the preliminary joint venture agreement dated April 16, 2004 between Minco Gold, GGEDC, Zhenjie and Baojiang.                                                                                                                                                                                                                                                                                                         
|Preliminary Fuwan JV Agreement     | means the preliminary Fuwan joint venture agreement dated April 16, 2004 and amended August 18, 2004 between Minco BVI and GGEDC.                                                                                                                                                                                                                                                                                           
|pyrite                             | A sulphide mineral of iron and sulphur.                                                                                                                                                                                                                                                                                                                                                                                     
|Pyroclastic                        | refers to a sedimentary rock composed or airborne volcanic material from a volcanic eruption.                                                                                                                                                                                                                                                                                                                               
|Qualified Person                   | an individual who is an engineer or geoscientist with at least five years experience in mineral exploration, mine development, production activities and project assessment, or any combination thereof, including experience relevant to the subject matter of the project or report and is a member in good standing of an approved self-regulating organization.                                                         
|quartz                             | A common rock-forming mineral comprised of silicon and oxygen (SiO2).                                                                                                                                                                                                                                                                                                                                                       
|RMB                                | means the Chinese currency Renminbi.                                                                                                                                                                                                                                                                                                                                                                                        
|sample                             | a sample of selected rock chips from within an area of interest.                                                                                                                                                                                                                                                                                                                                                            
|sandstone                          | A medium grained clastic sedimentary rock.                                                                                                                                                                                                                                                                                                                                                                                  
|Sb                                 | Antimony.                                                                                                                                                                                                                                                                                                                                                                                                                   
|Second Confirmation Agreement      | means the confirmation agreement dated August 24, 2006 between Minco Gold, Minco China and Minco Silver.                                                                                                                                                                                                                                                                                                                    
|sedimentary rock                   | A rock that has been formed by the consolidation of loose sediment that has accumulated in layers.                                                                                                                                                                                                                                                                                                                          
|sedimentary                        | formed by the deposition of solid fragmented material that originates from weathering of rocks and is transported from a source to a site of disposition.                                                                                                                                                                                                                                                                   
|strike                             | the direction or trend that a structural surface takes as it intersects the horizontal.                                                                                                                                                                                                                                                                                                                                     
|sulphide                           | a class of minerals commonly combining various elements in varying ratios with sulphur.                                                                                                                                                                                                                                                                                                                                     



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|                                  |                                                                                                                               
|--------------------------------- | ------------------------------------------------------------------------------------------------------------------------------
|tonne                           | metric unit of weight consisting of 1,000 kilograms.                                                                          
|Transfer Confirmation Agreement | means the confirmation agreement dated November 19, 2004 between 757 Team, GGEDC and Minco China.                             
|Triassic                        | the period of geological time from 225 to 195 million years before present.                                                   
|vein                            | A tabular mineral deposit formed in or adjacent to faults or fractures by the deposition of minerals from hydrothermal fluids.
|veinlet                         | A small vein; the distinction between vein and veinlet tends to be subjective.                                                
|volcanic                        | pertaining to the activity, structures or rock types of a volcano.                                                            
|Zhenjie                         | means Zhuhai Zhenjie Development Ltd.                                                                                         



All disclosure about our exploration properties in this Annual Report conforms to the standards of United States Securities and Exchange Commission Industry Guide 7, Description of Property by Issuers Engaged or to be Engaged in Significant Mining Operations, other than disclosure of Mineral Resources, Measured Mineral Resources, Indicated Mineral Resources and Inferred Mineral Resources, which are Canadian geological and mining terms as defined in accordance with Canadian National Instrument 43-101 under the guidelines set out in the CIM Standards.



In this Annual Report references to Canadian National Instrument 43-101 are references to National Instrument 43-101, Standards of Disclosure for Mineral Projects, of the Canadian Securities Administrators and references to CIM Standards are references to Canadian Institute of Mining, Metallurgy and Petroleum (the CIM) Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council on August 20, 2000 as may be amended from time to time by the CIM.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Cautionary Note to U.S. Investors concerning estimates of Measured Mineral Resources and Indicated Mineral Resources.                                                                                                                                                                                                                                                                                                                  
| | This Annual Report uses the terms Measured Mineral Resource and Indicated Mineral Resource. We advise U.S. investors that while such terms are recognized and permitted under 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 the Mineral Resources in these categories will ever be converted into Mineral Reserves.



PART 1



ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS



A.

DIRECTORS AND SENIOR MANAGEMENT



The following table sets forth as of June 15, 2008, the names, business addresses and functions of the Companys directors and senior management.



|                    |                                                                                    |                                                
|------------------- | ---------------------------------------------------------------------------------- | -----------------------------------------------
|Name                | Business Address                                                                   | Position                                       
|Ken Cai             | Suite #2772, 1055 West Georgia Street, Vancouver, British Columbia, Canada,V6E 3P3 | President, Chief Executive Officer and Director
|Robert M. Callander | 43 Delhi Avenue
North York, Ontario, Canada  M5M 3B8                               | Director                                       
|Michael Doggett     | Vancouver, British Columbia, Canada                                                | Director                                       
|Malcolm F. Clay     | West Vancouver, British Columbia, Canada                                           | Director                                       
|Dwayne Melrose      | Suite 1200, Kunxun Tower, 9 Zhichun Road, Haidian District, Beijing, China, 100083 | VP Exploration and Director                    



9





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|                 |                                                                                    |                        
|---------------- | ---------------------------------------------------------------------------------- | -----------------------
|Name             | Business Address                                                                   | Position               
|Garnet L. Clark  | Suite #2772, 1055 West Georgia Street, Vancouver, British Columbia, Canada,V6E 3P3 | Chief Financial Officer
|Fiona (Jin) Zhou | Suite #2772, 1055 West Georgia Street, Vancouver, British Columbia, Canada,V6E 3P3 | Controller             



B.

ADVISERS



The Company's registrar and transfer agent for its common shares is Computershare Trust Company of Canada, located at 510 Burrard Street, Vancouver, British Columbia, V6C 3B9, Canada, telephone: 604-661-0224, fax: 604-661-9401, internet: www.computershare.com.  The principal executive office of the Company is located at Suite #2772, 1055 West Georgia Street, PO Box 11176, Vancouver, British Columbia, Canada,V6E 3P3, Tel: 604-688-8002, Fax: 604-688-8030, email address info@mincomining.ca  and website www.mincomining.ca.  The Company's legal advisors are Salley Bowes Harwardt, located at 1185 West Georgia Street, Suite 1750, Vancouver, British Columbia, Canada, V6E 4E6 and US legal advisors are Bullivant, Houser, Bailey PC (formerly Bartel Eng & Schroder), located at 1331 Garden Hwy., Suite 300, Sacramento, CA, 95833.



C.

AUDITORS



The Company's auditors areErnst & Young, LLP, Chartered Accountants, located at Pacific Centre, 700 West Georgia Street, Vancouver, British Columbia, Canada, V7Y 1C7.



ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE



Not applicable.



ITEM 3.

KEY INFORMATION



A.

SELECTED FINANCIAL DATA



The following selected financial information for the fiscal years ended December 31, 2007, 2006, 2005, 2004 and 2003 are derived from the financial statements of the Company and should be read in conjunction with the financial statements and the notes attached to this Annual Report.  The Companys financial statements are prepared in accordance with Canadian generally accepted accounting principles (GAAP).  Over the period reviewed, there have been significant differences between Canadian GAAP and United States GAAP including the recognition of compensation expense upon release of the escrow shares, issuance of stock options and the recording of marketable securities.  The following tables summarize selected financial data. The Company has not declared any dividends.



Canadian GAAP



|                                |                   |                   |                   |                   |                  
|------------------------------- | ----------------- | ----------------- | ----------------- | ----------------- | -----------------
|                                | December
31, 2007 | December
31, 2006 | December
31, 2005 | December
31, 2004 | December
31, 2003
|Operations                      |                   |                   |                   |                   |                  
|Interest and sundry income      | 306,819           | 673,570           | 475,554           | $    318,424      | $     85,278     
|Exploration expense             | 2,947,948         | 2,535,281         | 2,666,958         | 766,377           | 271,864          
|Operating loss                  | (7,973,486)       | (8,295,163)       | (5,514,779)       | (3,234,271)       | (1,817,479)      
|Loss from continuing operations | (7,540,635)       | (1,529,160)       | (939,153)         | (850,421)         | (1,732,201)      
|Loss for year                   | (7,580,231)       | (1,589,324)       | (1,013,541)       | (861,662)         | (1,769,195)      





10





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|                                                 |                     |                   |                   |                   |                  
|------------------------------------------------ | ------------------- | ----------------- | ----------------- | ----------------- | -----------------
|                                                 | December
31, 2007   | December
31, 2006 | December
31, 2005 | December
31, 2004 | December
31, 2003
|Loss per Common share
from continuing operations |                     |                   |                   |                   |                  
|(basic and diluted)                              | $            (0.18) | $        (0.04)   | $        (0.03)   | $          (0.03) | $      (0.10)    
|Common shares used in calculations               | 42,908,809          | 41,193,591        | 34,501,784        | 28,117,471        | 17,883,807       
|Consolidated Balance Sheet Data                  |                     |                   |                   |                   |                  
|Total assets                                     | 16,747,109          | 19,584,528        | 18,643,798        | 13,025,691        | 6,982,050        
|Mineral interests                                | 358,500             | 358,500           | 100               | 100               | 100              
|Total liabilities                                | 2,819,893           | 501,128           | 1,365,105         | 316,154           | 357,670          
|Net assets                                       | 13,844,531          | 19,083,400        | 17,278,693        | 12,709,537        | 6,624,380        
|Share capital                                    | 33,941,510          | 33,809,903        | $28,187,245       | $24,690,137       | $19,201,871      
|Shares outstanding - basic                       | 42,928,385          | 42,865,219        | 38,633,992        | 35,043,897        | 27,614,029       



United States GAAP

|                                   |                   |                   |                   |                   |                  
|---------------------------------- | ----------------- | ----------------- | ----------------- | ----------------- | -----------------
|                                   | December
31, 2007 | December
31, 2006 | December
31, 2005 | December
31, 2004 | December
31, 2003
|Operations                         |                   |                   |                   |                   |                  
|Interest and sundry income         | $    306,819      | $    673,570      | $    475,554      | $   318,424       | $     85,278     
|Exploration expense                | 2,947,948         | 2,535,281         | 2,666,958         | 766,377           | 271,864          
|Loss for year                      | (7,582,231)       | (6,802,234)       | (5,427,996)       | (3,407,927)       | (2,501,937)      
|                                   |                   |                   |                   |                   |                  
|Income (loss) per common share     |                   |                   |                   |                   |                  
|From continuing operations         |                   |                   |                   |                   |                  
|(basic and diluted)                | $      (0.18)     | $      (0.17)     | $      (0.16)     | $       (0.12)    | $       (0.14)   
|Common shares used in calculations | 42,908,809        | 41,193,591        | 34,501,784        | 28,117,471        | 17,883,807       
|                                   |                   |                   |                   |                   |                  
|Consolidated Balance Sheet Data    |                   |                   |                   |                   |                  
|Total assets                       | 16,747,109        | 19,838,955        | 18,643,798        | 13,056,229        | 6,981,086        
|Mineral interests                  | 358,500           | 358,500           | 100               | 100               | 100              
|Total liabilities                  | 2,819,893         | 501,128           | 1,365,105         | 315,154           | 357,670          
|Net assets                         | 13,844,531        | 19,337,827        | 17,278,693        | 12,741,075        | 6,623,416        
|Share capital                      | $36,757,166       | $36,625,559       | $31,002,901       | $26,044,338       | $20,088,405      
|Common shares outstanding          | 42,928,385        | 42,865,219        | 38,633,992        | 35,043,897        | 27,614,029       



Exchange Rates



The following table sets forth information as to the average period end, high and low exchange rate for Canadian dollars and US dollars for the periods indicated based on the noon buying rate in New York City for cable transfers in Canadian dollars as certified for customs purposes by the Federal Reserve Bank of New York (US$1.00 = $1.021 as at June 16, 2008).



|                       |         |            |      |     
|---------------------- | ------- | ---------- | ---- | ----
|Year Ended December 31 | Average | Period End | High | Low 
|2007                   | 1.07    | 0.99       | 1.19 | 0.92
|2006                   | 1.13    | 1.16       | 1.17 | 1.10
|2005                   | 1.22    | 1.14       | 1.27 | 1.14
|2004                   | 1.26    | 1.20       | 1.40 | 1.18
|2003                   | 1.35    | 1.29       | 1.58 | 1.29



















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The following table sets out the high and low exchange rate for each month during the previous six months:



|              |        |       
|------------- | ------ | ------
|Month         | High   | Low   
|May 2008      | $1.019 | $0.984
|April 2008    | $1.027 | $1.002
|March 2008    | $1.028 | $0.984
|February 2008 | $1.019 | $0.972
|January 2008  | $1.029 | $0.991
|December 2007 | $1.022 | $0.978



B.

CAPITALIZATION AND INDEBTEDNESS



The following table sets forth our capitalization and indebtedness as of December 31, 2007 and December 31, 2006 in accordance with Canadian GAAP.  This section should be read in conjunction with the consolidated financial statements and related notes contained elsewhere in this Annual Report.



|                                      |                                                                     |                         |                        
|------------------------------------- | ------------------------------------------------------------------- | ----------------------- | -----------------------
|                                      |                                                                     | As of
December 31, 2007 | As of
December 31, 2006
|Shareholders equity                  |                                                                     |                        
|                                      | Common shares, unlimited number of common shares without par value: |                         |                        
|                                      | 42,928,385 (2006  42,865,219) issued and outstanding shares        | 33,941,510              | 33,809,903             
|                                      | Contributed surplus                                                 | 3,721,117               | 1,649,343              
|                                      | Deficit                                                             | (23,818,096)            | (16,375,846)           
|Total capitalization and indebtedness | 13,844,531                                                          | 19,083,400             



C.

REASONS FOR THE OFFER AND USE OF PROCEEDS



Not applicable.



D.

RISK FACTORS



In addition to the other information presented in this Annual Report, you should consider the following carefully in evaluating the Company and its business.  This Annual Report contains forward-looking statements that involve risks and uncertainties.  The Companys actual results may differ materially from the results discussed in the forward-looking statements.  Factors that might cause such a difference include, but are not limited to, those discussed below and elsewhere in this Annual Report.



Limited Operating History



The Company has no history of earnings and there are no known commercial quantities of mineral reserves on the Companys property. Accordingly it is not possible to predict when, if at all, the Company will generate revenues or income from its operations.



Exploration and Development is a Speculative Business



Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but also from finding mineral deposits that, though present, are insufficient in quantity and quality to return a profit from production.



The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, the availability of mining equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing



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and exporting of minerals, and environmental protection, the combination of which factors may result in the Company not receiving an adequate return of investment capital.



All of the properties in which the Company has an interest or a right to acquire an interest are in the exploration stages only and are without a known body of commercial ore. Development of the subject mineral properties would follow only if favourable exploration results are obtained. The business of exploration for minerals and mining involves a high degree of risk. Few properties that are explored are ultimately developed into producing mines.



There is no assurance that the Companys mineral exploration and development activities will result in any discoveries of commercial bodies of ore. The long-term profitability of the Companys operations will in part be directly related to the costs and success of its exploration programs, which may be affected by a number of factors.  Substantial expenditures are required to establish reserves through drilling and to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis.



No Assurance of Production



Mineral exploration is highly speculative in nature, involves many risks, and frequently does not lead to the discovery of commercial reserves of minerals. While the rewards can be substantial if commercial reserves of minerals are found, there can be no assurance that the Company's past or future exploration efforts will be successful, that any production there from will be obtained, or that any such production which is attempted will be profitable.



Industry Specific Risks



The exploration, development, and production of minerals are capital-intensive businesses, subject to the normal risks and capital expenditure requirements associated with mining operations, which even a combination of experience, knowledge and careful evaluation may not be able to overcome.



Factors Beyond Company's Control



Discovery, location and development of mineral deposits depend upon a number of factors, not the least of which is the technical skill of the exploration personnel involved. The exploration and development of mineral properties and the marketability of any minerals contained in such properties will also be affected by numerous factors beyond the control of the Company.  These factors include government regulation, high levels of volatility in market prices, availability of markets, availability of adequate transportation and refining facilities and the imposition of new or amendments to existing taxes and royalties. The effect of these factors cannot be accurately predicted.



Uninsured Risks



The Companys mining activities are subject to the risks normally inherent in mineral exploration, including but not limited to environmental hazards, industrial accident, flooding, periodic or seasonal interruptions due to climate and hazardous weather conditions, and unusual or unexpected formations. Such risks could result in damage to or destruction of mineral properties or production facilities, personal injury, environmental damage, delay in mining and possible legal liability.



The Company may become subject to liability for pollution and other hazards against which it cannot insure or against which it may elect not to insure because of high premium costs or other reasons. The payment for such liabilities would reduce the funds available for exploration and mining activities and may have a material impact on the Company's financial position.



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Currency Exchange RatesThe Company maintains its accounts in US dollar, Canadian dollar and Renminbi (RMB) denominations. The government of the PRC maintained the exchange rate between the RMB and the US dollar as a constant until July 2005 and thus exchange rates between the Canadian dollar and the RMB fluctuated in tandem with the changing exchange rates between the US and Canadian dollars. Since July 2005, the value of the RMB has been tied to a basket of currencies of Chinas largest trading partners.Given that most of Minco Golds expenditures are currently and are anticipated to be incurred in Canadian dollars and RMB, Minco Gold is subject to foreign currency fluctuations which may materially affect its financial position and operating results.

The Company does not currently have a formal hedging program to mitigate foreign currency exchange risks.



Competition



The precious metal minerals exploration industry and mining business are intensely competitive. The Company competes with numerous other companies and individuals in the search for and the acquisition of attractive precious metal mining properties. Many of these competitors have substantially greater technical and financial resources than the Company. Competition could adversely affect the Companys ability to acquire suitable properties or prospects in the future.



Future Financing



The Company has limited financial resources and has no assurance that additional funding will be available to it for further exploration and development of its projects. There can be no assurance that the Company will be able to obtain adequate financing in the future or that the terms of such financing will be favourable. Failure to obtain such additional financing could result in delay or indefinite postponement of further exploration and development of its projects with the possible loss of such properties.



Uncertainty of Estimates



Resource and reserve estimates of minerals are inherently imprecise and depend to some extent on statistical inferences drawn from limited drilling, which may prove unreliable. Although estimated recoveries are based upon test results, actual recovery may vary with different rock types or formations in a way which could adversely affect operations.



Management and Directors



The success of the Company is currently largely dependent on the performance of its officers. The loss of the services of these persons will have a materially adverse effect on the Companys business and prospects. There is no assurance the Company can maintain the services of its officers or other qualified personnel required to operate its business. Failure to do so could have a material adverse affect on the Company and its prospects. The Company has not purchased any key-man insurance with respect to any of its directors or officers to the date hereof. The loss of any key officer of the Company could have an adverse impact on the Company, its business and its financial position.



Potential Conflicts of Interest



None of the Companys officers and directors devotes their full-time efforts to the Company. Certain members of the Companys board and officers of the Company also serve as officers or directors of other companies involved in natural resource exploration and development. Consequently, there exists the possibility that those directors and officers may be in a position of conflict. In particular, Ken Z. Cai serves as Director and CEO in each of the Company, Minco Silver and Minco Base Metals. In addition, Garnet Clark serves as Chief Financial Officer and Dwayne Melrose serves as Vice President, Exploration with each of the Company, Minco Silver and Minco Base Metals. Any decision made by those directors and officers will be made in accordance with their duties and obligations to deal fairly and in good faith with the Company and such other companies. In addition, such directors and officers will declare, and refrain from voting on, any matter in which such directors or officers may have a conflict of interest. Nevertheless, there remains the possibility that the best interests of the Company will not be served because its directors and officers have other commitments.





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Fluctuating Mineral Prices



Factors beyond the control of the Company may affect the marketability of metals discovered, if any. Metal prices have fluctuated widely, particularly in recent years. The effect of these factors cannot be predicted.



The Mining Industry Is Highly Speculative



The Company is engaged in the exploration for minerals which involves a high degree of geological, technical and economic uncertainty because of the inability to predict future mineral prices, as well as the difficulty of determining the extent of a mineral deposit and the feasibility of extracting it without the expenditure of considerable money.



Penny Stock Rules May Make It More Difficult to Trade the Companys Common Shares



The SEC has adopted regulations which generally define a penny stock to be any equity security that has a market price, as defined, less than US$5.00 per share or an exercise price of less than US$5.00 per share, subject to certain exceptions.  The Company's securities may be covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors such as institutions with assets in excess of US$5,000,000 or an individual with net worth in excess of US$1,000,000 or annual income exceeding US$200,000 or US$300,000 jointly with his or her spouse.  For transactions covered by this rule, the broker-dealers must make a special suitability determination for the purchase and receive the purchasers written agreement of the transaction prior to the sale.  Consequently, the rule may affect the ability of broker-dealers to sell the Company's securities and also affect the ability of the Company's investors to sell their shares in the secondary market.



The Company is a Passive Foreign Investment Company for United State Federal Income Tax Purposes



The Company believes that it is a passive foreign investment company (PFIC) for United States Federal income tax purposes because it earns 75% or more of its gross income from passive sources.  As a result, United States holders of the Company's common shares could be subject to increased tax liability, possibly including an interest charge, upon the sale or other disposition of the United States holders common shares, or upon receipt of "excess distributions," unless such holder of common shares elected to be taxed currently on his or her pro rata portion of the Company's income, whether or not the income was distributed in the form of dividends or otherwise.  The election requires certain conditions to be met such as filing on or before the due date, as extended, for filing the shareholder's income tax return for the first taxable year to which the election will apply.  Otherwise, the election may only partially apply.  Further, the elections will increase the administrative and regulatory burden of the Company.  See Item 10.E. Taxation - United States Tax Consequences - Passive Foreign Investment Companies.



Risks Related to Doing Business in China



PRC Political and Economic Considerations



The business operations of the Company will be located in, and the revenues of the Company derived from activities in, the PRC. Likewise, the Companys operations in the PRC are currently conducted through and with the assistance of Minco China, a Chinese company. Accordingly, the business, financial condition and results of operations of the Company could be significantly and adversely affected by economic, political and social changes in the PRC. The economy of the PRC has traditionally been a planned economy, subject to five-year and annual plans adopted by the state, which set down national economic development goals. Since 1978, the PRC has been moving the economy from a planned economy to a more open, market-oriented system.



The economic development of the PRC is following a model of market economy under socialism. Under this direction, it is expected that the PRC will continue to strengthen its economic and trading relationships with foreign countries and that business development in the PRC will follow market forces and the rules of market economics. However, the Chinese government continues to play a significant role in regulating industry by imposing industrial policies. In addition, there is no guarantee that a major turnover of senior political decision makers will not occur, or that the existing economic policy of the PRC will not be changed. A change in policies by the PRC could adversely affect the Companys interests in China



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by changes in laws, regulations or the interpretation thereof, confiscatory taxation, restrictions on currency conversion, imports and sources of supplies, or the expropriation of private enterprises.



In order to conduct exploration and development of mineral deposits in the PRC, resource companies are required to obtain licenses and permits from the relevant authorities in the PRC, including a business license which authorizes companies to carry on business in the PRC. The business license of Minco China is subject to an annual review process pursuant to which it must pass annual inspections of the Administration for Industry and Commerce in the PRC. As a result, if Minco China does not pass its annual review it will not be authorized to carry on business in the PRC which may adversely affect the Companys interests in its properties. The Company believes that it and Minco China are operating in compliance with all applicable rules and regulations.



The purpose set out in Minco Chinas articles of association includes, among other things, the application of advances and appropriate exploration and mining technology and scientific methods to develop mine exploration and development software and technology, improve exploration precision and accuracy, and to reduce exploration risks.  Minco Chinas scope of business according to its articles of association includes, among others, the exploration of mineral deposits, development of exploration technology, and the development of software for mine exploration and development.  However, Minco Chinas approved business scope contained in its business licence does not clearly state that Minco China is approved to conduct exploration and mining business because Minco China has not obtained the approval from the Ministry of Commerce for its exploration and mining business.  Minco China has applied to amend the scope of its business to more clearly include mining exploration and development.  Minco Chinas application has been approved by the Beijing Metropolitan Department of Commerce and is subject to the final approval of the Ministry of Commerce.  While Minco China expects that its business scope application will be approved, no guarantee can be given that the Ministry of Commerce approval will ultimately be obtained.



Failure to comply with applicable laws, regulations, and permitting requirements may result in enforcement actions there under, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of 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 companies engaged in mineral resource exploration and development, or more stringent implementation thereof, could have a material adverse impact on the Company and cause increases in 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.  The Companys various property interests and potential property rights in the PRC involve various Chinese state-sector entities, including the GGEDC and 757 Team, whose actions and priorities may be dictated by government policies, instead of purely commercial considerations.  Additionally, companies (such as Minco China) with a foreign ownership component operating in the PRC may be required to work within a framework which is different to that imposed on domestic Chinese companies. The Chinese government is opening up opportunities for foreign investment in mining projects and this process is expected to continue. However, if the Chinese government should reverse this trend and impose greater restrictions on foreign companies, the Companys business and future earnings could be negatively affected.



PRC Legal System and Enforcement



Most of the material agreements to which the Company or its affiliates are party or will be party in the future with respect to mining assets in the PRC are expected to be governed by Chinese law and some may be with Chinese governmental entities. The PRC legal system embodies uncertainties that could limit the legal protection available to the Company and its shareholders. The outcome of any litigation may be more uncertain than usual because: (i) the experience of the PRC judiciary is relatively limited, and (ii) the interpretation of PRC laws may be subject to policy changes reflecting domestic political changes.  The laws that do exist are relatively recent and their interpretation and enforcement involve uncertainties, which could limit the available legal protections. Even where adequate law exists in the PRC, it may be impossible to obtain swift and equitable enforcement of such law or to obtain enforcement of judgments by a court of another jurisdiction. The inability to enforce or obtain a remedy under such agreements would have a material adverse impact on the Company.





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Many tax rules are not published in the PRC, and those that are published can be ambiguous and contradictory, leaving a considerable amount of discretion to local tax authorities. PRC currently offers tax and other preferential incentives to encourage foreign investment.  However, the tax regime of the PRC is undergoing review and there is no assurance that such tax and other incentives will continue to be available. There is also no guarantee that the pursuit of economic reforms by the State will be consistent or effective and as a result, changes in the rate or method of taxation, reduction in tariff protection and other import restrictions, and changes in state policies affecting the mining industry may have a negative effect on its operating results and financial condition.



Environmental Considerations



Although the PRC has enacted environmental protection legislation to regulate the mining industry, due to the very short history of this legislation, national and local environmental protection standards are still in the process of being formulated and implemented. The legislation provides for penalties and other liabilities for the violation of such standards and establishes, in certain circumstances, obligations to rehabilitate current and former facilities and locations where operations are being or have been conducted.  The Company believes that there are no outstanding notices, orders or directives from central or local environmental protection agencies or local government authorities alleging any breach of national or local environmental quality standards by Minco China, GGEDC, the 757 Team or any other party in respect of the Fuwan Property. Although the Company intends to fully comply with all environmental regulations, there is a risk that permission to conduct exploration and development activities could be withdrawn temporarily or permanently where there is evidence of serious breaches of such standards.



Reliability of Information



While the information contained herein regarding the PRC has been obtained from a variety of sources, including government and private publications, independent verification of this information is not available and there can be no assurance that the sources from which it is taken or on which it is based are wholly reliable.



Ownership and Regulation of Mineral Resources is subject to extensive government regulation



Ownership of land in China remains with the States and the State, at the national, regional and local levels, is extensively involved in the regulation of exploration and mining activities. Transfers of exploration and mining rights are also subject to governmental approval.  Failure or delays in obtaining necessary approvals could have a materially adverse affect on the financial condition and results of operations of the Company. Nearly all mining projects in the PRC require government approval. There can be no certainty that any such approvals will be granted (directly or indirectly) to Minco China in a timely manner, or at all.



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ITEM 4.

INFORMATION ON THE COMPANY



Cautionary Note to U.S. Investors



We describe our properties utilizing mining terminology such as "measured resources" and "indicated resources" that are required by Canadian regulations but are not recognized by the SEC. U.S. investors are cautioned not to assume that any part of the mineral deposits in these categories will ever be converted into reserves.



A.

HISTORY AND DEVELOPMENT OF THE COMPANY



The Company is a British Columbia corporation whose common shares trade on the Toronto Stock Exchange (TSX) under the trading symbol MMM.  The Companys common shares were also listed in the United Stated on the Over the Counter (OTC) market under the symbol MMAXF.  On November 11, 2005 the Company received listing approval from The American Stock Exchange (AMEX).  The Company began trading on the AMEX on November 22, 2005 with its trading symbol on the AMEX as MMK.  On February 1, 2006 the Company began trading its shares on the TSX and AMEX under its new name Minco Gold Corporation.  The symbol on the TSX remains unchanged and the new symbol on the AMEX is now MGH.  On May 9, 2007 the Company began trading on the Frankfurt Stock Exchange under the ticket symbol MI5 and the German securities code is (WKN) A0MKB6.





The Company was incorporated under the laws of the Province of British Columbia on November 5, 1982, under the name Caprock Energy Ltd.  On September 14, 1989 Caprock Energy Ltd. changed its name to Consolidated Caprock Resources Ltd. On February 8, 1993 Consolidated Caprock Resources Ltd. changed its name to Minco Mining & Metals Corporation.  On January 29, 2007 the Company changed its name to Minco Gold Corporation.  The principal executive office of the Company is located at Suite #2772, 1055 West Georgia Street, PO Box 11176, Vancouver, British Columbia, Canada,V6E 3P3, telephone 604-688-8002.  Through joint ventures with Chinese governmental entities, and others, the Company is engaged in the acquisition, exploration and development of precious and base metal mineral projects in the Peoples Republic of China.  The Company has subsidiaries which are also engaged in the acquisition and exploration of mineral projects in China. See Item 4, C - "Organizational Structure."  The Company has no affiliation with 3M Corporation, which company's trading symbol in the United States is MMM.



At present, all of the Company's properties are in the exploration stage and further exploration will be required before final evaluations as to the economic and legal feasibility can be determined.  None of the Companys properties has a known body of commercial ore, nor are any such properties at the commercial development or production stage.  No assurance can be given that commercially viable mineral deposits exist on any of the Companys properties.  Further, the Companys interest in joint ventures, which own properties, will be subject to dilution if the Company fails to expend further funds on the projects.  The Company has not generated cash flows from operations.  These facts increase the uncertainty and risks faced by investors in the Company.   For more information see Item 3. D. - "Risk Factors."



On January 31, 2007 the Company announced that it would be proceeding with a reorganization and spin-off of its White Silver Mountain Property to Minco Base Metals Corporation (Minco Base Metals) with the intention to build a strong base metals company in China.  The initial ownership of Minco Base Metals will mirror the shareholder base of the Company, on a pro-rata basis, at the time of the reorganization with the ratio and record date to be determined by the Board of Directors of the Company.  It is anticipated that Minco Base Metals will seek a stock exchange listing and complete equity offerings to further develop the White Silver Mountain property and acquire additional base metals properties.  The spin-off was approved by Shareholders at the Companys Annual General Meeting & Special Meeting on July 16, 2007 along with meeting certain regulatory requirements.  On November 15, 2007, the Company completed a Plan of Arrangement pursuant to which the Company spun off its White Silver Mountain project to Minco Base Metals.  The Plan of Arrangement resulted in the shareholders of the Company receiving one common share of Minco Base Metals for every five common share of the Company held on the record date, which was November 15, 2007.  The Company now holds no shares of Minco Base Metals.



The Company believes that separating its assets into two companies, with Shareholders holding proportionate interests in each company will provide a significant opportunity to increase overall shareholder value.  The reorganization would



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provide greater market awareness and opportunities for the Companys White Silver Mountain Property.  In addition, the separation of the Companys Base Metals property interests from the Company's Gold property interests will provide both the Company and Minco Base Metals increased flexibility to utilize and exploit their respective assets. Concurrently, the Company has designated the Anba Property (held by the Joint Venture Company on the White Silver Mountain project) as a non-material project and does not intend to perform any further work on the property. As a general policy, the Company does not intend to spend significant amount of money on a property until it has received all required approvals.



B.

BUSINESS OVERVIEW



Background



All disclosure about our exploration properties in this Annual Report conforms to the standards of United States Securities and Exchange Commission Industry Guide 7, Description of Property by Issuers Engaged or to be Engaged in Significant Mining Operations, other than disclosure of Mineral Resources, Measured Mineral Resources, Indicated Mineral Resources and Inferred Mineral Resources, which are geological and mining terms as defined in accordance with Canadian National Instrument 43-101 under the guidelines set out in the CIM Standards. U.S. investors in particular are advised to read carefully the definitions of these terms as well as the explanatory and cautionary notes in the Glossary, and the cautionary notes below, regarding use of these terms.



We are engaged in the exploration and acquisition of gold, silver and base metal properties in China.  We are an exploration stage company and none of our properties are currently beyond the advanced exploration stage. There is no assurance that a commercially viable mineral deposit exists on any of our properties and further exploration work may be required before a final evaluation as to the economic and legal feasibility is determined.  For further information, see Item 3.D  Risk Factors.  Since the signing of the Companys first co-operation agreement on the Chapuzi Project in China in 1995, the Company has been active in mineral exploration and property evaluations in China.  The Company intends, through its subsidiaries, to build a portfolio of base metals and precious metals properties in China.



The Company has conducted exploration work on properties located in Sichuan, Xinjiang, Hebei, Inner Mongolia, Guangdong and Gansu provinces of China.  Currently, the Company has interests in a number of Sino-foreign co-operative joint ventures with Chinese mining organizations to hold mineral rights in China.  In 2004, Minco Gold incorporated three subsidiaries, Minco Mining (China) Corporation (Minco China), Minco Silver Corporation (Minco Silver) and Minco Base Metals Corporation (Minco Base Metals). Minco China is wholly owned and Minco Base Metals was spun out in November 2007.  The Company plans to develop its silver projects in Minco Silver and its base metal projects in Minco Base Metals while retaining its gold projects (BYC, Gobi Gold, Gold Bull Mountain, Longnan, Xiaoshan and Changkeng) in Minco China under the main umbrella company, Minco Gold.  The equity markets for junior mineral exploration companies are unpredictable.  The Company may also enter into cost sharing arrangements through joint venture agreements.  While management believes that the quality of the concessions now held by the Company will attract joint venture partners in the short-term and medium-term, there is no guarantee that the terms would be as favorable as management would like.  For detailed property descriptions please refer to section D  Description of Property.



Financial (Canadian GAAP)



Year Ended December 31, 2007



In 2007, the Company generated cash of $537,000 from financing activities, compared to $4,940,000 in 2006. The 2007 financing included issuance of common shares in Minco Gold through the exercise of stock options, which generated $106,000, the contribution of cash from non-controlling interests of $512,000, offset by the cost of a share buyback program of $44,000.



In 2007, the Company used cash of $5,293,000 to support operating activities compared to $5,387,000 in 2006.  The net loss in 2007 was $7,541,000. In order to reconcile the loss to cash flows, it is necessary to eliminate non-cash expenses, such as amortization of $56,000, stock-based compensation of $2,023,000, a gain on sale of Minco Silver shares of $2,978,000 and equity loss on investment in Minco Silver of $3,240,000. In addition, certain other operating items did



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not generate cash including a dilution gain of $191,000, write down of short-term investments of $233,000 and the minority non-controlling interest in the loss of $429,000. Its also necessary to consider cash used or generated by non-cash working capital items. In aggregate, non-cash working capital generated cash of $295,000.  Cash flow used for discontinued operations in 2007 was $26,000 compared to $220,000 in 2006.



Year Ended December 31, 2006



In 2006, the Company generated cash of $4,940,000 from financing activities, compared to $9,343,000 in 2005. The 2006 financing included issuance of common shares in Minco Gold, which generated $4,853,000, including the exercise of options generating $1,130,000 and the exercise of warrants yielding $3,723,000.  During the period from January 1, to November 16, 2006, Minco Silver generated a total of $87,000 from the issuance of common shares through the exercise of warrants.



In 2006, the Company used cash of $5,387,000 to support operating activities compared to $3,530,000 in 2005.  The net loss in 2006 was $1,589,000. In order to reconcile the loss to cash flows, it is necessary to eliminate non-cash expenses, such as amortization of $52,000, stock-based compensation of $2,820,000 and equity loss on investment in Minco Silver of $521,000. In addition, certain other operating items did not generate cash including a dilution gain of $5,213,000, write up of short-term investments of $19,000 and the minority non-controlling interest in the loss of $1,382,000. Its also necessary to consider cash used or generated by non-cash working capital items. In aggregate, non-cash working capital used cash of $577,000.



Agreements



The Fuwan Joint Venture



On August 20, 2004, the Company, Minco Silver, Minco China and Minco BVI entered into an assignment agreement (the Assignment Agreement) whereby Minco Gold, Minco BVI and Minco China assigned to Minco Silver their respective interests in each of the following:



a)

the preliminary Fuwan joint venture agreement dated April 16, 2004 and amended August 18, 2004 between Minco BVI and GGEDC;

b)

the right to earn the 51% interest in the silver mineralization to be acquired by Minco Gold pursuant to the Changkeng JV Agreement; and

c)

certain additional exploration permits identified by and to be acquired by Minco China, namely the Additional Permits.



In consideration for the assignment of the foregoing interests, Minco Silver issued 14,000,000 common shares to the Company.



The Company holds 13,000,000 common shares of Minco Silver which, as of December 31, 2007, represents an ownership interest of 41.75% of Minco Silver.  During December 2007, the Company sold 1,000,000 common shares of Minco Silver at a gross price of $3.25 per share. This transaction resulted in a gain of $2,978,034.



The Changkeng Joint Venture



On April 16, 2004, Minco Gold, GGEDC, Zhenjie and Baojiang entered into a preliminary joint venture agreement to explore and develop the mineral property underlying the Changkeng Permit. The target mineral on the Changkeng Property is gold but the property is known to also contain silver mineralization.



On August 20, 2004, Minco Silver, Minco Gold, Minco China and Minco BVI entered into the Assignment Agreement whereby Minco Gold, Minco BVI and Minco China assigned to Minco Silver their respective interests in, among other things noted above, Minco Golds right to earn up to a 51% interest in the Changkeng Propertys silver mineralization pursuant to the Preliminary Changkeng JV Agreement.





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The Preliminary Changkeng JV Agreement was superseded by a formal joint venture agreement dated September 28, 2004 made among the original four parties to the preliminary joint venture agreement and a fifth company, GC Gold. The Changkeng JV Agreement provides for the establishment of a Sino-foreign joint venture with limited liability to be named Guangdong Minco-Jinli Mining Co., Ltd. (the Changkeng JV) to explore and develop non-ferrous and precious metals resources. The Changkeng JV Agreement provides that the total investment of the Changkeng JV (the Changkeng Total Investment) will be 100 million RMB and that the registered capital of the Changkeng JV will be 50 million RMB.



The contribution proportions of the parties to the Changkeng JV Agreement are as follows: GGEDC - 19%; Minco Gold - 51%; Zhenjie - 18%; Baojiang - 10%; and GD Gold - 2%. To earn a 51% equity interest in the Changkeng JV, Minco Gold must contribute 51 million RMB of the Changkeng Total Investment in six instalments.  The parties to the Changkeng JV Agreement agreed that following the establishment of the Changkeng JV, the parties would take the necessary steps to acquire the Changkeng Permit from 757 Team for total consideration of 33 million RMB.



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The original Changkeng Permit expired in September 2004 but was renewed on September 6, 2005. The renewed Changkeng Permit expired on September 10, 2006 and was renewed and now expires on September 10, 2008.



As at the date of this Annual Report, a business license has been granted to Guangzhou Mingzhong Mining Co. Ltd. (Mingzhong), a cooperative joint venture established among Minco China, GGEDC, and two private Chinese companies to jointly explore and develop the Changkeng Property.  Under the terms of the agreement, Minco China has the right to earn a 51% equity interest in Mingzhong with a total contribution of RMB 51 million (approx. US $7.1 million).  The other shareholders will contribute RMB 49 million (approx. US $6.8 million) for their 49% equity interest in Mingzhong.



Mingzhong has signed a purchase agreement to buy a 100% interest in the Changkeng Exploration Permit on the Changkeng Property from 757 Team.  Total purchase price (the Purchase Price) is appraised to be RMB 49 million (approx. US $6.8 million), payable in three instalments within two years.  The Ministry of Lands and Resources has approved the Purchase Price and the transfer of the Changkeng Exploration Permit from 757 Team to Mingzhong.  The Company can now proceed with the exploration program on the Changkeng Property with the granting of the business license and the transfer of the Changkeng Exploration Permit.



The Silver Standard Agreement



Minco Gold, Minco Silver and Silver Standard Resources Inc. (Silver Standard) entered into a strategic alliance agreement dated October 4, 2004 (the Silver Standard Agreement). The Silver Standard Agreement provides that Minco Gold shall acquire silver-dominant projects in China only through Minco Silver and that all silver-dominant projects located in China that are brought to the attention of Minco Gold shall be referred to Minco Silver.  The Silver Standard Agreement further provides that Silver Standard shall not actively explore for or seek out silver-dominant projects located in China but shall be entitled to acquire interests in silver-dominant projects located in China that are brought to its attention on an unsolicited basis.



In the event a silver-dominant property is brought to the attention of either Minco Gold or Minco Silver and Minco Silver determines not to acquire an interest in the property, Minco Gold or Minco Silver, as the case may be, shall provide Silver Standard with the opportunity to acquire an interest in that property prior to offering the opportunity to third parties.  Similarly, in the event that a silver-dominant property is brought to the attention of Silver Standard and it decides not to acquire an interest in that property, Silver Standard shall provide Minco Silver with the opportunity to acquire an interest in that property prior to providing the opportunity to third parties.



The 757 Team Agreement



Pursuant to an agreement made between 757 Team and Minco China dated November 19, 2004, as amended November 19, 2004 (the 757 Transfer Agreement), the 757 Team agreed to sell to Minco China its interests in the property which is the subject of the Fuwan Exploration Permit in consideration for the purchase price of 10.33 million RMB (approximately $1.5 million). Pursuant to a confirmation agreement dated May 5, 2005 among the Company, Minco China and Minco Silver, Minco China has confirmed that it holds its interest in the Fuwan Exploration Permit in trust for the Fuwan Joint Venture.



As at the date of this Annual Report, the acquisition of the 757 Teams interests in this exploration permit has been completed and the Fuwan Exploration Permit, which replaces the original exploration permit held by the 757 Team, has been issued to Minco China and is held in trust for the Fuwan Joint Venture.  The 757 Transfer Agreement provides that the purchase price for the Fuwan Exploration Permit is to be paid in three installments as follows:



(a)

40% (4,132,000 RMB or $600,000) within 30 days of receipt of approval from MOLAR to the transfer of the Fuwan Exploration Permit and within one week of Minco Chinas decision to proceed with the purchase following the receipt of results of a drilling inspection program on the Fuwan Property (the Commencement Date);

(b)

30% (3,099,000 RMB or $460,000) within 12 months after the Commencement Date; and

(c)

30% (3,099,000 RMB or $460,000) within 24 months after the Commencement Date.





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The Commencement Date was established as July 20, 2005. Minco Silver has paid 10,330,000 RMB (or $1,472,000) to the 757 Team, representing its 100% share of the foregoing payments.



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BACKGROUND TO MINING IN CHINA



Gold has been produced in China for over 4,000 years.  In the past ten years China has grown into the world's fourth largest gold producer.  In 2003, gold production was over 200 tonnes.  It is presumed that early Chinese production was from placer deposits, and placer reserves still account for over 15% of Chinas total gold production.  The primary gold producing provinces in China are Shandong, Henan, Hebei, Shaanxi, Heilongjiang, Liaoning and Inner Mongolia. In 2003, there were 800 gold mines in China with stable production capacity of 150 tonnes per year.



The Chinese mining industry has traditionally been closed to foreign participation.  However, a change in the mineral resources law implemented by Chinas central government permits foreign participation.  The regulation of mining, including gold mining, in China is in a state of evolution from a totally planned, state-controlled condition to free market conditions, as experienced in developed and most developing countries.  The Ministry of Lands and Mineral Resources (MLR) administers geological exploration and also carries out exploration through its own personnel.  The following is a general description of China's foreign investment in China and the history of gold mining therein.



General Background



China is the worlds fourth-largest country, after Russia, Canada and the United States, with an area of over 9,596,960 square kilometers and the population of China is estimated at approximately 1.3 billion people.  Industry is the most important sector of the economy of the China, accounting for 52.9 percent of its gross domestic product (GDP) in 2004.  The mining industry accounted for an estimated 6 percent of the national industrial output in 2004.  Services accounted for 33.3 percent and agriculture accounted for the remaining 13.8 percent of GDP in 2004.  In 2003, agriculture accounted for 49 percent of employment, while industry employed 22 percent and services 29 percent, with the mining industry employing more than 20 million people.  Since 1978, China has been moving from a planned economy to a more open, market-oriented system, with the result that the economic influence of privately owned enterprises and foreign investors has been steadily increasing.  The result of this economic development has been the quadrupling of GDP since 1978.



Agricultural output doubled in the 1980s, and industry has posted major gains, especially in coastal provinces, where foreign investment has helped spur output of both domestic and export goods.  Growth has not been without setbacks, as issues such as inflation, excessive capital investment, inefficient state owned enterprises and banks, and deterioration in the environment have periodically caused the State to backtrack, re-tightening central controls from time to time.



The Chinese legal system is comprised of written statutes and the interpretation of these statutes by the Peoples Supreme Court.  The General Principles of the Civil Law of the PRChas been in effect since January 1, 1987.  Continuing efforts are being made to improve civil, administrative, criminal and commercial law especially since Chinas accession into the WTO.  This includes the development of laws governing foreign investment in China, including a regime for Sino-foreign cooperative joint ventures and increased foreign participation in mineral resource exploration and mining.



Foreign Investment



Direct foreign investment in China usually takes the form of equity joint ventures (EJVs), co-operative joint ventures (CJVs) and wholly foreign-owned enterprises (WFOEs). These investment vehicles are collectively referred to as foreign investment enterprises (FIEs).



An EJV is a Chinese legal person and consists of at least one foreign party and at least one Chinese party.  The EJV generally takes the form of a limited liability company.  It is required to have a registered capital to which each party to the EJV subscribes.  Each party to the EJV is liable to the EJV up to the amount of the registered capital subscribed by it.  The profits, losses and risks of the EJV are shared by the parties in proportion to their respective contributions to the registered capital.  There are also rules and regulations governing specific aspects of EJVs or FIEs, including capital contribution requirements, debt-equity ratio, foreign exchange control, labor management, land use and taxation.  Unlike an EJV, a CJV may be, but need not be, incorporated as a separate legal entity.  The relationship between the parties is contractual in nature.  The rights, liabilities and obligations of the parties are governed by the CJV contract, as is each partys share of the goods produced or profits generated.  A CJV is considered a legal person with limited liability if it is incorporated as a separate legal entity.



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The establishment of FIEs requires the approval of various Chinese government authorities. Generally, the approval authority is determined on the basis of the total amount of investment involved and the location of the project in question. The State Council must approve restricted foreign invested projects having an investment of US$100 million or more, encouraged and permitted foreign investment projects having an investment of US$500 million or more.  Subject to the above, the State Development and Reform Commission and the Ministry of Commerce are authorized by the State Council to approve foreign investment projects under restricted catalogue having an investment of US$50 million or more, and foreign investment projects under the encouraged or permitted catalogue having an investment of US$100 million or more. Provincial authorities are authorized to approve projects less than the above thresholds under various catalogues.  However, companies which conduct exploration or mining will be required to obtain the approval of the Ministry of Commerce as required by doc. 70 issued by the State of Council in 2000.



Co-operative Joint Ventures



Cooperative joint ventures (CJVs) are a form of foreign direct investment in China and are governed by the Law of the PRC on Sino-foreign Cooperative Joint Ventures(implemented in 1988 and revised in 2000) and the PRC Sino-foreign Cooperative Joint Venture Law Implementing Rules (implemented in 1995) (collectively the CJV Law).  Foreign investment in mining in China may also take the form of Sino-foreign equity joint ventures or wholly foreign owned enterprises.  The CJV Law permits a CJV to choose to operate as a legal person by forming a limited liability company, subject to approval by relevant governmental authorities.  In that case, the limited liability company owns all of the CJVs assets, and the liabilities of the investor are limited as provided in the cooperative joint venture contract entered into between them.  The CJV Law requires investors in a CJV to make an investment or other contribution, which may take the form of cash, material, technology, land use rights, or other property rights.  Investors must satisfy their contribution obligations within the time frame prescribed by their joint venture contract subject to applicable PRC regulations.  Failure to satisfy contribution obligations by investors may lead to penalty and even to the business license being revoked by the governmental authorities.  Profits of a CJV are distributed as agreed by investors in the CJV contract and distributions need not be proportionate to each investors contributions. The CJV contract also determines how liquidation proceeds are to be distributed when the CJV contract is terminated.



Ownership and Regulation of Mineral Resources



Exploration for and exploitation of mineral resources in China is governed by the Mineral Resources Law of the PRC of 1986, amended effective January 1, 1997, and the Implementation Rules for the Mineral Resources Law of the PRC, effective March 26, 1994.  In order to further implement these laws, on February 12, 1998, the State Council issued three sets of regulations: (i) Regulation for Registering to Explore Mineral Resources Using the Block System, (ii) Regulation for Registering to Mine Mineral Resources, and (iii) Regulation for Transferring Exploration and Mining Rights (together with the mineral resources law and implementation rules being referred to herein as the Mineral Resources Law).  Under the Mineral Resources Law, the Ministry of Land and Resources (MOLAR) is charged with supervision nationwide of mineral resources prospecting and development.



The mineral resources administration authorities of provinces, autonomous regions and municipalities, under the jurisdiction of the State, are charged with supervision of mineral resources prospecting and development in their respective administration areas.  The peoples governments of provinces, autonomous regions and municipalities, under the jurisdiction of the State, are charged with coordinating the supervision by the mineral resources administration authorities on the same level.  The Mineral Resources Law, together with the Constitution of the PRC, provides that mineral resources are owned by the State, and the State Council, the highest executive body of the State, regulates mineral resources on behalf of the State.



The ownership of the State includes the rights to: (i) occupy, (ii) use, (iii) earn, and (iv) dispose of, mineral resources, regardless of the rights of owners or users of the land under which the mineral resources are located.  Therefore, the State is free to authorize third parties to enjoy its rights to legally occupy and use mineral resources and may collect resource taxes and royalties pursuant to its right to earn.  In this way, the State can direct and regulate the development and use of the mineral resources of China.



Mineral Resources Permits



The Provisions in Guiding Foreign Investment and the Industrial Catalogue in Guiding Foreign Investment, which was updated on April 1, 2002, January 1, 2005 and October 31, 2007 (collectively the Investment Guiding Regulations) govern foreign investment in China and categorize industries into four types where foreign investment is: (i) encouraged, (ii) permitted, (iii)



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restricted, or (iv) prohibited.  In mining industries, encouraged projects include the exploration and mining of coal (and its derived resources), iron, manganese, copper and zinc minerals, etc.  Restricted projects include the exploration and mining of the minerals of tin, antimony and other noble metals including gold and silver, etc.



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Prohibited projects include the exploration and mining of radioactive minerals, and rare earth.  Foreign investment is permitted if the exploration and mining of the minerals is included in the other three categories.  Subject to the Investment Guiding Regulations, foreign investment in the exploration and mining of minerals is generally encouraged, in particular in relation to minerals in the western region of China.



Until January, 2000, the production, purchasing, distributing, manufacturing, using, recycling, import and export of silver was strictly regulated by the Regulations of the Peoples Republic of China on the Control of Gold and Silver.  Since then however, Chinas silver market has been fully opened and silver is now treated as a commodity not subject to any special control or restrictive regulation by the State.  However, foreign investment in the exploration and mining of silver remains restricted.  China has adopted, under the Mineral Resources Law, a licensing system for the exploration and exploitation of mineral resources.  MOLAR and its authorized provincial or local departments are responsible for approving applications for exploration permits and mining permits.  The approval of MOLAR is also required to transfer those rights.



Applicants must meet certain conditions for qualification set by the State.  Pursuant to the Mineral Resources Law, the applicant for a mining right must present stated documents, including a plan for development and use of the mineral resources and an evaluation report of the environmental impact thereof.  The Mineral Resources Law allows individuals to excavate sporadic resources, sand, rocks and clay for use as materials for construction and a small quantity of mineral resources for sustenance.  However, individuals are prohibited from mining mineral resources that are more appropriate to be mined in scale by an enterprise, the specified minerals that are subject to protective mining by the State and certain other designated mineral resources, as may be determined by MOLAR.  Once granted, all exploration and mining rights are protected by the State from encroachment or disruption under the Mineral Resources Law.  It is a criminal offence to steal, seize or damage exploration facilities, or disrupt the working order of exploration areas.



Exploration Rights



Exploration permits are registered and issued to licensees.  The period of validity of an Exploration Permit can be no more than three years.  The Exploration Permit area is described by a basic block.  An Exploration Permit for metallic and non-metallic minerals has a maximum of 40 basic blocks.  When a mineral that is capable of economic development is discovered, the licensee may apply for the right to develop such mineral.  The period of validity of an Exploration Permit can be extended by application and each extension can be no more than two years in duration.  During the term of the Exploration Permit, the licensee has the privileged priority to obtain the mining right to the mineral resources in the exploration area covered by the Exploration Permit, provided the licensee meets the conditions of qualification for mining rights holders.  Further, the licensee has the rights, among others, to: (i) explore without interference within the area under permit during the permit term, (ii) construct exploration facilities, and (iii) pass through other exploration areas and adjacent ground to access the permitted area.



After the licensee acquires the Exploration Permit, the licensee is obliged to, among other things: (i) start exploration within the prescribed term, (ii) explore according to a prescribed exploration work scheme, (iii) comply with State laws and regulations regarding labour safety, water and soil conservation, land reclamation and environmental protection, (iv) make detailed reports to local and other licensing authorities, (v) close and occlude the wells arising from prospect work, (vi) take other measures to protect against safety concerns after the prospect work is completed, and (vii) complete minimum exploration expenditures as required by the Regulations for Registering to Explore Resources Using the Block.



Mining Rights



Holders of mining rights, or concessionaires, are granted licenses to mine for maximum terms of 10 to 30 years, based on magnitude of the mining project.  The concessionaires may extend the term of a mining license with an application at least 30 days prior to expiration of the term.  The user fee for the mining right is equal to RMB 1,000 per square kilometer per year.  Where there is any prior State investment in or State sponsored geological work conducted on a mineral property, the State must be compensated based on the assessed value of the State input before mining rights can be granted.  Concessionaires enjoy the rights, among others, to: (i) conduct mining activities during the term and within the mining area prescribed by the mining license, (ii) sell mineral products (except for mineral products that the State Council has identified for unified purchase by designated units), (iii) construct production and living facilities within the mine area, and (iv) use the land necessary for production and construction, in accordance with applicable law.





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Concessionaires are obliged to, among other things: (i) conduct mine construction or mining activities within a defined time period, (ii) conduct efficiently production, rational mining and comprehensive use of the mineral resources, (iii) pay resources tax and mineral resources compensation (royalties) pursuant to law, (iv) comply with State laws and regulations regarding labour safety, water and soil conservation, land reclamation and environmental protection, (v) be subject to the supervision and management from both the departments in charge of geology and mineral resources, and (vi) complete and present mineral reserves forms and mineral resources development and use statistics reports, according to applicable law.



Transferring Exploration and Mining Rights



A mining enterprise may transfer its exploration or mining rights to others, subject to the approval of MOLAR or its authorized departments at provincial or local level, as the case may be.  An Exploration Permit may only be transferred if the transferor has: (i) held the Exploration Permit for two years as of the issue date, or discovered minerals in the exploration block, which are able to be explored or mined further, (ii) a valid and subsisting Exploration Permit, (iii) completed the stipulated minimum exploration expenditure, (iv) paid the user fees and the price for prospect rights pursuant to the relevant regulations, and (v) obtained the necessary approval from the authorized department in charge of the minerals. Mining rights may only be transferred if the transferor needs to change the ownership of such mining rights because it is: (i) engaging in a merger or split, (ii) entering into equity or cooperative joint ventures with others, (iii) selling its enterprise assets, or (iv) engaging in a similar transaction that will lead to the alteration of the property ownership of the enterprise. A Mining Permit may only be transferred if the transferor has: (i) commenced production for no less than one year, (2) a valid and subsisting Mining Permit without title dispute, and (iii) paid the user fees,  the price for the mining right, resource tax and mineral resource compensation pursuant to laws.



Environmental Laws



In the past ten years, laws and policies for environmental protection in China have moved towards stricter compliance and stronger enforcement. The basic laws in China governing environmental protection in the mineral industry sector of the economy are the Environmental Protection Law, the Environment Impact Assessment Law and the Mineral Resources Law.  The State Administration of Environmental Protection and its provincial counterparts are responsible for the supervision of implementation and enforcement of environment protection laws and regulations.  Provincial governments also have the power to issue implementing rules and policies in relation to environmental protection in their respective jurisdictions.  Applicants for mining rights must submit environmental impact assessments and those projects that fail to meet environmental protection standards will not be granted licenses. In addition, after exploration the licensee must perform water and soil maintenance and take steps towards environmental protection.  After the mining rights have expired or the concessionaire stops mining during the permit period and the mineral resources have not been fully developed, the concessionaire shall perform water and soil maintenance, land recovery and environmental protection in compliance with original development scheme, or must pay the costs of land recovery and environmental protection.  After closing, the mining enterprises shall perform water and soil maintenance, land recovery and environmental protection in compliance with mine closure approval reports, or must pay the costs of land recovery and environmental protection.



Chinese-Foreign Co-Operative Joint Ventures



Legal Framework



Each of the various joint venture entities through which the Company may carry out business in China has been or will be formed under the laws of China as a Sino-foreign co-operative joint venture enterprise and is or will be a legal person with limited liability.  All joint ventures entered into, or to be entered into, by the Registrant must be approved by both the Ministry of Commerce (MOC) and the State Development and Reform Commission (SDRC) in Beijing or their provincial bureaus.



The establishment and activities of each of the Companys joint venture entities are governed by the law of the Peoples Republic of China on Sino-foreign co-operative joint ventures and the regulations promulgated there under (the China Joint Venture Law).  As with all Sino-foreign co-operative joint venture enterprises, the Companys joint venture enterprises will be subject to an extensive and reasonably well-developed body of statutory law relating to matters such as establishment and formation, distribution of revenues, taxation, accounting, foreign exchange and labor management.  On January 1, 1997, an amendment to the Mineral Resources Law of China became effective.  Among other things, the amended law deals with foreign ownership of Chinese mines and mineral rights, and allows, under some circumstances,



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the transfer of exploration rights and mining rights.  Pursuant to this law, new regulations were made effective on February 12, 1998.





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The MOLAR administers a new computerized central mineral title registry established in Beijing, which has streamlined the application for exploration and mining permits.  Under existing laws, in order to form a mining joint venture, foreign companies always complete two levels of agreements. In general, the first level of agreement is a letter of intent or a memorandum of understanding, which sets forth broad areas of mutual co-operation.  The second level of agreement is a joint venture contract that sets out the entire agreement among the parties and contemplates the establishment of a Chinese Legal Person, a separate legal entity.  Before a joint venture can be created, an assessment or feasibility study of the proposed joint venture must be prepared and approved by the SDRC or its provincial bureau. Therefore, upon completing a co-operation agreement, the parties prepare a feasibility study of the proposed joint venture and submit this feasibility study to the SDRC for the project verification, the granting of which depends upon whether the proposed project broadly conforms to the economic policy issued by the government and any prescribed regulations.



Upon receiving this approval in principle, the parties then negotiate and prepare a joint venture contract and submit it to the MOC, or its provincial bureaus, which approves the specific terms of all joint venture contracts between Chinese and foreign parties.  Within one month after the receipt of a certificate of approval from MOC, a joint venture must register with the State Administration of Industry and Commerce (the SAIC).  Upon registration of the joint venture, a business license is issued to the joint venture.  The joint venture is officially established on the date on which its business license is issued.  Following the receipt of its business license, the joint venture applies to the MOLAR to approve and grant to the joint venture its exploration permits and/or mining licenses.



Governance and Operations



Governance and operations of a Sino-foreign cooperative joint venture enterprise are governed by the Chinese joint venture law, the parties joint venture agreement and by the articles of association of each joint venture entity.  Pursuant to relevant Chinese laws, certain major actions of the joint venture entity require unanimous approval by all of the directors present at the meeting called to decide upon actions, such as amendments to the joint venture agreement and the articles of association; increase in, or assignment of, the registered capital of the joint venture; a merger of the joint venture with another entity; or the termination and dissolution of the joint venture enterprise.



Term



Under the joint venture agreement, the parties will agree to a term of the joint venture enterprise from the date a business license is granted.  However, the term may be extended with the unanimous approval of the board of directors of the joint venture entity and the approval of the relevant Chinese governmental entities.



Employee Matters



Each joint venture entity is subject to the Chinese employment laws and regulations.  In compliance with these laws and regulations, the management of the joint venture enterprise may hire and discharge employees and make other determinations with respect to wages, welfare, insurance and discipline of its employees.  Generally, in the joint venture agreement, the standard of salary, social welfare insurance and traveling expenses of senior management will be determined by the board of directors of the joint venture entity.  In addition, the joint venture will establish a special fund for enterprise development, employee welfare and incentive fund, and a general reserve.  The amount of after-tax profits allocated to the special funds is determined at the discretion of the board of directors on an annual basis.



Distributions



After provision for a reserve fund, an enterprise development fund and an employee welfare and incentive fund, and after provision for taxation, the profits of a joint venture enterprise will be available for distribution to the Company and its other shareholders, such distribution to be authorized by the board of directors of the joint venture entity.



Assignment of Interest



Under joint venture agreements and the Chinese Joint Venture Law, any assignment of an interest in a joint venture entity must be approved by the relevant governmental authorities.  The China Joint Venture Law also provides for pre-emptive rights and consent of the other party for proposed assignments by one party to a third party.



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Liquidation



Under the Chinese Joint Venture Law and joint venture agreements, the joint venture entity may be liquidated in certain limited circumstances including the expiry of its term or any term of extension, inability to continue operations due to severe losses, failure of a party to honor its obligations under the joint venture agreement and articles of association in such a manner as to impair the operations of Chinese governmental entitles and force majeure.



Resolution of Disputes



In the event of a dispute between the parties, attempts will be made to resolve the dispute through consultation. This is the practice in China and the Company believes that its relationship with Chinese governmental entities is such that it will be able to maintain a good working relationship with respect to the operations of its joint venture enterprises.  In the absence of a friendly resolution of any dispute, the parties may agree that the matter will be settled by an arbitration institute.  The parties may jointly select an arbitration institution to resolve disputes in the joint venture contract if it has been stated in the joint venture contract or when the dispute is raised.  Awards of the arbitration institute are enforceable in accordance with the laws of China by Chinese courts.   In the absence of a valid arbitration agreement, both parties or either party may decide to resort to Chinese courts to resolve disputes between the parties over the terms of the joint venture contract.



Expropriation



The Chinese Joint Venture Law also provides that China generally will not nationalize and requisition enterprises with foreign investment.  However, in special circumstances where demanded by social public interest, enterprises with foreign investment may be requisitioned by legal procedures, but appropriate compensation will be paid.



Division of Revenues



Revenues derived from operating joint ventures, once all necessary agreements, permits and licenses are obtained, will be divided between the Company and the entities which are parties to the joint venture according to the terms of each individual joint venture, which terms will vary from project to project.  The Company will be subject to various taxes on its revenues.



C.

ORGANIZATIONAL STRUCTURE



Minco Gold was incorporated under the laws of the Province of British Columbia on November 5, 1982, under the name Caprock Energy Ltd.  On February 19, 1996, current management acquired its interests in Minco Gold pursuant to the PCR Agreement, and the Teck-Cominco Agreements.  The following chart sets forth the Company's corporate structure, including its significant subsidiaries, related parties and their jurisdictions of incorporation along with the various mineral properties held by each of them, as at the date of this Annual Report:





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INTERCORPORATE RELATIONSHIPS

MINCO GOLD CORPORATION

[minco20f071708002.gif](formerly Minco Gold & Metals Corporation)



D.

DESCRIPTION OF PROPERTIES



The following is a discussion of the properties that Minco Gold holds directly and through its subsidiaries.



I.

CHANGKENG GOLD PROPERTY



The detailed history and background of Minco Golds Changkeng Gold Property is disclosed above under The Changkeng Joint Venture.



Location



The Changkeng gold deposit is located approximately 45 km southwest of Guangzhou, the fourth largest city in China with 13 million people and the capital city of Guangdong Province. The project is adjacent to Minco Silvers Fuwan Silver deposit and situated close to well established water, power and transportation infrastructure.









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Background



Gold was discovered at Changkeng in early 1990 by systematic follow up of stream sediment and soil geochemical anomalies identified from surveys completed by the Guangdong Provincial government (Regional Geological Survey Team of Guangdong Bureau of Geological Exploration). Illegal, small scale mining began in 1991 and removed most of the oxidized, near surface mineralization. Based on 8 trenches and 21 diamond drill holes, P&E Mining Consultants ((P&E) of Brampton, Ont. prepared an initial NI 43-101 compliant resource estimate on the deposit in March 2008.  The current resources residing on the Changkeng deposit include 379,000 ounces of gold indicated and 333,400 ounces of gold inferred.



Since 1949, mineral exploration in China has been performed at all scales by professional geologists and engineers organized into a series of brigades, each with specific mandates, geological, geochemical, mineral deposits evaluation, etc.  There is no historical record of gold mining in the area before the discovery of gold in early 1990.  Small-scale mining activities began in 1991 and a large portion of the oxidized mineralized zones between lines seven and eight have been mined out.  A summary of this history follows:



1959  1971

Geological exploration for pyrite, coal and uranium was carried out intermittently by different geological teams.

1986  1989

The Chinese government's Regional Geological Survey Team of Guangdong Bureau of Geological Exploration conducted a regional stream-sediment sampling program at 1:200,000 scale.  Significant gold and silver geochemical anomalies were delineated in the Changkeng-Fuwan area.  The gold and silver anomalies were followed-up with detailed soil sampling at 1:50,000 scale and it was proved that there is good potential for gold-silver mineralization in the area.

1990  1994

The Changkeng-Fuwan gold and silver deposits were discovered in 1990 during the following-up of the 1:50,000 soil geochemical anomalies by the 757 Geological Exploration Team (757 Team).  Detailed exploration was conducted at the Changkeng-Fuwan gold and silver zone and its adjacent area from 1990 to 1995.

1990

Report on reconnaissance investigation of gold mineralization in Changkeng, Gaoyao County, Guangdong Province was completed by the 757 Team.

1992

Geochemical soil sampling and mercury survey over the Luzhou-Shizhou area of 24 square kilometers to the south of Changkeng-Fuwan gold and silver deposits were conducted at 1:10,000 scale.  Test drilling over two geochemical anomalies intersected silver mineralization at Dieping and Luzhou areas.

1993

Seismic and electrical surveys were conducted along nine profiles over the Luzhou-Shizhou area.  Sections with good potential for gold and silver were delineated.



Drilling Results



Minco completed a limited drilling program at Changkeng in October 2004, confirming the results from previous Chinese drilling and the continuity of the Zone 1. All the holes were drilled vertically and true widths of the intersections have not yet been established. The holes are drilled on a northwest-southeast grid approximating the dip direction of the mineralized zone.

In late 2007, six holes were drilled to expand and confirm the mineralization on the Changkeng gold deposit. Significant gold results of the drilling are as follows and the complete results can be found on the Companys website:

·

CK2006 5.788 g/t Au over 12.62 metres (m)

·

CK2007 5.54 g/t Au over 8.0 m

·

CK2010 7.83 g/t Au over 26.81 m, including 12.23 g/t Au over 14.81 m













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2008 Work Program



An extensive exploration program has been approved by the board of directors of Mingzhong. The general objective of the exploration program is to upgrade the gold resource estimate to meet the minimum requirements of the Chinese government for application of a mining permit.

The current exploration program consists of 15,000 metres of drilling, investigation of the mined-out area, metallurgical testing and hydrogeological, geotechnical and environmental studies. The program will be initiated in April 2008 and is expected to be completed by the end of December 2008.  Following the completion of the drill program, an updated resource estimate will be completed and an Exploration Report will be completed for National permitting requirements.  These studies will be combined and used as the basis for completing an independent Preliminary Economic Assessment (PEA) on the project.



Currently BGRIMM (Beijing General Research Institute of Mining & Metallurgy) located in Beijing, China has commenced metallurgical studies on a bulk sample of the Changkeng mineralization.  These results will be used for the PEA.





II.

LONGNAN PROPERTIES (YANGSHAN, YEJIABA AND XICHENG EAST PROJECTS)



Minco Golds wholly-owned subsidiary, Minco China, presently holds 12 exploration permits in Longnan region of south Gansu Province. Nine of the permits are located in the Yangshan belt situated east and north of the Anba deposit.  Three permits are located in a geological terrain immediately north of the Yangshan belt and are referred to as the Xicheng East permits.  All 12 exploration permits are located over regional geochemical gold anomalies with host rocks and structure similar that at Anba and other gold deposits in the region.



Yangshan Project Area



The Yangshan Sub-project Area consists of five exploration permits.  The geochemical data in the Companys stream sediment sampling program at the northeast extension of the Anba gold deposit outlines 20 composite anomalies of Au, As, Sb or Ag which have been delineated in the survey area.  The gold anomalies coincide with strong As and Sb values located in a Devonian clastic rock unit closely associated with a regional arcuate fault structure.  The structural and geological setting and geochemical features of these anomalies are comparable to those of the known areas of gold mineralization along the Yangshan gold trend.  Follow up for some selected gold anomalies was conducted with detail soil sampling and sketch mapping.  Peak values in soil gold anomalies range from 100 to 779 ppb.  Two significant gold occurrences, the Yuezhao and the Yangshanli, were discovered through surface trenching.



Yejiaba Project Area



The Yejiaba Sub-project Area consists of four exploration permits.  14 composite anomalies in stream sediment samples have been delineated in the Yejiaba project area, a belt parallel to and north of Yangshan.  The largest composite anomaly, the Madigou anomaly, is 23 square kilometers in area and characterized by coincident Au, Ag, As, and Sb values.  Follow up for selected stream sediment anomalies was conducted with detail soil sampling, Peak values in soil anomalies are more than 100ppb for gold and from 1,000 to 14,000 ppb for silver.



Xicheng Project Area



Xicheng Project Area is located at the east extension of the well-known Xicheng Pb-Zn metallogenic belt northeast of Yejiana and consists of three exploration permits. 11 composite anomalies have been delineated in the project area. The largest anomaly is about 16 square kilometres in area and consists of coincident Au, Ag, Pb and Zn values. For the Xicheng East area as a whole, good potential for gold, silver, lead and zinc is indicated.  Follow up for some significant stream sediment anomalies was conducted with traverse line investigation, detailed soil sampling and sketch mapping.  Very strong anomalies for gold and silver were detected in soil samples and four Ag-Au-Pb-Zn occurrences were discovered.  High grade Ag, PB and Zn was detected from grab samples.





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The samples above were analyzed for Au, Ag, As. Sb, Bi, Cu, Pb, Zn, W, Mo, Ba and Hg at the central lab of the Institute of Geophysical and Geochemical Exploration in Langfang, Hebei province. Analytical quality was controlled by inserting reference samples and duplicate samples in each 20-sample batch.  In November 2006 the Company announced that significant gold, silver, antimony, lead and zinc mineralization had been discovered in all the three sub-project areas, including the following most significant mineral occurrences:



Major semi-regional geochemical anomalies delineated in 2005 were followed up with traverse line investigation, soil sampling, and sketch mapping in 2006 and 2007.  Further detailed trenching and test drilling were conducted over significant soil gold anomalies and alteration and mineralization zones.  Significant gold, silver, antimony, lead and zinc mineralization has been discovered in all the three sub-project areas, including the following most significant mineral occurrences:



Yangshanli Gold Occurrence:  Eight structurally controlled alteration and mineralization zones have been identified with the largest and strongest composite anomalies of Au, As, Sb and Ag at the central section of the Yangshan Project Area.  Individual zone ranges from several hundreds to more than 1,600 metres in length.  Average grade of gold mineralization intersected in trenches is from 0.3 to 1.03g/t and width of mineralization zones varies from 4 to 13.4 metres.  Significant channel sample intersections include 1.02g/t Au over 7m, 0.79g/t Au over 10.3m, and 0.5g/t Au over 10.9m.



Yuezhao Gold Occurrence: A major gold zone has been identified on the Yuezhao area located at the east end of the Yangshan Project Area. Gold mineralization occurs in the Devonian dark-grey carbonaceous phyllite and the strata-bound gold zone can be traced over 1,000 meters at surface. Continuous channel sampling across the mineralization zone revealed an average gold grade of 2.17g/t gold over 11 meters.



Chengjiagou Silver-Gold-Lead (Ag-Au-Pb) Occurrence: Mineralization occurred in Devonian carbonaceous slate in an abandoned artisan adit in the Xicheng Project Area. One sample returned 133.3g/t Ag, 0.39 g/t Au, 4.25% Pb, 0.1% Zn, and 0.2% Cu. Another grab sample yielded 567.4g/t Ag, 0.52g/t Au, 7.07% Pb, 0.38% Zn, 0.3% Cu.



Miaogou Ag-Pb-Zn Occurrence:  Artisan mining tunnels and pits have been seen within very strong soil silver anomalies at the east section of the Xicheng East Project area.  Individual veins range from 0.2 to 1m.  Two grab samples returned 0.2 and 0.24g/t Au, 160 and 615g/t Ag, 5.24 and 25.44% Pb, 9.79 and 13.62% Zn, respectively.



Shiaigou Pb-Zn-Ag Occurrence:  Five Pb-Zn mineralization zones discovered in Devonian sandy slate. Individual vein is from 0.2 to 0.6m in width and 200 to 270m in length.  Grab samples returned 0.11-6.31% Pb, 4.39-25.8% Zn and 39-58g/t Ag.



Yangjiagou Silver-Gold-Lead (Ag-Au-Pb) Occurrences: Mineralization occurs in the Devonian carbonaceous slate in the Yejiaba Project Area. A grab sample from a mineralized outcrop in carbonaceous slate returned 137g/t Ag, 0.87g/t Au and 2.6% Pb.



2005 Exploration



In November 2005, the Company completed a semi-regional stream sediment geochemical survey within five of the Yangshan permits, four of the Yejiaba permits and the three Xicheng East permits.  The survey covered approximately 1000 km2 and involved collection of stream sediment samples from active drainages at a density of approximately 4 samples per km2.   Many important and significant semi-regional anomalies were delineated in the three sub-project areas.  Some anomalies are located at the direct northeast extension of the well-known Yangshan gold zone.



2006 Exploration



Follow-up for some of the major drainage geochemical anomalies by a combination of geological mapping, prospecting, ridge and spur soil sampling, grid soil sampling and trenching was conducted in the three sub-project areas.  This has resulted in the direct discovery of Yuezhao, Yangjiogou, Chengjiagou, Qiuziping occurrences.  Significant soil anomalies of Au, As, Ag, and Sb were delineated at the Yangshanli area.





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2007 Exploration



Exploration activities in 2007 were focused on detailed follow up for major gold and silver soil anomalies in the Yangshan and the Xicheng East Sub-project Areas and reconnaissance follow up for some minor stream sediment anomalies in the Yejiaba and the Yangshan Sub-project Areas, including:



1.

Trenching and test drilling at Yuezhao Gold Occurrence:  The Yuezhao mineralization zone was traced with trenching along strike with trenching and along dip with test drilling.  Results from test drilling indicate that the Yuezhao mineralization zone show a pinch-out pattern at depth and potential for further discovery is limited;

2.

Mapping and Trenching at Yangshanli Soil Anomaly:  Detailed mapping and trenching were conducted in one of the major soil anomalies at Yangshanli.  Eight alteration and mineralization zones were recognized in the anomalous area and gold mineralization was intersected in most of the exploration trenches over three zones;

3.

Soil sampling at some selected stream sediment anomalies in the Yejiaba and the Yangshan Sub-project areas; and

4.

Reconnaissance Investigation at Xicheng East:  Investigation has resulted in the discovery of the Miaogou, the Shiaigou Ag, Pb and Zn occurrences.





2008 Exploration



Exploration focus in 2008 will consist of the following:



1.

Detailed mapping, IP survey and possibly test drilling at the Yangshanli and adjacent areas in the Yangshan Sub-project area;

2.

Details mapping, trenching, and soil sampling in the Chengjiagou, Shiaigou, and Miaogou occurrences at the Xicheng East Sub-project area to generate targets for test drilling; and

3.

Reconnaissance investigation at some geologically favourable areas at the Yangshan, the Yejiaba and the Xicheng East Sub-project areas.



In March Mincos field crew commenced reconnaissance work at Hemjiawan which is a geologically similar to the Anba deposit.  Work consisted of mapping, trenching and sampling.  A structural and alteration zone was identified and 54 chip samples collected.  The gold mineralization is mainly associated with dark grey phyllite and granite dykes.



III.

YANGSHAN GOLD BELT  WEST EXTENSION PROPERTIES



The Cooperation Agreement with No. 2 Exploration Institute of the Gansu Bureau of Geological Exploration (GBGE) for the exploration and development of mineral resources also in Gansu Province of China expired by the end of 2007.



GBGE repaid Minco China 1.3 million RMB and the 13 permits Minco China took in trust for the JV remained with Minco China.  One permit has been given up, the other 12 permits now belong 100% to Minco China.



The cooperation agreement was terminated in 2007.



IV.

ANBA PROPERTY



Gansu Keyin Mining Co. Ltd. and Minco Golds joint venture (Keyin), signed a joint venture agreement in principal with the Gansu provincial government and two other companies in October 2003 for the exploration and development of the Anba gold property in the Yangshan gold field (the YGM JV).  Under the agreement, Keyin can earn 40% interest in the YGM JV through investment of approximately $3.5 million over five years. The exploration permit for the Anba gold property, which expired in June 2006, is in the process of being extended and will then be transferred to the YGM JV once the definitive joint venture contract has been signed and all requisite approvals for the registration of the joint venture have been obtained. The YGM JV has applied for a business license.





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In April 2004, the board of directors of the YGM JV agreed to pay 3 million RMB (approximately $440,000) to Lan Zhou Qun Ying Ltd. ("Qun Ying") so that it might prepare for the transfer of the exploration permit to the YGM JV. Keyin and its Chinese partners each contributed 1.5 million RMB (approximately $220,000) towards this end. If Qun Ying could not fulfill the duties within six months, the 3 million RMB was to be returned to the YGM JV.  Qun Ying was unable to fulfill all the required duties and the YGM JV has authorized other persons to continue the work for the exploration permit transfer.  The YGM JV has also demanded the return of the 3 million RMB advanced to Qun Ying. Of this amount, 1,500,000 RMB (approximately $220,000), representing Keyins portion, is recorded as a receivable in the Companys consolidated accounts.



Total expenditures funded by the Company on the Anba gold property from inception to December 31, 2007 were $490,422 and from the inception to December 31, 2006 were $477,481.



This entire project was terminated in 2007.



V.

BYC GOLD PROPERTY



On November 18, 2002, the Company entered into an agreement with the Inner Mongolian Bureau of Non-Ferrous Metals and Exploration, the license holder of the BYC gold project, to acquire a majority interest in the BYC gold project located in central Inner Mongolia, China.  In July 2003, the Company and the Inner Mongolia Bureau of Non-Ferrous Metal Exploration formed the Inner Mongolia Huayu-Minco Mining Co. Ltd. to explore and develop the BYC gold project.  In October 2003, the Company entered into a joint venture with New Cantech Ventures Inc. (New Cantech).  In 2003, Minco Gold entered into a letter agreement with New Cantech whereby New Cantech acquired two options to acquire up to a 60% interest in Minco Golds BYC Gold project in Inner Mongolia, China.



The first option is exercisable to acquire a 51% interest in the BYC property by issuing 500,000 common shares in the capital stock of New Cantech and by spending $2.4 million in exploration over three years.



The agreement was amended in March 2004 and in April 2005 so that New Cantech could exercise the first option by issuing to Minco Gold 500,000 common shares in the capital stock of New Cantech and by incurring a total of 12 million RMB (approximately $1.76 million) in three installments as follows:



1)

2 million RMB (approximately $294,000) on or before March 22, 2005, which has been completed;

2)

4 million RMB (approximately $588,000) on or before March 22, 2006 of which $487,588 had been advanced as of March 13, 2006; and

3)

6 million RMB (approximately $881,000) on or before March 22, 2007.



The second option is exercisable to acquire a further 9% interest in the property by bringing the project to pre-feasibility stage. The BYC project has all permits necessary to pursue exploration on this property.  Pursuant to the letter agreement, New Cantech has issued common shares of New Cantech to Minco Gold as follows:



·

September 2005  50,000 common shares at $0.30 per share for $15,000;

·

May 2005 - 100,000 common shares at $0.21 per share for $21,000; and

·

Year ended December 31, 2004 - 250,000 common shares at $0.34 per share for a value of $85,000 and 100,000 common shares at $0.37 per share for a value of $37,000.



This large property covers approximately 100 individual gold showings related to shear-hosted fracture systems within or peripheral to an elongate granite intrusion. The focus of recent exploration has been the North Zone, which is located on the north-west contact of the granite intrusion. Illegal local miners had removed approximately 400,000 tonnes of near surface oxide ore before being expelled by authorities. In New Cantechs program, six diamond drill holes were drilled in 2004 aggregating 1,434.5 metres in the North Zone and its north-east projections.  Geological mapping, trenching and sampling was completed in 2004 and 2005 to supplement diamond drilling information and contribute to understanding controls on mineralization.  A diamond drill program consisting of 1,500 metres was initiated in Q4 of 2005.  This program tested new areas of mineralization exposed by illegal mining activity and follow-up on intersections from previous drilling.



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Assays were pending as of year end.  On August 20, 2007, Inner Mongolia Huayu Minco Mining Co., Ltd. renewed two Reconnaissance Survey Exploration Permits from the Ministry of Land and Resources of China on the properties as follows:



a)

Houxiaonuqi gold property in Wulateqianqi of Inner Mongolia (Permit No. 0100000730295 expiring April 7, 2009); and

b)

Dongwufenzi gold property in Wulateqianqi of Inner Mongolia (Permit No.  0100000730294 expiring April 7, 2009).



Total expenditures funded by the Company from inception to December 31, 2007 were $869,535 (from inception to December 31, 2006  $835,437).  On October 3, 2006, the Company and New Cantech entered into a termination agreement, therefore as of the date of this Annual Information Form New Cantech has no interest in the property.



Property Description and Location



The BYC gold project is located at the central section of the north margin of the North China Platform and the eastward extension of the well-known Tianshan metallogenic zone in China.  The zone hosted several important gold-producing regions in North China and extends to the famous gold metallogenic zone in the former Soviet Union republics where several world-class gold deposits have been developed.  The project area is about 50 kilometres northwest of Baotou, the largest rare-earth producing city in the world, and very close to a railroad that connects to the national railway system.  The original discovery of gold was made in late 1980s by follow-up of a regional geochemical gold anomaly that covered an area of more than 100 square kilometres.  More than 100 surface gold showings were delineated in an area 12 kilometres long and 3 kilometres wide.



Some of the showings returned very high values. Like many areas of new gold discoveries this triggered the widespread illegal artisanal mining activities for the surficial portions of the gold showings over the entire area. Recently, all the illegal mining activities at BYC gold project were banned by the government as a nationwide law enforcement program.



Geological Setting



The BYC gold project occurrence is a structurally controlled shear hosted auriferous vein system, which develops at or near the contact of a Mesozoic granodiorite with early Proterozoic sedimentary and volcanic rocks.  All principal-mineralized zones on BYC concession are either shear hosted or extensional veins.  Most of these structures are located within well-formed planar brittle-ductile shear zones with very good surface continuity.  Based on the distribution of the auriferous veins at surface, at least four major structural and auriferous zones are identified with strike lengths ranging from 700 metres to more than 1,500 metres.  The grade of auriferous veins occurred in the Proterozoic sedimentary and volcanic sequence are generally from 1 gram per tonne to 8 grams per tonne gold.  Higher grades were detected where the auriferous veins occurred in the granodiorite intrusions (the inner contact zone) with significant values as high as 71 grams per tonne gold over 9 metres and 14.5 grams per tonne gold over 4 metres.



Exploration and Development Operations



2004 Exploration Program



During 2004, exploration focused on two gold zones outlined in previous programs.  In July 2004, New Cantech conducted an exploration program under the supervision of Mr. Folk.  Work consisted of drilling, geophysics, geochemical soil sampling, surface trenching, and geological mapping over the property, which has in excess of 100 gold showings.  A magnetic survey was completed over the North Zone and new trenches were dug across the zone.  Sampling was initiated in a newly discovered gold zone 1.5 kilometres north east of the North Zone and on the same structural trend, where local miners have been active.  A total of 1,434.5 metres of drilling were completed in six holes.  Fire assays received for holes 1, 2, 4, 5 and 6 had the following significant intervals:











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|                |     |        |                 |                   |               |                      |                   
|--------------- | --- | ------ | --------------- | ----------------- | ------------- | -------------------- | ------------------
|HOLE #          | DIP | LENGTH | FROM
(M)        | TO
(M)            | INTERVAL
(M)  | GEOCHEM
ASSAY
ppb Au | FIRE ASSAY
Gm/t Au
|1
Includes      | -47 | 294.5  | 132.5
132.5     | 285.2
159.4       | 152.7
26.9    | 682
737              | 0.633
0.947       
|2               | -66 | 240    | 58.7            | 71.4              | 12.7          | 365                  | 1.12              
|4
Includes
Plus | -47 | 321    | 241.8
246.5
317 | 292.4
274.6
318.5 | 50.6
28.1
1.5 | 522
706
1448         | 1.01
1.54
4.92    
|5
Plus          | -47 | 252    | 61.2
97.1       | 73.5
98.6         | 12.3
1.5      | 488
1304             | 0.34
1.36         
|6               | -50 | 147    | 70.0            | 71.7              | 1.7           | 146.0                | 38.08             
|Plus            |     |        | 97.7            | 99.2              | 1.5           | 54210                | 73.70 (*)         

(*)

Average of two fire assays.



Hole 2 was drilled below the plunge of the mineralized zone.  True widths have not been determined at this stage.

Gold-bearing low-sulfide, shear and tension related quartz veins occur where a zone of regional shearing cross-cuts irregular bodies of K-spar rich Mesozoic granite of the North Zone.  The area of interest represents the northeasterly extension of a historical mining zone.  Drilling, core logging and sample splitting were done under the supervision of Mr. Folk.  The intervals reported consist of NQ-2 and BQ core sizes which were split by diamond saw under close supervision.



Samples were stored in a secure, locked storage area and then transported by company truck to Baotou, Inner Mongolia.  The samples were then shipped by train to the Institute of Geophysical and Geochemical Exploration in Langfang, Hebei Province which performed sample preparation and geochemical analyses.



This laboratory is certified by the China National Accreditation of Registrars to be International Organization for Standardization ("ISO") 9001:2000 compliant.  Prepared pulps of the same samples were then sent to The Sub-Institute of Analytical Chemistry, Beijing General Research Institute of Mining and Metallurgy in Beijing. Fire assaying of the samples using standard techniques was then performed and have been reported above.  This laboratory has been assessed by the China National Accreditation Board for Laboratories and found to be compliant using standards identical to ISO requirements.  Both of the above laboratories were examined by Mr. Folk and were found to be similar to accredited assay laboratories in Canada.



2005 Exploration Program



The program in 2005 consisted of a compilation of all available data for the North Zone and test drilling for the 2,000m mineralization zone.  Approximately 1,500m of drilling was completed along the northeast strike extent of the North Zone to better define grade and geometry of this extensive gold bearing area.  In the four holes drilled in 2005, three of them intersected the 100m-300m wide shearing zone which hosts gold mineralization within the altered and sheared granite in the north zone.  Eight gold mineralization zones were intersected within the wide shear zone, and individual gold zone is generally from 1.4 to 4.7m in width and contains 1 to 10.46g/t gold.  It is confirmed that the gold mineralization within the shear zone extended for more than 2,000m along strike at both surface and depth.



2006 Exploration Program



The drilling program in 2005 was successful in confirming the continuity of the gold-bearing structure extending northeast from the area of old mine workings that was drill-tested in 2004.  During the year, New Cantech advised that due to other project development programs that it would withdraw from the BYC Project.



2007 Exploration Program



The two exploration permits are in good standing and will expire on April 7, 2009.  The Company will be seeking a joint venture partner for the BYC Project in 2008.



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A systematic sampling and mapping program on the previously abandoned mining pits within the exploration permit was carried out by Minco geologists in July 2007.  A detailed discovery-oriented study on structural geology of the property was conducted by a consulting structural geologist in September 2007.



VI.

GOBI GOLD PROPERTY



The Company acquired its earn-in rights to the Gobi gold project, located in western Inner Mongolia in the south Gobi Desert, China, in 1999.  The Company has the right to acquire a 75% equity interest in Damo Mining Co. Ltd., who was assigned the licenses on the project, by spending approximately US$2,500,000 on exploration and development over four years.



Total expenditures funded by the Company from inception to December 31, 2007 were $1,713,010 as compared to December 31, 2006, expenditures of $1,498,691.  The Company has earned a 63% project interest as at December 31, 2007.



During 1998 a regional exploration and property evaluation was carried out in Inner Mongolia on the Gobi gold project culminating in the joint venture agreement in 1999 between the Company and the Exploration Institute of Land and Resources of Inner Mongolia ("EILR").  In 1999, the Company and EILR created Inner Mongolia Damo Mining Co. Ltd., a fully-licensed Sino-foreign co-operative joint venture ("Damo Mining"), to explore for metallic  mineral  deposits within the Inner Mongolia Autonomous Region. Initially, Damo Mining will focus on exploring its existing license holding that covers 550 square kilometres. The Damo Mining joint venture agreement allows the Company to earn up to a 75% interest in joint venture by spending US$2.5 million on exploration on the Gobi gold project over four years.  In the event the Company does not spend the specified amounts, its interest in the joint venture agreement may be subject to being capped by a predetermined formula as set out in the joint venture agreement.



Inner Mongolia Damo Mining Co., Ltd.



Damo Mining was formed in 1999 and operates pursuant to a Sino-foreign co-operative joint venture contract between EILR and the Company.  Under the terms of the joint venture contract, Damo Mining's board of directors consists of seven directors of which the Company has the right to select four directors, including the chairman.  The Company has selected Messrs. Ken Cai, Sunzhaojun Huqiufeng and Ruijin Jiang as its representatives.  EILR has the right to select the remaining three directors.  Due to the Company's majority ownership and majority representatives on Damo Mining's board, the Company controls Damo Mining's operations in the ordinary course of business.  However, the following transactions by Damo Mining require the unanimous approval by its board: (i) terminating or dissolving Damo Mining; (ii) selling or mortgaging assets that have a value of 10% of Damo Mining's assets; (iii) increasing or decreasing Damo Mining's registered capital; (iv) borrowing by Damo Mining; (v) merging Damo Mining; (vi) guaranteeing on behalf of Damo Mining; and (vii) establishing organizations under the board.



Property Description and Location



The Gobi gold project is located in the Gobi Desert of western Inner Mongolia, approximately 300 kilometres north of Yinchuan, the capital city of the neighboring Ningxia Province, and 900 kilometres northwest of Beijing.  The Gobi gold project is situated along the eastern extension of the Tian Shan Gold Belt, which hosts important deposits in Uzbekistan and Kyrgystan to the west.  World-class, sediment-hosted gold deposits occurring in the Tian Shan Gold Belt include Murantau with a resource of 140 million ounces gold (site of the Newmont Dump-Leach Project), Kalmakya with 26 million ounces gold and 13 million tons of copper, and Kumtor with 13 million ounces gold which is a Centerra Gold operated mine.  The Gobi gold Project is the culmination of a series of regional exploration programs undertaken by the EILR. EILR carried out a broad program of stream and drainage sampling.  This program highlighted several areas with gold concentrations some of which were followed up by mapping, prospecting and more closely spaced geochemical sampling.



Geological Setting



The Company believes that the potential for discovering more extensive, near surface skarn mineralization is good, given the limited exploration that has taken place beyond the surficial oxide zones. An initial  program of detailed ground



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magnetic  surveys  combined with geological mapping  was  completed  to  give  better  resolution  of  features  controlling mineralization.  Other prospects identified in the license blocks from regional geochemical surveys have had limited to no follow-up work. Known mineralization is developed in calcareous sedimentary units and proximal to small felsic intrusions.  Field examination of two prospects visited in 1999 showed features indicative of skarn style mineralization.



The 2000 exploration program involved ground magnetic surveys and geological mapping over the two identified skarn prospects to establish drill targets. Field-checks of the remaining geochemical anomalies were conducted.  The 2002 drill program tested results from previous exploration programs and 2003 fieldwork involved more drilling on the most favorable targets.  Total expenditures from inception to December 31, 2007, funded by the Company were $1,713,010, as compared to December 31, 2006 $1,498,691.



Exploration and Development Operations



2000-2003 Exploration Programs



The 2000 exploration program involved ground magnetic survey, structure-geochemical sampling and geological mapping over the two identified skarn prospects, the Zhulazhaga and the Haishenghari areas, to establish drill targets.  Most of the geochemical samples over the host rock unit contain 0.5-40g/t Au and extremely anomalous arsenic and antimony.  Favorable exploration targets were delineated according to geology, structure geology, geochemistry and geophysics.



The 2002 drill program tested resulted in the exploration targets delineated with geophysical and geochemical anomalies from previous exploration programs.  A new type of gold mineralization, the skarn gold mineralization, was intersected at the contact zone between the Proterozoic marble and the diorite dyke when testing the strongest magnetic anomaly M2 to the southeast of the know Zhula mineralization.  A new parallel mineralization zone was discovered at the south of the known Zhula mineralization zone by surface trenching.



2003 fieldwork involved more drilling over the new mineralization zone south of the know Zhula mine.  The strike and dip extensions of the new zone were traced.



In 2007, trenching and drilling were conducted to the west extension of the known gold mineralization zone. The drilling program was primarily focused on tracing the strike and dip extensions of the thick low-grade gold mineralization intersected in the previous drilling program. Multilayer mineralization zones were intersected in all five completed holes. Width of each individual zone is from 1 metre to more than 20 metres and grade of gold is from 0.6g/t to 2.45g/t.



Exploration Plan for 2008



Exploration activities will be focused on 1) diamond drilling the southwest extension and 2) mapping, trenching, of the northeast extension of the Zhula Mine.  Field programs are expected to commence in May.



Environmental Considerations



The exploration activities proposed for the Gobi gold project, including potential drill testing of new anomalies, will result in little surface disturbance,  and standard reclamation procedures will be used for areas such as trenches or drill pads.  The Company does not believe that there will be any potential environmental liability arising from these activities.





VII

JINNIUSHAN GOLD PROJECT (Gold Bull Mountain Project)



On November 14, 2006 the Company announced that its wholly-owned subsidiary, Minco Mining, had acquired a mining license on the Jinniushan Gold Mine (Gold Bull Mountain), covering 0.18 km2, and an exploration permit (16.68 km2), covering the strike extension of the Jinniushan Gold Mine.  Total consideration for the acquisition of the mining license and the exploration permit was approximately US$1 million.  The Company at the time of the announcement was in its



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final stage of the due diligence on the project and the acquisition is subject to regulatory approval.  Minco China has incorporated a local operation subsidiary in Hunan and the Gold Bull Mountain mining licenses were transferred to its subsidiary.



The 16.86 km2 GBM gold project covers most part of the Jinniushan gold mineralization belt which extends for more than 15 kilometers and is recognizable with the distribution of abandoned artisan mining adits and tunnels. The Gold Bull Mountain mining license is located in the middle of the belt.  High grade quartz-vein style gold mineralization is hosted in the late Proterozoic sandy slate characterized with obvious silification, seritization and pyrititization.  The Company commissioned the preparation of a NI 43-101 report on the Jinniushan Gold Project. The technical report dated December 28, 2006 was prepared by Peter G. Folk, P. Eng., of 280 Wood Dale Drive, Comp. 47, Site 21, Mayne Island, B.C., Canada, V0N 2J2.



The technical report was prepared under the guidelines of Canadian National Instrument 43-101.  The Company filed the Updated 43-101 technical report on January 3, 2007 via SEDAR.  Peter G. Folk has consented to the inclusion of this information and has authorized the relevant contents.  The information below is from the December 28, 2006 Technical Report.



Summary



The Jinniushan gold project, located in the western part of Hunan Province in the Peoples Republic of China, consists of a 0.178 km2 mining permit and a contiguous 16.78 km2exploration permit along strike.  These permits have been acquired by a wholly-owned Chinese subsidiary of the Company for a total consideration of about CDN$1,210,000 (which includes a Mining License and exploration permits) and have been transferred into a local subsidiary in Hunan Province.  The area under Minco control represents a portion of an historical mining district, which has been in periodic production utilizing small-scale artisanal methods since before the formation of the modern China in 1949.  Gold-quartz mineralization occurs primarily within reverse-brittle-ductile-shear veins in a compressive environment within Proterozoic sedimentary rocks.  Most of these dip to the southeast parallel to a nearby mapped thrust fault which occupies the contact between Proterozoic and Cretaceous to Tertiary sandy sediments.



The project has some geological similarities (age and type of host rocks and similar structural regime) to an important, deep Au-Sb-W underground mine about 6 km to the southeast but the Jinniushan area lacks Sb and W.  To date Minco has re-opened, surveyed, mapped and sampled accessible portions of the primary historical underground mine on the acquired mining permit.



This work has identified accessible areas within the mine that warrant further exploration and development.  Since it appears that the upper portions of the mine have been mined out, the future of the mine depends upon exploration down-dip.  At the time of writing a program to evaluate the multitude of mine works, trenches and adits on the exploration permit had just started.  Work to date has shown the presence of significant gold values which, however, contain within the assay distribution a significant nugget effect which will have to be contended with by careful sampling and fire assaying.  A surface program to evaluate the potential of the contiguous exploration permit complements a recommended program of underground development and drilling on the mining permit.  A two-stage budget of $1,677,000 is proposed with the first phase totaling $600,000.



Property Description and Location



Through a 100% owned subsidiary, the Company has purchased, in eastern Hunan Province, China, a 0.178 km2 mining permit and a contiguous 16.78 km2exploration permit along strike.  The mining permit is located at 1100 40 15 east longitude and 280 38 15 north latitude, 40 km from the county seat of Yuanling.  The mining permit was transferred to the Minco subsidiary from the former state-owned Jinniushan Gold Mine and the exploration permit was acquired by taking over a private company.  Both permits are valid until mid-2009 and renewable thereafter.  Annual fees, relating to the area of the permits held, are less than $2,500 per year.  The law requires local compensation for temporary use of land for mining and exploration purposes; however, habitations and land under cultivation form only a small part of the whole area and are not considered to present a significant liability.  A China Compensation Fee on gold mined is 2% of net smelter revenue.





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The mining permit is completely surrounded by the exploration permit and is defined by surveyed coordinates. Exploration permits in China are paper staked and can be defined by hand-held GPS units.  A map showing permit boundaries and known mining works (adits and trenches).  Being small underground mine workings of limited extent, the environmental liabilities that have been created by the various mining works are, in a Chinese context, not considered to be significant.  On exploration permits, the local (county) government is to be informed when work is to start and is in charge of some dealings with the local citizens.  For example at Jinniushan the local county government must deal with a small group of illegal miners said to be operating within the permit area.  Allowed underground work has been in progress for some time within the mining permit.



Accessibility, Climate, Local Resources

Infrastructure and Physiography



The location is well situated along a large man-made hydroelectric reservoir and is accessible by road and by lake-boat.  Hydroelectric power, telephone lines, cell-phone service, labor, goods and services are available nearby.  The climate is sub-tropical and the topography is hilly with elevations ranging from 92 to 232 m above sea level.  Vegetation, where not tamed by agricultural terraces, is thick and bushy.  All manner of exploration and mining work can be conducted on a year-round basis.  Surface rights have been sufficient for the operation of the small historical mines, which have operated in the area and are not considered to present a significant problem.  Expanded operations in the case that larger deposits are discovered will require the establishment of tailings areas without connection to the lake.  Insofar as there are few habitations (except along the lake) and no significant villages in the area under discussion the placement of larger scale tailings and plant sites should present no unusual difficulties.



History



The mining history of the area is similar to many other places in China in which uncontrolled mining has taken place (and continues to take place in some areas) with little regard for health and safety, environment, proper land use etc.  The mining permit and on-strike portions of the exploration permit were actively mined for gold (both placer gold and hard rock mines) in the period before 1949 when communist China was established, private enterprises were confiscated, and the mines were closed.



Only on the mining permit area was this work well organized, although mine plans, surveys and production figures have been lost.  When international gold prices increased in the 1970s hand mining at various locations resumed to be largely replaced by small local government operations at three locations in the 1980s.  In 1993, the local hydroelectric dam was completed and some of the historical mining areas were flooded.  In 2001 and 2004, the Federal Chinese government, in an attempt to bring some regulation and safety to gold mining, decreed the closure of two of the existing small (illegal) mines.  Production within the remaining mining permit stopped last year as part of a re-organization.



There are unconfirmed rumors that illegal hand miners are still operating in the area of the exploration permit.  In the history of the permit areas there has never been organized large or medium-scale mining.  Only the crudest of recovery methods using small crushers, gravity devices, cyanide ponds and mercury were utilized.  If records were ever kept, they have been lost.  Except for the active mining permit area, mine maps and engineering records do not exist.  Production figures are not known.  No drilling or other modern exploration techniques (geochemistry, geophysics, etc.) have ever been undertaken in the area.  On the exploration permit, to the northeast of the mining permit a group of mines was examined in 1992 by a geological unit of the Provincial Government.  Unfortunately, most of the results of this work are not available and, in any case, the most interesting zone, along about 900 m of strike length, became submerged when the hydroelectric reservoir was completed in 1993.



Geological Setting



Regional and Local Geology



The area of interest occurs within Paleozoic rocks of the South China Plate in unconformable and faulted contact with younger Cretaceous sediments.  A strong element of NW-SE compression is evident with abundant NE-SW fold axes and reverse faults striking in the same direction.  This is consistent with modern GPS observations, which show that entire area is moving to the southeast at a rate slightly less than 5 cm/year.  The geology of the region is divided into low-grade



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metamorphically altered:



·

Cretaceous to Tertiary sediments comprising sandstone, shale and coal seams (K and K-E).

·

Small remnants of Devonian-Permian sediments (D-P).

·

Precambrian (Sinian or Late Proterozoic) to Silurian sandstone and slate or shale (Z-S).

·

Proterozoic sediments comprising slate, sandstone and siltstone (Pt1 and Pt2).



The Jinniushan Project has similarities to the Xiangxi (also called Woxi) Sb-Au-W underground mine, about 6 km to the southeast, which has reached over 1,000 m below surface and has been mined for over 100 years. The mine is the second largest Sb producer in China (Qinglin, Xie et al).  It has been classed as a Carlin type deposit (Li and Peters, 1998) and contains native gold, stibnite, tungstite, pyrite, arsenopyrite and aurotite.  Structurally the mineralization is found in shoots within reverse faults in Middle Proterozoic slates (RSG Global, 2006).  Although the structural setting is similar to that at the Jinniushan Project, geochemically the two are very different with no significant stibnite or tungsten minerals noted at Jinniushan.



Property Geology



Predominantly shear-hosted gold-quartz mineralization occurs in Proterozoic sandstones, and shales, which have undergone NW-SE compression.  The Proterozoic sequence is unconformably overlain by Cretaceous to Tertiary purplish sandy sediments and forms the central unit of a NE-SW trending anticline.  The southern contact between the two formations has been mapped as a thrust fault.  Gold mineralization is associated with brittle-ductile shears with a reverse sense of movement similar in form to the mapped thrust fault.



Shallow dipping tension veins splay off the shear veins, usually in the footwall.  The gold-quartz mineralization seen so far is entirely structurally controlled and the mineralizing fluids have barely affected the wall rocks.  The veins contain few examples of open space filling but rather appear to be of a deeply seated type containing ribbon structures consisting of alternating bands of country rock and vein quartz.  It appears that the shearing event within which the quartz veins were emplaced continued after the main mineralizing event to form re-sheared and brecciated veins.  Minor iron carbonate and sericitic wall rock alteration have been noted.



Deposit Types



Similar to the geometry of a mapped thrust fault are southeast variably dipping (usually about -500) quartz-pyrite (minor Pb, Zn, As) veins which have been emplaced within reverse-movement shears.  A secondary set of conjugate northwest dipping reverse shears is also present along with a flat set of quartz-filled tension fractures usually splaying off into the footwall.  In detail, the vein system is complex, but the main elements of the system, which have been emplaced under the effects of NW-SE compression, can be shown in the simple diagram below.  Theoretically, in this type of stress regime the individual mineralized ore shoots would likely have a strong horizontal trend.  Veins contain very little evidence of open-space filling and do not have banded epithermal characteristics.  Rather, white quartz veins containing ribbon structures and shearing which approaches the brittle-ductile provenance suggest a mesothermal setting.



The main focus of historical mining and of recent work has been on the set of shear veins located on the Mining Permit, however an additional six km of strike length is indicated to be prospective by the occurrence of numerous trenches and at least 17 small mine adits which are shown on existing maps.  Known shear veins average about 0.7 m in thickness, but there are locations where shear veins come close together and the intervening wall rock becomes permeated with tension veins.  In these cases much wider, but irregularly shaped, mineralized stockwork bodies may be formed.  Although presently there is no indication of disseminated mineralization, there could arise, through combinations of structures and naturally permeable sandstone host-rocks, a situation where low-grade bulk-mineable mineralization may be encountered.  This aspect should also be explored.



Mineralization



The central part of the mine is developed on at least three separate, but related shear veins across a horizontal width of about 60 metres.  The strike length of the main portion of the mine is about 350 metres.  Most of the vein material above



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the primary access levels has been mined out and some material has been mined below these levels by means of declines.  The future of the mine is downwards.  Although the declines are well below the level of the man-made lake, the mine is almost completely dry (from a mining point of view the presence of the lake will require some engineering care, however this is well understood by the technical people involved).



At the current level of knowledge there is no reason to think that the mineralization will not go to considerable depth.  Also, although the shear-veins cross cut local lithologies, there may eventually be found to be some lithological control to the mineralization.  Where shear veins come close together the intervening space can become riddled with tension veins leading to the supposition that there may be sections of the mine where the narrow-vein, open-stope mining utilized in the past may be replaced by larger scale mining techniques.



Exploration



Before involvement by the Company, there was little organized exploration activity.  Tracked mining using open-stope methods took place at a rate of a few tonnes per day on the mining permit and have occurred at lesser scales (even perhaps to the present day) at other locations on the exploration permit.  Prior engineering and geological control and proper documentation of the mining works are unknown.  Ore processing consisted of small electric crushers, gravity separation, cyanidation in concrete ponds and some amalgamation by mercury.  The processing machinery has been removed, leaving crude foundations behind.  Neither the large quantities of waste-rock that were taken out of the mine, nor processed tailings are apparent and the author concludes that this material has gone into the lake.



Work done by the professional staff of Minco since the end of August, 2006 has consisted of underground surveying, mapping and sampling of accessible portions of the mine on the mining permit.  To date 71 channel samples have been taken within the mine and these are set out on the Companys website.



The preliminary results serve to show that gold in economically interesting quantities occurs in several veins within the central area of the mine.  The total strike length in which the best assays occur is about 350 metres.  A program of duplicate assays has been carried out whereby the sample rejects were sent to Process Research Associates Ltd in Yunnan for re-assay by fire assay techniques.  Each sample was fire assayed three to four times in Yunnan and the average results are shown on Table 1 shown above.  Also shown on the same table are the authors check sample results, which were taken at exactly the same locations as the prior samples.  These seven samples were analyzed by metallic screen analysis and fire assay at Acme Analytical Laboratories in Vancouver, British Columbia.  The table clearly shows that a strong nugget effect is present which affects the repeatability of results.



Nugget Effect



Because coarse gold has been reported in the mine the author requested that his samples be analyzed by metallic screen analysis and fire assay, which would be considered to be the most accurate assay method for samples with a strong nugget effect.



A cursory analysis of Table 1 shows a strong variation in gold values when the same sites are re-sampledsamples initially with high assays can be re-sampled with very low results and the opposite is also true.  This problem is often encountered in gold mining and can be illustrated by examining the metallic screen analyses shown in the table below.



|       |           |          |            |       
|------ | --------- | -------- | ---------- | ------
|       | Sample.Wt | CoarseAu | Fine Assay | TotAu 
|SAMPLE | Gm        | Mg       | gm/mt      | gm/mt 
|#1-14A | 506       | <.01     | 0.12       | 0.12  
|#2-01A | 505       | 29.78    | 64.6       | 123.57
|#2-02A | 503       | 7.02     | 17.31      | 31.27 
|#2-05A | 498       | 9.16     | 22.09      | 40.48 
|#3-05A | 505       | 9.16     | 13.47      | 31.61 
|#3-07A | 497       | 5.77     | 11.74      | 23.35 
|#3-09A | 495       | 0.07     | 0.09       | 0.23  





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Table 2.  Metallic Screen Analysis from the authors seven check samples.



In this technique, approximately 500 grams are pulverized and passed through a -150 mesh screen.  The fine fraction and coarse fractions are fire assayed separately and the results are combined.  The above table shows that approximately 50% of the gold is in the form of coarse nuggets (greater than -150 mesh size).  Practically, a strong nugget effect means that each individual sample has a low confidence level, and that to prove a gold resource will be more than usually difficult.  In cases such as this, drilling can be used to define the geometry of the various veins; however it may be necessary, especially until experience is gained, to use underground drifting and sampling to prove-up the gold resource.



Geochemistry



Peter G. Folk had seven check samples also analyzed for 32 elements by ICP.  Results No other elements are present in economic concentrations and only Pb occurs in what might be considered to be weakly anomalous quantities.  Although seven samples is not statistically sufficient to come to a firm conclusion, the data may indicate that there is a negative correlation between Au and Ca, i.e. the more calcium that occurs in the sample, the weaker is the gold result.  In practical terms the negative correlation between Au and Ca may (if further work confirms the effect) yield a geochemical tool to help determine the validity of gold analyses, i.e. a high gold assay which also contains high Ca may be suspect.  It is likely that the element Ca noted in the data occurs in a calcium carbonate mineral therefore indicating a common mineralogical zonation whereby carbonates occur as a halo around a precious-metal-silicate core zone.  Further geochemical work and careful examinations underground should be undertaken to determine if these noted effects are actually present and can become useful exploration tools.



Recommendation made to

The Company by Peter G. Folk



In Mr. Folks opinion the character of the property is of sufficient merit to justify the following recommended program of work.  A staged program is envisaged whereby a second phase composed primarily of drilling from surface and underground development depends on the first phase of underground development and underground drilling on the mining permit, and surficial examinations over the area of the exploration permit.



Phase 1



Mining Permit



1.

A program of 440 m of underground development is recommended to expose large sections of
prospective veins for sampling and to provide material for metallurgical testing.

2.

A program of 1,950 m of underground drilling is to follow the underground development.

3.

Preliminary metallurgical testing should be undertaken.



Exploration Permit



1.

The entire exploration permit needs to be examined and all of the mine openings, trenches, and prospect pits should be identified, mapped, sampled and defined with GPS coordinates.

2.

The most interesting mine workings should be rehabilitated and the workings mapped and sampled.

3.

Geological mapping should be undertaken over the entire permit.

4.

Soil geochemistry should be undertaken on widely-spaced lines.



Phase 2 (Contingent on the results of Phase 1)



Contingent on Phase 1 results, a phase 2 project would be concerned with diamond drilling targets defined in the Phase 1 surface program and would include further underground development utilizing a shallow shaft to access areas down dip of the known veins on the mining permit. Further metallurgical testing would be done as would preliminary environmental and engineering studies.  With positive results the end of the Phase 2 program would see the calculation of a gold resource and the project would be at a pre-feasibility stage.





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Budget



It is the nature of mineral exploration that it is impossible to exactly predict what the results, best methods and expenditures will be, these being entirely dependant on factors at the exploration site, the timing of the work, and various contract costs at the time.  Below is a recommended estimate of expenditures prepared by Mr. Folk.  Mr. Folk also recommended that a budget be prepared in China at the time that various parts of the program are put to tender.



Phase 1



Underground development

450m @ $120/m



54,000

Underground drilling

1,950 m @ $20/m

39,000

Mine rehabilitationexploration permit

45,000

Surface mapping (geology, topography, hydrogeology)

83,000

Trenching

10,000 cubic m @ $10/cubic m

100,000

Preliminary metallurgical test

25,000

Assays

2,000 @ $20

40,000

Soil samples

500 samples @ $25 per analysis

12,500

Sample shipping

5,000

Camp costs, food and supplies

12,000

Local transportation, vehicle rental, gasoline and supplies

10,000

Non-camp lodging, food, hotels

10,000

Communications, telephone, internet

5,000

Office costs (Yuanling), drafting, report writing, consulting

25,000

Local public relations, social program

5,000

Supervision, engineering, geology, mine administration

50,000

Casual labor, camp maintenance, cooks, drivers

10,000

Airfare and other travel

8,000

Road construction and repairs

7,000

545,500

Contingency 10%

54,500

$600,000



Phase 2 (Contingent on the results from Phase 1)



Surface diamond drilling

3,300 m @ $100/m (large diameter)

330,000

Exploration shaft

150 m @ $1,200/ m (all inclusive)



180,000

Underground development

800 m @ $120/m

96,000

Assays

3,000 @ $20

60,000

Metallurgical studies

50,000

Engineering and environmental studies

75,000

Sample shipping

5,000

Camp costs, food and supplies

15,000

Local transportation, vehicle rental, gasoline and supplies

10,000

Non-camp lodging, food, hotels

20,000

Communications, telephone, internet

5,000

Office costs (Yuanling), drafting, report writing, consulting

50,000

Local public relations, social program

10,000

Supervision, engineering, geology, mine administration

50,000

Casual labor, camp maintenance, cooks, drivers

10,000

Airfare and other travel

8,000

Road construction and repairs

5,000

979,000

Contingency 10%

98,000



1,077,000

GRAND TOTAL

$1,677,000



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Exploration and Development Operations



2007 Exploration Program



On February 6, 2007 the Company announced an update on the current exploration program of Jinniushan or Gold Bull Mountain Gold Project (hereafter the GBM Project), located in eastern Hunan Province, P.R. China.



The GBM gold belt extends for more than 15 kilometers and is recognizable by wide distribution of artisanal mining adits, pits and tunnels. Gold mineralization at the GBM belt occurs in late Proterozoic sandy slate characterized by strong silification, seritization and pyrititization. Four parallel quartz-vein style gold zones have been recognized with a strong continuity along strike and dip directions.



Minco geologists have completed a preliminary investigation program on the GBM Mining License area, including underground surveying, mapping, and sampling of accessible portions of the GBM gold mine. 71 channel samples in cross cuts were collected from four individual gold zones. At a cutoff of 1g/t gold, the average gold grade and thickness are as follows:



Zone

Average Grade (g/t )

Thickness (m)

V2-1

6.87

0.65

V2-2

22.68

1.06

V2-3

18.78

0.77



Two grab samples collected from zone V2-4 yield 9.25 g/t and 22.45g/t gold.



In 2007, exploration activities were focused on drilling and underground exploration tunneling within the GBM mining permit.  A sketch mapping, trenching and mapping for the widespread artisan adits were conducted in the GBM exploration permit.  Total completed exploration work included 3,987.5m drilling, 1,745.2m tunneling, 17km2 sketch mapping, 3,964.5m artisan adit investigation, and 3.64km2 geochemical soil sampling.  It is confirmed that the mineralization zone at GBM is highly uncontinuous along strike and dip directions and grade of gold is extremely unevenly distributed in mineralization zones because of significant nugget effect.



Upon reviewing the results from the above exploration programs, the Company will focus on underground exploration and exploitation on levels 87 and 47 within the GBM mining permit in 2008.



VIII.   XIAOSHAN GOLD & POLYMETAL PROJECT



The Xiaoshan project is located in the Shanxian County of NW Henan Province and is 45 kilometres from the Shanxian county town. The project can be accessed by dirt road from Sanmenxia city. The Xiaoshan project consists of two exploration permits, the 17.1km2 Huluyu permit and the 12km2 Dafangshan permit and both permits are hold by the Henan Nonferrous Exploration and Mining Company (HNEM), a subsidiary of the Nonferrous Geological Exploration Bureau of Henan Province. On February 7, 2007, a JV agreement was signed between the Minco Mining (China) Corporation and the Henan Nonferrous Exploration and Mining Company (HNEM) to jointly explore and develop the precious and nonferrous resources in the Xiaoshan project area. Minco will earn 70% interest of the Xiaoshan project by making an instalment cash payment of RMB15 million and funding all the exploration and development activities. The HNEM will hold a carried interest of 30% in the Xiaoshan project. All the exploration and development will be operated through the joint venture, Zhongjia-Minco Mining Company.  The project area is characterized with structurally denuded low to medium mountains from 869 to1387 meters above sea level. Strong dissection has resulted in deep valleys and steep slopes in the area. Annual precipitation is 586mm and most of them concentrate in the rain season from June to September. The annual evaporation is 1858.8mm. The area is covered with well developed vegetation.



The Company commissioned the preparation of a NI 43-101 report on the Xiaoshan Project. The technical report dated October 1, 2007 was prepared by Peter G. Folk, P. Eng., of 280 Wood Dale Drive, Comp. 47, Site 21, Mayne Island, B.C., Canada, V0N 2J2.  The full report can be found on SEDAR.





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Exploration History



Most of the previous exploration has been focused on surface or near surface investigation, including 1:200,000 scale mapping, 1:50,000 scale mapping, 1:50,000 scaled stream sediment sampling and investigation on hundreds of ancient workings and quartz veins. The previous investigation has resulted in the delineation of some important geochemical gold and silver anomalies and tens of quartz veins and alteration zones. It has been concluded that the Xiaoshan project area is dominated with gold and silver near surface but increasing silver and lead has been noticed at depth. Almost no exploration has been conducted in the deep portion of the project area with modern exploration techniques.



Regional Geology



Tectonically, the Xiaoshan project area sits at the Xiaoshan uplift block on the southern rim of the North China Craton. The area is also located at the east section of the E-W trending Qinling metallogenic belt. Bedrock consists of highly metamorphosed Archean rocks in the core area and the adjacent Proterozoic intermediate volcanics, phyllites and schists. The Archaean metamorphics comprise plagioclase amphibolite, biotite amphibolite, chlorite mica schist and migmatite. The Archaean rocks form the core of the Xiaoshan uplift and Proterozoic rocks distributes around, which formed an anticline/dome structural feature. The axis of the Xiaoshan Dome is E-W orientated. The dipping angles of the stratigraphic bedding vary 30° to 60°.



Three sets of faults have been identified and they are striking to NEE, NNW and NWW respectively. Gold and silver mineralization is dominantly controlled by NNW and NWW faults.



Volcanic activities in northwest Henan mainly occurred in the early Middle Proterozoic and volcanics include Andesite and Andesitic porphyrite. Intrusive activities occurred in two episodes, the early Middle Proterozoic and the Early and Middle Mesozoic (Yanshanian). Intrusive rocks consist of the Middle Proterozoic diabase and diorite dykes, and the Mesozoic grano-porphyry, pegmatite and syenite dykes. No sizable intrusion has been observed at surface. However, geophysical data may indicate the presence of large-scaled acidic intrusion at depth.



The Archean metamorphosed rocks of Taihua Group are the dominant host for the large and giant gold-silver deposits in the east section of the Qinling metallogenic belt. High-grade lead and silver usually discovered at the deeper portion of the gold-silver system. The high potential Ying property of Sivercorp is located at a parallel zone to the south of the Xiaoshan project area. The largest gold mine within the property area is located to the west of the Xiaoshan project area at the same EW trending zone. All these important precious and nonferrous deposits in this area are hosted in the Archean metamorphosed rocks of Taihua Group.



Property Geology



Both permits are located within the uplifted core area at the Xiaoshan Uplift Block.  Bedrocks within the two permits are mainly Archean migmatite, schist and gneiss (Taihua Group) which were intruded by Proterozoic diabase dykes and Mesozoic acidic dykes.



Geology and mineralization characteristics of the two exploration permits will be described respectively in the following sections.



Alteration & Mineralization



(1) Alteration: Alteration associated with gold and silver mineralization includes silification, carbonatization, pyrite-sericite-quartz alteration, Kaolinization, sericitization, chloritization, epidotization, and ferritization.



(2) Mineralization: Mineralization types closely associated with gold and silver mineralization include pyrite, galena, sphalerite, chalcopyrite, and magnetite as well as a minor amount of limonite and malachite.



Characteristics of Gold and Silver Veins



13 gold and silver lodes were mapped out at surface within the Huluyu permit. Ore lodes occurred as thin veins in



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structural cataclastic belts and mainly controlled by NW- and NNW-trending faults. The most important lodes include K1, K3, K4, K5, K6, K7 and K8. The largest lode is 4150m in length and dips to 245° at 75°.



Metallic minerals include pyrite, galena, sphalerite, chalcopyrite, magnetite, hematite, limonite and malachite. Major non-metallic minerals are plagioclase, quartz, and muscovite.



According to structure and texture, ore can be divided into the following categories (1) densely massive ore; (2) veinlet banded ore; (3) brecciated ore; and (4) sporadically disseminated ore.



7 gold and silver lodes have been defined at surface in the Dafangshan area. Mineralized lodes occur as thin veins in structural cataclastic alteration belts and are controlled by NW-, NE- and EW-trending faults. Limonite, pyrite and galena are closely associated with gold mineralization.





Exploration Programs



Exploration target:

High-grade massive sulfide at depth of the major ore-control structures.



Exploration Focus in 2007 included (1) systematic mapping and sampling of available artisan mining tunnels; (2) surface mapping to trace the distribution of surface mineralization; and (3) test drilling along K3 vein system, the major ore-control structure at the Huluyu permit.



The major K3 ore-control structure was partially tested with seven holes and has been traced for more than 250m below surface. No encouraging results for the expected massive sulfide received from assay data of the four of the seven completed holes so far.



A comprehensive review on the available results from 2007 exploration programs shall be arranged before further exploration programs are carried out in the two areas.



The Company has started a diamond drill program within the Huluyu exploration permit of the Xiaoshan project area consisting of seven holes for a total of 1,763 metres. The drill program has been designed to trace the dip and strike extensions of the southern portion of the K3 structural zone. Results are currently being interpreted before proceeding with further exploration.



ITEM 5

OPERATING AND FINANCIAL REVIEW AND PROSPECTS



This discussion and analysis of the operating results and the financial position of the Company for the three years ended December 31, 2007, 2006 and 2005 should be read in conjunction with the consolidated financial statements and the related notes.  Financial amounts (other than per share amounts) in the following discussion have been rounded to the nearest thousand dollars.



A.

OPERATING RESULTS



General



The Company is in the exploration stage and had no operating revenue during the years ended December 31, 2007, 2006 and 2005.  Since the signing of the Companys first co-operation agreement in China in 1995, the Company has been active in mineral exploration, property evaluation and acquisition in China and plans to build a portfolio of precious and base metals properties in China.  To date, the Company is in the exploration stage and has no operating revenue.



Since the signing of its first co-operation agreement in China in 1996, the Company has been active in Chinese mineral exploration, property evaluation and acquisitions and plans to build a portfolio of precious and base metals properties in China.  The Company has conducted exploration work on properties located in Sichuan, Xinjiang, Hebei, Inner



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Mongolia, Henan, Hunan, Guangdong and Gansu provinces of China, and investigated or evaluated many Chinese mineral properties.



Results of Operations (Canadian GAAP)



In the following discussion, financial amounts have been rounded to the nearest thousand dollars. For comparison, the Company's results of operations for the year from 2005 to 2007 and for the first quarter ended March 31, 2008 are included.



Year Ended December 31, 2007 Compared to Year Ended December 31, 2006

And First Quarter ended March 31, 2008



EXPLORATION COSTS



First Quarter ended March 31, 2008 Compared to March 31, 2007



Gross exploration costs totaled $1,768,000 for the three months ended March 31, 2008 compared to $653,000 in 2007.







|                                                       |                            |                           
|------------------------------------------------------ | -------------------------- | --------------------------
|Minco Gold:                                            | (Unaudited)
March 31, 2008 | (Unaudited)
March 31, 2007
|Gansu                                                  |                            |                           
|·
Yangshan, Anba                                       | 2,344                      | 549                       
|·
Minco-Qinqi
(formerly Western Extension of Yangshan) | -                          | 892                       
|·
Longnan                                              | 114,327                    | 219,837                   
|Inner Mongolia                                         |                            |                           
|·
Gobi Gold                                            | 32,083                     | 2,420                     
|·
BYC                                                  | 3,263                      | 6,820                     
|Guangdong                                              |                            |                           
|·
Changkeng                                            | 1,411,950                  | 10,958                    
|Hunan                                                  |                            |                           
|·
Gold Bull Mountain                                   | 30,750                     | 411,953                   
|Henan                                                  |                            |                           
|·
Xiaoshan                                             | 173,359                    | -                         
|Gross exploration costs                                | 1,768,076                  | 653,429                   
|Exploration cost recoveries                            | -                          | -                         
|Expensed exploration permits                           | (1,368,426)                | -                         
|Expensed exploration costs                             | (399,650)                  | (653,429)                 



The increase in exploration costs is due to the spending on the Changkeng Exploration Permit purchased in 2008, partially offset by less field work conducted on the Longnan Properties and less underground development on the Gold Bull Mountain Properties during the three months ended March 31, 2008. The Company transferred the interest in the White Silver Mountain project to Minco Base Metals Corporation effective November 15, 2007 and treats the exploration expenditures as part of discontinued operations.  Exploration expenditures for the White Silver Mountain project included in discontinued operations are nil for the three months ended March 31, 2008 $6,974 for the three months ended March 31, 2007.















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Year Ended December 31, 2007 Compared to Year Ended December 31, 2006



For the year 2007, gross exploration costs totaled $2,948,000 compared to $2,989,000 in 2006. Over the 12 month period, ended December 31, 2007, the Company expensed $2,948,000 (2006: $2,535,000) and recovered $ nil (2006: $95,000).





|                                                       |                   |             |               
|------------------------------------------------------ | ----------------- | ----------- | --------------
|                                                       | 2007              | 2006        | 2005          
|Gansu                                                  |                   |             |               
|·
Yangshan, Anba                                       | 12,941            | 4,209       | 319,226       
|·
Minco-Qinqi
(formerly Western Extension of Yangshan) | (163,088)         | 20,088      | 207,699       
|·
Longnan                                              | 886,375           | 416,215     | 81,169        
|Inner Mongolia                                         |                   |             |               
|·
Gobi Gold                                            | 214,319           | 11,151      | 15,382        
|·
BYC                                                  | 34.098            | 135,374     | 286,918       
|Guangdong                                              |                   |             |               
|·
Changkeng                                            | 176,365           | 56,034      | 89,884        
|·
Fuwan                                                | -                 | 943,207     | 2,004,354     
|Henan                                                  |                   |             |               
|·
Xiaoshan                                             | 1,131,000         | -           | -             
|Hunan                                                  |                   |             |               
|·
Gold Bull Mountain                                   | 655,858           | 1,402,734   | -             
|Gross exploration costs                                | 2,947,948         | 2,989,012   | 3,004,632     
|Exploration cost recoveries                            | -                 | (95,331)    | (337,674)     
|Expensed exploration permits                           | (842,788)         | (852,000)   | (1,739,594)   
|Expensed exploration costs                             | (2,105,160)       | (1,683,281) | (927,364)     
|Capitalized mining permit costs                        | $               - | $  358,400  | $            -



Most of the decrease in exploration costs in 2007 is due to the transfer of all spending on the Fuwan silver project to Minco Silver offset by the additional spending on the Xiaoshan project. The Company ceased being the majority shareholder of Minco Silver Corporation on November 17, 2006, and no longer consolidates its property costs after that date. Prior to November 17, 2006, Minco Silver had incurred, and the Company had consolidated $943,206 in 2006 and $2,004,354 in 2005 in exploration and permit costs on the Fuwan property.  In addition the Company transferred the interest in the White Silver Mountain project to Minco Base Metals Corporation effective November 15, 2007 and treats the exploration expenditures as part of discontinued operations.  Exploration expenditures for the White Silver Mountain project included in discontinued operations are $9,172 in 2007, $27,852 in 2006 and $64,210 in 2005.



a.

In July 2006, Minco Chinas wholly owned subsidiary Yuanling Minco entered into a Gold Bull Mountain Mining License Transfer Agreement with Yuanling County Government.  On August 10, 2006, the Gold Bull Mountain Mining License was transferred to Yuanling Minco. In 2006, the Company has paid a total of RMB 2,546,652 (approximately $358,400).



On August 5 2006, the Company entered into a Shareholding and Enterprise Assets Transfer Agreement to acquire Huaihua Tiancheng in order to obtain exploration permits for the areas around the Gold Bull Mountain mining licensed area. The acquisition price was RMB 6,000,000 (approximately $852,000), which was paid as of December 31, 2006.



b.

On September 28, 2006, New Cantech notified the Company that it did not want to proceed with the BYC Option, and the two parties signed a termination agreement on October 3, 2006. Pursuant to the BYC Option Agreement, New Cantech reconveyed to the Company all of its rights and interest in and to the BYC project.



As of September 28, 2006, New Cantech has spent $781,588 on geophysical and geochemical surveys, geology and drill holes. In the period ended September 28, 2006, the direct costs and management fees incurred on the BYC project totaled $95,331 (2005: 286,918, 2004: $358,362, 2003: $40,977), which were repaid by New Cantech.



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The Companys exploration costs represent expenditures to undertake and support exploration activities on the Companys properties.  As of December 31, 2007, the Company committed to pay $6,800,000 for Changkeng exploration permit and other investments, $2,600,000 for Xiaoshan exploration permit, investment commitments and drilling programs and $160,000 for Longnan drilling programs.



Administrative Expenses



First Quarter ended March 31, 2008 Compared to March 31, 2007



The Companys administrative expenses include overhead associated with administering and financing the Companys exploration activities. In the three-month period ended March 31, 2008, the Company spent a total of $896,000 on administrative expenses compared to $893,000 in the same period of 2007.



Significant changes in expenses are as follows:



·

The Company realized a foreign exchange gain of $101,000, as compared to a gain of $60,000 in the same period of 2007.



·

The Company recorded stock based compensation in the three-month period ended March 31, 2008 of $419,000 compared to $389,000 in the comparative period. The increase was attributable to the fact that the Company has a higher amount of stock options outstanding during this period.



·

Personnel costs (comprising salaries, benefits and consulting fees) for the three-month period ended March 31, 2008 were $174,000, compared to $207,000 in the same period of 2007.  The amount decreased due to a decrease in employees.



·

The Company incurred investor relations expense of $148,000 in the three-month period ended March 31, 2008 compared to $109,000 in the same period of 2007. The amount increased due to a higher level of investor relation activity.



In the three-month period ended March 31, 2008, the Company did not grant stock options to employees and consultants.



Year Ended December 31, 2007 Compared to Year Ended December 31, 2006



The Companys administrative expenses include overhead associated with administering and financing the Companys exploration activities. Minco Gold and Minco Silver share its Vancouver and China offices. Minco Gold allocates a portion of salaries, rent and office administration expenses at cost to Minco Silver.



In the year ended December 31, 2007, the Company spent a total of $5,026,000 on administrative expenses compared to $5,760,000 in 2006. Of these expenses, $2,023,000 was non-cash stock based compensation expenses compared to $2,820,000 in the same period of 2006.



Significant changes in expenses were:



·

A foreign exchange loss of $416,000 was incurred in 2007 as compared to a gain of $241,000 in 2006.



·

Most expenditures in 2007 were lower than in 2006 due to Minco Silver being equity accounted for all of 2007.  Minco Silver was consolidated into Minco Golds accounts until November 19, 2006.





Year Ended December 31, 2006 Compared to Year Ended December 31, 2005



The Companys administrative expenses include overhead associated with administering and financing the Companys exploration activities. Minco Gold and Minco Silver share its Vancouver and China offices. Minco Gold allocates a



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portion of salaries, rent and office administration expenses at cost to Minco Silver.



In the year ended December 31, 2006, the Company spent a total of $5,792,000 on administrative expenses compared to $2,858,000 in 2005. Of these expenses, $2,820,000 was non-cash stock based compensation expenses compared to $374,000 in the same period of 2005.



Minco Silver increased its operating activity after its public listing on the TSX on December 1, 2005; in March 2006, Minco China set up a new branch office in Gansu which is mainly responsible for Gansu-Longnan properties. Minco China also set up a new wholly-owned subsidiary Yuanling Minco in July 2006 and acquired Huaihua Tiancheng in August 2006. Many expenses such as office and miscellaneous, rent and telephone increased accordingly. Changes in other significant expenses were:



·

Personnel costs (comprising salaries, benefits and consulting fees) for the year ended December 31, 2006 were $813,000, compared to $613,000 in 2005. The increase is a result of more operating activity after Minco Silvers public listing. In addition, in late 2005 and early 2006, the Company recruited several senior level employees in Canada and China, including a CFO, a VP Corporate Development and investor relations manager. The Company expects that salaries expense will increase further in coming periods as it hires additional employees in and China, a VP Exploration for all projects and a VP Operations to manage the development of the Fuwan property.

·

Following Minco Silvers public listing, the Company undertook investor relations initiatives for both Minco Gold and Minco Silver. The Company increased investor relations initiatives by attending more investment conferences and experienced higher printing costs related to IR activities. As a result, the Company incurred investor relations expense of $843,000 in the year ended December 31, 2006 compared to $453,000 in 2005. The Company retained the services of several investor relations groups, including Boardmarker Consultancy Group, O&M Partners LLC, K Crew Communications Inc., etc.

·

For the year ended December 31, 2006, the Company incurred a foreign exchange gain of $237,000 as a result of an increase in the Canadian dollar value of its RMB-denominated net assets, as compared to a loss of $10,000 in 2005.

·

The Company recorded $2,820,000 stock based compensation in 2006, of which $1,432,000 (2005: $323,000) related to Minco Gold and $1,388,000 (2005: $51,000) related to Minco Silver. The increase in this expense was attributable to higher vesting of stock options in the year, which in turn resulted in an increased fair value of stock options.



In 2006, Minco Gold granted 2,197,000 stock options to its directors, officers, employees and consultants at the price range from $1.43 to $2.55 per share. Minco Gold recorded $1,432,000 of stock based compensation expense in 2006 (2005 - $323,000).



·

In 2006, Minco Silver granted 725,000 stock options to its directors, officers, employees and consultants at the price range from $2.80 to $3.67 per share. The Company recorded $1,388,000 of stock based compensation expense prior November 17, 2006 (2005 - $51,000).



INTEREST AND SUNDRY INCOME



First Quarter ended March 31, 2008 Compared to March 31, 2007



To date the Company has been in the exploration stage and has not earned significant revenue other than interest income, office sublease income, drilling tools rental income and management fees.



In the three months ended March 31, 2008, interest and sundry income was $61,000 compared to $89,000 in the comparative period. The decrease was mainly due to a lower balance on deposit.











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Year Ended December 31, 2007 Compared to Year Ended December 31, 2006



To date the Company has been in the exploration stage and has not earned significant revenue other than interest income, office sublease income, drilling tools rental income and management fees. In the year ended December 31, 2007, interest and sundry income was $307,000 compared to $674,000 in 2006. The 2007 decrease was mainly due to decreased balances invested.



As at December 31, 2007, short-term investments consisted of cashable guaranteed investment certificates, commercial notes, and 420,000 common shares of New Cantech Venture Inc. (New Cantech). The market value of the shares was $88,200 as of December 31, 2007.

At December 31, 2007, the yields on the short-term investments were between 4.00% and 4.30% per year (December 31, 2006  1.08% to 4.35%)

As at December 31, 2006, short-term investments consisted of: short term fixed deposits, cashable guaranteed investment certificates; two provincial bonds and a Canadian government bond (maturing from September 15, 2008 to April 1, 2015); a Canadian government treasury bill (maturing on April 5, 2007), and 420,000 common shares of New Cantech Venture Inc. (New Cantech). The market value of the shares was $277,000 on December 31, 2006.

Year Ended December 31, 2006 Compared to Year Ended December 31, 2005



To date the Company has been in the exploration stage and has not earned significant revenue other than interest income, office sublease income, drilling tools rental income and management fees. In the year ended December 31, 2006, interest and sundry income was $674,000 compared to $476,000 in 2005. The 2006 increase was mainly due to increased balances invested, although yields have risen in the last year. Interest income increased to $578,000 in 2006 from $389,000 in 2005; management fees and rental income decreased from $86,000 in 2005 to $58,000 in 2006. The Company also recorded short-term investment income of $38,000 from the sale of 80,000 common shares of New Cantech (2005 - $ nil).



NON CONTROLLING INTEREST



First Quarter ended March 31, 2008 Compared to March 31, 2007



The non-controlling interest represents the interest of minority shareholders in Zhongjia JV, which holds the Xiaoshan project, and the interest of the minority shareholders in Mingzhong, based on the amount of their investment adjusted for income or losses from operations since the date of their investment. The non-controlling interest in the Zhongjia JV was 30% and the non-controlling interest in Mingzhong was 49% as at March 31, 2008 and amounted to a non-controlling interest in their losses of $62,000 compared to nil in 2007.

Year Ended December 31, 2007 Compared to Year Ended December 31, 2006



The Companys non-controlling interest in the Zhongjia JV and Mingzhong in 2007 amounted to $429,000 compared to a non-controlling interest in the loss of Minco Silver of $1,382,000 in 2006.



Year Ended December 31, 2006 Compared to Year Ended December 31, 2005



The Companys non-controlling interest in the loss of Minco Silver in 2006 amounted to $1,382,000 compared to $1,182,000 in 2005.



Financial Position (Canadian GAAP)



First Quarter ended March 31, 2008 Compared to March 31, 2007



Since the Companys last year end on December 31, 2007, its total assets have increased from $16,747,000 to $17,404,000 at March 31, 2008.  None of the components of total assets have changed significantly in that period other



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than some of the short-term investments were converted to cash and used to fund operations and the Equity Investment in Minco Silver decreased due to the Companys equity loss in the operations of Minco Silver.



Year Ended December 31, 2007 Compared to Year Ended December 31, 2006



Since the Companys last year end on December 31, 2006, the Companys total assets have changed from $19,585,000 to $16,747,000 at December 31, 2007. Included in total assets as at December 31, 2006 were assets of discontinued operations of $23,000 (December 31, 2007  nil).



Year Ended December 31, 2006 Compared to Year Ended December 31, 2005



The Companys total assets have changed from $18,644,000 on December 31, 2005 to $19,585,000 at December 31, 2006.  Included in total assets as at December 31, 2006 are assets of discontinued operations of $23,000 (December 31, 2005 - $251,000).



Summary of Quarterly Results (Canadian GAAP unaudited)



The following table summarizes selected financial information for the eight most recently completed quarters:

|                                                            |             |           |             |             |             |             |             |             
|----------------------------------------------------------- | ----------- | --------- | ----------- | ----------- | ----------- | ----------- | ----------- | ------------
|                                                            | 2008        | 2007      | 2006       
|                                                            | Q1          | Q4        | Q3          | Q2          | Q1          | Q4          | Q3          | Q2          
|Interest and sundry income                                  | $  61,112   | $  54,374 | $   82,349  | $80,586     | $ 89,510    | $   173,201 | $   179,545 | $    194,884
|Net income (loss)-as reported                               | (3,350,924) | (311,368) | (2,880,632) | (2,403,260) | (1,984,971) | 2,506,835   | (2,170,137) | (963,757)   
|Net income (loss)-as restated (1)                           | -           | -         | -           | -           | -           | (3,078,835) | (2,170,137) | (1,280,757) 
|Net income (loss) per share  basic and diluted-as reported | (0.08)      | (0.01)    | (0.07)      | (0.06)      | (0.05)      | 0.06        | (0.05)      | (0.02)      
|Net income (loss) per share  basic and diluted-as restated | -           | -         | -           | -           | -           | (0.07)      | (0.05)      | (0.02)      





(1)

The Company refined the calculation of the stock based compensation expense in the fourth quarter of 2006 to reflect changes in the expected stock price volatility and risk- free interest rate. As a result of these refinements, the stock based compensation expense and net loss for the second and fourth quarters of 2006 have been increased by $317K and $572K, respectively.



During the most recent eight quarters, the Company had no extraordinary items.



Some period-to-period fluctuations are the result of specific exploration initiatives.



In the first quarter of 2008, the Company spent $1,368,000 on the Changkeng Exploration Permit.  There were no further sales of Minco Silver shares.



In the fourth quarter of 2007, the Company recorded a gain on the sale of 1,000,000 Minco Silver shares of $2,978,000. This is the main contributor to the decrease in loss in the fourth quarter of 2007.



In the last quarter of 2006, the Company generated a dilution gain of $5,213,000 on November 16, 2006 on the issuance of shares by Minco Silver pursuant to a short form prospectus and recorded equity loss on investment in Minco Silver of $521,000.



In the fourth quarter of 2006, the loss increased compared to the same period of 2005, due primarily to more exploration activities, especially on the Gold Bull Mountain, Fuwan and Longnan projects. The increased loss was also due to the increase of stock based compensation from $78,000 in the fourth quarter of 2005 to $1,018,000 in the same period of this year.







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In the first three quarters of 2006, the loss reflected drilling activities and higher administrative costs following Minco Silvers public listing and Minco China Gansu branchs setup.



In the third quarter of 2006, the Companys losses were increased, which were mainly due to more exploration activities on Fuwan silver project and Longnan project and the acquisition of Gold Bull Mountain extension exploration permits. $494,000 and $74,000 exploration costs were spent on Fuwan project and Longnan projects, respectively, and $852,000 was paid to get the exploration permits on the Gold Bull Mountain extension. The Company also undertook more investor relations initiatives for both Minco Gold and Minco Silver. The Company increased investor relations initiatives by attending more investment conferences and experienced higher printing costs related to IR activities.



EXCHANGE RATES



The Company maintains its accounting records using the Canadian dollar as the functional currency.  The Company translates foreign currency transactions into its functional currency in the following manner:  At the transaction date, each asset, liability, revenue and expense is translated into Canadian dollars at the exchange rate in effect on that date.  At each period end, all monetary assets and liabilities are translated into the functional currency by using the exchange rate in effect at that date.  The resulting foreign exchange gains and losses are included in the consolidated statement of operations.  The Company pays for its expenses related to its Chinese joint ventures in Canadian dollars which are then converted into Chinese RMB.  The Company does not believe that foreign currency fluctuations have had a material impact on its financial condition.  However, no assurance can be given that material foreign currency fluctuations will not occur in the future.  The Company does not engage in foreign currency hedging transaction.



INFLATION



The Company does not believe that inflation will have a materially adverse effect on its financial condition.  However, no assurance can be given that the Company will not experience a substantial increase in inflation.



CRITICAL ACCOUNTING ESTIMATES



The preparation of the Companys financial statements requires management to make various judgments with respect to estimates and assumptions. On an ongoing basis, management regularly reevaluates its estimates and assumptions; however actual amounts could differ from those based on such estimates and assumptions.   In the opinion of management, none of the accounting estimates reflect matters that are highly uncertain at the time the accounting estimate is made or that would have a material impact on the Companys financial condition, changes in financial condition or results of operations.



MINERAL PROPERTY COSTS



One of the most critical areas where estimates are used is in the area of the valuation of its carrying value of its mineral property costs. Under Canadian GAAP, the company records its interests in mineral properties at cost.



The costs of acquiring mineral properties are capitalized until the viability of the mineral property is determined and would be amortized against future production following commencement of commercial production or are written off if the properties are sold, allowed to lapse or abandoned. Exploration, overhead and administration costs are expensed in the period incurred.  The estimated values of all properties are assessed by management on a continual basis. This assessment may be estimated by quantifiable evidence of a geological resource or reserve or the companys assessment of its ability to sell the property for an amount greater or less than the carrying value. If the carrying values exceed estimated recoverable values, then the costs are written down to the estimated recoverable values.  Managements estimates of mineral prices, recoverable resources, and operating, capital and reclamation costs are subject to certain risks and uncertainties that may affect the recoverability of mineral property costs.



Although management has made its best estimate of these factors, it is possible that changes could occur in the near term that could adversely affect managements estimate of the net cash flows to be generated from its properties. The company presently has no proven or probable reserves.  Option payments received are treated as a reduction of the carrying value



57





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of the related mineral property and deferred costs until the payments are in excess of costs incurred, at which time they are then credited to income.



STOCK-BASED COMPENSATION



Another significant estimate relates to accounting for stock-based compensation. Option pricing models require the input of highly subjective assumptions, including the expected price volatility. Changes in the subjective input assumptions can materially affect the fair value estimate, and therefore, the existing models do not necessarily provide a reliable single measure of the fair value of the companys stock options granted/vested during the year.  The Company has adopted the Canadian Institute of Chartered Accountants (CICA) Section 3870  Stock-based Compensation and Other Stock-based Payments, which requires an expense to be recognized in the financial statements for all forms of employee stock-based compensation, including stock options. Effective January 1, 2004, the Company adopted the accounting procedures recommended by the Canadian Institute of Chartered Accountants Handbook section on stock-based compensation and other stock-based payments.  Previously, the Company did not record any compensation cost on the granting of stock options to employees and directors as the exercise price was equal to or greater than the market prices at the date of the grant.



The Company now expenses, over the vesting period, the fair value of the options at the date of grant.  As permitted by this Handbook section, the Company applied this change retroactively, without restatement, for options granted on or after January 1, 2003.  The Companys other significant accounting policies are described in the notes to the audited financial statements for the year ended December 31, 2007.



SIGNIFICANT CHANGES IN ACCOUNTING POLICIES



The Companys significant accounting policies are described in the notes to the audited financial statements and are included in the interim financial statements for the Company. There has been no change in the Companys accounting policies in the current period other than the accounting policy changes described in Note 2 to the financial statements.



B.

LIQUIDITY AND CAPITAL RESOURCES



Currently, none of the Companys projects are producing revenues.  To provide working capital for its operations and project development, the Company plans to raise additional funds within 12 months.  Traditionally, the Company has raised capital through the issuance of common shares.  It is contemplated that it will continue to raise capital primarily through investors consisting of resource investment groups, senior mining companies, and public financing through the facilities of the Toronto Stock Exchange.  However, no assurance can be given that the Companys future capital requirements will be obtained.  The Companys access to capital is always dependent upon future financial market conditions, especially those pertaining to venture capital situations such as mining exploration companies.



First Quarter ended March 31, 2008 Compared to March 31, 2007



For the period ended March 31, 2008, the Company used cash of $955,000 to support operating activities compared to $1,202,000 in the same period of 2007.  The net loss in this quarter was $3,351,000. In order to reconcile the loss to cash flows, it is necessary to eliminate non-cash expenses, such as amortization of $21,000, stock-based compensation of $419,000, the equity loss on the investment in Minco Silver of $994,000 and the dilution gain of $181,000. Its also necessary to consider cash used or generated by non-cash working capital items. In aggregate, non-cash working capital generated cash of $1,208,000.



For the period ended March 31, 2008 the Company generated $435,000 from financing activities, through an increase in cash contributed by the non-controlling interest in the Mingzhong JV (2007 - $nil).



In the first three months period ended March 31, 2008, the Company generated $3,273,000 from investing activities compared to cash generated of $4,038,000 in the same period of 2007. In the current quarter, $3,593,000 was generated from short-term investments and was subsequently used to fund the Companys activities. The Company also spent $1,000 to purchase new equipment and capital assets and net advanced $319,000 to Minco Silver for the funding of



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activities on behalf of Minco Silver.



The Companys cash and short-term investment balance at March 31, 2008 amounted to $6,620,000.

The Company has an authorized capital of 100,000,000 common shares with no par value. As at March 31, 2008 and December 31, 2007, the Company had 42,928,385 common shares outstanding compared to 42,865,219 common shares outstanding at December 31, 2006.  During 2007, the Company generated $170,000 through the exercise of employee stock options and used $38,000 to purchase and cancel 48,000 shares pursuant to a normal course issuer bid.  As at March 31, 2008, Minco Gold had no share purchase warrants outstanding (December 31, 2007  nil).



As at March 31, 2008, Minco Gold had 4,996,667 stock options outstanding, exercisable at varying prices between $0.55 and $2.55 per share.  The maximum number of shares that are potentially issuable for Minco Gold is 47,925,052. As at December 31, 2007, Minco Gold had 5,236,667 stock options outstanding, exercisable at varying prices between $0.55 and $2.55 per share.



As at March 31, 2008, none (December 31, 2007  nil: December 31, 2006 - 759,030) of the shares issued were held in escrow. Under the original escrow agreement, 4,880,000 escrow shares were to be released based on the Companys expenditures on exploration and development of a particular resource property. In July 2005, the Company released 1,473,264 escrow shares based on exploration expenditures. In June 2005, the Companys shareholders approved a new escrow agreement that will result in the remaining 1,518,058 escrow shares being released over a period of 18 months on a time release basis: (a) 379,514 escrow shares in January 2006; (b) 379,514 escrow shares on July 1, 2006; (c) 379,514 escrow shares in January 2007 and (d) 379,516 escrow shares on July 1, 2007.



Year Ended December 31, 2007 Compared to Year Ended December 31, 2006



For the year ended December 31, 2007, the Company used cash of $5,293,000 to support continuing operating activities compared to $5,176,000 in 2006.  The net loss from continuing operations in 2007 was $7, 541,000. In order to reconcile the loss to cash flows, it is necessary to eliminate non-cash expenses, such as amortization of $56,000, stock-based compensation of $2,023,000 and equity loss on investment in Minco Silver of $3,240,000. In addition, certain other operating items need to be eliminated including the dilution gain of $191,000, write down of short-term investments $233,000 and the minority non-controlling interest in a loss of $429,000, as well as the gain on the sale of Minco Silver shares of $2,978,000. Its also necessary to consider cash used or generated by non-cash working capital items. In aggregate, non-cash working capital generated cash of $295,000 in 2007.



For the year ended December 31, 2007 the Company used generated cash of $573,000 from financing activities, compared to $4,940,000 in 2006. The cash generated from financing included issuance of common shares in Minco Gold through the exercise of options and warrants, which generated $106,000 and cash generated by non-controlling interests of $512,000.  This was partially offset by the repurchase of 48,000 shares through a normal course issuer bid for $44,000.



In the year ended December 31, 2007, the Company generated $5,864,000 from investing activities compared to cash used of $177,000 in 2006. In the current year there was an increase of $1,904,000 in the cash advance from Minco China to Minco Silver, $3,248,000 in proceeds from the sale of 1,000,000 Minco Silver shares and $4,746,000 was generated from short-term investments. $226,000 was spent to purchase new equipment and capital assets.



The Companys cash and short-term investment balance at December 31, 2007 amounted to $7,457,000, which is sufficient to fund the Companys operations and exploration activities for at least 12 months.



Year Ended December 31, 2006 Compared to Year Ended December 31, 2005



In 2006, the Company used cash of $5,387,000 to support operating activities compared to $3,530,000 in 2005.  The net loss in 2006 was $1,589,000. In order to reconcile the loss to cash flows, it is necessary to eliminate non-cash expenses, such as amortization of $52,000, stock-based compensation of $2,820,000 and equity loss on investment in Minco Silver of $521,000.









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In addition, certain other operating items did not generate cash including a dilution gain of $5,213,000, write up of short-term investments $19,000 and the minority non-controlling interest in the loss of $1,382,000. Its also necessary to consider cash used or generated by non-cash working capital items. In aggregate, non-cash working capital used cash of $577,000.



In 2006, the Company generated cash of $4,940,000 from financing activities, compared to $9,343,000 in 2005. The 2006 financing included issuance of common shares in Minco Gold, which generated $4,853,000, including exercise of options $1,130,000 and exercise of warrants $3,723,000.



During the period from January 1, to November 16, 2006, Minco Silver generated a total of $87,000 from the issuance of common shares by exercise of warrants.



In the year ended December 31, 2006, the Company used $185,000 in investing activities compared to $5,439,000 in 2005. In the current year there was an increase of $133,000 in the cash advanced from Minco China to Minco Silver, $358,000 was used in purchasing the Gold Bull Mountain Mining License, and $222,000 was spent to purchase new equipment and capital assets. The Company generated cash of $535,000 from short-term investments.



The Companys cash and short-term investment balance at December 31, 2006 was $11,171,000, which is sufficient to fund the Companys operations and exploration activities for at least 12 months.



COMMITMENTS



Refer to Tabular Disclosure of Contractual Obligations below.



C.

RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES



The Company does not engage in research and development activities and does not have any patents or licenses.



D.

TREND INFORMATION



As the Company is an exploration company with no producing properties, information regarding trends in production, sales and inventory and similar are not meaningful. The Company has recently acquired interests in properties and it is likely that it will expand its exploration activities. As a result, the Company expects that its operating losses will increase over the next 12 months.



E.

OFF-BALANCE SHEET ARRANGEMENTS



The Company does not have any off-balance sheet arrangements except through its joint ventures. In its joint ventures, Chinese partners contribute exploration permits in exchange for a combination of debt and equity in the joint venture.  The exploration permits and related obligations are not recorded in the Companys balance sheet, but, as disclosed elsewhere in this Annual Report, the Company has certain obligations in respect of the allocation of any profits that may be generated from the joint ventures.



60





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F.

Tabular Disclosure of Contractual Obligations



(a)

The Company has commitments in respect of office leases requiring minimum payments of $2,325,180, as follows:

|     |             
|---- | ------------
|     |             
|2008 | $    353,625
|2009 | 291,462     
|2010 | 296,258     
|2011 | 311,850     
|2012 | 317,048     
|2013 | 332,640     
|2014 | 337,838     
|2015 | 84,459      
|     | $ 2,325,180 



The Company has entered into sub-lease agreements for a portion of its leased premises and the office lease payments will be shared with these companies.

(b)

The Company is also conditionally committed to payments of up to $9,567,311 in respect of joint venture investments and mineral property development.





|              |             |                  |             |             |                  
|------------- | ----------- | ---------------- | ----------- | ----------- | -----------------
|              | Total       | Less than 1 year | 1 - 3
years | 3 - 5
years | More than 5 years
|Mingzhong (1) | $ 6,840,404 | $3,420,202       | $3,420,202  | $        -  | $          -     
|Zhongjia(2)   | 2,567,767   | 153,507          | 2,414,260   | -           | -                
|Gobi Gold(3)  | 159,140     | 159,140          | -           | -           | -                
|              |             |                  |             |             |                  
|Total         | $9,567,311  | $3,732,849       | $5,834,462  | $        -  | $          -     



Notes:



1.

Costs of exploration permits and investment commitments in accordance with the Mingzhong JV Contract dated February 8, 2007;

2.

Costs of exploration permits and investment commitments in accordance with the Zhongjia Contract dated April 30, 2007 as well as a commitment of RMB 1,144,000 (approximately $154,000) to be paid on a Zhongjia exploration program;

3.

A commitment of RMB 1,186,000 (approximately $ 159,000) to be paid on a Gobi Gold exploration program.





G.

SAFE HARBOR



Statements included here, which are not historical in nature, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including without limitation, statements as to management's beliefs, strategies, plans, expectations or opinions in connection with the Company's performance, which are based on a number of assumptions concerning future conditions that may ultimately prove to be inaccurate and may



61





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differ materially from actual future events or results.



Readers are referred to the documents filed by the Company with the pertinent security exchange commissions, specifically the most recent quarterly reports, annual report and material change reports, each as it may be amended from time to time, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements.



ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES



A.

DIRECTORS AND SENIOR MANAGEMENT



The following table sets forth all current directors and executive officers of the Company as of June 15, 2008, with each position and office held by them in the Company, their terms of office and the period of service as such.  Each directors term of office expires at the next annual general meeting of shareholders.



|                                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                           |                                     | 
|--------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | ----------------------------------- | 
|NAME AND
PRESENT POSITION
WITH THE COMPANY                      | PRINCIPAL
OCCUPATION AND POSITIONS
DURING LAST FIVE YEARS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | DIRECTOR OR OFFICER
SINCE | NUMBER OF
COMMON
SHARES
HELD (2)(3)
|Ken Z. Cai (17)
President,
Chief Executive Officer
and Director | President and CEO of Minco Gold Corporation (formerly Mining & Metals Corporation) from February 1996 to present; CEO and Director of Minco Silver Corporation from 2004 to present; Chairman, CEO and Director of Pacific Link Mining Corp. from 2001 to present; Director of East Energy Corp. (formerlyGobi Gold Inc.). from August 2005 to present and past Acting President from January 2006 to July 2006;  Director of Linear Metals Corporation from July 2006 to present; Director & President of Aquasol Envirotech Ltd, from March 2000 to present; Director of Dragon Pharmaceuticals Inc. from September 1998 to January 2005. | February,
29, 1996        | 7,447,460(4)                       
|Robert M. Callander
(1) (9) (10) (17)
Director                  | Vice President of Caldwell Securities Ltd. from 1995 to present and joined Caldwell Securities in 1992.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | August
23, 1996           | 335,000(6)                         
|Michael Doggett(1) (9)(10) (17)
Director                        | Professor/Researcher at Queens University from 1997 to 2007; Michael Doggett & Associates from 1990 to present; President of PCDEP Inc. from 1997 to present; Director of InterCitic Minerals from Feb. 2008 to present; Director of Murgor Resources from March, 2004 to present; Director of Pacific Link Mining Corp. from April, 2007 to present;                                                                                                                                                                                                                                                                                           | July 16, 2007             | 287,000(8)                         



62





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|                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                   |             | 
|---------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------- | ----------- | 
|Malcolm F. Clay
(1) (9) (10) (16)(17)
Director | Mr. Clay is a Chartered Accountant (FCA) and was a partner of KPMG and its predecessor firms for 27 years, retiring in 2002. Self-employed consultant from 2002 to present;  Director of Versatile Systems June 2003  Dec. 2007; Director of Abode Mortgage, Feb. 2003  Dec. 2007; Director of Zonghsem Pem, June 2004  December 2007.                                                                                                                                                                                                                                                                                                                                                                  | November 16, 2007 | 230,000(13)
|Dwayne Melrose
Director and VP Exploration     | VP, Exploration for Minco Gold Corporation from May 2007 to present; VP, Exploration for Minco Silver Corporation from May 2007 to present;  Exploration Manager for Kumtor Operating Company (subsidiary of Cameco Corp) from 1998 to 2007; Project Geologist for Cameco Corp./ Cameco Gold Inc. from 1986  1998.                                                                                                                                                                                                                                                                                                                                                                                        | July, 2007        | 475,000(11)
|Garnet Clark(14)(17)
Chief Financial Officer   | Chief Financial Officer of Minco Gold Corporation (formerly Minco Mining & Metals Corporation) from October 2007 to present; Chief Financial Officer of Minco Silver Corporation from October 2007 to present; Chief Financial Officer of Minco Base Metals Corporation from October 2007 to present; Chief Financial Officer and Vice-President, Finance of East Energy Corp. from August, 2007 to present, Chief Financial Officer of Pacific Link Mining Corp. from October, 2007 to present; Vice-President, Oil & Gas Operations for Sherritt International Corp, 2006  2007; Chief Financial Officer and Vice President, Finance of Luscar Energy Partnership and related companies, 2003  2005; | October 11, 2007  | 150,000(14)
|Jin (Fiona) Zhou (17)
Controller               | Controller of Minco Gold Corporation (formerly Minco Mining & Metals Corporation) from June 2004 to present; Controller of Minco Silver Corporation from October 2004 to present; Controller of Tranzcom China Security Networks Inc. from June 2004 to April 2005.  Previously she served as the accounting manager of several companies and has held several positions such as finance supervisor and senior auditor.                                                                                                                                                                                                                                                                                  | June
23, 2004     | 65,000(12) 



Notes:



|    |                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Current member of the Audit Committee of the Company.                                                                                                                                                                                                                                            
|(2) | Common shares and options beneficially owned, directly and indirectly, or over which control or direction is exercised, at the date hereof, based upon the information furnished to the Company by individual directors and officers.  Unless otherwise indicated, such shares are held directly.



63





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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                        
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3)  | The directors, nominees, officers and other members of management of the Company, as a group beneficially own, directly or indirectly, 9,089,460 common shares of the Company, representing 19% of the fully diluted issued and outstanding common shares of the Company.  Of the 9,089,460 a total of 2,955,000 are pursuant to stock options granted but not exercised and 5,697,060 are held by Pacific Canada Resources (Note (4)).
|(4)  | Includes 5,697,060 common shares held by Pacific Canada Resources, a private company, of which Dr. Ken Cai has more than a 10% interest.  Also includes 1,100,000 common shares subject to options.                                                                                                                                                                                                                                    
|(5)  | Includes 100,000 common shares subject to options.                                                                                                                                                                                                                                                                                                                                                                                     
|(6)  | Includes 295,000 common shares subject to options.                                                                                                                                                                                                                                                                                                                                                                                     
|(7)  | Includes 200,000 common shares subject to options.                                                                                                                                                                                                                                                                                                                                                                                     
|(8)  | Includes 275,000 common shares subject to options.                                                                                                                                                                                                                                                                                                                                                                                     
|(9)  | Current member of the Nominations Committee of the Company.                                                                                                                                                                                                                                                                                                                                                                            
|(10) | Current member of the Compensation Committee of the Company.                                                                                                                                                                                                                                                                                                                                                                           
|(11) | Includes 475,000 common shares subject to options.                                                                                                                                                                                                                                                                                                                                                                                     
|(12) | Includes 60,000 common shares subject to options.                                                                                                                                                                                                                                                                                                                                                                                      
|(13) | Includes 200,000 common shares subject to options.                                                                                                                                                                                                                                                                                                                                                                                     
|(14) | Includes 150,000 common shares subject to options.                                                                                                                                                                                                                                                                                                                                                                                     
|(15) | Includes 100,000 common shares subject to options.                                                                                                                                                                                                                                                                                                                                                                                     
|(16) | Mr. Clay was appointed as a Director of the Company on November 16, 2007.  Mr. Clay was also appointed as Chairman of the Audit Committee.                                                                                                                                                                                                                                                                                             
|(17) | Resident of Canada                                                                                                                                                                                                                                                                                                                                                                                                                     





Other positions currently held by the Companys directors and officers presently other than with other reporting issuers are as follows:



|                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                   
|----------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name of Director
or Officer                           | Positions Held                                                                                                                                                                                                                                                                                                                                                                                                    
|Ken Cai
President, Chief
Executive Officer
& Director | Chairman & Director of Aquasol Envirotech Ltd.
President & Director of Sinowin Investments Inc.
President & Director of Pacific Canada Resources Inc.
Chairman & Director of Pacific Link Mining Corp.
President, CEO & Director of Minco Silver Corporation
President & Director of Minco Base Metals Corporation
Director of East Energy Corp. (formerly Gobi Gold Inc.)
Director of Linear Metals Corporation
|Robert Callander
Director                             | Director of Pacific Canada Resources Inc.
Director of Environwaste Technologies Inc.
Director of Member Savings Credit Union
Director of Intraconnect Inc.
Director of Iamgold Corporation                                                                                                                                                                                                                        
|Malcolm Clay
Director                                 |                                                                                                                                                                                                                                                                                                                                                                                                                   
|Michael Doggett
Director                              | Director of Pacific Link Mining Corp.                                                                                                                                                                                                                                                                                                                                                                             
|Garnet Clark
Chief Financial Officer                  | Chief Financial Officer of Minco Silver Corporation
Chief Financial Officer of Minco Base Metals Corporation
Chief Financial Officer of Pacific Link Mining Corp.
VP Finance and CFO of East Energy Corp.                                                                                                                                                                                                         
|Dwayne Melrose
Director and VP Exploration            | VP Exploration of Minco Silver Corporation
VP Exploration of Minco Base Metals Corporation                                                                                                                                                                                                                                                                                                                        
|Jin (Fiona) Zhou
Controller                           | Controller of Minco Silver Corporation
Controller of Minco Base Metals Corporation                                                                                                                                                                                                                                                                                                                                



64





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The business background and principal occupations of the Companys officers and directors are as follows:

Ken Z. Cai

President, Chief Executive Officer and Director



Dr. Cai has served as president, chief executive officer and a director of the Company since February 29, 1996. Dr. Cai, age 43 devotes approximately 40% of his time to the Companys business.  Dr. Cai holds a Ph.D. in mineral economics from Queens University in Kingston, Ontario.  Dr. Cai, a Chinese national now living in Canada, has 20 years' experience in mineral exploration, project evaluation, corporate financing and company management. He has been the driving force behind the Company and responsible for negotiating the property agreements in China. He has a wide range of high-level contacts in the Chinese mining communities and this has allowed Minco to access data on a large number of projects throughout China.  Dr. Cai serves as a director and/or officer of the following publicly-traded companies: Minco Silver Corporation, a TSX listed company (Director, President and CEO); Pacific Link Mining Corp., a TSX Venture listed company (Director and Chairman); Linear Metals Corporation (Director) a TSX Venture listed company and East Energy Corp. (formerly Gobi Gold Inc.), a TSX Venture listed company (Director).



Robert Callander

Director



Mr. Callander has been a director since August 1996.  Mr. Callander, age 61, devotes approximately 5% of his time to the Companys business.  He holds an MBA from York University, Toronto, Ontario, Canada, as well as a CFA from the Institute for Investment Management, Charlotte, Virginia.  Mr. Callander has worked for Caldwell Securities Ltd. since 1992 and currently serves as a vice-president with that firm.  Prior to his engagement with Caldwell Securities Ltd., Mr. Callander served as a corporate finance analyst with Nesbitt Burns.



Dwayne Melrose

Director and Vice-President, Exploration



Mr. Melrose has been a director since July, 2007 and as Vice-President, Exploration since May, 2007.  Mr. Melrose is a graduate from the University of Waterloo, Ontario and has over 25 years experience as an exploration and mine geologist.  He has been involved in all aspects of exploration and mine exploration from grass roots to mine definition/feasibility stage and open pit mine geology.  Mr. Melrose has worked with the Cameco/Centerra Gold companies exploration departments for the past 21 years in Canada, USA and Kazakhstan with the last nine years as the Exploration Manager at the Kumtor Gold Mine in the Krygyz Republic.  Prior to Kumtor, Mr. Melrose has worked in a variety of gold and base metals geological environments in Eastern-Western Canada, Western USA and Kazakhstan.



Michael Doggett

Director



Dr. Doggett has been a director since July, 2007.  Dr. Doggett is the Director of the Mineral Exploration Masters Program and Associate Professor in the Department in Geological Sciences and Geological Engineering at Queens University.  He holds degrees in geology and mineral economics from Mount Allison University and Queens University.  Dr. Doggett has taught professional development seminars in exploration and project evaluation to more than 600 industry participants in a dozen countries and has carried out a range of consulting activities with mining companies, governments and international agencies.  He currently sits as a Director of Murgor Resources Inc., Pacific Link Mining Corp., Inter-Citic Minerals, the Prospectors and Developers Association of Canada, and on the Committee for Earth Resources for the United States National Academy of Sciences.



Malcolm F. Clay

Director



Mr. Clay was appointed a Director of the Company and Chairman of the Audit Committee on November 16, 2007.  He devotes approximately 10% of his time to the Companys business.  Mr. Clay is a Chartered Accountant (FCA) and was a partner of KPMG and its predecessor firms for 27 years, retiring in 2002.  As a public accountant, he served as lead audit or concurring partner for public companies listed on AMEX, NYSE and Canadian Stock Exchanges.  He was the Partner-



65





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in-Charge of the KPMG Vancouver Audit practice for ten years.  In 1997, he was elected as the non-executive Chairman of KPMG Canada.  During his career he acted as an accountant and advisor for numerous private companies and is currently the Chairman of the Audit Committee for four TSX Venture Exchange listed companies.



Garnet Clark

Chief Financial Officer



Mr. Clark has been the Companys Chief Financial Officer since October, 2007. He devotes approximately 25% of his time to the Companys business.  Mr. Clark serves as Chief Financial Officer for Minco Silver Corporation, Minco Base Metals Corporation, East Energy Corp. and Pacific Link Mining Corp.  Mr. Clark, a Certified Management Accountant (CMA), is a senior executive with two decades of national and international experience in the resource sector.  He was appointed to the Board of Governors for the Northern Alberta Institute of Technology (NAIT) in October of 2004 and has been the Chair of the Finance and Audit Committee since May, 2005.  He has served for two decades with Sherritt International Corp. during which time he filled a number of senior positions, including 11 years as the CFO of the companys metals, oil/gas and coal businesses.  Mr. Clark is also former Vice-President, Finance and Chief Financial Officer of the Luscar group of companies, Canadas largest coal company.  At Luscar from 2003  2005, Mr. Clark helped the company achieve its status as one of the safest and most efficient coal miners in the world, while at the same time generating an overall improvement in cash flow.



Jin (Fiona) Zhou

Controller



Ms. Zhou has been the Companys controller since September 2004.  Ms. Zhou, age 35, devotes approximately 30% of her time to the Companys business.  She is currently a CGA Member and a CPA Member in China.  Ms. Zhou is also a Certified SAP Consultant specializing in Financial Accounting and Cost Accounting and she holds a Bachelor's Degree in Commerce, majoring in Financing.  Ms. Zhou has over10 years of experience in accounting and auditing in both Canada and China. Previously she served as the accounting manager of several companies and has held several positions such as finance supervisor and senior auditor.



B.

COMPENSATION



Certain information about payments to the Companys executive officers is set out in the following table:



SUMMARY COMPENSATION



|                                        |                                  |                                  |                        |                     |                                               |                                                           |                 |                             
|--------------------------------------- | -------------------------------- | -------------------------------- | ---------------------- | ------------------- | --------------------------------------------- | --------------------------------------------------------- | --------------- | ----------------------------
|                                        | Annual Compensation              | Long Term Compensation          
|Name and
Principal Position             | Fiscal
Year
End                  | Consulting
Fees/
Salary
($)      | Bonus
($)              | Other
Ann.
Comp
($) | Common
Shares
Under
Options
/SARs
Granted
(#) | Common Shares
or Units Subject
to
Resale Restrictions
($) | LTIP
Payout
($) | All Other
Compen-
sation
($)
|Ken Z. Cai
President, CEO
& Director    | Dec. 31/07
Dec. 31/06
Dec. 31/05 | 114,275(1)
114,675(1)
110,730(1) | 4,687
55,625
30,775(9) | Nil
Nil
Nil         | 925,000
175,000
Nil                           | N/A
N/A
N/A                                               | N/A
N/A
N/A     | N/A
N/A
N/A                 
|Garnet Clark(2)
Chief Financial Officer | Dec. 31/07
Dec. 31/06
Dec. 31/05 | 16,552
Nil
Nil                   | Nil
Nil
Nil            | Nil
Nil
Nil         | 150,000
Nil
Nil                               | N/A
N/A
N/A                                               | N/A
N/A
N/A     | N/A
N/A
N/A                 



66





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|                                                             |                                  |                   |                  |             |                 |             |             |            
|------------------------------------------------------------ | -------------------------------- | ----------------- | ---------------- | ----------- | --------------- | ----------- | ----------- | -----------
|Dwayne Melrose
Director and VP,
Exploration                  | Dec. 31/07
Dec. 31/06
Dec. 31/05 | 120,000
Nil
Nil   | 7,500
Nil
Nil    | Nil
Nil
Nil | 475,000
Nil
Nil | N/A
N/A
N/A | N/A
N/A
N/A | N/A
N/A
N/A
|William Meyer (3)
Former Chairman &  Director                | Dec. 31/07
Dec. 31/06
Dec. 31/05 | 8,000
Nil
Nil     | Nil
41,700
1,750 | Nil
Nil
Nil | Nil
100,000
Nil | N/A
N/A
N/A | N/A
N/A
N/A | N/A
N/A
N/A
|Matthew Kavanagh
Former Chief Financial Officer (4)          | Dec. 31/07
Dec. 31/06
Dec. 31/05 | 38,500
11,897
Nil | Nil
625
Nil      | Nil
Nil
Nil | 150,000
Nil
Nil | N/A
N/A
N/A | N/A
N/A
N/A | N/A
N/A
N/A
|Mark Orsmond Former Vice President Corporate
Development (5) | Dec. 31/07
Dec. 31/06
Dec. 31/05 | 12,500
61,171
Nil | Nil
3,000
Nil    | Nil
Nil
Nil | Nil
300,000
Nil | N/A
N/A
N/A | N/A
N/A
N/A | N/A
N/A
N/A
|Robert S. Tyson
Former Vice- President Corporate Development | Dec. 31/07
Dec. 31/06
Dec. 31/05 | Nil
13,939
27,750 | Nil
Nil
2,500    | Nil
Nil
Nil | Nil
Nil
100,000 | N/A
N/A
N/A | N/A
N/A
N/A | N/A
N/A
N/A
|Paul J. Johnston Former VP Exploration                       | Dec. 31/07
Dec. 31/06
Dec. 31/05 | Nil
4,209
43,371  | Nil
Nil
5,000    | Nil
Nil
Nil | Nil
Nil
150,000 | N/A
N/A
N/A | N/A
N/A
N/A | N/A
N/A
N/A
|Simon Anderson
Former Chief Financial Officer                | Dec. 31/07
Dec. 31/06
Dec. 31/05 | Nil
9,340
28,720  | Nil
Nil
Nil      | Nil
Nil
Nil | Nil
Nil
Nil     | N/A
N/A
N/A | N/A
N/A
N/A | N/A
N/A
N/A



Notes:



(1)

Fees paid to Sinowin Investments Inc. pursuant to a consulting agreement.  Dr. Cai serves as president and chief executive officer of Sinowin Investments Inc. providing consulting, management and supervision services in connection with the development of overall corporate strategy.

(2)

Mr. Clark was appointed Chief Financial Officer on October 10, 2007.

(3)

Mr. Meyer was a Member of the Audit Committee from November 1, 1999 to October 3, 2005.  Mr. Meyer received $8,000 in directors fees during 2007.  He did not stand for re-election and resigned as a director and Chairman of the Audit Committee on July 16, 2007.

(4)

Mr. Kavanagh resigned on September 30, 2007.

(5)

Paid to Mercantile Consulting Limited, a company controlled by Mr. Orsmond.  Mr. Orsmond resigned on April 25, 2007.



C.

BOARD PRACTICES



The current directors of the board were elected to their position at the annual meeting of shareholders held on June 27, 2006 with the exception of Mr. James Carter who was appointed as a Director of the Company on June 30, 2006.



Each director will continue to serve as such until the next meeting of the shareholders.  The officers of the Company are elected by the board and serve at the boards pleasure. Directors are elected annually at the annual general meeting of shareholders, whereas officers appointments are approved by the board of directors and terminate upon resignation or termination by the board.   The Company has no contract with any of its officers or directors that provide for payments upon termination.





67





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Audit Committee



The Company has an audit committee consisting of Messrs. Clay, Doggett and Callander.  The following is the Companys Charter of the Audit Committee.



Independence



The members of the Audit Committee must be "independent" of the Company as defined in Canadian National Instrument 58-101 - Disclosure of Corporate Governance Practices.



Mandate



The primary function of the audit committee (the "Committee") is to assist the board of directors in fulfilling its financial oversight responsibilities by reviewing the financial reports and other financial information provided by the Company to regulatory authorities and shareholders, the Company's systems of internal controls regarding finance and accounting and the Company's auditing, accounting and financial reporting processes. The Committee's primary duties and responsibilities are to:



·

Serve as an independent and objective party to monitor the Company's financial reporting and internal control system and review the Company's financial statements.

·

Review and appraise the performance of the Company's external auditors.

·

Provide an open avenue of communication among the Company's auditors, financial and senior management and the Board of Directors.



Composition



The Committee shall be comprised of three independent directors as determined by the Board of Directors, the majority of whom shall be free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of his or her independent judgment as a member of the Committee.



At least one member of the Committee shall have accounting or related financial management expertise. All members of the Committee that are not financially literate will work towards becoming financially literate to obtain a working familiarity with basic finance and accounting practices. For the purposes of the Audit Committee Charter, the definition of financially literate is 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 presumably be expected to be raised by the Company's financial statements.



The members of the Committee shall be elected by the Board of Directors at its first meeting following the annual shareholders' meeting. Unless a Chair is elected by the full Board of Directors, the members of the Committee may designate a Chair by a majority vote of the full Committee membership.



Meetings



The Committee shall meet a four times annually,or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee will meet at least annually with the Chief Financial Officer and the external auditors in separate sessions.



Responsibilities and Duties



To fulfill its responsibilities and duties, the Committee shall:



Documents/Reports Review



(a)

Review and update the Charter annually.



68





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(b)

Review the Company's financial statements, MD&A and any annual and interim earnings, press releases before the Company publicly discloses this information and any reports or other financial information (including quarterly financial statements), which are submitted to any governmental body, or to the public, including any certification, report, opinion, or review rendered by the external auditors.



External Auditors



(a)

Review annually, the performance of the external auditors who shall be ultimately accountable to the Board of Directors and the Committee as representatives of the shareholders of the Company.

(b)

Recommend to the Board of Directors the selection and, where applicable, the replacement of the external auditors nominated annually for shareholder approval.

(c)

Review with management and the external auditors the audit plan for the year-end financial statements and intended template for such statements.

(d)

Review and pre-approve all audit and audit-related services and the fees and other compensation related thereto, and any non-audit services, provided by the Company's external auditors.



Provided the pre-approval of the non-audit services is presented to the Committee's first scheduled meeting following such approval such authority may be delegated by the Committee to one or more independent members of the Committee.



Financial Reporting Processes



(a)

In consultation with the external auditors, review with management the integrity of the Company's financial reporting process, both internal and external.

(b)

Consider the external auditors' judgments about the quality and appropriateness of the Company's accounting principles as applied in its financial reporting.

(c)

Consider and approve, if appropriate, changes to the Company's auditing and accounting principles and practices as suggested by the external auditors and management.

(d)

Following completion of the annual audit, review separately with management and the external auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information.

(e)

Review any significant disagreement among management and the external auditors in connection with the preparation of the financial statements.

(f)

Review with the external auditors and management the extent to which changes and improvements in financial or accounting practices have been implemented.

(g)

Review any complaints or concerns about any questionable accounting, internal accounting controls or auditing matters.

(h)

Review certification process.

(i)

Establish a procedure for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.



Other



Review any related-party transactions.



Compensation Committee



The Company has a Compensation Committee consisting of Messrs. Callander, Doggett and Clay.  The primary purpose of the Compensation Committee is to:



(a)

establish, review and recommend to the Board of Directors of Minco Gold Corporation (the "Company") compensation and incentive plans and programs; and

(b)

review and approve compensation and awards under compensation and incentive plans and programs for the CEO and senior officers;





69





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with the intention of attracting, retaining and appropriately rewarding employees in order to motivate their performance in the achievement of the Companys business objectives and align their interests with the long-term interests of the Companys shareholders.



Independence



The members of the Compensation Committee must be "independent" of the Company as defined in Canadian National Instrument 58-101 - Disclosure of Corporate Governance Practices.  The duties and responsibilities of the Compensation Committee include:



·

reviewing and making recommendations to the Board of Directors with respect to the compensation, including compensation criteria and incentives and annual performance review, of the Chief Executive Officer, for final approval by the Board of Directors;

·

reviewing and providing guidance to the Board of Directors with respect to the compensation, including compensation criteria and incentives, of the executive officers of the Company, as recommended by the Chief Executive Officer, for final approval by the Board of Directors;

·

reviewing and providing guidance to the Board of Directors with respect to the compensation, including compensation criteria and incentives, of the directors of the Company;

·

reviewing and making recommendations to the Board of Directors regarding other plans that are proposed for adoption or adopted by the Company for the provision of compensation to employees of, directors of and consultants to the Company;

·

advising on the development of management succession plans by the Board;

·

preparing an annual report on executive compensation to the shareholders of the Company for the management information circular for the annual and general meeting of the Companys shareholders;

·

reviewing and assessing, annually, the Compensation Committee charter and submitting any changes deemed necessary or advisable for approval of the Board of Directors; and

·

performing other functions as requested by the Board of Directors.



Nominations Committee



The Company has a Nominations Committee consisting of Messrs. Callander, Doggett and Clay.  The following is the Companys Charter of the Nominations Committee.



Purpose



The purpose of the Nominating Committee shall be to:



a)

assist the Board of Directors of Minco Gold Corporation, on an annual basis, by identifying individuals qualified to become Board members, and to recommend to the Board the director nominees for the next annual meeting of shareholders;

b)

assist the Board in the event of any vacancy on the Board by identifying individuals qualified to become Board members, and to recommend to the Board qualified individuals to fill any such vacancy; and

c)

recommend to the Board, on an annual basis, director nominees for each Board committee.



Committee Membership



The members of the Nominating Committee must be "independent" of the Company as defined in Canadian National Instrument 58-101 - Disclosure of Corporate Governance Practices.  A Nominating Committee member is independent if he or she has no direct or indirect material relationship with the Company.  A "material relationship" includes a relationship which could, in the view of the Company's Board of Directors, be reasonably expected to interfere with the exercise of a member's independent judgment.



Independence





70





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The members of the Nominations Committee must be "independent" of the Company as defined in National Instrument 58-101 - Disclosure of Corporate Governance Practices.  A Nominating Committee member is independent if he or she has no direct or indirect material relationship with the Company.  A "material relationship" includes a relationship which could, in the view of the Company's Board of Directors, be reasonably expected to interfere with the exercise of a member's independent judgment.



Meetings



The Nominating Committee will meet as often as the Chair shall determine to be necessary or appropriate.



Authority



The Committee may request any officer or employee of the Company to attend a Committee meeting.  The Committee shall have the authority to retain and terminate any search firm to be used to identify director candidates and shall have authority to approve the search firm's fees and other retention terms, at the Company's expense.



Nominating Committee Duties and Responsibilities



Duties and responsibilities of the Nominating Committee include:



·

reviewing on a periodic basis, the composition of the Board to ensure that an appropriate number of unrelated directors sit on the Board of Directors;

·

analyzing the needs of the Board of Directors when vacancies arise on the board and recommending nominees who meet such needs;

·

ensuring that an appropriate selection process for new nominees to the Board of Directors is in place;

·

recommending to the Board, on an annual basis, nominees for election as directors for the next annual meeting of shareholders;

·

recommending to the Board the nominees for appointment to Committees of the Board on at least an annual basis;

·

reviewing and assessing, annually, the Nominating Committee charter and submitting any changes deemed necessary or advisable for approval of the Board of Directors; and

·

performing other functions as requested by the Board of Directors.



D.

EMPLOYEES



As at June 15, 2008, the Company shares 65 full time employees with Minco Silver Corporation, of which 11 employees are located in Vancouver, British Columbia and the other 44 are located in China.



E.

SHARE OWNERSHIP



During the fiscal year ended December 31, 2007, no amounts were set aside or accrued by the Company or its subsidiaries during such year to provide pension, retirement or similar benefits for directors and officers of the Company, pursuant to any existing plan provided or contributed to by the Company or its subsidiaries.  As at December 31, 2007, the Company had 4,966,667 stock options outstanding and exercisable (as at December 31, 2006 2,945,334) at varying prices between $0.55 and $2.55 per share, which were granted to directors, officers and employees of the Company.  The following table sets forth, as of June 15, 2008, common stock held by the Companys officers and directors and all outstanding options and warrants to purchase common shares of the Company.



Common Shares Owned by Officers and Directors



|                                                         |                    |                                                            
|-------------------------------------------------------- | ------------------ | -----------------------------------------------------------
|Name and Title                                           | Common
Shares Held | Percentage of Common Shares Outstanding at June 15, 2008(2)
|Ken Cai, President, Chief Executive Officer and Director | 6,147,464(1)       | 14.30%                                                     
|Robert Callander, Director                               | 40,000             | 0.09%                                                      



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|                          |           |       
|------------------------- | --------- | ------
|Michael Doggett, Director | 12,000    | 0.03% 
|Malcolm Clay, Director    | 30,000    | 0.07% 
|Fiona Zhou, Controller    | 5,000     | 0.01% 
|TOTAL                     | 6,234,464 | 14.50%



Note:



|    |                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes 5,497,064 common shares held by Pacific Canada Resources, a private company, of which Dr. Ken Cai has more than a 10% interest.



Outstanding Options



The Company has implemented a stock option plan that provides for the issuance of up to 15% of outstanding common shares to directors, employees and consultants. As at June15, 2008 the Company has granted options to purchase up to 4,936,001common shares to directors, officers, employees and contractors.  The following table sets forth, as of June 15, 2008 granted and outstanding incentive stock options which have been granted to directors, officers, employees and contractors.



|                   |                                 |                                     |                    |                   
|------------------ | ------------------------------- | ----------------------------------- | ------------------ | ------------------
|Date of Grant      | Number of
Stock Options
Granted | Number of
Stock Options
Outstanding | Exercise
Price ($) | Expiry Date       
|March 30, 2004     | 320,000                         | 300,000                             | 1.81               | March 29, 2009    
|April 1, 2005      | 150,000                         | 75,000                              | 1.35               | April 1, 2010     
|May 19, 2005       | 100,000                         | 66,667                              | 1.08               | May 19, 2010      
|January 9, 2006    | 1,015,000                       | 915,000                             | 1.64               | January 9, 2011   
|May 1, 2006        | 100,000                         | 100,000                             | 2.55               | May 1, 2011       
|February 7, 2007   | 215,000                         | 215,000                             | 1.79               | February 7, 2012  
|May 17, 2007       | 315,000                         | 300,000                             | 1.44               | May 17, 2012      
|June 1, 2007       | 100,000                         | 100,000                             | 1.54               | June 1, 2012      
|September 28, 2007 | 2,010,000                       | 1,939,334                           | 0.79               | September 28, 2012
|October 11, 2007   | 150,000                         | 150,000                             | 1.10               | October 10, 2012  
|November 14, 2007  | 475,000                         | 475,000                             | 0.97               | November 13, 2012 
|November 15, 2007  | 100,000                         | 100,000                             | 1.12               | November 14, 2012 
|November 16. 2007  | 200,000                         | 200,000                             | 1.08               | November 15, 2012 
|                   |                                 |                                     |                    |                   
|                   |                                 | 4,936,001                           |                    |                   



ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS



A.

MAJOR SHAREHOLDERS



As of June 15, 2008 the Company believes that 4,710,520 of the issued and outstanding common shares were held by 33 registered shareholders with addresses in the United States.



As far as known to the Company, and except as disclosed herein, the Company is not directly or indirectly owned or controlled by another corporation(s) or by any foreign government.  As disclosed below, Pacific Canada Resources Inc., a private company controlled by a director of the Company, as at June 15, 2008, owned 5,497,064 common shares or 12.8% of the issued and outstanding shares of the Companys common stock.  The following table sets forth, as of June 15, 2008, information with respect to (i) any person who is known to the Company to be the owner of more than 5% of any class of the Companys outstanding voting securities and (ii) the total amount of any class of the Companys voting securities owned by the officers and directors as a group.



72





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|               |                                                      |                  |                    
|-------------- | ---------------------------------------------------- | ---------------- | -------------------
|Title of Class | Identity of Holder                                   | Amount Owned     | Percent of Class(1)
|Common shares  | Pacific Canada Resources Inc.                        | 5,497,064        | 12.8%              
|Common shares  | Ken Cai                                              | 7,247,464 (2)(3) | 16.8%              
|Common shares  | Teck-Cominco                                         | 2,680,643        | 6.2%               
|Common shares  | Arthur Richards Rule                                 | 2,403,500(5)     | 5.6%               
|Common shares  | All directors, Officers & deemed insiders as a group | 8,889,464 (3)(4) | 20.7%              



Notes:



(1)

Based on the issued and outstanding shares of the Company.

(2)

Dr. Ken Cai, a director and officer of the Company, beneficially owns more than 10% of Pacific Canada Resources Inc., a private company.  Also includes options to purchase 1,100,000 common shares.

(3)

Includes Dr. Ken Cai's beneficial interest in 5,497,064 common shares owned by Pacific Canada Resources, Inc. and direct holdings of directors.  The total does include stock options granted.

(4)

Of the 8,889,464 common shares of which a total of 2,894,334 are pursuant to stock options granted but not exercised.

(5)

Mr. Arthur Richards Rule owns, either directly or indirectly, or controls and directs these shares, by a combination of direct ownership, limited partnerships, corporations and a family trust.



Escrow Securities



As at March 31, 2008 there were no escrow shares outstanding.



Table of Escrow Shares



|                                         |                              
|---------------------------------------- | -----------------------------
|                                         | Pacific Canada Resources Inc.
|Balance December 31, 1996                | 4,880,000                    
|Released at $1.20 per share, June 1998   | (949,561)                    
|Released at $1.50 per share, August 1999 | (508,736)                    
|Released at $0.97 per share, March 2001  | (430,381)                    
|Released at $1.81 per share, August 2005 | (1,473,264)                  
|Balance December 31, 2005                | 1,518,058                    
|Released January 2006                    | (379,514)                    
|Released July 2006                       | (379,514)                    
|Released January 2007                    | (379,514)                    
|Released July 2007                       | (379,516)                    
|Balance as at June 15, 2008              | -                            



B.

RELATED PARTY TRANSACTIONS



In April, 2004, Dr. Cai formed a consulting enterprise known as Sinowin Investments Inc. (Sinowin) and the Company entered into a consulting agreement with Sinowin, which replaced the previous agreement with Kaisun Investment.  Under the terms of the Sinowin agreement, Sinowin receives $9,375 per month in exchange for Dr. Cai serving as president and chief executive officer of the Company and providing consulting, management and supervision services in connection with the development of overall corporate strategy.



During the years ended December 31, 2007, 2006 and 2005, the Company paid to Sinowin Investments Inc. (a consulting company controlled by Dr, Ken Cai,  a total of $119,063, $334,375 and $264,215, respectively, for management services, property investigation, geological consulting, and bonus for arranging financing.  The Company believes that the consulting agreement with Sinowin Investments Inc. and Dr. Cai, are on terms as favorable as could be obtained from an unaffiliated third party.



During 2006, the Company paid William Meyer, the Companys former Chairman, a bonus of $82,000 as compared to



73





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$1,750 during the fiscal year ended December 31, 2005.   There was no bonus paid in 2007. The Company also paid $2,875 during the fiscal year ended December 31, 2005 as compared to $7,250 during 2004 to Dr. Robert Gayton, a former director of the Company as directors fees. None of the directors or senior officers of the Company and no associates or affiliates of any of them are, or have been indebted to the Company or its subsidiaries at any time during the years ended December 31, 2007 and 2006.



ITEM 8.

FINANCIAL INFORMATION



Consolidated Statements and Other Financial Information



The following financial statements of the Company are attached to this Annual Report:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Consolidated audited financial statements for the Company for the year ended December 31, 2007 (in Canadian dollars) with comparative figures for the years ended December 31, 2006 and December 31, 2005.
Consolidated audited financial statements of Minco Silver Corporation for the year ended December 31, 2007 (in Canadian dollars) with comparative figures for the years ended December 31, 2006 and life-to-date cumulative figures to December 31, 2007.



Dividend policy



The Company has never paid any dividends and does not intend to pay any dividends in the near future.



ITEM 9.

THE OFFER AND LISTING



Since February 24, 1998, the Companys common shares have been listed on the Toronto Stock Exchange.  Previously, the Companys common shares were dual listed on the CDNX (formerly the Vancouver Stock Exchange and now the TSX Venture Exchange) and Toronto Stock Exchange.  On January 29, 1999, the Company voluntary delisted its common shares from the CDNX.    The Companys common shares were listed in the United States on the Over The Counter market (OTC) under the symbol MMAXF.  On November 11, 2005 the Company received listing approval on The American Stock Exchange (AMEX).  The Company began trading on the AMEX on November 22, 2005 with its trading symbol on the AMEX as MMK.  The following tables set forth the reported high and low prices for the five most recent fiscal years (Table A), each quarterly period for the past two fiscal years and for the first quarter of 2008 (Table B) and each month for the past six months (Table C).

Table A



High and low price for the five most recent fiscal years.



|                   |                 |                |                 |                
|------------------ | --------------- | -------------- | --------------- | ---------------
|YEAR               | TSX
(CDN$)
HIGH | TSX
(CDN$)
LOW | AMEX
(US$)
HIGH | AMEX
(USD$)
LOW
|December 31, 2007  | 2.40            | 0.67           | 2.07            | 0.65           
|December 31, 2006  | 3.07            | 1.35           | 2.68            | 1.20           
|December 2005  (*) | 1.71            | 1.54           | 1.58            | 1.35           
|December 31, 2004  | 1.90            | 1.58           | N/A             | N/A            
|December 31, 2003  | 2.70            | 0.28           | N/A             | N/A            





(*)

On November 11, 2005 the Company received listing approval on The American Stock Exchange (AMEX).  The Company began trading on the AMEX on November 22, 2005 with its trading symbol on the AMEX as MMK.  The November 2005 high and low is for the period between November 22, 2005 to December 31, 2005.  On February 1, 2007 the symbol for the Company was changed from MMK to MGH.



Table B



High and low prices for each quarterly period for the past two fiscal years ended December 31, 2007 and 2006 and the



74





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first quarter of 2008.





|                           |                 |                |                      |                    
|-------------------------- | --------------- | -------------- | -------------------- | -------------------
|MONTH/YEAR                 | TSX
(CDN$)
HIGH | TSX
(CDN$)
LOW | AMEX
(USD$)
HIGH (*) | AMEX
(USD$)
LOW (*)
|Quarter 1  March 2006     | 2.98            | 1.60           | 2.60                 | 1.41               
|Quarter 2  June 2006      | 3.07            | 1.42           | 2.68                 | 1.24               
|Quarter 3  September 2006 | 1.79            | 1.35           | 1.65                 | 1.20               
|December 2006              | 1.95            | 1.50           | 1.75                 | 1.34               
|Quarter 1  March 2007     | 2.40            | 1.38           | 2.07                 | 1.29               
|Quarter 2  June 2007      | 2.18            | 1.35           | 1.88                 | 1.23               
|Quarter 3  September 2007 | 1.47            | 0.69           | 1.42                 | 0.65               
|December 2007              | 1.37            | 0.67           | 1.49                 | 0.68               
|Quarter 1  March 2008     | 1.72            | 0.70           | 1.71                 | 0.70               



(*)

On November 11, 2005 the Company received Listing approval on The American Stock Exchange (AMEX).  The Company began trading on the AMEX on November 22, 2005 with its trading symbol on the AMEX as MMK.  The November 2005 high and low if for the period between November 22, 2005 to December 31, 2005.  .  On February 1, 2007 the symbol for the Company was changed from MMK to MGH.



ITEM 10.

ADDITIONAL INFORMATION



Table C



High and low prices for each month for the past six months.



|              |                  |                 |                       |                     
|------------- | ---------------- | --------------- | --------------------- | --------------------
|MONTH/YEAR    | TSX
(CDN $)
HIGH | TSX
(CDN $)
LOW | AMEX
(USD $)
HIGH (*) | AMEX
(USD $)
LOW (*)
|May 2008      | 1.27             | 1.08            | 1.29                  | 1.07                
|April 2008    | 1.57             | 1.17            | 1.53                  | 1.18                
|March 2008    | 1.72             | 1.12            | 1.71                  | 1.14                
|February 2008 | 1.24             | 0.75            | 1.25                  | 0.75                
|January 2008  | 0.99             | 0.70            | 0.99                  | 0.70                
|December 2007 | 0.93             | 0.67            | 0.90                  | 0.68                



The Company has 100,000,000 common shares authorized, without par value, of which 42,989,051 common shares were issued and outstanding as of June 15, 2008.  Each of the common shares has equal dividend, liquidation and voting rights.  Voters of the common shares are entitled to one vote per share on all matters that may be brought before them.  Holders of the common shares are entitled to receive dividends when declared by the board of directors from funds legally available for that purpose.  The common shares are not redeemable, have no conversion rights and carry no pre-emptive or other rights to subscribe for additional shares.  The outstanding common shares are fully paid and non-assessable.  Of the Companys common shares outstanding, none are currently held in escrow, subject to release or cancellation upon certain conditions.  See Item 7 - Escrow Securities. The transfer agent and registrar for the common shares is Computershare Trust Company of Canada, 510 Burrard Street, Vancouver, British Columbia, Canada, V6B 5A1.  The following table sets forth a history of the share capital for the Company for the last three fiscal years, and through June 15, 2008.



|                  |                        |          |                     
|----------------- | ---------------------- | -------- | --------------------
|                  |                        | Issuance | Common Share
Balance
|December 31, 2004 | Issued and outstanding |          | 35,043,897          



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|                   |                                   |           |                     
|------------------ | --------------------------------- | --------- | --------------------
|Jan. 10, 2005      | $0.20 options exercise            | 30,000    |                     
|Jan. 12, 2005      | $0.20 options exercised           | 50,000    |                     
|Jan. 19, 2005      | $0.20 options exercised           | 30,000    |                     
|Feb 10, 2005       | $0.20 options exercised           | 70,000    |                     
|Feb. 25, 2005      | $0.20 options exercised           | 52,700    |                     
|Feb. 28, 2005      | $0.60 warrants exercised          | 250,000   |                     
|Feb. 28, 2005      | $0.55 options exercise            | 20,000    |                     
|                   |                                   | Issuance  | Common Share
Balance
|Mar. 18, 2005      | $0.50 options exercise            | 13,333    |                     
|April 6, 2005      | $0.38 options exercised           | 150,000   |                     
|April 6, 2005      | $0.60 warrants exercised          | 31,428    |                     
|April 6, 2005      | $0.38 option exercised            | 150,000   |                     
|April 6, 2005      | $0.60 warrants exercised          | 31,428    |                     
|June 6, 2005       | $0.50 option exercise             | 13,334    |                     
|July 18, 2005      | $0.55 option exercise             | 50,000    |                     
|July 21, 2005      | Private Placement @ $1.15         | 2,500,000 |                     
|September 13, 2005 | $0.55 options exercised           | 7,000     |                     
|October 24, 2005   | $0.55 options Exercised           | 40,000    |                     
|November 2, 2005   | $0.83 options Exercised           | 50,000    |                     
|November 25, 2005  | $0.55 options Exercised           | 135,000   |                     
|December 13, 2005  | $0.55 options Exercised           | 97,300    |                     
|December 31, 2005  | Issued and Outstanding            |           | 38,633,992          
|January 3, 2006    | Options Exercised                 | 45,000    |                     
|January 20, 2006   | $1.40 Broker Options Exercised    | 162,500   |                     
|February 7, 2006   | Exercise of Warrants @ $1.70      | 10,500    |                     
|February 15, 2006  | $1.40 Broker Options Exercised    | 38,885    |                     
|February 18, 2006  | $1.40 Broker Options Exercised    | 48,615    |                     
|February 23, 2006  | $0.55 options Exercised           | 321,500   |                     
|March 7, 2006      | Exercise of Warrants @ $1.70      | 10,500    |                     
|March 14, 2006     | Exercise of Warrants @ $1.50      | 15,000    |                     
|March 17, 2006     | Exercise of Warrants @ $1.70      | 21,000    |                     
|March 17, 2006     | Exercise of Warrants @ $1.50      | 22,000    |                     
|March 22, 2006     | Exercise of Warrants @ $1.70      | 25,000    |                     
|March 24, 2006     | Exercise of Stock Options @ $0.50 | 40,000    |                     



|               |                              |         | 
|-------------- | ---------------------------- | ------- | 
|April 3, 2006  | Exercise of Warrants @ $1.70 | 25,000  | 
|April 4, 2006  | $1.50 options Exercised      | 8,333   | 
|April 17, 2006 | Exercise of Warrants @ $1.50 | 50,000  | 
|April 25, 2006 | Exercise of Warrants @ $1.50 | 20,000  | 
|April 26, 2006 | Exercise of Warrants @ $1.50 | 10,000  | 
|April 27, 2006 | $1.80 options Exercised      | 13,300  | 
|May 1, 2006    | Exercise of Warrants @ $1.50 | 15,000  | 
|May 3, 2006    | $1.50 options Exercised      | 10,000  | 
|May 3, 2006    | $1.35 options Exercised      | 10,000  | 
|May 8, 2006    | $0.83 options Exercised      | 50,000  | 
|May 8, 2006    | Exercise of Warrants @ $1.50 | 10,000  | 
|May 9, 2006    | Exercise of Warrants @ $1.70 | 8,928   | 
|May 10, 2006   | Exercise of Warrants @ $1.50 | 37,000  | 
|May 15, 2006   | Exercise of Warrants @ $1.50 | 125,500 | 
|May 16, 2006   | Exercise of Warrants @ $1.50 | 78,100  | 
|May 17, 2006   | Exercise of Warrants @ $1.50 | 50,000  | 
|May 23, 2006   | Exercise of Warrants @ $1.50 | 11,000  | 



76





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|                   |                              |           |                     
|------------------ | ---------------------------- | --------- | --------------------
|May 24, 2006       | Exercise of Warrants @ $1.50 | 31,000    |                     
|May 25, 2006       | Exercise of Warrants @ $1.50 | 10,000    |                     
|May 25, 2006       | Exercise of Warrants @ $1.50 | 1,672,900 |                     
|May 25, 2006       | $1.08 options Exercised      | 33,333    |                     
|June 6, 2006       | Exercise of Warrants @ $1.50 | 12,000    |                     
|June 6, 2006       | $0.83options Exercised       | 100,000   |                     
|June 16, 2006      | $1.13options Exercised       | 33,333    |                     
|July 12, 2006      | $0.55 options Exercised      | 150,000   |                     
|September 26, 2006 | Exercise of Warrants @ $1.70 | 50,000    |                     
|October 2, 2006    | Exercise of Warrants @ $1.70 | 125,000   |                     
|                   |                              | Issuance  | Common Share
Balance
|November 28, 2006  | $0.20options Exercised       | 596,000   |                     
|November 28, 2006  | $0.55options Exercised       | 100,000   |                     
|December 7, 2006   | $1.60options Exercised       | 25,000    |                     
|December 31, 2006  | Issued and Outstanding       |           | 42,865,219          
|June 1, 2007       | $1.35 options Exercised      | 45,000    |                     
|June 1, 2007       | $1.07 options Exercised      | 8,333     |                     
|June 21, 2007      | $0.55 options Exercised      | 49,500    |                     
|July 12, 2007      | $1.07 options exercised      | 8,333     |                     
|August 17, 2007    | Normal course issuer bid     | (40,000)  |                     
|August 20, 2007    | Normal course issuer bid     | (3,500)   |                     
|August 21, 2007    | Normal course issuer bid     | (4,500)   |                     
|December 31, 2007  | Issued and Outstanding       |           | 42,928,385          
|April 10, 2008     | $0.79 options exercised      | 33,333    |                     
|May 5, 2008        | $0.79 options exercised      | 13,333    |                     
|May 8, 2008        | $0.79 options exercised      | 10,000    |                     
|May 29, 2008       | $0.79 options exercised      | 4,000     |                     
|                   |                              |           |                     
|June 15, 2008      | Issued and Outstanding       |           | 42,989,051          



Except for finders fees, all issuances noted above were for cash. No shares issuances in the period covered by the above table were subject to discounts, special terms or installment payments.  In addition, the Company has raised funds by issuing special warrants that may be converted into common shares of its subsidiary Minco Silver as described in Item 5B "Liquidity and Resources".



Normal Course Issuer Bid

(Share Buy-Back Program)



On November 20, 2006, the Company announced that it had received approval from the Toronto Stock Exchange (TSX) for the Companys Notice of Intention to Make a Normal Course Issuer Bid.  Under the terms of the Normal Course Issuer Bid, the Company may acquire up to 2,107,210 common shares of the Company (the Shares) between November 22, 2006 and November 21, 2007.  As of the date of the acceptance, the Company had not acquired any of its shares in the last 12 months.  All Shares purchased by the Company under the Normal Course Issuer Bid will be effected through the facilities of the TSX.



The Company is limited, pursuant to the policies of the TSX on issuer bids, to purchase not more than 842,884 shares (2% of the Companys 42,144,219 issued and outstanding Shares as of October 31, 2006) during any 30-day period to a maximum of 2,107,210 Shares (5% of the Companys 42,144,219 issued and outstanding Shares) during the 12 month period.  The price at which the Shares will be purchased pursuant to the Normal Course Issuer Bid by the Company will be the market price of the Shares at the time of acquisition and will be at a price that is not higher than the last independent trade of a board lot of Shares of the Company.  In August 2007, the Company acquired and cancelled a total of 48,000 shares under the Normal Course Issuer Bid at an average purchase price of $0.90. No other shares were



77





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acquired pursuant to the Normal Course Issuer Bid.



B.

MEMORANDUM AND ARTICLES OF ASSOCIATION



On July 8, 1996, the Company adopted revised Articles of the Company under the laws of the Province of British Columbia Company Act.  On March 29, 2004, the new British Columbia Business Corporations Act (BCA) was proclaimed, replacing the pre-existing British Columbia Company Act.  Accordingly, the Company is now subject to the BCA, and no longer governed by the Company Act.  The BCA is a more modern corporate statute, and is designed to provide greater flexibility and efficiency for British Columbia companies.  For example, the new BCA does not impose any British Columbia or Canadian residency requirements on the members of the Board of Directors of the Company.



In accordance with the BCA, the Company has filed a transition application with the Registrar of Companies, the principal element of which involved replacing the Companys Memorandum with a new form designated a Notice of Articles.  The Company filed its transition application as of May 11, 2005.  As a result of the Company having filed its transition application, it may alter its Notice of Articles and adopt a new form of Articles to take advantage of the greater flexibility and efficiency inherent in the BCA, and to make its Articles consistent with the terminology and certain provisions of the BCA.  At the Companys Annual General and Special Meeting of Shareholders held on June 27, 2005,



Shareholders approved a Special Resolution approving the alteration of The Notice of Articles of the Company be altered to remove the application of the pre-existing company provisions, as provided for in the British Columbia Business Corporations Act, and the Companys Notice of Articles be altered accordingly.  In addition to deleting the PCPs, the Shareholders of the Company approved the deletion of the Companys existing Articles in their entirety and replaced them with a new set of Articles.  The new set of Articles makes the Companys Articles consistent with the terminology and provisions of the BCA.  Most of the changes in the new form of Articles are minor in nature, and will not affect the Shareholders or the day-to-day administration of the Company.  However, there are several changes of note:  i)  The directors will be able to approve a change of name of the Company without the necessity of obtaining shareholder approval; ii) The directors will be able to increase the authorized capital of the Company, or create one or more classes or series of shares, without the necessity of obtaining shareholder approval; and iii) The requirement that the Company purchase or redeem its shares on a pro-rata basis will be deleted.



Common Shares



All issued and outstanding common shares are fully paid and non-assessable.  Each holder of record of common shares is entitled to one vote for each common share so held on all matters requiring a vote of shareholders, including the election of directors.  The holders of common shares will be entitled to dividends on a pro-rata basis, if and when as declared by the board of directors. There are no preferences, conversion rights, preemptive rights, subscription rights, or restrictions or transfers attached to the common shares.  In the event of liquidation, dissolution, or winding up of the Company, the holders of common shares are entitled to participate in the assets of the Company available for distribution after satisfaction of the claims of creditors.



Powers and Duties of Directors



The directors are to manage or supervise the management of the affairs and business of the Company and have authority to exercise all such powers of the Company as are not, by the Business Corporations Act, or by the memorandum or the articles of incorporation, required to be exercised by the Company in a general meeting.  Directors will serve as such until the next annual meeting.  In general, a director who is, in any way, directly or indirectly interested in an existing or proposed contract or transaction with the Company whereby a duty or interest might be created to conflict with his duty or interest director, is to declare the nature and extent of his interest in such contract or transaction or the conflict or potential conflict with his duty and interest as a director.



Such director may not vote in respect of any such contract or transaction with the Company in which he is interested and if he does so, his vote will note be counted, but he will be counted in the quorum present at the meeting at which such vote is taken.  However, notwithstanding the foregoing, directors have the right to vote on determining the remuneration of the directors.  The directors may from time to time on behalf of the Company; (a) borrow money in such manner and amount from such sources and upon such terms and conditions as they think fit; (b) issue bonds, debentures and other



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debt obligations; or (c) mortgage, charge or give other security on the whole or any part of the property and assets of the Company.  There is a minimum share ownership requirement for the Company's directors.



Shareholders



An annual general meeting is to be held once in every calendar year at such time and place as may be determined by the directors.  A quorum at an annual general meeting and special meeting is two shareholders or one or more proxy holder representing two shareholders, or one shareholder and a proxy holder representing another shareholder.



There is no limitation imposed by the laws of Canada or by the charter or other constituent documents of the Company on the right of a non-resident to hold or vote the common shares, other than as provided in the Investment Canada Act, (the Investment Act) discussed below under Item 10. Additional Information, D. Exchange Controls..  In accordance with British Columbia law, directors are elected by an ordinary resolution which means (a) a resolution passed by the shareholders of the Company in general meeting by a simple majority of the votes cast in person or by proxy, or (b) a resolution that has been submitted to the shareholders of the Company who would have been entitled to vote on it in person or by proxy at a general meeting of the Company and that has been consented to in writing by such shareholders of the Company holding shares carrying not less than three-quarters of the votes entitled to be cast on it.



Under British Columbia law certain items such as an amendment to the Companys articles or entering into a merger, requires approval by a special resolution which means (a) a resolution passed by a majority of not less than 3/4 of the votes cast by the shareholders of the Company who, being entitled to do so, vote in person or by proxy at a general meeting of the Company (b) a resolution consented to in writing by every shareholder of the Company who would have been entitled to vote in person or by proxy at a general meeting of the Company, and a resolution so consented to is deemed to be a special resolution passed at a general meeting of the Company.



C.

MATERIAL CONTRACTS



The only material contracts not in the ordinary course of business entered into by the Company during thefinancial year ended December 31, 2007, or in prior years that are still in effect are:



|                   |                                 |                                                                                                                                                                        |                                               
|------------------ | ------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------
|DATE               | DOCUMENT                        | PARTY                                                                                                                                                                  | REFERENCE TO:                                 
|March 24, 2004     | Amending agreement              | Between the Company and Exploration and Development Institute of Land and Resources of Inner Mongolia                                                                  | Mineral Properties, Gobi                      
|April 26, 2004     | Share transfer agreement        | Between the Company and Shengda Group of Companies                                                                                                                     | Mineral Properties, Yangshan Western Extension
|May 17, 2004       | 30-year
joint venture agreement | Between the Company,  Guangdong Geological Exploration and Development Corporation, Zhuhai Zhenjie Developments Ltd. and Foshan Baojiang Nonferrous Metals Corporation | Mineral Properties, Changkeng Gold Deposit    
|May 26, 2004       | 30-year joint venture
agreement | Guangdong Geological Exploration and Development Corporation                                                                                                           | Mineral Properties, Fuwan silver property     
|August 20, 2004    | Assignment Agreement            | Between Minco Gold Corporation, Minco China, Minco BVI and Minco Silver Corporation                                                                                    | Mineral Properties, Fuwan silver property     
|September 28, 2004 | Joint venture contract          | Between Minco Silver and Guangdong Geological Exploration and Development Corp.                                                                                        | Mineral Properties, Fuwan silver property     



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| |  |  | 
| |  |  | 



|                                   |                                     |                                                                                                                                                                                   |                                                                   
|---------------------------------- | ----------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------
|Date                               | Document                            | Party                                                                                                                                                                             | Reference to:                                                     
|January 1, 2007                    | Cost Sharing
Agreement              | Between Minco Silver Corporation, Minco Gold Corporation, Tranzcom China Security Networks Inc. and Aquasol Envirotech (Canada) Inc.                                              |                                                                   
|October 4, 2004                    | Strategic alliance agreement        | Between the Company, Minco Silver and Silver Standard                                                                                                                             | Mineral Properties, Fuwan silver property                         
|December 18, 2004                  | Joint venture agreement             | Between the Company and Gansu Quinqi Mining Co. Ltd.                                                                                                                              | Mineral Properties, Yangshan Western Extension                    
|May 2, 2005                        | Confirmation Agreement              | Between Minco Silver Corporation, the Company and Minco China                                                                                                                     | Mineral Properties, Fuwan silver property                         
|August 24, 2006                    | Second Confirmation Agreement dated | Between Minco Silver Corporation, the Company and Minco China                                                                                                                     | Mineral Properties, Fuwan silver property                         
|June 6, 2007                       | Arrangement Agreement               | Between the Company, Minco Base Metals Corporation and 0791852 B.C. Ltd.                                                                                                          | Plan of Arrangement and spin-off of White Silver Mountain project.
|November 7, 2007                   | Arrangement Agreement Amendment     | Between the Company and Minco Mining & Metals Corporation (formerly Minco Base Metals Corporation) and Minco Base Metals Corporation (formerly 0791852 B.C. Ltd.)                 | Plan of Arrangement and spin-off of White Silver Mountain project.
|January 1,2005  December 31, 2007 | Various Stock Option Agreements     | Various stock option agreements dated between January 1, 2005 and December 31, 2007 between the Company and certain directors, officer, consultants and employees of the Company. |                                                                   



D.

EXCHANGE CONTROLS



There is no law, governmental decree or regulation in Canada that restricts the export or import of capital or affects the remittance of dividends, interest or other payments to a non-resident holder of common shares other than withholding tax requirements.  Any such remittances to United States residents are subject to withholding tax.  See Taxation.  There is no limitation imposed by the laws of Canada or by the charter or other constituent documents of the Company on the right of a non-resident to hold or vote the common shares, other than as provided in the Investment Act.



The following discussion summarizes the principal features of the Investment Act for a non-resident who proposes to acquire the common shares.  The Investment Act generally prohibits implementation of a reviewable investment by an individual, government or agency thereof, corporation, partnership, trust or joint venture (each an entity) that is not a Canadian as defined in the Investment Act (a non-Canadian), unless after review, the Director of Investments appointed by the minister responsible for the Investment Act is satisfied that the investment is likely to be of net benefit to Canada.  An investment in the common shares by a non-Canadian other than a WTO Investor (as that term is defined by the Investment Act, and which term includes entities which are nationals of or are controlled by nationals of member states of the World Trade Organization) when the Company was not controlled by a WTO Investor, would be reviewable under the Investment Act if it was an investment to acquire control of the Company and the value of the assets of the Company, as determined in accordance with the regulations promulgated under the Investment Act, was $5 million or more, or if an order for review was made by the federal cabinet on the grounds that the investment related to Canadas



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cultural heritage or national identity, regardless of the value of the assets of the Company.  An investment in the common shares by a WTO Investor, or by a non-Canadian when the Company was controlled by a WTO Investor, would be reviewable under the Investment Act if it was an investment to acquire control of the Company and the value of the assets of the Company, as determined in accordance with the regulations promulgated under the Investment Act was not less than a specified amount, which for 1996 was any amount in excess of $168 million.



A non-Canadian would acquire control of the Company for the purposes of the Investment Act if the non-Canadian acquired a majority of the common shares.  The acquisition of one third or more, but less than a majority of the common shares would be presumed to be an acquisition of control of the Company unless it could be established that, on the acquisition, the Company was not controlled in fact by the acquirer through the ownership of the common shares.  Certain transactions relating to the common shares would be exempt from the Investment Act, including:  (a) an acquisition of the common shares by a person in the ordinary course of that persons business as a trader or dealer in securities; (b) an acquisition of control of the Company in connection with the realization of security granted for a loan or other financial assistance and not for a purpose related to the provisions of the Investment Act; and (c) an acquisition of control of the Company by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of the Company, through the ownership of the common shares, remained unchanged.



Chinese Currency



The Renminbi currently is not a freely convertible currency.  Although central government's policies were introduced in 1996 to reduce restrictions on the convertibility of Renminbi into foreign currency for current account items, conversion of Renminbi into foreign exchange for capital items, such as foreign direct investment, loans or security, requires the approval of the State Administration of Foreign Exchange and other relevant authorities.  The People's Bank of China, or PBOC, sets and publishes daily a base exchange rate with reference primarily to the supply and demand of Renminbi against a basket of currencies in the market during the prior day.



The PBOC also takes into account other factors, such as the general conditions existing in the international foreign exchange markets. Since 1994, the conversion of Renminbi into foreign currencies, including Hong Kong dollars and U.S. dollars, has been based on rates set by the PBOC, which are set daily based on the previous day's interbank foreign exchange market rates and current exchange rates in the world financial markets.  From 1994 to July 20, 2005, the official exchange rate for the conversion of Renminbi to U.S. dollars was generally stable.



Although Chinese governmental policies were introduced in 1996 to reduce restrictions on the convertibility of Renminbi into foreign currency for current account items, conversion of Renminbi into foreign exchange for capital items, such as foreign direct investment, loans or securities, requires the approval of the State Administration for Foreign Exchange and other relevant authorities.



On July 21, 2005, the PRC government introduced a managed floating exchange rate system to allow the value of the Renminbi to fluctuate within a regulated band based on market supply and demand and by reference to a basket of currencies. On the same day, the value of the Renminbi appreciated by 2% against the U.S. dollar.  The PRC government has since made and in the future may make further adjustments to the exchange rate system. The PBOC announces the closing price of a foreign currency traded against the Renminbi in the inter-bank foreign exchange market after the closing of the market on each working day, and makes it the central parity for the trading against the Renminbi on the following working day.



E.

TAXATION



Canadian Federal Income Tax Consequences



The following summarizes the principal Canadian federal income tax consequences applicable to the holding and disposition of common shares in the capital of the Company by a United States resident, and who holds common shares solely as capital property (a US Holder as defined below).  This summary is based on the current provisions of the Income Tax Act (Canada) (the Tax Act), the regulations there under, all amendments thereto publicly proposed by the government of Canada, the published administrative practices of Canada Revenue Agency, and on the current



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provisions of the Canada-United States Income Tax Convention, 1980, as amended (the Treaty).



Except as otherwise expressly provided, this summary does not take into account any provincial, territorial or foreign (including without limitation, any US) tax law or treaty.  It has been assumed that all currently proposed amendments will be enacted substantially as proposed and that there is no other relevant change in any governing law or practice, although no assurance can be given in these respects.  Each US Holder is advised to obtain tax and legal advice applicable to such US Holders particular circumstances.  Every US Holder is liable to pay a Canadian withholding tax on every dividend that is or is deemed to be paid or credited to the US Holder on the US Holders common shares.  The statutory rate of withholding tax is 25% of the gross amount of the dividend paid.  The Treaty reduces the statutory rate with respect to dividends paid to a US Holder for the purposes of the Treaty.  Where applicable, the general rate of withholding tax under the Treaty is 15% of the gross amount of the dividend, but if the US Holder is a company that owns at least 10% of the voting stock of the Company and beneficially owns the dividend, the rate of withholding tax is 5% for dividends paid or credited after 1996 to such corporate US Holder.  The Company is required to withhold the applicable tax from the dividend payable to the US Holder, and to remit the tax to the Receiver General of Canada for the account of the US Holder.



Pursuant to the Tax Act, a US Holder will not be subject to Canadian capital gains tax on any capital gain realized on an actual or deemed disposition of a common share, including a deemed disposition on death, provided that the US Holder did not hold the common share as capital property used in carrying on a business in Canada, and that neither the U. S. Holder nor persons with whom the US Holder did not deal at arms length (alone or together) owned or had the right or an option to acquire 25% or more of the issued shares of any class of the Company at any time in the five years immediately preceding the disposition.



United States Tax Consequences



US Holders



As used herein, a US Holder includes a holder of Common Shares who is a citizen or resident of the United States, a corporation (including any other entity taxable as a corporation) created or organized in or under the laws of the United States or of any political subdivision thereof, and estates or trusts as defined in IRC Section 7701(a) (30). If a partnership (including for this purpose any entity treated as a partnership for U.S. federal income tax purposes) holds common shares, the tax treatment of a partner generally will depend upon the status of the partner and the activities of the partnership. If a U.S. Holder is a partner in a partnership that holds the common shares, the U.S. Holder should consult its tax advisor regarding the specific tax consequences of owning and disposing of its shares.  A US Holder does not include (1) those who own (directly, or indirectly by attribution) 10% or more of the share capital or voting power of the Company; (2) are persons subject to the alternative minimum tax; (3) persons holding the shares as part of a straddle, hedging or conversion transaction and (4)persons subject to special provisions of federal income tax laws, such as tax exempt organizations, qualified retirement plans, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, non-resident alien individuals or foreign corporations whose ownership of common shares is effectively connected with the conduct of a trade or business in the United States and shareholders who acquired their stock through the exercise of employee stock options or otherwise as compensation.



The following discussion is based upon the sections of the Code, Treasury Regulations, published Internal Revenue Service rulings, published administrative positions of the Internal Revenue Service and court decisions that are currently applicable, any or all of which could be materially adversely changed, possibly on a retroactive basis, at any time.  In addition, this discussion does not consider the potential effects, both adverse and beneficial, of recently proposed legislation which, if enacted could be applied, possibly on a retroactive basis, at any time.  A holder or prospective holder of the Companys common shares should consult his or her own tax advisors about federal, state local and foreign tax consequences of purchasing, owning and disposing of the common shares of the Company.



Dividends and Other Distributions on the Common Shares



Subject to the passive foreign investment company rules discussed below under Passive Foreign Investment Company, the gross amount of all our distributions to a U.S. Holder with respect to the common shares (including any



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Canadian taxes withheld there from) will be included in the U.S. Holders gross income as foreign source ordinary dividend income on the date of receipt by the U.S. Holder, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits, it will be treated first as a tax-free return of a U.S. Holders tax basis in its common shares, and to the extent the amount of the distribution exceeds the U.S. Holders tax basis, the excess will be taxed as capital gain. We do not currently, and we do not intend to, calculate our earnings and profits, if any, under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution, if any, will be treated as a dividend. The dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations.



With respect to non-corporate U.S. Holders for taxable years beginning before January 1, 2011, dividends may constitute qualified dividend income that is taxed at the lower applicable capital gains rate provided that (1) the common shares are readily tradable on an established securities market in the United States or we are eligible for the benefits of the income tax treaty between the United States and Canada, (2) we are not a passive foreign investment company (as discussed below) for either our taxable year in which the dividend was paid or the preceding taxable year, (3) certain holding period requirements are met and (4) the U.S. Holder is not under an obligation to make related payments with respect to positions in substantially similar or related property. U.S. Treasury guidance indicates that our common shares, which are listed on the American Stock Exchange, are readily tradable on an established securities market in the United States. There can be no assurance that our common shares will be considered readily tradable on an established securities market in later years. U.S. Holders should consult their tax advisors regarding the availability of the lower rate for dividends paid with respect to our common shares.





Subject to certain limitations, Canadian taxes withheld from a distribution to a U.S. Holder will be eligible for credit against such U.S. Holders U.S. federal income tax liability. If a refund of the tax withheld is available to the U.S. Holder under the laws of Canada or under the income tax treaty between the United States and Canada, the amount of tax withheld that is refundable will not be eligible for such credit against the U.S. Holders U.S. federal income tax liability (and will not be eligible for the deduction against the U.S. Holders U.S. federal taxable income). If the dividends are qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will in general be limited to the gross amount of the dividend, multiplied by the reduced rate divided by the highest rate of tax normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by us with respect to common shares generally will constitute passive category income but could, in the case of certain U.S. Holders, constitute general category income. The rules relating to the determination of the U.S. foreign tax credit are complex, and U.S. Holders should consult their tax advisors to determine whether and to what extent a credit would be available. A U.S. Holder that does not elect to claim a foreign tax credit with respect to any foreign taxes for a given taxable year may instead claim an itemized deduction for all foreign taxes paid in that taxable year.



Passive Foreign Investment Companies



We believe we were not a passive foreign investment company (PFIC) for U.S. federal income tax purposes for our taxable year ended December 31, 2007. A non-U.S. corporation is considered to be a PFIC for any taxable year if either:



§

at least 75% of its gross income is passive income, or

§

at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the asset test).



We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, 25% or more (by value) of the stock.



We must make a separate determination each year as to whether we are a PFIC. As a result, our PFIC status may change. In particular, because the total value of our assets for purposes of the asset test will be calculated using the market price of our common shares (assuming that we continue to a publicly traded corporation for purposes of the



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applicable PFIC rules), our PFIC status will depend in large part on the market price of our common shares. Accordingly, fluctuations in the market price of our common shares may result in our being a PFIC for any year. If we are a PFIC for any year during which a U.S. Holder holds common shares, we generally will continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds common shares, absent a special election. For instance, if we cease to be a PFIC, a U.S. Holder may avoid some of the adverse effects of the PFIC regime by making a deemed sale election with respect to the common shares. If we are a PFIC for any taxable year and any of our non-U.S. subsidiaries is also a PFIC, a U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of these rules. U.S. Holders are urged to consult their tax advisors about the application of the PFIC rules to any of our subsidiaries.



If we are a PFIC for any taxable year during which a U.S. Holder holds common shares, such U.S. Holder will be subject to special tax rules with respect to any excess distribution that it receives and any gain it realizes from a sale or other disposition (including a pledge) of the common shares, unless the U.S. Holder makes a mark-to-market election as discussed below. Distributions received by a U.S. Holder in a taxable year that are greater than 125% of the average annual distributions such U.S. Holder received during the shorter of the three preceding taxable years or its holding period for the common shares will be treated as an excess distribution. Under these special tax rules:



§

the excess distribution or gain will be allocated ratably over the U.S. Holders holding period for the common shares,

§

the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we became a PFIC, will be treated as ordinary income, and

§

the amount allocated to each other year will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.



The tax liability for amounts allocated to years prior to the year of disposition or excess distribution cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the common shares cannot be treated as capital, even if the U.S. Holder holds the common shares as capital assets.



Alternatively, a U.S. Holder of marketable stock (as defined below) in a PFIC may make a mark-to-market election with respect to shares of a PFIC to elect out of the tax treatment discussed above. If a U.S. Holder makes a valid mark-to-market election for the common shares, the U.S. Holder will include in income each year an amount equal to the excess, if any, of the fair market value of the common shares as of the close of its taxable year over its adjusted basis in such common shares. The U.S. Holder is allowed a deduction for the excess, if any, of the adjusted basis of the common shares over their fair market value as of the close of the taxable year. However, deductions are allowable only to the extent of any net mark-to-market gains on the common shares included in the U.S. Holders income for prior taxable years. Amounts included in a U.S. Holders income under a mark-to-market election, as well as gain on the actual sale or other disposition of the common shares, are treated as ordinary income. Ordinary loss treatment also applies to the deductible portion of any mark-to-market loss on the common shares, as well as to any loss realized on the actual sale or disposition of the common shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such common shares. A U.S. Holders basis in the common shares will be adjusted to reflect any such income or loss amounts. If a U.S. Holder makes such an election, the tax rules that ordinarily apply to distributions by corporations that are not PFICs would apply to distributions by us, except that the lower applicable capital gains rate for qualified dividend income discussed above under Dividends and Other Distributions on the Common Shares would not apply.



The mark-to-market election is available only for marketable stock, which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter on a qualified exchange, including the American Stock Exchange, or other market, as defined in applicable U.S. Treasury regulations. We expect that our common shares will continue to be listed on the American Stock Exchange and, consequently, the mark-to-market election would be available to U.S. Holders of common shares were we to be a PFIC.



If a non-U.S. corporation is a PFIC, a holder of shares in that corporation can avoid taxation under the rules described above by making a qualified electing fund election to include its share of the corporations income on a current basis. However, a U.S. Holder can make a qualified electing fund election with respect to its common shares only



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if we furnish the U.S. Holder annually with certain tax information, and we do not intend to prepare or provide such information.



A U.S. Holder that holds common shares in any year in which we are a PFIC will be required to file IRS Form 8621 regarding distributions received on the common shares and any gain realized on the disposition of the common shares.



U.S. Holders are urged to consult their tax advisors regarding the application of the PFIC rules to the ownership and disposition of common shares.



Other Consequences



To the extent a shareholder is not subject to the tax regimes outlined above with respect to foreign corporations that are PFICs, the following discussion describes the United States federal income tax consequences arising from the holding and disposition of the Companys Common Shares.



Foreign Tax Credit



A US Holder who pays (or has withheld from distribution) Canadian income tax with respect to the ownership of the Companys common shares may be entitled, at the option of the US Holder, to either a deduction or a tax credit for such foreign tax paid or withheld.  Generally, it will be more advantageous to claim a tax credit, because a credit reduces United States federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayers income subject to tax.



This election is made on a year-by-year basis and generally applies to all foreign income taxes paid by (or withheld from) the US Holder during that year.  There are significant and complex limitations which apply to the credit, among which is the general limitation that the credit cannot exceed the proportionate share of the US Holders United States income tax liability that the US Holders foreign source income bears to his or its worldwide taxable income.  In the determination of the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources.  Complex rules govern this classification process.  There are further limitations on the foreign tax credit.  The availability of foreign tax credit and the application of the limitations on the credit are fact specific and holders and prospective holders of common shares should consult their own tax advisors regarding their individual circumstances.



Information Reporting and Backup Withholding



Dividends on common shares and the proceeds of a sale or redemption of a common share may be subject to information reporting to the IRS and possible U.S. backup withholding at a current rate of 28%, unless the conditions of an applicable exemption are satisfied. Backup withholding will not apply to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status can provide such certification on IRS Form W-9. U.S. Holders should consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.



Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. Holders U.S. federal income tax liability, and a U.S. Holder may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the IRS and furnishing any required information.



U.S. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS ABOUT THE APPLICATION OF THE U.S. FEDERAL TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE AND LOCAL AND FOREIGN TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF COMMON SHARES.



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F.

DIVIDENDS AND PAYING AGENTS



There are no restrictions on the payment of dividends by the Company. While dividends may be declared at the discretion of the Companys board of directors, the Company has not declared any dividends as of the date of this Registration Statement, nor does it intend to do so in the foreseeable future. Accordingly the Company has not appointed any financial organization to act as paying agents of the Company.



G.

STATEMENT BY EXPERTS



We have included in Item 4. Information on the Company information about the Fuwan Silver Project from an updated technical report prepared by P & E Mining Consultants Inc., of 2 County Court Blvd., Suite 202, Brampton. Ontario, Canada, L6W 3W8. The authors of the report are Eugene Puritch P.Eng. and Tracy Armstrong P.Geo. The technical report was prepared under the guidelines of Canadian National Instruments 43-101.  The Company filed the Updated 43-101 technical report on November 2, 2006 via SEDAR.  P&E Mining Consultants Inc. has consented to the inclusion of this information and has authorized the relevant contents of Item 4. Information on the Company.  We have included in Item 4. Information on the Company information about the Jinniushan Gold Project from a technical report prepared by Peter G. Folk, P. Eng., of 280 Wood Dale Drive, Comp. 47, Site 21, Mayne Island, B.C., Canada, V0N 2J0. The technical report was prepared under the guidelines of Canadian National Instruments 43-101.  The Company filed the Updated 43-101 technical report on January 3, 2007 via SEDAR.  Peter G. Folk has consented to the inclusion of this information and has authorized the relevant contents of Item 4. Information on the Company.  We have included in Item 4. Information on the Company information about the Changkeng Gold Project from a technical report by P & E Mining Consultants Inc., of 2 County Court Blvd., Suite 202, Brampton. Ontario, Canada, L6W 3W8. The authors of the report are Eugene Puritch P.Eng., Antoine Yassa, P. Geo. and Tracy Armstrong P.Geo. The technical report was prepared under the guidelines of Canadian National Instruments 43-101.  The Company filed the Updated 43-101 technical report on April 24, 2008 via SEDAR.



H.

DOCUMENTS ON DISPLAY



The Company files annual reports and furnishes other information with the SEC. You may read and copy any document that we file at the SEC's Public Reference Room at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 or by accessing the Commissions website (http://www.sec.gov). The Company also files its annual reports and other information with the Canadian Securities Administrators via SEDAR (www.sedar.com).  Copies of the Companys material contracts are kept in the Companys administrative headquarters.



I.

SUBSIDIARY INFORMATION



The Company has three subsidiaries with current or planned business operations, which are all created for the exploration and acquisition of mineral projects in China as described below. With the exception of Minco Silver, these subsidiaries are wholly-owned.



·

Minco Base Metals Corporation, incorporated on August 20, 2004, under the laws of British Columbia.  This company was formed to segregate its base metal projects as part of a long term plan to build the Companys base metals assets in China.  The White Silver Mountain project will form the asset base of this company.  This company is currently searching for other projects to acquire and develop in China.



On November 15, 2007 the Company completed a Plan of Arrangement pursuant to which the Company spun off its White Silver Mountain project in Gansu Province, PRD to Minco Base Metals.  The Company now holds no shares of Minco Base Metals.



·

Minco Mining (China) Corporation, incorporated in China on May 12, 2004, for the purposes of  managing Minco Golds projects in China, enhancing the Companys management team in China, and expanding upon certain mining activities (such as staking) in China.  This company currently has eight full time and part time
employees.



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·

Minco Silver Corporation, incorporated on August 20, 2004, under the laws of British Columbia.  Minco Silver was a 100% owned subsidiary of the Company.  This company was incorporated to acquire and develop silver projects in China and is currently involved with the development of the Fuwan silver property in Guangdong Province, China.



At December 31, 2004, the Company owned a 70% interest in Minco Silver but following a subsequent financing by Minco Silver, Minco Golds interest decreased to 55.56%.  On December 2, 2005, Minco Silver became a report issuer listed on the Toronto Stock Exchange (TSX) under the trading symbol MSV.  The Company currently owns 13,000,000 common shares of Minco Silver or a 41.75% of the issued and outstanding common shares of Minco Silver.  Minco Silver and GGEDC agreed pursuant to the Amending Contract that, subject to the payment of the applicable purchase price, Minco Silver (through Minco China) would hold a 100% interest in the Fuwan Permits, subject to GGEDC retaining a 10% net profit interest in the properties subject to the Fuwan Permits.



ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK



The Company is exposed to market risk, primarily related to foreign exchange.  The Company uses the Canadian dollar as its reporting currency and is therefore exposed to foreign exchange movements in China where the Company is conducting exploration activities.  The following table sets forth the principal components of the balance sheet at December 31, 2007 showing the sensitivity to exchange risk:



Year Ended December 31, 2007





|                                                                         |                |                  |                                         |     
|------------------------------------------------------------------------ | -------------- | ---------------- | --------------------------------------- | ----
|                                                                         | Denominated in | Total Value
in $ | Effect of a 10% Change in Exchange Rate
|$                                                                        | RMB           
|Cash and equivalents                                                     | 87,034         | 9,029,705        | 1,307,892                               | 9%  
|Temporary investments                                                    | 5,344,290      | 6,000,000        | 6,149,044                               | 1%  
|Receivables (including due from Minco Silver)                            | 374,408        | 34,096,684       | 5,192,779                               | 9%  
|Prepaid expenses and deposits                                            | 99,072         | 36,960           | 104,034                                 | 0.5%
|Accounts payable and accrued liabilities (including due to Minco Silver) | 2,292,383      | 3,548,066        | 2,819,893                               | 2%  



The following table sets forth the principal components of statement of operations for the year ended December 31, 2007 showing the sensitivity to exchange risk:



|                         |                |                  |                                         |     
|------------------------ | -------------- | ---------------- | --------------------------------------- | ----
|                         | Denominated in | Total Value
in $ | Effect of a 10% Change in Exchange Rate
|$                        | RMB           
|Exploration costs        | 331,187        | 18,629,320       | 2,947,948                               | 9%  
|Administrative expenses  | 4,219,436      | 5,851,379        | 5,025,538                               | 2%  
|Other income (loss)      | (39,260)       | 331,794          | 3,409                                   | 125%
|Non-controlling interest | -              | 3,057,293        | 429,442                                 | 10% 



Year Ended December 31, 2006





|                      |                |                  |                                         |    
|--------------------- | -------------- | ---------------- | --------------------------------------- | ---
|                      | Denominated in | Total Value
in $ | Effect of a 10% Change in Exchange Rate
|$                     | RMB           
|Cash and equivalents  | (93,004)       | 1,889,997        | 188,749                                 | 14%
|Temporary investments | 7,974,825      | 20,177,000       | 10,982,726                              | 2% 
|Receivables           | 594,248        | 3,294,801        | 1,085,423                               | 4% 



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|                                         |         |         |         |     
|---------------------------------------- | ------- | ------- | ------- | ----
|Prepaid expenses and deposits            | 178,003 | 47,435  | 185,074 | 0.3%
|Accounts payable and accrued liabilities | 384,482 | 782,458 | 501,128 | 2%  



The following table sets forth the principal components of statement of operations for the year ended December 31, 2006 showing the sensitivity to exchange risk:







|                         |                |                  |                                         |     
|------------------------ | -------------- | ---------------- | --------------------------------------- | ----
|                         | Denominated in | Total Value
in $ | Effect of a 10% Change in Exchange Rate
|$                        | RMB           
|Exploration costs        | 1,097,844      | 10,316,226       | 2,563,132                               | 5%  
|Administrative expenses  | 5,465,183      | 2,302,731        | 5,792,256                               | 1%  
|Other income (loss)      | 5,348,678      | 251,054          | 5,384,337                               | 0.1%
|Non-controlling interest | 1,381,727      | -                | 1,381,727                               | 0%  



We believe that the selected rate change of 10% is reasonably possible in the near term.  The Company has not entered into any material foreign exchange contracts to minimize or mitigate the effects of foreign exchange fluctuations on the Companys operations.  The Company exchanges Canadian dollars to fund its Chinese operations.  The Company has no long-term debt, therefore, the Company does not believe that the interest rate market risk to be material.



ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES



Not applicable.





PART II



ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES

AND DELINQUENCIES



Not Applicable



ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF

SECURITY HOLDERS AND USE OF PROCEEDS



Not Applicable







ITEM 15.

CONTROLS AND PROCEDURES



(a)

Disclosure controls and procedures



Disclosure controls and procedures are designed to provide reasonable assurance that all relevant information is gathered and reported to senior management, including the Companys Chief Executive Officer and Chief Financial officer, on a timely basis so that appropriate decisions can be made regarding public disclosure.  Based on their evaluation as of December 31, 2007, the Company's principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act")) are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules.



(b)

Managements annual report on internal controls over financial reporting





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The Company maintains internal controls over financial reporting designed to provide reasonable assurance regarding the completeness and reliability of financial reporting and the preparation of the consolidated financial statements in accordance with generally accepted accounting principles in Canada and the United States ("GAAP). The Company has in place polices and procedures regarding the maintenance of records to ensure they are complete and accurate and fairly reflect the transactions of the Company and provide reasonable assurance that only authorized expenditures and asset dispositions are undertaken.

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes. We recognize that because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.



To evaluate the effectiveness of our internal control over financial reporting, management used the criteria described in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). A material weakness (within the meaning of PCAOB Auditing Standard No. 5) is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.



During our review, it was noted that the Company has not yet developed a formal, documented evaluation process to evaluate compliance of internal control over financial reporting for purposes of Section 404 of Sarbanes-Oxley.  Although management believes that due to the small size of the Company and the hands-on involvement of senior management it is in control of all aspects of the financial operations of the Company, because the Company has not yet developed a formal documented evaluation process, it cannot determine its internal controls over financial reporting are effective. As a result, this lack of documentation is deemed a material weakness.  In light of this weakness, we have initiated a project, assisted by external parties with expertise in designing and implementing internal control systems over financial reporting, to implement a formal, documented evaluation and testing process of our internal controls over financial reporting.  This project will be completed in 2008.

As a result of the material weakness in internal control over financial reporting described above, management has concluded that, as of December 31, 2007, the Companys internal control over financial reporting were not effective based on the criteria in Internal Control  Integrated Framework issued by the COSO.





(c)

Attestation report of the registered public accounting firm



This annual report does not include an attestation report of the Companys registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the Companys registered public accounting firm pursuant to current rules of the Securities and Exchange Commission that permit the Company to provide only managements report in this annual report.





(d)

Changes in internal controls



There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT



The Companys board of directors has determined that the company has one audit committee financial expert serving on its audit committee and that the individual is independent.  Mr. Malcolm F. Clay, Chairman of the audit committee



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serves as the audit committees financial expert. He is a Chartered Accountant, with over 27 years experience in both public and private companies.



ITEM 16B.

CODE OF ETHICS - BOARD OF
DIRECTORS AND OFFICERS



The following is the Companys Code of Ethics for the Board of Directors.



Introduction



Our board of directors has adopted a code of ethics to provide principles for the purpose of promoting:



·

honest and ethical conduct, including the ethical handling of actual or apparent  conflicts of interest between personal and professional relationships;

·

full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications;

·

compliance with applicable governmental laws, rules and regulations;

·

the prompt internal reporting of violations of our code of ethics; and

·

accountability for adherence to our code of ethics.



Our code of ethics applies to our chief executive officer and other senior financial officers performing similar functions as these individuals are responsible for our financial management and satisfying our reporting requirements to securities commissions, stock exchanges and shareholders as well as reporting to our board of directors.  In our code of ethics these individuals are referred to as you.



Principles



1.

You shall act with honesty and integrity in the performance of your duties, shall comply with all laws, rules and regulations of federal, provincial, state and local governments and other private and public regulatory agencies that affect the conduct of our business and our financial reporting.

2.

You are responsible for full, fair, accurate, timely and understandable disclosure in the reports and documents that we file with, or submit to, the Securities and Exchange Commission and in our other public communications.  Accordingly, each of you is responsible for promptly bringing to the attention of the chairman of the board any material information of which you may become aware that affects our disclosure in our public filings.

3.

You shall promptly bring to the attention of the chairman of the board any information you may have concerning evidence of a material violation of the securities or other laws, rules or regulations applicable to us and the operation of our business or any violation of this Code of Ethics.  In either event, any reporting is confidential and you are protected from retaliation.

4.

You shall promptly bring to the attention of the chairman of the board any information you may have concerning (a) significant deficiencies in the design or operation of internal controls which could adversely affect our ability to record, process, summarize and report financial data or (b) any fraud, whether or not material, that involves management or other employees who have a significant role in our financial reporting, disclosures or internal controls.

5.

You must avoid any personal activity or association that could appear to influence your judgment or affect our best interests.  You shall promptly bring to the attention of the chairman of the board any information you may have concerning any actual or apparent conflicts of interest between personal and professional relationships, involving any management or other employees who have a significant role in our financial reporting, disclosures or internal controls.



Violations and Waivers



Our chairman of the board is to advise the board of directors in writing of all violations of this code of ethics reported to him.  Our board of directors is to determine, with or without the advice of others, appropriate actions to be taken in the



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event you violate this code of ethics.  These actions shall be reasonably designed to deter wrongdoing and to promote accountability for adherence to this code of ethics and may include actions ranging from: (a) writing notices to the individual involved that the Board has determined that there has been a violation to (b) termination of the individuals employment.  In determining what action is appropriate in a particular case, the board of directors will take into account all relevant information, including the nature and severity of the violation, whether the violation was a single occurrence or repeated occurrences, whether the violation appears to have been intentional or inadvertent, whether the individual in question had been advised prior to the violation as to the proper course of action and whether or not the individual in question had committed other violation in the past.



No waivers of any provision of this code of ethics may be made except by the board of directors.  Only the board of directors may amend this code of ethics.  Any waiver or amendment shall be reported as required by law or regulation.



ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES



During the past two fiscal years, the Company has paid the following fees to its principal accountants, Ernst & Young, LLP:



|                   |           |         
|------------------ | --------- | --------
|                   | 2007      | 2006    
|Audit fees         | $ 125,000 | $ 80,000
|Audit-related fees | -         | -       
|Tax fees           | 1,200     | 3,800   
|All other fees     | -         | -       
|Total              | $ 126,200 | $83,800 



ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS

FOR AUDIT COMMITTEES



The Company believes that the majority of the members of the audit committee were independent.



ITEM 16E.

PURCHASES OF EQUITY SECURITIES BY

THE ISSUER AND AFFILIATE PURCHASERS



None



ITEM 16F.

OTHER



CORPORATE GOVERNANCE CHARTER



The following is the Companys Corporate Governance Charter.



In accordance with the disclosure requirements of Toronto Stock Exchange and using the Corporate Governance Guidelines set out in Section 474 of the Toronto Stock Exchange Company Manual as a reference (the "Guidelines"), the Board of Directors of the Company has adopted the following statement of corporate governance practices:



1.

The Board acknowledges its responsibility for the stewardship of the Company in the following ways:



(i)

The Board participates in strategic planning by considering and, if deemed appropriate, adopting plans proposed and developed by management, with management having the primary responsibility for developing a strategic plan.

(ii)

The Board considers the risks inherent in the mining industry and receives periodic assessments from management as to these risks and the Company's strategies to manage these risks.

(iii)

The Board reviews the personnel needs of the Company from time to time, having particular regard to succession issues relating to senior management.  The training and development of personnel is



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generally left to management.

(iv)

The Board assesses from time to time how effectively the Company communicates with shareholders, but does not have a formal communication policy.

(v)

The Board, through the Audit Committee and in conjunction with its auditors, assesses the adequacy of the Company's internal control and management information systems.



The foregoing does not and is expressly not intended to alter, affect or expand in any way the legal duties of the directors to manage or supervise the management of the affairs and business of the Company.



2.

The Guidelines define an "unrelated director" as a director who is independent of management and is free from any interest and any business or other relationship which could, or could be perceived to, materially interfere with the director's ability to act with a view to the best interests of a corporation, other than interests and relationships arising from shareholdings. The Guidelines further state that if the Company has a "significant shareholder", the board should include a number of directors who do not have interests in or relationships with either the corporation or the significant shareholder.  The Company does not have a "significant shareholder" which, as defined by the Guidelines, is a shareholder with the ability to exercise a majority of votes for the election of the board of directors. The entrepreneurial nature of the Company, and the current stage of the Company's development, make it appropriate for the Board to be composed of the present number and composition of directors, and the Board believes that when balanced against the attendant increase in cost to the Company and possible reduction in the efficiency with which decisions are made, it would not be warranted to significantly increase the size of the Board or change the Board's composition at this time.

3.

The Board has not constituted a nominating committee to propose new Board nominees and for assessing directors' performance as the Company is too small to justify a formal process in this regard.  However, the Board as a whole from time to time discusses potential candidates for the Board.

4.

For the reasons cited in 3 above, the Board has not constituted a committee to assess the effectiveness of the Board as a whole or the contribution of individual directors.

5.

The Company does not have a formal process of orientation and education for new members of the Board as some senior Board members currently have considerable experience as members of the boards of other public companies.

6.

The Board has considered its size with a view to the impact of size upon its effectiveness and has concluded that the number of directors as presently constituted is appropriate for the Company given the complexity and current stage of development of the Company's business.  The Board as presently constituted includes considerable experience in the mining industry and generally in the resource sector as well as financial experience.

7.

Board members are presently compensated in the manner described under "Executive Compensation" and the Board has determined that the level of compensation is appropriate having regard to the responsibilities and risks associated with Board membership and the compensation provided to Boards of similar companies.

8.

The Board of Directors has expressly assumed the responsibility for developing the Company's approach to governance issues and in responding to governance guidelines.

9.

The Company has not formally developed position descriptions for the Board and the Chief Executive Officer.  However, the Board is satisfied that senior management is fully aware of their responsibilities and those matters which are within their mandate.

10.

The Board has functioned, and is of the view that it can continue to function, independently of management as required.  The Board has not met without management present, given management representation on the Board and given that in view of the size of the Company and the nature of its business, it is essential that those having an intimate knowledge of the Company's operations be present during important Board discussions.  Notwithstanding the foregoing, if the Board believed it was appropriate and meaningful, it would formalize a process whereby the Board could meet in the absence of management for the handling of the Board's overall relationship with management.

11.

The Audit Committee is composed of two outside and unrelated directors and one inside and related director.  The roles and responsibilities of the Audit Committee have been specifically defined and include responsibility for overseeing management reporting on internal control.  The Audit Committee has direct communication channels with the external auditors.  The external auditors report directly to the Audit Committee.  Due to its size, the Company has no formal internal audit process.  The Audit Committee also recommends to the Board the external auditor to be nominated for the purpose of preparing or issuing an auditors report, as well as the



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compensation to be paid to the external auditor.

12.

The Board has not adopted a formal system which would enable an individual director to engage an outside advisor at the expense of the Company.  If such an engagement were deemed appropriate, it is anticipated that such a request would be brought by the particular director to the Board for consideration.



IN ADDITION TO THE FOREGOING CORPORATE GOVERNANCE PRACTICES, THE COMPANY HAS ALSO ADOPTED A COMMUNICATIONS POLICY.  BOTH THE TORONTO STOCK EXCHANGE (THE TSX) AND THE VARIOUS PROVINCIAL SECURITIES COMMISSIONS ENCOURAGE COMPANIES TO ADOPT THEIR OWN INTERNAL COMMUNICATIONS POLICIES (THE COMMUNICATIONS POLICY). TO FACILITATE THIS, THE TSX AND THE CANADIAN SECURITIES ADMINISTRATORS (THE CSA) HAVE ISSUED SIMILARLY-WORDED GUIDELINES  THE FORMER IS FOUND IN PART IV(B) TIMELY DISCLOSURE OF THE TSX COMPANY MANUAL; THE LATTER IN NATIONAL POLICY 51-201, DISCLOSURE STANDARDS.  THE COMPANYS COMMUNICATIONS POLICY INCORPORATES THE AFOREMENTIONED TSX AND CSA GUIDELINES.



COMMUNICATIONS POLICY



The Communications Policy also explains the Company's policies with respect to confidentiality of information and rules that must be followed when buying or selling the Company shares.  The onus for complying with the Communications Policy and the relevant insider trading and other rules is on each director, officer, employee and insider of the Company.The Communications Policy also contains the Companys whistleblower policies.  Each employee is expected to report situations in which he or her suspects fraud or is aware of any internal control weaknesses.  In addition, weaknesses in the internal control procedures of the Company that may result in errors or omissions in financial information, or that create a risk of potential fraud or loss of the Companys assets, are expected to be brought to the attention of both management and the Board of Directors.



To facilitate the reporting of suspected fraud, it is the policy of the Board of Directors that employees have anonymous and direct access to the Chair of the Audit Committee.  In addition, it is the policy of the Board that employees concerned about reporting internal control weaknesses directly to management are able to report such weaknesses to the Board anonymously.  In this case, the employee should follow the same procedure detailed above for reporting suspected fraud.



The following is the Companys Communications Policy.



Overview



Both the Toronto Stock Exchange (the TSX) and the various provincial securities commissions encourage companies to adopt their own internal communications policies (the Policy). To facilitate this, the TSX and the Canadian Securities Administrators (the CSA) have issued similarly-worded guidelines  the former is found in Part IV(B) Timely Disclosure of the TSX Company Manual; the latter in National Policy 51-201, Disclosure Standards.  This Policy, which is current as of May 11, 2005, incorporates the aforementioned TSX and CSA guidelines.  This Policy has been approved by the Board of Directors of Minco Gold Corporation (the Company) and must be presented for reading by all directors, officers and employees of the Company and its subsidiaries with access to strategic or material non-public information involving the Company and its affairs.



The Policy covers all employees of the Company, its Board of Directors, those authorized to speak on its behalf and all other insiders.  It covers disclosures in documents filed with the securities regulators, financial and non-financial disclosure, including managements discussion and analysis (MD&A) and written statements made in the Companys annual and quarterly reports, press releases, letters to shareholders, presentations by senior management and information contained on the Companys web site and other electronic communications.



It extends to oral statements made in meetings and telephone conversations with analysts and investors, interviews with the media as well as speeches, press conferences and conference calls.  This document will explain the Company's policies with respect to confidentiality of information and rules that must be followed when buying or selling the Company shares. This document is only a summary of specific rules and regulations.  If you have any questions on any issues discussed in this Policy or how you may be affected by the various securities laws, please contact the Chief Financial Officer (CFO), or in his absence, the Chief Executive Officer (CEO).   The onus for complying with the



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Policy and the relevant insider trading and other rules is on each director, officer, employee and insider of the Company.  It is fundamental to the reputation and ongoing success of the Company that its directors, officers, employees and insiders respect and adhere to the rules and procedures outlined in this Policy.



Members of the families of the directors, officers, employees and insiders of the Company and others living with them are expected to comply with this Policy, as if they themselves were directors, officers, employees or insiders of the Company. It is in your interest that the rules and procedures outlined in this Policy are complied with fully.  Failure to comply with these rules and procedures may result in disciplinary action up to and including immediate termination of employment.



DISCLOSURE OF MATERIAL INFORMATION



A.

Policy



To comply with the requirements of provincial securities regulators and the TSX, and in the interests of developing and maintaining the confidence of the investing public, and in assisting the public in making informed investment decisions based on equal access to information, it is the policy of the Company to promptly disclose to the investing public, and to its other public constituencies, all material information concerning the operations and financial results of the Company other than such information as may be lawfully withheld from disclosure and only for such time as it may be lawfully withheld from disclosure.



B.

Procedure



(I)

Information is deemed material and will require prompt disclosure when such information, if made public, would reasonably be expected to result in a significant change in the market price or value of any of the Company's listed securities.  It is also defined as anything that a reasonable investor would consider important in assessing the Company as a potential investment. Material information consists of both material facts and material changes.  Examples of material information would include quarterly results, acquisition of new assets, senior management changes, equity or debt issues, commencement or update of co-development programs, etc. In addition, the declaration of any dividend, conditional or unconditional, will be disclosed immediately upon the conclusion of the Board meeting at which the decision to declare the dividend was made and quarterly financial statements will be disclosed immediately after the Board meeting at which they were approved. The release of information pertaining to dividends and quarterly financial statements will be addressed by the CFO of the Company upon the Boards approval of such statements and dividends without further instructions or authority.  The Company shall endeavor to include, where appropriate, in its press releases and other disclosure documents (i) appropriate cautionary information, especially in reference to forward-looking statements, (ii) specific time references, e.g., ''as of (specific time and date rather than indefinite time references such as 'currently') no merger discussions have taken place" to minimize the duty to update, and (iii) information sufficient to answer likely questions to minimize further inquiry.

(II)

Except as mentioned in the preceding paragraph, the CEO shall determine whether or not any information pertaining to the Company is material, and whether and when it will be disclosed.  In making this determination, the CEO should obtain the advice and counsel of the Board of Directors and of the Companys securities counsel.  In the event of the absence or unavailability of the CEO, the responsibility for determining whether or not information is material, and whether and when it will be disclosed, will be assumed by the CFO with the advice and counsel of the Companys securities counsel.

(III)

The CEO and CFO (the Responsible Officers) may appoint designated spokespersons (the Designated Spokespersons) authorized to disclose or discuss information concerning the Company to specific groups such as the media, analysts, institutional investors and other market professionals.  All other directors, officers and employees approached by these, or other parties for such information shall refer such inquiries to one or more of the Responsible Officers.

(IV)

In the event that a Responsible Officer determines that material information should be disclosed, the Responsible Officer shall cause a news release to be issued disclosing all material facts and, if the TSX is open for trading, shall advise the Market Surveillance branch of the TSX (Market Surveillance) of the details of the release and the proposed method of dissemination.  In the event that a Designated Spokesperson believes that material information should be disclosed, he or she should inform a Responsible Officer immediately.  Where an announcement is to be made after the TSX has closed for trading, Market Surveillance should be advised of



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this information before trading opens the next trading day.  Market Surveillance shall determine whether a halt in trading is necessary.  After consulting with Market Surveillance, the Responsible Officer shall send the news release to Canada Stockwatch, Market News, Canada News Wire or other news distribution service, with a copy to Market Surveillance. Immediately following the issuance of the news release, the Responsible Officer shall seek the advice and counsel of the Companys securities counsel regarding possible filing requirements (i.e., material change reports) with the appropriate securities regulatory authorities.

(V)

In the event that material information which would otherwise be required to be promptly disclosed must, for any reason, is kept secret for any length of time, the Responsible Officer, on the advice and counsel of the Companys securities counsel, shall so advise Market Surveillance and explain the reasons for such request.  The Company should also discuss with securities counsel whether or not a confidential material change report should be filed.  Release of the information shall thereafter be made as soon as possible, consistent with the instructions of Market Surveillance. If material information is being withheld, the Company is under a duty to take precautions to keep such information confidential (see Item #2 of this Policy  Maintaining Confidentiality of Information).  In the event that such information or rumours thereof is divulged (other than in the necessary course of business), the Company shall immediately disclose the information to the general public in a news release prepared in accordance with this Policy.

(VI)

In making material disclosure and preparing the text and content of news releases and other disclosure documents, the Responsible Officer shall observe that:



(a)

Half-truths are misleading; disclosure must include any information which, if omitted, would make the rest of the disclosure misleading;

(b)

Unfavourable information must be disclosed as promptly and completely as favourable information;

(c)

No disclosure of previously undisclosed information should be made to selected individuals or groups such as analysts, major shareholders or other market professionals including members of the financial press. If such selective disclosure is made through inadvertence, immediate general disclosure should immediately be made of the subject information through a news release prepared in accordance with this Policy;

(d)

Disclosure must be updated if earlier disclosure has become misleading as a result of intervening events;

(e)

The CFO will determine in advance what information is to be disclosed at meetings with analysts, and shall brief those officers in attendance accordingly.  No material information concerning the finances or prospects of the Company is to be disclosed to analysts (in response to questioning or otherwise) before it has been released to the stock exchanges and to Canada Stockwatch, Market News, Canada News Wire or other news distribution service.  If material information is to be announced at an analyst or shareholder meeting or a press conference, its announcement must be coordinated with a general public announcement by a news release; and

(f)

The CFO shall maintain a record of all public records concerning the Company, including news releases, analyst research reports, reports in the press and debriefings following meetings, conference calls or other interactions with analysts.  The materials in the record shall be available to the management of the Company and will assist the Responsible Officers in determining whether any particular information is material.



2.

MAINTAINING CONFIDENTIALITY OF INFORMATION



A.

Policy



No director, officer or employee in possession of non-public information concerning the technology, finances, affairs and prospects of the Company that, if generally known, could be reasonably expected to cause a significant change in the market price of the Companys stock (Confidential Information) shall disclose such information to any person outside the Company, unless such person has been designated under this Policy, or by the CEO, to make such disclosure.



In addition, no director, officer or employee disclose any such information to any person within the Company whose job duties do not require the possession of such information.  Employees of the Company are permitted to disclose Confidential Information, if required to do so in the necessary course of business.  This exemption from the prohibition



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against disclosing material non-public information, however, is not available for communications made to the media, securities analysts, institutional investors or other market professionals.



B.

Procedure



(I)

If any ambiguity exists as to whether or not information should be confidential, it should be discussed with the Companys CEO, CFO or securities counsel.

(II)

To limit the number of people who know about Confidential Information, the Company should limit access to only those parties who, as a function of their employment with the Company, are required to know the information.  Documents containing confidential information should be clearly marked Confidential, be stored in a secure place and code words should be used where practicable for material projects that have not been generally disclosed to the public.

·

Confidential matters should not be discussed in places where the discussion may be overheard.  Confidential documents should not be read or displayed in public places and should be discarded via secure shredder service whenever practicable. Employees must ensure they maintain the confidentiality of information in their possession outside of the office as well as inside the office. Transmission of documents by electronic means, such as by fax or directly from one computer to another, should be made only where it is reasonable to believe that the transmission can be made and received under secure conditions.

(IV)

Before a meeting with other parties at which Confidential Information may be imparted, the other parties should be told that they must not divulge that information to any other party, other than in the necessary course of business, and that they may not trade in the Companys securities until the information is generally disclosed (see Item #3 of this Policy  Trading by Insiders and Employees).  In addition, other parties are required to sign a copy of the Companys Non-Disclosure and Non-Competition Agreement.

(V)

Confidential Information may be disclosed if this disclosure takes place as part of the necessary course of business with, and is pertinent to, the ongoing business relationship between the Company and such parties as:



(a)

vendors and suppliers;

(b)

employees, directors and officers;

(c)

lenders, legal counsel and auditors;

(d)

parties to negotiations;

(e)

labour unions and industry associations;

(f)

governmental and non-governmental regulators, and

(g)

credit-rating agencies.



In the event that there is an ambiguity as to whether or not the disclosure of certain Confidential Information is considered to be in the necessary course of business, the party responsible for the disclosure should consult the CEO or CFO, who may seek the further advice and counsel of the Companys securities counsel.

(VI)

All employees who are or who may be aware of Confidential Information (including clerical staff) must be explicitly warned to keep it confidential.  More specifically:

(a)

Employees are required to sign the Companys Non-Disclosure and Non-Competition Agreement upon commencement of their employment with the Company; and

(b)

Employees must not disclose Confidential Information to anyone, except in the necessary course of business; Employees must not discuss Confidential Information in situations where they may be overheard; and

(c)

Employees must not participate in discussions with others about investments in the Company.

(VII)

Directors, officers and employees of the Company should not comment on draft reports submitted to them by analysts other than identifying inaccuracies, omissions or publicly disclosed factual information that may affect an analysts model.  Those parties appointed to speak to the media, analysts, institutional investors and other market professionals should be briefed in advance to review what information is material and what information has not been publicly disclosed.  Voice recordings



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of quarterly analyst conference calls shall be kept available for public access on a call-in basis for seven days after the call in question.



TRADING BY INSIDERS AND EMPLOYEES



A.

Policy



Trading in the securities of the Company (including dealings with options, futures, rights and all other securities) or the provision to other parties of information to facilitate a possible trade (tipping) by any director, officer or employee with knowledge of undisclosed material information about the Company is strictly prohibited.  In addition, in circumstances where a director, officer or employee becomes aware of undisclosed material information concerning another public company as a result of their employment with the Company, trading in the securities of such other company is similarly prohibited.



B.

Procedure



(I)

It is an offence for any person in a special relationship with the Company to trade securities of the Company while in possession of material non-public information that, if made public, could reasonably be expected to cause a significant change in the price of the Companys stock.  Persons in a special relationship with the Company include all directors, officers and employees of the Company, plus all parties (tippees) who learn of material information from any director, officer or employee of the Company (tippers), where the tippee knows or reasonably ought to have known that the tipper was in a special relationship with the Company.  Directors, officers and employees are also deemed to be in a special relationship with another company (and are correspondingly prohibited from trading in the securities of said other company), if they become aware of undisclosed material information concerning the other company as a result of their employment with the Company.

(II)

Insiders are considered to have a special relationship with the Company on an ongoing basis.  For the purpose of this Policy, the definition of "Insider" includes all directors, senior officers and greater than 10% shareholders of the Company.  In order to prevent insider trading violations or any appearance of impropriety, any Insider that proposes to make a trade that may be prohibited under this Policy should obtain from the CEO or the CFO a determination as to whether or not the undisclosed information that he or she possesses is material or whether a trade may be made. If any ambiguity exists as to whether or not a director, officer or employee should be permitted to make a trade, the matter should be discussed with the Companys securities counsel. Insiders of the Company will be required to complete and file an insider trading report within 10 days of the date that such Insider purchased or sold securities of the Company.  These reports may be obtained from the CFO or the Corporate Secretary. Insiders are personally responsible for filing accurate and timely insider trading reports.  Insiders are required to provide a copy of all insider reports to the Corporate Secretary, or other designated person, concurrent with their filing to regulatory authorities.  There now exists a web-based on-line filing system for Insider reports (www.sedi.ca).  Failure of an Insider to file an insider trading report on a timely basis may result in a fine of up to $1 million, imprisonment for a term of upto three years, or both.  Any questions regarding filing insider trading reports should be taken up with the Corporate Secretary as early as possible.

(III)

Certain circumstances will give rise to periods of time (Black-out Periods) during which no trading of securities is to take place at all by directors, officers and employees who are routinely (or in the special circumstances at hand) in possession of undisclosed material information (Restricted Persons).  The imposition of Black-out Periods is to be determined and announced by the CFO and shall include periods from two weeks following the end of the first, second and third fiscal quarter, and four weeks following the end of the fourth quarter, and shall remain in effect until the second business day following release of the related financial information.  A Black-out Period shall also be declared by the CFO pending the announcement of any material undisclosed development affecting the Company or following the crystallization of a material transaction involving the Company. Black-out Periods shall remain in effect until the second business day following release of the material information concerned. In declaring a Black-out Period, the CFO may stipulate whether any particular class of Restricted Person is to be fully or partially excused from the application of the Black-out Period, and the CFO may determine whether any particular reason is to be given for the imposition of a Black-out Period.



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(IV)

Persons involved in the negotiation of material transactions will be held to a higher standard than other Restricted Persons as a result of their more intimate knowledge of a particular transaction. Accordingly, such persons should cease trading in the Companys securities when any material transaction comes under serious negotiation, rather than upon the imposition of a Black-out Period. If any ambiguity exists as to whether or when a transaction has come under serious negotiation, the matter should be discussed with the Companys securities counsel.

(V)

Breaches of this Policy may constitute violation of securities laws and can cause acute embarrassment to the Company. If the Company discovers that a director, officer or employee has violated applicable securities laws, it will refer the matter to the appropriate regulatory authorities. Disciplinary action may be brought against a party who violates this Policy, which could result in termination of employment with the Company.



4.

FORWARD-LOOKING INFORMATION



It is the Companys policy to provide forward-looking information to enable the investment community to better evaluate the Company and its prospects. The Company will make statements and respond to inquiries with respect to, for example: revenue projections, income or loss projections, pricing and profit margin trends, significant new developments, projected demand or market potential for products. In certain circumstances, however, the Company will refrain from making specific quantifiable projections or disclosing information with respect to, for example: pricing, margins, customer identities or other information for competitive reasons. Moreover, all statements will be accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the statement.  The Company will observe the following guidelines with respect to forward-looking statements:





The information will be clearly identified as forward looking;



The Company will identify the material assumptions used in the preparation of the forward-looking information;



The information will be accompanied by a statement that identifies, in specific terms, the risks and uncertainties that may cause the actual results to differ materially from those projected in the statement; and



The information will be accompanied by a statement that the information is stated as of the current date and subject to change after that date, and the Company disclaims any intention to update or revise this statement of forward-looking information, whether as a result of new information, future events or otherwise.



Example:



Certain information included in this news release is forward-looking and is subject to important risks and uncertainties.  The results or events predicted in these statements may differ materially from actual results or events.  Factors which could cause results or events to differ from current expectations include, among other things: the impact of price and product competition; the ability of the Company to make acquisitions and/or integrate the operations and technologies of acquired businesses in an effective manner; general industry and market conditions and growth rates; the impact of consolidations in the telecommunications industry and stock market volatility.



For additional information with respect to certain of these and other factors, see the reports filed by the Company with the B.C. Securities Commission.  The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.



5.

ELECTRONIC DISCLOSURE



A.

Policy



All information disclosed by the Company electronically shall comply with the National Policy 51-201s electronic communications guidelines (sec. 6.12) to ensure that such information is timely, accurate and up-to-date.







B.

Procedure





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(I)

The Company should ensure that its investor relations information is available through its website.  However, the Company must not disclose material information on its website, or distribute it by e-mail, or any other electronic manner, before it is disseminated in a news release in accordance with this Policy.  Information is not considered to be generally disclosed to the public, if it only appears on the Companys website.  The Company shall furthermore review and update its electronic security systems on a regular basis and shall monitor the integrity of its website to ensure that the site is accessible and has not been altered and shall regularly review, correct and update information on its website over time.  It is not sufficient, for purposes of this Policy, if the information has been corrected or updated elsewhere.

(II)

The CFO is responsible for overseeing the Companys policies on electronic communications and should ensure that all information on the Companys website or published elsewhere electronically complies with applicable securities laws and the internal policies of the Company.  The Company should not post any information on its website that is authored by a third party unless the information was prepared on behalf of the Company or is of a general nature and is not specific to the Company.

(III)

Employees of the Company must not engage in internet chat rooms and news groups in discussions relating to the Company, its securities or any actions taken or proposed to be taken by the Company.  All employee e-mail addresses are considered, for purposes of this Policy, to be corporate addresses of the Company and all correspondence received and sent via e-mail is considered, for purposes of this Policy, to be corporate correspondence of the Company.

(IV)

The Company should not directly respond to rumors posted in news groups or chat rooms, but instead should issue a news release in accordance with the terms of this Policy.  If any director, officer or employee of the Company becomes aware of a rumor in a chat room or news group or other source that may have a material impact on the price of the Companys stock, he or she should immediately contact the CEO or the CFO who will, with the assistance of the Companys securities counsel, decide the appropriate course of action.



6.

PROCEDURE FOR REPORTING OF FRAUD OR CONTROL WEAKNESSES



Each employee is expected to report situations in which he or her suspects fraud or is aware of any internal control weaknesses. An employee should treat suspected fraud seriously, and ensure that the situation is brought to the attention of the Board of Directors. In addition, weaknesses in the internal control procedures of the Company that may result in errors or omissions in financial information, or that create a risk of potential fraud or loss of the Companys assets, should be brought to the attention of both management and the Board of Directors.  To facilitate the reporting of suspected fraud, it is the policy of the Board of Directors that the employee (the whistleblower) has anonymous and direct access to the Chair of the Audit Committee.  The current Chair, Mr. Robert Gayton, can be reached at (604) 641-2767.  Should a new Chair be appointed prior to the updating of this document, current Chair will ensure that the whistleblower is able to reach the new Chair in a timely manner.  In the event that the Chair of the Audit Committee cannot be reached, the whistleblower should contact the Chair of the Board of Directors.  Access to the names and place of employment of the Companys Directors can be found in the Companys website.  In addition, it is the policy of the Board that employees concerned about reporting internal control weaknesses directly to management are able to report such weaknesses to the Board anonymously.  In this case, the employee should follow the same procedure detailed above for reporting suspected fraud.





NOMINATIONS COMMITTEE



The Nominations Committee is composed of three outside and unrelated directors, Messrs. Callander, Doggett and Clay. Below is the full disclosure of the Nominations Committee Charter.



NOMINATIONS COMMITTEE CHARTER



Purpose



The purpose of the Nominating Committee shall be to:





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(a)

assist the Board of Directors of Minco Gold Corporation (the "Company"), on an annual basis, by identifying individuals qualified to become Board members, and to recommend to the Board the director nominees for the next annual meeting of shareholders;

(b)

assist the Board in the event of any vacancy on the Board by identifying individuals qualified to become Board members, and to recommend to the Board qualified individuals to fill any such vacancy; and

(c)

recommend to the Board, on an annual basis, director nominees for each Board committee.



Committee Membership



The members of the Committee shall be appointed by the Board of Directors.  The Committee shall be composed of not less than three members of the Board.   The Chairman of the Committee shall be designated by the Board of Directors.  Nominating Committee members serve at the pleasure of the Board, and Committee members may be replaced by the Board.



Independence



The members of the Nominating Committee must be "independent" of the Company as defined in Canadian National Instrument 58-101 - Disclosure of Corporate Governance Practices.  A Nominating Committee member is independent if he or she has no direct or indirect material relationship with the Company.  A "material relationship" includes a relationship which could, in the view of the Company's Board of Directors, be reasonably expected to interfere with the exercise of a member's independent judgment.



Meetings



The Nominating Committee will meet as often as the Chair shall determine to be necessary or appropriate.



Authority



The Committee may request any officer or employee of the Company to attend a Committee meeting.  The Committee shall have the authority to retain and terminate any search firm to be used to identify director candidates and shall have authority to approve the search firm's fees and other retention terms, at the Company's expense.



Nominating Committee Duties and Responsibilities



Duties and responsibilities of the Nominating Committee include:



·

reviewing on a periodic basis, the composition of the Board to ensure that an appropriate number of unrelated directors sit on the Board of Directors;

·

analyzing the needs of the Board of Directors when vacancies arise on the board and recommending nominees who meet such needs;

·

ensuring that an appropriate selection process for new nominees to the Board of Directors is in place;

·

recommending to the Board, on an annual basis, nominees for election as directors for the next annual meeting of shareholders;

·

recommending to the Board the nominees for appointment to Committees of the Board on at least an annual basis;

·

reviewing and assessing, annually, the Nominating Committee charter and submitting any changes deemed necessary or advisable for approval of the Board of Directors; and

·

performing other functions as requested by the Board of Directors.



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COMPENSATION COMMITTEE



The Compensation Committee is composed of three outside and unrelated directors, Messrs. Callander, Doggett and Clay.  Below is the full disclosure of the Compensation Committee Charter.



COMPENSATION COMMITTEE CHARTER



Purpose



The purpose of the Compensation Committee shall be to:



(a)

establish, review and recommend to the Board of Directors of Minco Gold Corporation (the "Company") compensation and incentive plans and programs; and

(b)

review and approve compensation and awards under compensation and incentive plans and programs for the CEO and senior officers;



with the intention of attracting, retaining and appropriately rewarding employees in order to motivate their performance in the achievement of the Companys business objectives and align their interests with the long-term interests of the Companys shareholders.



Committee Membership



The members of the Committee shall be appointed by the Board of Directors.  The Committee shall be composed of not less than three members of the Board.   The Chairman of the Committee shall be designated by the Board of Directors.  Compensation Committee members serve at the pleasure of the Board, and Committee members may be replaced by the Board.



Independence



The members of the Nominating Committee must be "independent" of the Company as defined in Canadian National Instrument 58-101 - Disclosure of Corporate Governance Practices.  A Nominating Committee member is independent if he or she has no direct or indirect material relationship with the Company.  A "material relationship" includes a relationship which could, in the view of the Company's Board of Directors, be reasonably expected to interfere with the exercise of a member's independent judgment.



Meetings



The Compensation Committee will meet as often as the Chair shall determine to be necessary or appropriate.



Authority and Resources



The Committee may request any officer or employee of the Company or the Companys outside counsel to attend a Committee meeting.  The Committee has the right at any time to obtain advice, reports or opinions from internal and external counsel and expert advisors and has the authority to hire independent legal, financial and other advisors as it may deem necessary, at the Companys expense, without consulting with, or obtaining approval from, any officer of the Company in advance.



Compensation Committee Duties and Responsibilities



Duties and responsibilities of the Compensation Committee include:



·

reviewing and making recommendations to the Board of Directors with respect to the compensation, including compensation criteria and incentives and annual performance review, of the Chief Executive Officer, for final approval by the Board of Directors;



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·

reviewing and providing guidance to the Board of Directors with respect to the compensation, including compensation criteria and incentives, of the executive officers of the Company, as recommended by the Chief Executive Officer, for final approval by the Board of Directors;

·

reviewing and providing guidance to the Board of Directors with respect to the compensation, including compensation criteria and incentives, of the directors of the Company;

·

reviewing and making recommendations to the Board of Directors regarding other plans that are proposed for adoption or adopted by the Company for the provision of compensation to employees of, directors of and consultants to the Company;

·

advising on the development of management succession plans by the Board;

·

preparing an annual report on executive compensation to the shareholders of the Company for the management information circular for the annual and general meeting of the Companys shareholders;

·

reviewing and assessing, annually, the Compensation Committee charter and submitting any changes deemed necessary or advisable for approval of the Board of Directors; and

·

performing other functions as requested by the Board of Directors.



PART III



ITEM 17.

FINANCIAL STATEMENTS



Attached hereto



Financial Statement



|                                                                                                                                                                                                                                                                                                                                                                                                                                                         |          
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------
|DOCUMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                 | PAGE     
|Consolidated Financial Statements of the Company as at December 31, 2007, 2006 and 2005 (in Canadian Dollars) including Auditors Report, Balance Sheet, Income Statement, Cash Flow and Notes
Consolidated Financial Statements of Minco Silver Corporation as at December 31, 2007, 2006 and life-to-date cumulative figures to December 31, 2007 (in Canadian Dollars) including Auditors Report, Income Statement, Balance Sheet, Cash Flow and Notes | 103


141





ITEM 18.

FINANCIAL STATEMENTS



Not Applicable



ITEM 19.

EXHIBITS



|               |                                                                                                                                                    
|-------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBIT
NUMBER | DESCRIPTION                                                                                                                                        
|12.1           | Certification of the President Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002              
|12.2           | Certification of the Chief Financial Officer Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|13.1           | Certification of the President Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002              
|13.2           | Certification of the Chief Financial Officer Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|14.1           | Consent of P & E Mining Consultants Inc.                                                                                                           
|14.2           | Consent of Peter G. Folk                                                                                                                           





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MINCO GOLD CORPORATION

(Formerly Minco Mining & Metals Corporation)

(An exploration stage enterprise)



Consolidated Financial Statements

(EXPRESSED IN CANADIAN DOLLARS)



DECEMBER 31, 2007, 2006, AND 2005













Index





Auditors Report



Consolidated Balance Sheets



Consolidated Statements of Operations and Comprehensive Loss and Deficit



Consolidated Statements of Cash Flows



Notes to Consolidated Financial Statements



















103





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[minco20f071708004.gif]







Management's Responsibility for Financial Reporting





The financial statements and the information contained in the annual report are the responsibility of the Board of Directors and management. The financial statements have been prepared by management in accordance with Canadian generally accepted accounting principles.



The Audit Committee of the Board of Directors is composed of three Directors and meets periodically with management and the independent auditors to review the scope and results of the annual audit and to review the financial statements and related financial reporting matters prior to submitting the financial statements to the Board for approval.



The financial statements have been audited by Ernst & Young LLP, Chartered Accountants, who were appointed by the shareholders. The auditors report outlines the scope of their examination and their opinion on the financial statements.









Ken Cai

Garnet Clark

President and CEO

Chief Financial Officer



Vancouver, Canada

March 31, 2008





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[minco20f071708006.gif]



105





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|                                                            |                |           |                     |           |                   |  |  |  |  |  |  |  |  |  |  |  |  |  | 
|----------------------------------------------------------- | -------------- | --------- | ------------------- | --------- | ----------------- |  |  |  |  |  |  |  |  |  |  |  |  |  | 
|MINCO GOLD CORPORATION                                      |                |          
|(Formerly Minco Mining & Metals Corporation)                |                |          
|(An exploration stage enterprise)                           |                |          
|Consolidated Balance Sheets                                 |                |           |                     |           |                  
|(Expressed in Canadian Dollars)                             |                |           |                    
|                                                            |                |           | December 31,
2007   |           | December 31,
2006
|                                                            |                |           |                     |           |                  
|ASSETS                                                      |                |           |                     |           |                  
|                                                            |                |           |                     |           |                  
|Current assets                                              |                |           |                     |           |                  
|Cash and cash equivalents                                   |                |           | 1,307,892           |           | 187,247          
|Short-term investments (Note 3)                             |                |           | 6,149,044           |           | 10,982,726       
|Receivables (Note 11(b))                                    |                |           | 552,991             |           | 277,347          
|Due from Minco Silver Corporation (Note 11(b))              |                | 4,639,788 |                     | 806,293  
|Prepaid expenses and deposits                               |                | 104,034   |                     | 185,074  
|Assets of discontinued operations (Note 8)                  |                | -         |                     | 3,285    
|                                                            |                |           |                     |           |                  
|                                                            |                |           | 12,753,749          |           | 12,441,972       
|                                                            |                |           |                     |           |                  
|Long-term rental deposit                                    |                |           | 51,277              |           | 51,277           
|                                                            |                |           |                     |           |                  
|Mineral interests(Notes 4 and 12(b))                        |                |           | 358,500             |           | 358,500          
|                                                            |                |           |                     |           |                  
|Plant, property and equipment (Note 5)                      |                |           | 504,171             |           | 314,237          
|                                                            |                |           |                     |           |                  
|Equity investment in Minco Silver Corporation(Note 6)       |                |           | 3,079,412           |           | 6,398,692        
|Assets of discontinued operations(Note 8)                   |                |           | -                   |           | 19,850           
|                                                            |                |           |                     |           |                  
|Total assets                                                |                |           | 16,747,109          |           | 19,584,528       
|                                                            |                |           |                     |           |                  
|LIABILITIES                                                 |                |           |                     |           |                  
|                                                            |                |           |                     |           |                  
|Current liabilities                                         |                |           |                     |           |                  
|Accounts payable and accrued liabilities                    |                | 890,000   |                     | 400,410  
|Due to Minco Silver (Note 11(b))                            |                | 1,929,893 |                     | -        
|Liabilities of discontinued operations (Note 8)             |                | -         |                     | 100,718  
|                                                            |                |           |                     |           |                  
|Total liabilities                                           |                |           | 2,819,893           |           | 501,128          
|Commitments and contingencies (Note 12)                     |                |           |                     |           |                  
|                                                            |                |           |                     |           |                  
|Non-controlling interest (Note 7)                           |                | 82,685    |                     | -        
|                                                            |                |           |                     |           |                  
|SHAREHOLDERS' EQUITY                                        |                |           |                     |          
|                                                            |                |           |                     |           |                  
|Share capital(Note 9(a))                                    |                |           | 33,941,510          |           | 33,809,903       
|                                                            |                |           |                     |           |                  
|Contributed surplus(Note 9(c))                              |                | 3,721,117 |                     | 1,649,343
|                                                            |                |           |                     |           |                  
|Deficit accumulated during the exploration stage            |                |           | (23,818,096)        |           | (16,375,846)     
|                                                            |                |           |                     |           |                  
|Total shareholders equity                                  |                |           | 13,844,531          |           | 19,083,400       
|                                                            |                |           |                     |           |                  
|Total liabilities and shareholders equity                  |                |           | 16,747,109          |           | 19,584,528       
|See accompanying notes to consolidated financial statements |                |           |                     |           |                  
|                                                            |                |           |                    
|On behalf of the Board                                      | Malcolm Clay" |           | "Robert Callander "
|                                                            | Malcolm Clay   |           | Robert Callander   
|                                                            | Director       |           | Director           



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| |                                                                               |  |                        |  |                        |  |              |  | 
| | ----------------------------------------------------------------------------- |  | ---------------------- |  | ---------------------- |  | ------------ |  | 
| | MINCO GOLD CORPORATION                                                        |  |                        |  |                       
| | (Formerly Minco Mining & Metals Corporation)                                  |  |                        |  |                       
| | (An exploration stage enterprise)                                             |  |                       
| | Consolidated Statements of Operations and Comprehensive Loss and Deficit      |  |                       
| | (Expressed in Canadian Dollars)                                               |  |                        |  |                        |  |             
| |                                                                               |  | 2007
(See note  below) |  | 2006
(See note  below) |  | 2005        
| | Exploration permits (Note 4)                                                  |  | 842,788                |  | 852,000                |  | 1,739,594   
| | Exploration costs, net of recoveries (Notes 4 and 11)                         |  | 2,105,160              |  | 1,683,281              |  | 927,364     
| |                                                                               |  | 2,947,948              |  | 2,535,281              |  | 2,666,958   
| | Administrative expenses (Note 11)                                             |  |                        |  |                        |  |             
| | Accounting and audit                                                          |  | 122,441                |  | 288,098                |  | 136,702     
| | Amortization                                                                  |  | 56,045                 |  | 46,556                 |  | 41,249      
| | Consulting                                                                    |  | 76,368                 |  | 183,142                |  | 138,089     
| | Directors fees                                                               |  | 62,500                 |  | 78,781                 |  | -           
| | Foreign exchange loss (gain)                                                  |  | 416,393                |  | (241,218)              |  | 19,858      
| | Investor relations                                                            |  | 579,498                |  | 842,555                |  | 452,805     
| | Legal                                                                         |  | 47,408                 |  | 84,701                 |  | 200,780     
| | Regulatory and filing                                                         |  | 91,948                 |  | 123,857                |  | 181,071     
| | Meals and entertainment                                                       |  | 51,146                 |  | 58,958                 |  | 39,326      
| | Office and miscellaneous                                                      |  | 201,757                |  | 213,230                |  | 98,549      
| | Property investigation                                                        |  | 218,672                |  | 233,438                |  | 330,798     
| | Rent                                                                          |  | 235,981                |  | 259,698                |  | 224,814     
| | Salaries and benefits                                                         |  | 697,888                |  | 623,459                |  | 470,161     
| | Stock-based compensation  (Note 9(d))                                         |  | 2,022,850              |  | 2,820,000              |  | 374,249     
| | Telephone                                                                     |  | 17,195                 |  | 29,790                 |  | 26,226      
| | Travel and transportation                                                     |  | 127,448                |  | 114,838                |  | 113,144     
| |                                                                               |  | 5,025,538              |  | 5,759,882              |  | 2,847,821   
| | Operating loss                                                                |  | (7,973,486)            |  | (8,295,163)            |  | (5,514,779) 
| | Other income (loss)                                                           |  |                        |  |                        |  |             
| | Equity loss on investment in Minco Silver (Note 6)                            |  | (3,239,898)            |  | (521,095)              |  | -           
| | Dilution gain (Note 6)                                                        |  | 191,000                |  | 5,213,000              |  | 2,953,000   
| | Write up (down) of short-term investments                                     |  | (232,546)              |  | 18,801                 |  | (34,750)    
| | Gain on sale of Minco Silver shares (Note 6)                                  |  | 2,978,034              |  | -                      |  | -           
| | Interest and sundry income                                                    |  | 306,819                |  | 673,570                |  | 475,554     
| | Loss for the year before discontinued operations and non-controlling interest |  | (7,970,077)            |  | (2,910,887)            |  | (2,120,975) 
| | Non-controlling interest (Note 7)                                             |  | 429,442                |  | 1,381,727              |  | 1,181,822   
| | Loss from continuing operations                                               |  | (7,540,635)            |  | (1,529,160)            |  | (939,153)   
| | Loss from discontinued operations (Note 8)                                    |  | (39,596)               |  | (60,164)               |  | (74,388)    
| | Loss and comprehensive loss for the year                                      |  | (7,580,231)            |  | (1,589,324)            |  | (1,013,541) 
| | Deficit,beginning of year                                                     |  | (16,375,846)           |  | (14,786,522)           |  | (13,772,981)
| | Share buy back cost in excess of book value (Note 9(a))                       |  | (6,499)                |  | -                      |  | -           
| | Transition adjustment for adoption of CICA HB 3855 (Note 2(o))                |  | 144,480                |  | -                      |  | -           
| | Deficit,end of year                                                           |  | (23,818,096)           |  | (16,375,846)           |  | (14,786,522)
| | Loss per share from continuing operations basic and diluted                  |  | (0.18)                 |  | (0.04)                 |  | (0.03)      
| | Loss per share from discontinued operations basic and diluted                |  | (0.00)                 |  | (0.00)                 |  | (0.00)      
| | Loss per share - basic and diluted                                            |  | (0.18)                 |  | (0.04)                 |  | (0.03)      
| | Weighted average number of common shares outstanding basic and diluted       |  | 42,908,809             |  | 41,193,591             |  | 34,501,784  

Note: The results of Minco Silver Corporation are consolidated in the above statement to November 16, 2006. Thereafter, the results of Minco Silver Corporation are accounted for on an equity basis (see Note 6).



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|                                                                                       |  |                        |  |                        |  |             |  | 
|-------------------------------------------------------------------------------------- |  | ---------------------- |  | ---------------------- |  | ----------- |  | 
|MINCO GOLD CORPORATION                                                                 |  |                        |  |                        |  |            
|(Formerly Minco Mining & Metals Corporation)                                           |  |                        |  |                        |  |            
|(An exploration stage enterprise)                                                      |  |                        |  |                        |  |            
|Consolidated Statements of Cash Flows                                                  |  |                        |  |                        |  |            
|(Expressed in Canadian Dollars)                                                        |  |                        |  |                        |  |            
|                                                                                       |  | 2007
(See note  below) |  | 2006
(See note  below) |  | 2005       
|Cash flows from (used in) operating activities                                         |  |                        |  |                        |  |            
|Net loss from continuing operations for the year                                       |  | (7,540,635)            |  | (1,529,160)            |  | (939,153)  
|Adjustment for items not involving cash:                                               |  |                        |  |                        |  |            
|- exploration permits                                                                  |  | -                      |  | -                      |  | 920,000    
|- amortization of equipment                                                            |  | 56,045                 |  | 46,556                 |  | 41,249     
|- equity loss on investment in  Minco Silver                                           |  | 3,239,898              |  | 521,095                |  | -          
|- dilution gain                                                                        |  | (191,000)              |  | (5,213,000)            |  | (2,953,000)
|- stock-based compensation (Note 7(d))                                                 |  | 2,022,850              |  | 2,820,000              |  | 374,249    
|- non-controlling interest in loss                                                     |  | (429,442)              |  | (1,381,727)            |  | (1,181,822)
|- non-cash recovery of exploration costs                                               |  | -                      |  | -                      |  | (36,000)   
|- write down (up) of short-term investments                                            |  | 232,546                |  | (18,801)               |  | 34,750     
|- gain on sale of Minco Silver shares                                                  |  | (2,978,034)            |  | -                      |  | -          
|Change in non-cash working capital items:                                              |  |                        |  |                        |  |            
|- decrease (increase) in receivables                                                   |  | (275,645)              |  | (15,746)               |  | 290,416    
|- increase in prepaid expenses and deposits                                            |  | 81,040                 |  | (159,501)              |  | (109,674)  
|- increase in long-term rental deposit                                                 |  | -                      |  | (51,277)               |  | -          
|- payment of 2nd installment of Fuwan Exploration Permit                               |  | -                      |  | (436,000)              |  | -          
|- increase (decrease) in accounts payable and accrued
liabilities                      |  | 489,590                |  | 241,366                |  | (183,736)  
|                                                                                       |  | (5,292,787)            |  | (5,176,195)            |  | (3,742,721)
|Cash flows from financing activities                                                   |  |                        |  |                        |  |            
|Proceeds from issuance of shares in Minco Gold                                         |  | 105,808                |  | 4,852,958              |  | 3,245,845  
|Cost of share buyback                                                                  |  | (44,451)               |  | -                      |  | -          
|Non-controlling interest (Note 7)                                                      |  | 512,128                |  | -                      |  | -          
|Proceeds from issuance of shares in Minco Silver                                       |  | -                      |  | 87,375                 |  | 6,097,425  
|                                                                                       |  | 573,485                |  | 4,940,333              |  | 9,343,270  
|Cash flows from (used) in investing activities                                         |  |                        |  |                        |  |            
|Acquisition of equipment                                                               |  | (226,129)              |  | (213,669)              |  | (88,711)   
|Acquisition of mineral interest                                                        |  | -                      |  | (358,400)              |  | -          
|Cash disposed upon deconsolidation of Minco Silver Corporation                         |  | -                      |  | (6,539)                |  | -          
|Decrease (increase) in short-term investments                                          |  | 4,745,616              |  | 534,943                |  | (5,350,231)
|Proceeds from sale of Minco Silver shares (Note 6)                                     |  | 3,248,416              |  | -                      |  | -          
|Increase in Due from Minco Silver Corporation                                          |  | (1,903,602)            |  | (133,039)              |  | -          
|                                                                                       |  | 5,864,301              |  | (176,704)              |  | (5,438,942)
|Increase (decrease) in cash and cash equivalents from continuing operations            |  | 1,144,999              |  | (412,566)              |  | 161,607    
|Increase (decrease) in cash and cash equivalents from discontinued operations (Note 8) |  | (25,856)               |  | (219,849)              |  | 211,944    
|Change in cash and cash equivalents during the year                                    |  | 1,119,143              |  | (632,415)              |  | 373,551    
|Cash and cash equivalents, beginning of period                                         |  | 188,749                |  | 821,164                |  | 447,613    
|Cash and cash equivalents, end of period                                               |  | 1,307,892              |  | 188,749                |  | 821,164    
|Supplemental disclosure of cash flows information                                      |  |                        |  |                        |  |            
|Interest paid                                                                          |  | -                      |  | -                      |  | -          
|Income taxes paid                                                                      |  | -                      |  | -                      |  | -          



Note: The results of Minco Silver Corporation are consolidated in the above statement to November 16, 2006. Thereafter, the results of Minco Silver Corporation are accounted for on an equity basis (see Note 6).



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1.

Nature of Operations

Minco Gold Corporation (Minco Gold) (formerly Minco Mining & Metals Corporation) was incorporated on November 5, 1982 under the laws of British Columbia, Canada. Its principal business activities include the acquisition and exploration of mineral resource properties.

Minco Gold Corporation and its subsidiaries and joint ventures (collectively the Company) are in the process of exploring and evaluating its mineral properties and projects in the Peoples Republic of China (China) and have not yet determined whether these properties contain ore reserves that are economically recoverable. The ability of the Company to meet its commitments as they become payable, the exploration and development of mineral properties and projects, and the underlying value of the mineral properties are entirely dependent upon the existence of economically recoverable reserves, the ability of the Company to arrange appropriate financing to complete the exploration and development of its properties, the receipt of necessary permits and upon achieving future profitable production or receiving proceeds from the disposition of the properties. The timing of such events occurring, if at all, is not yet determinable. The Company is considered to be an exploration stage enterprise as it has not yet generated any revenue from operations.

2.

Significant Accounting Policies

a)

Basis of Presentation

These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles.

The consolidated financial statements include the accounts of Minco Gold Corporation (formerly Minco Mining & Metals Corporation) (Minco Gold), its wholly-owned China subsidiaries Minco Mining (China) Corporation (Minco China), Yuanling Minco Mining Ltd. (Yuanling Minco) and Huaihua Tiancheng Mining Ltd. (Huaihua Tiancheng), its wholly-owned British Virgin Island subsidiary Triple Eight Mineral Corporation (Temco), its right to earn up to a 75% interest in the joint venture company Inner Mongolia Damo Mining Co. Ltd. (Damo), its  right to earn up to a 75% interest in the joint venture company Inner Mongolia Huayu-Minco Mining Co., Ltd. (HYMK), its right to earn up to a 70% interest in the joint venture company Henan Zhongjia Minco Mining Co., Ltd. (Zhongjia Minco), and its right to earn up to a 51% interest in the joint venture company Guangzhou Mingzhong Mining Co., Ltd. (Mingzhong).

As at December 31, 2007, Minco Gold beneficially owns 13,000,000 shares of Minco Silver Corporation (Minco Silver), which represents approximately 41.75% of Minco Silvers share capital. The Company uses the equity method to account for the investment in Minco Silver and Minco Silvers interest in Fuwan Property (See note 6).

The Company has not recorded non-controlling interests in the other joint venture companies, except for Zhongjia Minco and Mingzhong, as their ownership percentages represent only the profit sharing and working interests and the minority partners are not responsible for any of the associated costs. As at December 31, 2007, the joint ventures are still in the exploration stage and have not generated any revenue



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2.

Significant Accounting Policies (continued)

All inter-company accounts and transactions have been eliminated.



. b)

Use of Estimates

The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and revenues and expenses during the period reported. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant.  Actual results could differ from those estimates.

i)

Cash and Cash Equivalents

Cash and cash equivalents consist of short-term money market instruments which are highly-liquid investments and readily convertible into cash with a remaining term to maturity of 90 days or less when acquired. As of December 31, 2007 and 2006, cash and cash equivalents consisted of cash only.

ii)

Short-term Investments

Short-term investments comprise marketable securities, highly liquid investment grade bonds, and guaranteed investment certificates with remaining terms to maturity of greater than 90 days when acquired. Short-term investments are classified as held-for-trading financial instruments in accordance with the new requirements of Canadian Institute of Chartered Accountants (CICA) Handbook Section 3855 Financial Instruments, adopted by the Company on January 1, 2007.  These investments are recorded at fair value. A transition amount was recorded effective January 1, 2007 as an adjustment to retained earnings to reflect the adoption of the policy.

Prior to 2007, short-term investments were carried at the lower of original cost or market.

b)

Plant, Property and Equipment

Plant, property and equipment are recorded at cost and amortization is provided as follows:

Computer equipment30% per year, declining-balance basisLeasehold improvements5 year, straight-line basisMining equipment30% per year, declining-balance basisMotor vehicles30% per year, declining-balance basisOffice equipment and furniture20% per year, declining-balance basis




Amortization is provided at half the annual rate in the year of acquisition.



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2.

Significant Accounting Policies (continued)

c)

Revenue Recognition

Interest income on cash and cash equivalents and short-term investments is recognized as it is earned.

d)

Loss Per Share

Basic loss per share is computed using the weighted average number of common shares outstanding during the year. Diluted loss per share amounts are calculated giving effect to the potential dilution that would occur if securities or other contracts to issue common shares were exercised or converted to common shares using the treasury stock method.  The treasury stock method assumes that proceeds received from the exercise of stock options and warrants are used to repurchase common shares at the prevailing market rate. Shares held in escrow that are returnable to the Company if the conditions for their release are not met (Note 9) are excluded in the computation of loss per share until the conditions for their release are satisfied.  As the Company incurred net losses in fiscal 2007, 2006 and 2005, the stock options and share purchase warrants as disclosed in Note 9 were not included in the computation of loss per share as their inclusion would be anti-dilutive.

e)

Translation of Foreign Currencies

The Companys functional currency is the Canadian dollar. The Company follows the temporal method of accounting for the translation of its integrated foreign operations and for foreign currency transactions. Under this method, transactions denominated in foreign currencies are translated into Canadian dollars at the exchange rates prevailing at the transaction dates.  At year-end, monetary assets and liabilities are re-measured at the year-end exchange rates, and non-

monetary assets and liabilities denominated in foreign currencies are translated to Canadian dollars at their historical exchange rates.  The exchange gains and losses on translation are charged to operations.

f)

Equity investments

Investments in which the Company has a significant influence are accounted for by the equity method, whereby the Company records its proportionate share of the investees income or loss.

g)

Acquisition, Exploration and Development of Mineral Interests

Mineral property and mineral rights acquisition costs are capitalized until the viability of the mineral interest is determined. If a mineral ore body is discovered, capitalized costs will be amortized over their estimated useful lives following the commencement of production. Otherwise, capitalized acquisition costs are expensed when it is determined that the mineral property has no future economic value. Capitalized amounts (including capitalized development costs) are written down if future cash flows, including potential sales proceeds, related to the mineral property are estimated to be less than the propertys total carrying value. Management of the Company reviews the carrying value of each mineral property periodically, and whenever events or changes in circumstances indicate that the carrying value



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2.

Significant Accounting Policies (continued)

may not be recoverable. Reductions in the carrying value of a property would be recorded to the extent that the total carrying value of the mineral property exceeds its estimated fair value.

Exploration permits and other exploration costs are expensed as incurred. When it is determined that a mining deposit can be economically and legally extracted or produced based on established proven and probable reserves, further exploration costs and development costs incurred after such determination will be capitalized. The establishment of proven and probable reserves is based on results of final feasibility studies which indicate whether a property is economically feasible. Upon commencement of commercial production, capitalized costs will be transferred to the appropriate asset categories and amortized over their estimated useful lives. Capitalized costs, net of salvage values, relating to a deposit which is abandoned or considered uneconomic for the foreseeable future will be written off.

h)

Asset Retirement Obligations

The Company recognizes the fair value of liabilities for asset retirement obligations in the period in which they are incurred and in which a reasonable estimate of such costs can be made.  The asset retirement obligation is recorded as a liability with a corresponding increase to the carrying amount of the related asset and depreciated over the life of the asset. Over time, the liability is increased to reflect an interest element (accretion expenses) considered in its initial measurement at fair value. The amount of liability will be subject to re-measurement at each reporting period. It is possible that the Companys estimates of its ultimate reclamation and closure liabilities could change as a result of changes in regulations, the extent of environmental remediation required, and the means of reclamation or cost estimates. Changes in estimates are accounted for prospectively from the period the estimate is revised.

As at December 31, 2007 and 2006, the Company did not have any asset retirement obligations.

i)

Income Taxes

The Company follows the liability method of accounting for income taxes.  Under this method, future income tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities, measured using substantively enacted tax rates and laws that will be in effect when the differences are expected to reverse.

j)

Stock Based Compensation

The Company follows the fair value method, as determined using the Black-Scholes option valuation model, of accounting for stock-based compensation as recommended by the Canadian Institute of Chartered Accountants Handbook section 3870, Stock-based compensation and other stock-based payments.

Under the fair value method, compensation cost is measured at fair value at the date of grant and is expensed over the awards vesting period.

As permitted by this Handbook section, the Company applied this change retroactively, without restatement, for options granted after January 1, 2002. As a result, the opening deficit as at January 1, 2004 was adjusted to reflect a compensation expense of $154,300 relating to options granted in 2002 and 2003.



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2.

Significant Accounting Policies (continued)

k)

Comprehensive Income and Equity

Effective January 1, 2007, the Company adopted the new recommendations of the CICA Handbook Section 1530, Comprehensive Income and Section 3251, Equity. These new accounting standards apply to fiscal years beginning on or after October 1, 2006.



·

Section 1530 provides standards for reporting and display of comprehensive income, which is the change in equity, from transactions and other events and circumstances from non-owner sources. Other comprehensive income refers to items recognized in comprehensive income that are excluded from net income calculated in accordance with Canadian GAAP.



·

Section 3251 establishes standards for the presentation of equity and changes in equity during the reporting period. The requirements in Section 3251 are in addition to Section 1530.



The adoption of these new Handbook sections had minimal impact on the consolidated financial statements for the year ended December 31, 2007.



l)

Financial Instruments



Effective January 1, 2007, the Company also adopted the new recommendations of the CICA Handbook Section 3855, Financial Instruments  Recognition and Measurement and Section 3861, Financial Instruments  Disclosure and Presentation. These new accounting standards, which apply to fiscal years beginning on or after October 1, 2006, provide comprehensive requirements for the recognition, measurement, disclosure and presentation of financial assets, financial liabilities and non-financial derivatives. Under the new standards, policies followed for periods prior to the effective date are not reversed and therefore, the comparative figures have not been restated.



·

Section 3855 requires financial instruments be classified into one of five categories: held-for-trading, held-to-maturity, loans and receivables, available-for-sale financial assets, or other financial liabilities. All financial instruments , including derivatives, are measured on the balance sheet at fair value except for loans and receivables, held-to-maturity investments and other financial liabilities which are measured at amortized cost. Subsequent measurement and changes in fair value will depend on their initial classification. Held-for-trading financial assets are measured at fair value and changes in fair value are recognized in net income. Available-for-sale financial instruments are measured at fair value with changes in fair value recorded in other comprehensive income until the investment is derecognized or impaired at which time the amounts would be recorded in net income.  Transaction costs are included in the initial carrying amount of financial instruments except for held-for-trading items in which case they are expensed as incurred. Section 3855 also requires that embedded derivatives be identified and separated from the related host contract and be measured at
fair value. Subsequent changes in fair value of embedded derivatives are recognized in the statement of operations in the period the change occurs.





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2.

Significant Accounting Policies (continued)

·

Section 3861 establishes the requirements for presentation and disclosure of financial instruments and non-financial derivatives.



Upon adoption of these new standards, the Company has classified cash and cash equivalents and short-term investments as held-for-trading, receivables as loans and receivables, accounts payable and accrued liabilities as other financial liabilities. There was a transition adjustment of $144,480 that was credited to the opening retained earnings upon adoption of Section 3855.



m)

Accounting Changes



In July 2006, the CICA revised Section 1506, Accounting Changes, which now requires that: (i) a voluntary change in accounting principles can be made if, and only if, it is required by primary source of GAAP or the changes result in more reliable and relevant information, (ii) changes in accounting policies are accompanied with disclosures of prior period amounts and justification for the change, and (iii) for

changes in estimates, the nature and amount of the change should be disclosed. The revised section is effective for the Companys financial year beginning January 1, 2007 for the year ended December 31, 2007. The adoption of this section does not have an impact on the Companys consolidated financial statements for the year ended December 31, 2007.



n)

Comparative Figures

Certain comparative figures have been reclassified to conform with the presentation as at and for the year ended December 31, 2007.

o)

Future Accounting Standards

During the fourth quarter of 2006, the CICA issued three new accounting standards: CICA Handbook Section 1535 Capital Disclosures, CICA Handbook Section 3863 Financial Instruments  Presentation and CICA Handbook Section 3862 Financial Instruments  Disclosure. These standards are effective for interim and annual financial statements for the Companys reporting periods beginning on January 1, 2008.

Capital Disclosures section describes the standards for disclosing information about a companys objectives, policies and processes for managing capital, quantitative data about what a company regards as capital and whether a company has complied with any capital requirements and, if not, the consequences of such non-compliance. Financial Instruments  Presentation carries forward the guidance under Section 3861 with little change and Financial Instruments  Disclosures requires disclosure on the face of the balance sheet of each of the financial instrument categories as well as additional disclosure regarding credit, market and liquidity risk faced by the Company.

The Company is currently assessing the impact of these new accounting standards on its financial statements.





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2.

Significant Accounting Policies (continued)



p)

Short Term Invetment



As at December 31, 2007, short-term investments consisted of cashable guaranteed investment certificates,  commercial notes, and 420,000 common shares of New Cantech Venture Inc. (New Cantech, see Note 11(d)). The market value of the shares was $88,200 as of December 31, 2007.

i.

At December 31, 2007, the yields on the short-term investments were between 4.00% and 4.30% per year (December 31, 2006  1.08% to 4.35%)

ii.

As at December 31, 2006, short-term investments consisted of: short term fixed deposits, cashable guaranteed investment certificates; two provincial bonds and a Canadian government bond (maturing from September 15, 2008 to April 1, 2015); a Canadian government treasury bill (maturing on April 5, 2007), and 420,000 common shares of New Cantech Venture Inc. (New Cantech, see Note 11(d)). The market value of the shares was $277,000 on December 31, 2006.

3.

Mineral Interests(continued)

A: Gold Projects:

1.Guangdong - Changkeng

i.

On September 28, 2004, Minco Gold signed a 30-year joint venture contract with four companies in Guangdong for the exploration and development of the Changkeng gold deposit in Gaoyao City of Guangdong Province, China. Pursuant to the contract, Minco Gold and its four partners will form Guangdong Minco-Jinli Mining Co. Ltd. (the Jinli JV), a Sino-Foreign Joint Venture company, whereby a total of a RMB 100 million (approximately $14.9 million) would be invested by Minco Gold and its four partners to explore and develop the Changkeng gold deposit.

ii.

The 50% initial payment of the total investment, RMB 50 million (approximately $7.5 million), shall be paid in three instalments and the balance of 50% shall be paid in

iii.

three instalments within one and a half years after the initial payment is fully contributed. To earn a 51% equity interest in the Jinli JV, Minco Gold is to contribute RMB 51 million (approximately $7.6 million) of the RMB100 million (approximately $14.9 million). The Company has spent $703,083 as of December 31, 2007 on exploration costs. None of the above mentioned instalments had been made as at December 31, 2007.

iv.

The Jinli JV intends on acquiring the Changkeng exploration permit from the No. 757 Exploration Team of Guangdong Geological Exploration Bureau (No. 757 Exploration Team). The value of the exploration permit was appraised at RMB 33 million (approximately $4.9 million) by an independent valuator, which was confirmed by the Ministry of Land and Resources of China. The Jinli JV is



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3.

Mineral Interests(continued)

iv.

to pay the RMB 33 million for the exploration permit in three installments within 360 days of the exploration permit title transfer.  The remaining RMB 67 million (approximately $10 million) will be used for project exploration and feasibility studies on the mine property.

v.

In November 2006, the JV partners of Changkeng reached an agreement to change the JV name from Guangdong Minco-Jinli Mining Co. Ltd to Guangdong Mingzhong Mining Corporation (Mingzhong). All the terms will remain the same as the original JV agreement.

On February 8, 2007, Minco China, Minco Golds wholly owned subsidiary, signed a joint venture agreement with the JV partners to form Mingzhong. Mingzhong received its business license on March 30, 2007.

The original Changkeng exploration permit, which expired in September 2006, has been renewed until September 10, 2008, and is presently held by the No. 757 Exploration Team. Mingzhong has signed an exploration permit transfer agreement with No.757 Exploration Team. The value of the exploration permit has been currently appraised at 48.363 million RMB (approximately $6.5 million) by an independent valuator, which was confirmed by the Ministry of Land and Resources of China. Subsequent to the end of the year Mingzhong received the exploration permit.

The Company currently has a 51% interest in Mingzhong and therefore records a 49% non-controlling interest to reflect the minority owners interests in Mingzhong.



2 (a) Gansu - Yangshan (Anba)

The Keyin joint venture company was formed pursuant to an agreement dated August 28, 1998 and amended August 28, 2003.

(i)

On October 29, 2003, Keyin signed agreements with the Gansu provincial government and two other companies in Gansu for the exploration and development of the Anba gold deposit in the Yangshan gold field. The agreement was amended on January 8, 2004. Pursuant to the terms of the agreements, Keyin has the right to acquire a 40% equity interest in Yangshan Gold Mining Co., Ltd. (YGM), a joint venture company to be established for the exploration and development of the Anba gold deposit. YGM will acquire a 100% interest in the Anba gold deposit for RMB 60 million (approximately $8.9 million); including an initial payment of RMB 24 million (approximately $3.6 million) and the balance of RMB 36 million (approximately $5.4 million) will be paid over five years. Keyins share of the capital contribution is 40%, which is RMB 24 million (approximately $3.6 million). The Company has spent $490,022 on exploration to the end of December 31, 2007.

(ii)

In April 2004, YGMs board of directors agreed to pay RMB 3 million (approximately $447,000) to a company engaged to prepare the transfer of the exploration permit to YGM. The Company advanced RMB 2.0 million (approximately $298,000) but that company was unable to fulfill all the required duties. The Company has demanded that the RMB 2.0 million be returned but the ability to collect this amount is uncertain and so the Company has recorded a



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3.

Mineral Interests(continued)

provision for doubtful collectability in 2005. Should these funds be collected in the future, this amount will be recorded as exploration cost recovery.

(iii)

The Company does not consider the Anba gold property to be a material property and does not intend to undertake any further exploration expenditures on the property at the current time.  This project was terminated in 2007.

2(b) Gansu  Minco-Qinqi (formerly West Extension of Yangshan)

On October 28, 2004, Minco Gold signed a joint venture contract with Gansu Qinqi Mining Co. Ltd. for the exploration and development of mineral resources for gold in three areas in Chinas south Gansu province, for which the joint venture partner holds exploration permits. Pursuant to the contract, Minco Gold will participate in a Sino-Foreign Joint Venture, Gansu Minco Mining Co., Ltd.(the Gansu JV), the total investment of RMB 10 million (approximately $1.49 million) is required to be paid by March 1, 2008. To earn a 75% equity interests in the three areas, Minco Gold must contribute RMB 7.5 million (approximately $1.12 million) on this project over three years. The Company has spent $278,576, net of recoveries from partners, to December 31, 2007 on exploration costs.The joint venture contract was terminated on October 30, 2007 and the Chinese partner reimbursed the Company RMB 1.3 million (approximately $165,000).

2(c) Gansu  Longnan



Minco China presently holds thirteen exploration permits in the Longnan region of south Gansu province in China. The Longnan region is within the southwest Qinling gold field. The Longnan project has been divided into three sub-projects according to their geographic distribution, type and potential of mineralization:



(1)

Yangshan: including six exploration permits located in the northeast extension of the Yangshan gold belt and its adjacent area; potential for gold.

(2)

Yejiaba: including four exploration permits adjacent to Guojiagou exploration permit; potential for gold and antimony.



(3)

Xicheng East: including three exploration permits to the east extension of the famous Xicheng Pb-Zn mineralization belt; potential for gold, silver, lead and zinc.

The Company has spent $1,383,760 to December 31, 2007 on exploration costs.

3.

Inner Mongolia - Gobi Gold

The project is located in Inner Mongolia Autonomous Region, China.  Pursuant to a co-operative joint venture agreement signed on March 12, 2004, Minco Gold can earn a 75% interest in the project by spending RMB 18 million (approximately $2.7 million) over a four-year period by March 12, 2008.  The Damo joint venture company was formed to hold the above noted mineral interests. At December 31, 2007, the Company has spent approximately $1.7 million and earned a 63% project interest.

4.

Inner Mongolia  BYC



117





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3.

Mineral Interests(continued)

In 2002, Minco Gold reached an agreement with the Inner Mongolian Bureau of Non-ferrous Metals and Exploration to acquire a majority interest in a joint venture company, which holds the BYC gold project located in central Inner Mongolia. The joint venture contract was signed on July 18, 2003.  On December 3, 2003, the HYMK joint venture company was formed to hold the above noted mineral interest.  Minco Gold can earn a 75% interest in HYMK by spending RMB 12 million (approximately $1.8 million) over four years by December 3, 2007.  In 2003, Minco Gold entered into a letter agreement with New Cantech.  Pursuant to the agreement, New Cantech acquired the right to earn a 51% interest, reducing Minco Golds interest to 24%, in the BYC project by spending RMB 12 million (approximately $1.8 million) in exploration by March 22, 2007. New Cantech can earn another 9% by funding all further exploration and development expenditures leading to the completion of a preliminary feasibility study that recommends completion of a final feasibility study.

Pursuant to the terms of the agreement on the BYC project, Minco Gold received, from New Cantech, 100,000 common shares at $0.21 per share for $21,000 in May 2005 and 50,000 common shares at $0.30 per share for $15,000 in September 2005.  In 2004, the Company received 250,000 common shares at $0.34 per share for a total of $85,000 and 100,000 common shares at $0.37 per share for a total of $37,000. The aggregate value of these shares at the date of issue of $158,000 has been recorded as an exploration cost recovery in prior years.

On September 28, 2006, New Cantech notified Minco Gold that it did not want to proceed with the BYC Option, and the two parties signed a termination agreement on October 3, 2006. Pursuant to the BYC Option Agreement, New Cantech reconveyed to Minco Gold all of its rights and interest in and to the BYC project.

As of September 28, 2006, New Cantech has spent $781,588 on geophysical and geochemical surveys, geology and drill holes. In the nine-month period ended September 28, 2006, the direct costs and management fees incurred on the BYC project totalled $95,331 (2005: 286,918, 2004: $358,362), which were repaid by New Cantech.

The above transactions were conducted in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the parties.

5.

Hunan  Gold Bull Mountain

In July 2006, Minco Chinas wholly owned subsidiary Yuanling Minco entered into a Gold Bull Mountain Mining License Transfer Agreement with Yuanling County Government.  On August 10, 2006, the Gold Bull Mountain Mining License was transferred to Yuanling Minco. As of December 31, 2006, the Company has paid a total of RMB 2,546,652 (approximately $358,400), which includes a mining licence transfer fee of RMB 1,000,000 (approximately $143,000), an environmental protection fee of RMB 740,000 (approximately $104,000) and other related costs.  The acquisition was recently completed.

On August 5 2006, the Company entered into a Shareholding and Enterprise Assets Transfer Agreement to acquire Huaihua Tiancheng in order to obtain exploration permits for the areas around the Gold Bull Mountain mining licensed area. The acquisition price was RMB 6,000,000 (approximately $852,000), which was paid as of December 31, 2006.



6.

Xiaoshan - Zhongjia



118





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The Xiaoshan project consists of two exploration permits, the 17.1km2 Huluyu permit and the 12km2 Dafangshan permit and both permits are held by the Henan Nonferrous Exploration and Mining Company (HNEM), a subsidiary of the Nonferrous Geological Exploration Bureau of Henan Province.



On April 30, 2007, a JV contract was signed between Minco China and HNEM to jointly explore and develop the precious and nonferrous resources in the Xiaoshan project area. On June 11, 2007, a business license was issued to the JV, Henan Zhongjia Minco Mining Co. Ltd. (Zhongjia). The Company has spent $1,131,000 to December 31, 2007 on exploration costs, including $842,788 (RMB 6,000,000) to acquire the exploration permits.



The Company currently has a 70% interest in Zhongjia and therefore records a 30% non-controlling interest to reflect the minority owners interests in Zhongjia.



B: Base Metals Project

Gansu - White Silver Mountain

White Silver Mountain is operated through Keyin. Further to an amendment to the joint venture contract signed on August 28, 2003, Minco Gold has earned a 61% total project interest. Both parties to Keyin may proceed in accordance with the original joint venture contract which provided Minco Gold the right to earn an 80% interest by spending another RMB 20 million (approximately $2.9 million). There is no time limit for the expenditure.



The White Silver Mountain project is fully licensed.  The Company has spent approximately $1,489,651 to December 31, 2006 on exploration costs.

On January 31, 2007, the Company announced it is proceeding with a reorganization and spin-off of its White Silver Mountain Project to Minco Base Metals with the intention to build a strong base metals company in China. On November 15, 2007 the re-organization and spin-off took effect.  It is anticipated that Minco Base Metals will seek a stock exchange listing and complete equity offerings to further develop the White Silver Mountain property and acquire additional base metals properties.



Effective November 15, 2007 the Company no longer has an interest in White Silver Mountain and therefore  he expenditures have been treated as discontinued operations.







119





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3.

Mineral Interests(continued)



The following is a summary of exploration costs incurred by the Company:



| |                                                     |   |                                                 |   |                                                 |   |                                                   |  |  |  |  |  | 
| | --------------------------------------------------- | - | ----------------------------------------------- | - | ----------------------------------------------- | - | ------------------------------------------------- |  |  |  |  |  | 
| |                                                     |   | Cumulative Costs
 Incurred to December 31, 2006 |   | Costs
Incurred January 1 to December 31,   2007 |   | Cumulative
Costs
 Incurred to December 31,   2007
| | Currently active properties:                        |   |                                                 |   |                                                 |   |                                                  
| | Gansu                                               |   |                                                 |   |                                                 |   |                                                  
| | - Minco-Qinqi
(formerly West Extension of Yangshan) |   | $     441,584                                   |   | $     (163,008)                                 |   | $     278,576                                    
| | - Yangshan (Anba)                                   |   | 477,481                                         |   | 12,941                                          |   | 490,422                                          
| | - Longnan                                           |   | 497,384                                         |   | 886,375                                         |   | 1,383,760                                        
| | Inner Mongolia                                      |   |                                                 |   |                                                 |   |                                                  
| | - Gobi Gold                                         |   | 1,498,691                                       |   | 214,319                                         |   | 1,713,010                                        
| | - BYC                                               |   | 835,437                                         |   | 34,098                                          |   | 869,535                                          
| | Guangdong                                           |   |                                                 |   |                                                 |   |                                                  
| | - Changkeng                                         |   | 526,718                                         |   | 176,365                                         |   | 703,083                                          
| | Hunan                                               |   |                                                 |   |                                                 |   |                                                  
| | - Gold Bull Mountain                                |   | 1,402,734                                       |   | 655,858                                         |   | 2,058,592                                        
| | Henan                                               |   |                                                 |   |                                                 |   |                                                  
| | - Xiaoshan                                          |   | -                                               |   | 1,131,000                                       |   | 1,131,000                                        
| | Total                                               |   | 5,680,029                                       |   | 2,947,948                                       |   | 8,627,977                                        
| | Exploration cost recoveries                         |   | (956,903)                                       |   | -                                               |   | (956,903)                                        
| | Expensed exploration permits                        |   | (2,591,594)                                     |   | (842,788)                                       |   | (2,591,594)                                      
| | Expensed exploration costs                          |   | (1,773,032)                                     |   | (2,105,160)                                     |   | (4,720,980)                                      
| | Capitalized mining permit costs                     | $ | 358,500                                         | $ | -                                               | $ | 358,500                                          



120





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|                                                          |                           |  |                            |  |                           |  |  |  |  |  |  |  | 
|--------------------------------------------------------- | ------------------------- |  | -------------------------- |  | ------------------------- |  |  |  |  |  |  |  | 
|                                                          | 2007                      |  | 2006                       |  | 2005                     
|Gansu  Minco-Qinqi
(formerly West Extension of Yangshan) |                           |  |                            |  |                          
|                                                          |                           |  |                            |  |                          
|Consulting fees                                           | $                8,725    |  | $                16,444    |  | $             59,014     
|Drilling and geology                                      | (162,911)                 |  | -                          |  | 106,732                  
|Labor costs                                               | (1,572)                   |  | 2,610                      |  | 9,572                    
|Other exploration costs                                   | (7,250)                   |  | 1,034                      |  | 32,381                   
|Total                                                     | $               (163,008) |  | $                20,088    |  | $           207,699      
|                                                          | 2007                      |  | 2006                       |  | 2005                     
|Gansu  Yangshan  (Anba)                                  |                           |  |                            |  |                          
|                                                          |                           |  |                            |  |                          
|Consulting fees                                           | $                   8,906 |  | $                        - |  | $             11,292     
|Legal and license fees                                    | -                         |  | -                          |  | -                        
|Labor costs                                               | 2,834                     |  | 4,209                      |  | 3,767                    
|Other exploration costs                                   | 1,201                     |  | -                          |  | 304,167                  
|Total                                                     | $                 12,941  |  | $                 4,209    |  | $            319,226     
|                                                          | 2007                      |  | 2006                       |  | 2005                     
|Gansu  Longnan                                           |                           |  |                            |  |                          
|                                                          |                           |  |                            |  |                          
|Consulting fees                                           | $              121,977    |  | $              130,472     |  | $                       -
|Geology and geochemistry                                  | 446,908                   |  | 162,456                    |  | 47,652                   
|Labor costs                                               | 139,960                   |  | 56,849                     |  | 8,602                    
|Other exploration costs                                   | 177,530                   |  | 66,438                     |  | 24,915                   
|Exploration costs recoveries                              |                           |  |                            |  | (14,757)                 
|Total                                                     | $              886,375    |  | $              416,215     |  | $              66,412    





121





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3.

Mineral Interests(continued)

|                             |                            |  |                            |  |                           
|---------------------------- | -------------------------- |  | -------------------------- |  | --------------------------
|                             | 2007                       |  | 2006                       |  | 2005                      
|Inner Mongolia  Gobi Gold   |                            |  |                            |  |                           
|                             |                            |  |                            |  |                           
|Consulting fees              | $                   44,750 |  | $                   625    |  | $                5,276    
|Geology and drilling         | 66,208                     |  | 5,099                      |  | 3,856                     
|Labor costs                  | 32,657                     |  | 597                        |  | 2,333                     
|Other exploration costs      | 70,704                     |  | 4,830                      |  | 3,917                     
|Total                        | $              214,319     |  | $              11,151      |  | $             15,382      
|                             |                            |  |                            |  |                           
|                             | 2007                       |  | 2006                       |  | 2005                      
|Inner Mongolia  BYC         |                            |  |                            |  |                           
|                             |                            |  |                            |  |                           
|Consulting fees              | $                  6,050   |  | $                  1,420   |  | $                       - 
|Geology and drilling         | 3,101                      |  | 42,735                     |  | -                         
|Other exploration costs      | 24,947                     |  | 91,219                     |  | 286,918                   
|Exploration costs recoveries | -                          |  | (95,331)                   |  | (322,918)                 
|Total                        | $               34,098     |  | $               40,043     |  | $           (36,000)      
|                             |                            |  |                            |  |                           
|                             | 2007                       |  | 2006                       |  | 2005                      
|Guangdong  Changkeng        |                            |  |                            |  |                           
|                             |                            |  |                            |  |                           
|Consulting fees              | $              31,099      |  | $              14,952      |  | $              41,877     
|Drilling and geology         | 113,100                    |  | 20,229                     |  | 18,568                    
|Labor costs                  | 623                        |  | 2,289                      |  | -                         
|Other exploration costs      | 31,543                     |  | 18,564                     |  | 29,439                    
|Total                        | $              176,365     |  | $              56,034      |  | $              89,884     
|                             |                            |  |                            |  |                           
|                             | 2007                       |  | 2006                       |  | 2005                      
|Henan  Xiaoshan             |                            |  |                            |  |                           
|                             |                            |  |                            |  |                           
|Consulting fees              | $              30,338      |  | $                        - |  | $                        -
|Drilling                     | 195,911                    |  | -                          |  | -                         
|Labor costs                  | 37,459                     |  | -                          |  | -                         
|Other exploration costs      | 204,504                    |  | -                          |  | -                         
|Subtotal  Exploration costs | 468,212                    |  | -                          |  | -                         
|Exploration permits          | 842,788                    |  | -                          |  | -                         
|Total                        | $              1,311,000   |  | $                       -  |  | $                       - 





122





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3.

Mineral Interests   (continued)

|                             |                         |  |                         |  |                          
|---------------------------- | ----------------------- |  | ----------------------- |  | -------------------------
|                             | 2007                    |  | 2006                    |  | 2005                     
|Gold Bull Mountain           |                         |  |                         |  |                          
|(1)
Exploration costs        |                         |  |                         |  |                          
|Consulting fees              | $                63,246 |  | $                37,687 |  | $                       -
|Drilling and geology         | 575,094                 |  | 154,089                 |  | -                        
|Other exploration costs      | 17,518                  |  | 558                     |  | -                        
|Subtotal  Exploration costs | 655,858                 |  | 192,334                 |  | -                        
|(2)
Exploration permits      | -                       |  | 852,000                 |  | -                        
|(3)
Mining license           | -                       |  | 358,400                 |  | -                        
|Total                        | $             655,858   |  | $           1,402,734   |  | $                       -



5.

Property, Plant and Equipment



|                               |                                |                   |              |          |  |  |  | 
|------------------------------ | ------------------------------ | ----------------- | ------------ | -------- |  |  |  | 
|                               | December 31, 2007             
|                               |                                | Accumulated       | Net Book    
|                               | Cost                           | Amortization      | Value       
|                               |                                |                   |             
|Computer equipment             | $201,139                       | $123,702          | $77,437     
|Leasehold improvements         | 63,980                         | 38,683            | 25,296      
|Mining equipment               | 306,142                        | 197,697           | 108,445     
|Motor vehicles                 | 368,874                        | 109,766           | 259,107     
|Office equipment and furniture | 132,055                        | 98,170            | 33,886      
|                               | $1,072,190                     | $568,018          | $504,171    
|                               |                                |                   |              |         
|                               |                                | December 31, 2006
|                               |                                |                   | Accumulated  | Net Book
|                               |                                | Cost              | Amortization | Value   
|                               |                                |                   |              |         
|                               | Computer equipment             | $190,164          | $99,250      | $90,914 
|                               | Leasehold improvements         | 43,726            | 33,042       | 10,684  
|                               | Mining equipment               | 255,913           | 186,415      | 69,498  
|                               | Motor vehicles                 | 202,954           | 88,345       | 114,609 
|                               | Office equipment and furniture | 118,291           | 89,759       | 28,532  
|                               |                                | 811,048           | 496,811      | 314,237 
|                               | Discontinued operations        | 46,544            | 26,694       | 19,850  
|                               |                                | $857,592          | $523,505     | $334,087















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6.        Equity Investment in Minco Silver Corporation



As at December 31, 2007 the Company owns 13,000,000 common shares of Minco Silver (December 31, 2006  14,000,000 common shares) that were acquired in 2004 in exchange for the transfer of the Fuwan property and the silver interest in the Changkeng property from Minco Gold to Minco Silver.



On December 1, 2005, Minco Silver received approval of its application to list its common shares on the Toronto Stock Exchange (TSX). Minco Silvers common shares began trading on the TSX on December 2, 2005 with the trading symbol MSV. On the same date, Minco Silver issued and converted 10,276,000 special warrants to common shares. Minco Silver also completed its initial public offering of 920,000 common shares at a price of $1.25 per common share for gross proceeds of $1,150,000. The Company did not participate in the public offerings and as a result its ownership interest decreased from approximately 100% to 56% in 2005.



On November 17, 2006, Minco Silver completed a public offering, by way of a short form prospectus, of 5,000,000 units at a price of $3.00 per common share for gross proceeds of $15,000,000. Each unit consisted of one common share and one-half of one common share purchase warrant. Each warrant is exercisable at $3.45 per share until May 17, 2008. On December 1, 2006, Minco Silver completed an additional issuance of 528,200 common shares at a price of $2.80 per common share and an additional 375,000 common share purchase warrants at a price of $0.40 per warrant for gross proceeds of $1,628,960 pursuant to the exercise of an over-allotment option by the underwriters. Each warrant is exercisable at $3.45 per share until May 17, 2008.



The Company did not participate in the public offering and as a result its ownership interest decreased from approximately 55.6% to 45.5% on November 17, 2006 and reduced further to 45.3% as at December 31, 2006. As at December 31, 2007 the Companys ownership had decreased to 41.75% primarily due to the sale of 1,000,000 shares of Minco Silver by the Company.  Prior to November 17, 2006, the Company consolidated the accounts of Minco Silver. Effective November 17, 2006, the Company commenced accounting for its investment in Minco Silver on an equity basis and as a result the following assets and liabilities were deconsolidated at that date: cash of $6,539; short term investment of $5,578,000; current assets of $5,786,000; property and equipment of $80,000; current liabilities of $1,175,000 and non-controlling interest of $2,985,000.



During December 2007, the Company sold 1,000,000 shares of Minco Silver at a gross price of $3.25 per share. This transaction resulted in a gain of $2,978,034.



Following the dilution of Minco Golds shareholding interest in Minco Silver, Minco Gold recognized a dilution gain and equity loss on investment in Minco Silver since November 17, 2006 as follows:





124





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6.

Equity Investment in Minco Silver Corporation(continued)



200720062005Dilution gain on issuance of shares by Minco Silver$191,000$5, 213,000$2,953,000Equity loss of Minco Silver Corporation(3,239,898)(521,095)-Income from investment in Minco Silver$(3,048,898)$4, 691,905$2,953,000




The carrying value and market value of the Minco Silver shares held by the Company and accounted for using the equity basis, are as follow:



December 31, 2007December 31, 2006Investment in Minco Silver Corporation on an equity basis$  3,079,412$  6,398,692Market value of Minco Silver shares$38,740,000$39,200,000






As of December 31, 2007, Minco Silver had current assets of $17,083,000, property and equipment of $244,000, current liabilities of $3,678,000 and shareholders equity of $13,649,000. Minco Silver incurred exploration costs of $4,790,000, administration costs of $3,255,000 and a loss of $7,275,000 during the year ended December 31, 2007.



7.

Non-Controlling Interest



The non-controlling interest represents the interest of minority shareholders in Zhongjia JV, which holds the Xiaoshan project, and the interest of the minority shareholders in Mingzhong, based on the amount of their investment adjusted for income or losses from operations since the date of their investment. The non-controlling interest in the Zhongjia JV was 30% and the non-controlling interest in Mingzhong was 49% as at December 31, 2007.

8.

Discontinued Operations



On November 15, 2007, the Company effected the reorganization and spin-off of Minco Base Metals Corp.  The Company effectively transferred the wholly-owned subsidiary called Minco Base Metals Corporation (Minco Base Metals) to Minco Base Metals Corp., including its interest in Gansu Keyin Mining Co. Ltd. and the White Silver Mountain project. The Company issued 1 common share in Minco Base Metals Corp. for every 5 common shares of the Company.  As at November 15, 2007, the assets disposed of consisted primarily of cash, receivables and payables.  The 2007 loss of Minco Base Metals prior to disposition was $39,596. The net liabilities of $112,674 of Minco



Base Metals as of November 14, 2007 was credited to contributed surplus of the Company.



Pursuant to CICA Handbook Section 3475 Disposal of Long-Lived Assets and Discontinued Operations, the consolidated financial statements of the Company have

been reclassified to reflect discontinued operations of Minco Base Metals.  Accordingly, exploration costs and administrative expenses, assets and liabilities and cash flows of discontinued operations have



125





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8.

Discontinued Operations(continuedbeen segregated in the Consolidated Statements of Operations and Comprehensive Loss and Deficit and Consolidated Balance Sheets.)



Below is the summarized financial information for the Companys discontinued operations:



Minco Base Metals Corporation

Balance Sheet

(Expressed in Canadian Dollars)November 14,
2007December 31,
2006ASSETSCurrent assetsCash5,0821,502Receivables4,5041,783Current assets of discontinued operations9,5863,285Plant, property and equipment16,53419,850Total assets of discontinued operations26,12023,135LIABILITIESCurrent liabilitiesAccounts payable and accrued liabilities138,794100,718Total liabilities of discontinued operations138,794100,718Net assets of Minco Base Metals disposed(112,674)(77,583)




Minco Base Metals Corporation

Statement of Operations and Comprehensive Loss and Deficit

(Expressed in Canadian Dollars)Period from January 1, 2007 to November 14,
2007Year Ended December 31,
2006Exploration costs9,17227,851Administration expenses30,42432,313Net loss from discontinued operations(39,596)(60,164)






126





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8.

Discontinued Operations(continued)



Minco Base Metals Corporation

Statement of Cash Flows

(Expressed in Canadian Dollars)Period from January 1, 2007 to November 14,
2007Year Ended December 31,
2006Cash used by operating activities of discontinued operations(4,240)(241,914)Cash used in investing activities of discontinued operations-(8,629)Cash provided by (used in) financing activities of discontinued operations7.82030,694Increase (decrease) in cash3,580(219,849)Cash, beginning of year1,502221,351Cash, end of period5,0821,502




9.

Share Capital



Common Stock



Authorized:

100,000,000 common shares without par value

Issued:



SharesAmountBalance, December 31, 200538,633,99228,187,245Stock options exercised ranging from $0.20 to $1.80 per share, including $658,700 contributed surplus attributed to stock-based compensation recognized1,535,7991,438,330Broker options exercised at $1.40 per share, including $111,000 allocated to contributed surplus in a private placement in 2004250,000461,000Share purchase warrants exercised ranging from $1.50 to $1.70 per share2,445,4283,723,328Balance, December 31, 200642,865,219$     33,809,903Stock options exercised ranging from $0.55 to $1.35 per share, including $63,750 contributed surplus attributed to stock-based compensation recognized111,166169,558Purchased and cancelled pursuant to normal course issuer bid(48,000)(37,951)Balance, December 31, 200742,928,385$     33,941,510








127





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9.

Share Capital(continued)



Under the original escrow agreement, 4,880,000 escrow shares were to be released based on the Companys expenditures on exploration and development of a particular resource property. In July 2005, the Company released 1,473,264 escrow shares based on exploration expenditures. In June 2005, the Companys shareholders approved a new escrow agreement that will result in the remaining 1,518,058 escrow shares being released over a period of 18 months on a time release basis: (a) 379,514 escrow shares on December 31, 2005 (the release was  effected in January 2006); (b) 379,514 escrow shares on July 1, 2006; (c) 379,514 escrow shares on December 31, 2006 (the release was effected in January 2007); and (d) 379,516 escrow shares on July 1, 2007. As at December 31, 2007, all shares are released from escrow (December 31, 2006  759,030).



The Toronto Stock Exchange accepted a Notice of Intention by the Company to make a Normal Course Issuer Bid. Under the terms of the Normal Course Issuer Bid, the Company may acquire up to 2,107,210 common shares of the Company between November 22, 2006 and November 21, 2007. Prior to the expiry of the bid, the Company acquired and cancelled 48,000 common shares at a cost $44,450.  The cost to purchase the shares exceeded their carrying value by $6,499.  This excess has been debited to retained earnings.



Share purchase warrants and broker options

There was no share purchase warrants outstanding as at September 30, 2007.

A summary of the status of share purchase warrants and broker options granted by the Company is as follows:

Number of WarrantsWeighted AverageNumber of BrokerWeighted AverageExerciseOptionsExercisePricePriceOutstanding at December 31, 20054,398,214$ 1.57250,000$       1.40Exercised(2,445,428)1.52(250,000)1.40Expired(1,372,286)1.70--Outstanding at December 31, 2006580,5001.50--Expired(580,500)1.50--Outstanding at December 31, 2007-$        --$        -






128





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9.

Share Capital (continued)



Contributed Surplus

Summary of contributed surplus is as follows:

Balance at December 31, 2005987,0432006 stock-based compensation1,432,000Transfer to share capital on exercise of stock options(769,700)Balance at December 31, 2006$  1,649,3432007 stock-based compensation2,022,850Transfer to share capital on exercise of stock options(63,750)Transfer of net liabilities to Minco Base Metals112,674Balance at December 31, 2007$  3,721,117




Minco Gold Stock Options

Minco Gold may grant options to its directors, officers, employees and consultants under its stock option plan.  The maximum number of stock options reserved for issuance is 5,979,226 common shares.

In 2007, Minco Gold granted 3,865,000 stock options to its directors, officers, employees and consultants at the price range from $0.79 to $1.95 per share. The stock options granted vest in various increments and have a maximum term of five years.

Minco Gold recorded $2,022,850 in stock based compensation expense in 2007 (2006 - $2,820,000).

A summary of the status of options granted by Minco Gold is as follows:

Weighted AverageNumberExercise PriceOptions outstanding at December 31, 20052,954,5000.98Granted2,197,0001.67Exercised(1,535,799)0.51Forfeited(470,367)1.34Expired(200,000)2.00Options outstanding at December 31, 20062,945,334$ 1.61Granted3,865,0001.07Exercised(111,166)0.95Forfeited(1,197,501)1.71Expired(265,000)1.50Options outstanding at December 31, 20075,236,667$ 1.21






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9.

Share Capital(continued)

The weighted average fair value of options granted by Minco Gold during the period ended December 31, 2007 was $0.71. Each option entitles the holder to purchase one common share.



Options OutstandingOptions ExercisableRange of
Exercise
PricesNumber
OutstandingWeighted
Average
Remaining
Contractual
Life (yr)Weighted
Average
Exercise
PriceNumber
ExercisableWeighted
Average
Exercise
Price$0.00 - $1.062,485,0004.67$0.8291,666$0.79$1.07 - $1.631,221,6673.93$1.30380,001$1.41$1.64 - $2.541,430,0002.82$1.701,396,666$1.69$2.55 - $3.00100,0003.33$2.55100,000$2.555,236,6673.96$1.211,968,333$1.64




The Company used the Black-Scholes option pricing model to determine the fair value of the options with the following assumptions:

200720062005Risk-free interest rate3.95% - 4.59%3.83% - 4.5%3.47%Dividend yield0%0%0%Volatility86% - 104%114% - 134%58% - 64%Approximate expected lives5 years5 years3 years


Option pricing models require the use of highly subjective estimates and assumptions including the expected stock price volatility.  Changes in the underlying assumptions can materially affect the fair value estimates and therefore, in managements opinion, existing models do not necessarily provide a reliable measure of the fair value of the Companys stock options.



10.

Income Taxes



On March 16, 2007, the National Peoples Congress (NPC) of China approved the new Corporate Income Tax Law, which will become effective on January 1, 2008.  The new law establishes a unified 25% tax rate for both domestic enterprises and foreign invested enterprises (FIEs).  This change of the Chinese tax law will have impact to the extent of the Companys business operation in China when the Company becomes profitable in China.



Income tax expense differs from the amount that would result from applying the Canadian federal and provincial income tax rates to earnings before income taxes. These differences result from the following items:



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200720062005Loss before non-controlling interest$(7,970,077)$(2,910,887)$(2,120,975)34.12%34.12%34.87%Income tax recovery at statutory rates$  (2,719,390)$  (1,013,723)$  (765,523)Non-taxable capital gain(553,530)--Non-taxable dilution gain520,313(1,778,676)(1,029,711)Non-taxable foreign exchange gain-(122,393)-Non-deductible expenses734,6771,220,990144,906Difference in foreign tax rates145,9999,94618,485Impact of federal tax  rate change637,268636,021202,228Expiry of non-capital loss carryforward356,895389,542401,466Change in valuation allowance877,768658,2931,028,149$               -$               -$               -




Future income taxes arise from temporary differences in the recognition of income and expenses for financial reporting and tax purposes. The significant components of future income tax assets and liabilities at December 31 are as follows:





2007200627.00%31.00%Future income tax assets:Net capital losses$                -$      245,012Non-capital losses2,576,5972,547,986Unclaimed resource expenditures1,744,2821,580,169Capital assets142,273129,053Share issue costs53,514144,6954,516,6664,646,915Less: valuation allowance(4,516,666)(4,646,915)Net future income tax assets$                  -$                  -




(b)  No future income tax asset has been recognized as realization is not considered more likely than not, due to the uncertainty of future taxable income.



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10.

Income Taxes (continued)

The Company has Canadian non-capital loss carryforwards of approximately $6,538,000 that may be available for tax purposes. The expiry for Canadian non-capital loss carryforwards is as follows:

Non-Capital Losses Canada2008757,0002009774,0002010857,00020141,161,00020151,215,00020161,459,00020171,361,000$7,584,000




The Company also has $4,430,000 (2006 - $4,098,000) of cumulative foreign resource expenses for Canadian income tax purposes which can be carried forward indefinitely and used to reduce future taxable income in Canada.

Such cumulative foreign resource expenses are related to the Companys exploration activities in China. Consequently, these resource expenses may also be currently deductible for Chinese tax purposes (subject to Chinese tax law deductibility limitations) which would result in tax losses in China.

The Company has approximately $2,115,000 of operating losses and approximately $4,214,000 of unclaimed exploration expenses for Chinese income tax purposes. Operating losses incurred in a year can be carried forward for five years, while unclaimed exploration expenses will be amortized to match with future sales.

11.

Related Party Transactions

a.

The Company incurred the following fees to its directors or corporations controlled by its directors:

200720062005Exploration costs$80,625$   206,680$   104,175Management fees17,344121,41016,115Property investigation21,09470,51047,820Investor relations-17,77596,105Director's fees62,50093,2502,875$181,563$   509,625$   267,090




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11.

Related Party Transactions (continued)



b.

Receivables of $239,260 (December 31, 2006 - $86,238) are due from five (2006: five) companies related by two common directors. $13,903 has been received subsequent to December 31, 2007.

At December 31, 2007, the Company also has $1,929,893 (December 31, 2006 - $363,889 due from) due to Minco Silver. The amount is unsecured, non-interest bearing and repayable on demand.

At December 31, 2007, Minco China also has a due from balance of $4,639,788 (December 31, 2006  $442,404) from Minco Silver in relation to expenditures on the Fuwan Property, new silver projects investigation, and shared office expenses paid by Minco China on behalf of Minco Silver. The amount due from Minco Silver is unsecured, non-interest bearing and repayable on demand.

c.

The Company and Minco Silver (Minco Group) have entered into a strategic alliance with Silver Standard Resources Ltd. (Silver Standard), a company that is a shareholder of Minco Silver and which is related by one common director. The agreement provides that all silver-dominant properties of the Minco Group located in China will be held by Minco Silver and that Silver Standard will not



actively explore for or seek out silver-dominant properties located in China. In addition, both the Minco Group and Silver Standard have agreed to offer to the other a first right of refusal on any silver-dominant properties in China brought to their attention which they do not intend to pursue.



d.

In 2003, the Company entered into a letter agreement with New Cantech, which is related by one common director.

Pursuant to the terms of the agreement on the BYC project in Inner Mongolia, the Company received, from New Cantech, 100,000 common shares at $0.21 per share for $21,000 and 50,000 common shares at $0.30 per share for $15,000 in 2005.  In 2004, the Company received 250,000 common shares at $0.34 per share for a total of $85,000 and 100,000 common shares at $0.37 per share for a total of $37,000. The aggregate value of these shares at the date of issue ($158,000) has been recorded as an exploration cost recovery in prior years.



On September 28, 2006, New Cantech notified the Company that it did not want to proceed with the BYC Option, and the two parties signed a termination agreement on October 3, 2006. Pursuant to the BYC Option Agreement, New Cantech reconveyed to the Company all of its rights and interest in and to the BYC Property.



The above transactions were conducted in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the parties.





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12.

Commitments and Contingencies

(a)

The Company has commitments in respect of office leases requiring minimum payments of $2,325,180, as follows:

2008$    353,6252009291,4622010296,2582011311,8502012317,0482013332,6402014337,838201584,459$ 2,325,180






The Company has entered into sub-lease agreements for a portion of its leased premises.



(b)

Minco Gold is also conditionally committed to payments of up to $9,567,311 in respect ofjoint venture investments and mineral property development.



TotalLess than 1 year1 - 3  years3 - 5  yearsMore than 5 yearsMingzhong (1)$ 6,840,404$3,420,202$3,420,202$              -$          -Zhongjia(2)2,567,767153,5072,414,260--Gobi Gold(3)159,140159,140---Total$9,567,311$3,732,849$5,834,462$            -$
           -




Notes:

6.

Costs of exploration permits and investment commitments in accordance with the Mingzhong JV Contract dated February 8, 2007;

7.

Costs of exploration permits and investment commitments in accordance with the Zhongjia Contract dated April 30, 2007 as well as a commitment of RMB 1,144,000 (approximately $154,000) to be paid on a Zhongjia exploration program;

8.

A commitment of RMB 1,186,000 (approximately $ 159,000) to be paid on a Gobi Gold exploration program.



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13.

Geographic Information

The Companys business is considered as operating in one segment, mineral exploration and development. The geographical division of the Companys total assets, liabilities and operating loss is as follows:

|                                       |                        |                       
|-------------------------------------- | ---------------------- | ----------------------
|                                       | December 31            | December 31           
|2007                                   | 2006                  
|Current Assets                         |                        |                       
|Canada                                 | $        7,844,446     | $        8,658,009    
|China                                  | 4,909,303              | 3,783,963             
|                                       | $        12,753,749    | $        12,441,972   
|                                       |                        |                       
|                                       | December 31            | December 31           
|2007                                   | 2006                  
|Long-term Assets                       |                        |                       
|Canada                                 | $            3,207,479 | $            6,513,058
|China                                  | 785,881                | 629,498               
|                                       | $            3,993,360 | $            7,253,556
|13.
Geographic Information (continued)
|                                       | December 31            | December 31           
|2007                                   | 2006                  
|Current Liabilities                    |                        |                       
|Canada                                 | $         2,344,007    | $         384,481     
|China                                  | 475,886                | 116,647               
|                                       | $         2,819,893    | $         501,128     



|                  |                      |                  |                    
|----------------- | -------------------- | ---------------- | -------------------
|                  | 2007                 | 2006             | 2005               
|                  |                      |                  |                    
|Loss for the year |                      |                  |                    
|Canada            | $        (3,959,788) | $        167,378 | $             2,735
|China             | (3,620,443)          | (1,756,702)      | (1,016,276)        
|                  | $        (7,580,231) | $  (1,589,324)   | $   (1,013,541)    



14.

Financial Instruments



Fair value - The fair values receivables, accounts payable and accrued liabilities approximates their carrying values due to the short-term nature of these financial instruments.

Exchange risk - The Company operates in China and many of its exploration expenditures are payable in either U.S. dollars or the Chinese currency RMB and are



135





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14.

Financial Instruments (continued)

therefore subject to foreign currency risk arising from changes in exchange rates with the Canadian dollar.

Interest rate risk - The Company has no interest-bearing debt and so is not exposed to interest rate risk.

Credit risk - The Company generally places its short-term investment funds into government and Canadian bank debt securities and is therefore subject to minimal credit risk with regard to short-term investments.

15.

Subsequent Event

Subsequent to the end of the year, Mingzhong received the Changkeng exploration permit from the No. 757 Exploration Team.

16.

Reconciliation of Canadian and United States Generally Accepted Accounting Principles

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Canada (Canadian GAAP). These consolidated financial statements also conform, in all material respects, with generally accepted accounting principles in the United States of America (United States GAAP) with respect to recognition, measurement and presentation except as described and quantified below.

In accordance with Canadian GAAP, the Company recognized an expense in the years ended December 31, 2005 and 2004 for the fair value of stock options granted to employees, directors and consultants. In the year ended December 31, 2003, the Company recognized an expense only for the fair value of stock options granted to consultants. For US GAAP, the Company

(a)

adopted SFAS 123 on January 1, 2004 using the retroactive restatement method. Accordingly, the Company recognized stock-based compensation expense relating to stock options granted to employees and directors subsequent to December 31, 1994 and which were not fully vested at January 1, 2002 that had previously been disclosed only by way of a pro forma presentation.

Effective January 1, 2006, the Company adopted SFAS 123(R) Share-Based Payment for US GAAP purposes. SFAS 123(R) requires that stock-based compensation expense be based on awards that are ultimately expected to vest. The adoption of SFAS 123(R) did not result in a significant difference from the stock-based compensation expense that would have been recognized under SFAS 123.

(b)

Comprehensive income:

Generally accepted accounting principles in the United States require that the Company classify items of other comprehensive income by their nature in a financial statement and display the accumulated balance of other comprehensive income separately from retained earnings (deficit) and contributed surplus in the equity section of the balance sheet.

All of the Companys short-term investments were classified as available-for-sale securities under US GAAP up to December 31, 2006. Available-for-sale securities are recorded at market value. Unrealized holding gains and losses on available-for sale securities are excluded from income and charged toaccumulated other comprehensive income as a separate component of



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16.

Reconciliation of Canadian and United States Generally Accepted Accounting Principles (continued)

shareholders equity until realized. Starting from January 1, 2007, the Company changed the classification for all new short-term investments to held-for-trading.  Held-for-trading financial assets are recorded at market value and any unrealized gains or losses on held-for-trading financial assets are included in net income.  Any securities acquired prior to January 1, 2007 and still held as at December 31, 2007 would still be classified as available-for-sale.   There was one security acquired in 2006 that was still held by the company as at December 31, 2007 and classified as available-for-sale and the remaining short-term investments as at December 31, 2007 were classified as held-for-trading.

(c)

Contributed surplus

Under US GAAP, as Minco Silver is considered an exploration stage enterprise, the dilution gains recognized in 2007, 2006 and 2005 under Canadian GAAP are recorded in contributed surplus for the year.

(d)

Escrow Shares:

As described in note 9(a), 4,880,000 common shares were escrowed, to be released based on certain expenditures on exploration and development of a resource property. The escrow terms were subsequently changed to be on a time release basis over 18 months.

US GAAP requires that the fair value of the shares at the time they are issued should be recognized and charged to income over the expected escrow period, which was 12 years. The 2005 change to the escrow terms resulted in the recognition of the remaining unamortized grant date fair value as the shares are no longer contingently cancellable.

Contingently cancellable shares are excluded from the calculation of the weighted average number of shares for purpose of loss per share under US GAAP.

(e)

Income Tax Uncertainty:

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, on January 1, 2007. No future income tax asset has been recognized as realization is not considered more likely than not, due to the uncertainty of future taxable income.  There is no difference between the Companys treatment of income taxes under Canadian GAAP versus US GAAP.



137





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(f)

Reconciliation of consolidated balance sheet items:

December 31, 2007December 31, 2006Short-term investments under Canadian GAAP$6,149,044$10,982,726Unrealized gains on held-for-trading financial assets-254,427Short-term investments under US GAAP$6,149,044$11,237,153Total assets under Canadian GAAP$16,747,109$19,584,528Unrealized gains on short-term investments-254,427Total assets under US GAAP$16,747,109$19,838,955Share capital under Canadian GAAP$33,941,510$33,809,903Value of escrow shares under Canadian GAAP(48,800)(48,800)Value of escrow shares under US GAAP2,864,4562,864,456Share capital under US GAAP$36,757,166$36,625,559Contributed surplus under Canadian GAAP$3,721,117$1,649,343Adjustment for stock based compensation (note 2(m))(154,300)(154,300)Value of stock based compensation recognized under
Canadian GAAP(5,971,760)(3,948,910)Value of stock based compensation recognized under US GAAP6,309,8884,287,038Dilution gain10,467,00010,276,000Contributed surplus under US GAAP$14,371,945$12,109,171Deficit under US GAAP -beginning of year$(29,651,330)$(22,849,006)Normal Course Issuer Bid  cost in excess of value(6,499)-Loss for the year under US GAAP(7,582,231)(6,802,324)Deficit under US GAAP  end of year$(37,240,060)$(29,651,330)Shareholders' equity under Canadian GAAPShare capital$33,941,510$33,809,903Contributed surplus3,721,1171,649,343Deficit(23,818,096)(16,375,846)Total shareholders' equity under Canadian GAAP$13,844,531$19,083,400Shareholders' equity under US GAAPShare capital$36,757,166$36,625,559Contributed surplus14,371,94512,109,171Accumulated other comprehensive income(44,520)254,427Deficit(37,240,060)(29,651,330)Total shareholders' equity under US GAAP$13,844,531$19,337,827






138





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16.

Reconciliation of Canadian and United States Generally Accepted Accounting Principles (continued)



(g)

Reconciliation of consolidated statement of operations items:

200720062005Losses for the yearUnder Canadian GAAP$(7,580,231)$(1,589,324)$(1,013,541)Dilution gain not recognized under US GAAP(191,000)(5,213,000)(2,953,000)Unrealized loss on available-for-sale securities not recognized by US GAAP189,000--Fair value of escrow shares recognized under US GAAP--(1,461,455)Under US GAAP$(7,582,231)$(6,802,234)$(5,427,996)Weighted average number of shares outstanding42,908,80941,193,59134,501,784Loss per share under US GAAP$(0.18)$(0.17)$(0.16)Loss of the yearUnder US GAAP$(7,582,231)$(6,802,234)$(5,427,996)Net increase (decrease) in unrealized gains on available-for-sale securities(298,947)254,427-Comprehensive income (loss)
under US GAAP$(7,881,178)$(6,547,897)$(5,427,996)




(h)

Recent accounting pronouncements:

In December 2007, the FASB issued SFAS No. 160, "Non-controlling Interests in Consolidated Financial Statements, an Amendment of ARB No. 51". This statement amends ARB 51 to establish accounting and reporting standards for the non-controlling interest (minority interest) in a subsidiary and for the deconsolidation of a subsidiary. Upon its adoption, effective as of the beginning of the Company's fiscal year 2010, non-controlling interests will be classified as equity in the Company's balance sheet and income and comprehensive income attributed to the non-controlling interest will be included in the Company's income and comprehensive income. The provisions of this standard must be applied prospectively upon adoption except for the presentation and disclosure requirements. Management is currently evaluating the impact of adopting SFAS No. 160 on the Company's consolidated financial position and results of operations.





139





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16.

Reconciliation of Canadian and United States Generally Accepted Accounting Principles (continued)



In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations" ("SFAS No. 141(R)"). SFAS No. 141(R) establishes principles and requirements for how an acquirer (continued)business combination recognizes and measures the assets acquired, liabilitiesassumed, and any non-controlling interest in the acquiree. The provisions of SFAS No. 141(R) will become effective for the Company's business combinations occurring on or after January 1, 2009.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS 159"). SFAS 159 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses



on items for which the fair value option has been elected will be reported in earnings. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Company currently is assessing the impact of SFAS 159 on its' consolidated financial position or results of operation. 
In September 2006, FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS 157"). The objective of SFAS 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The Company has not determined the effect, if any, that the adoption of SFAS 157 will have on the Company's consolidated financial position or results of operations.

In February 2008, the FASB released FSP No. FAS 157-2. FSP No. FAS 157-2 defers the effective date of SFAS 157 for one year for non-financial assets and non-financial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. It does not defer recognition and disclosure requirements for financial assets and financial liabilities, or for non-financial assets and non-financial liabilities that are remeasured at least annually.



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MINCO SILVER CORPORATION

(An exploration stage enterprise)



Consolidated Financial Statements

(Expressed in Canadian dollars)



DECEMBER 31, 2007 AND 2006

















Index





Auditors Report



Consolidated Balance Sheets



Consolidated Statements of Operations and Comprehensive Loss and Deficit



Consolidated Statements of Cash Flows



Notes to Consolidated Financial Statements















141





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Management's Responsibility for Financial Reporting





The financial statements and the information contained in the annual report are the responsibility of the Board of Director and management. The financial statements have been prepared by management in accordance with Canadian generally accepted accounting principles.



The Audit Committee of the Board of Directors is composed of three Directors and meets periodically with management and the independent auditors to review the scope and results of the annual audit and to review the financial statements and related financial reporting matters prior to submitting the financial statements to the Board for approval.



The financial statements have been audited by Ernst & Young LLP, Chartered Accountants, who were appointed by the shareholders. The auditors report outlines the scope of their examination and their opinion on the financial statements.











Ken Cai

Garnet Clark

Ken Cai

Garnet Clark

President and CEO

Chief Financial Officer



Vancouver, Canada

March 31, 2008





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[minco20f071708008.gif]



143





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144





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|                                                            |                          |                  |                 |                  |  |  |  |  |  |  |  |  | 
|----------------------------------------------------------- | ------------------------ | ---------------- | --------------- | ---------------- |  |  |  |  |  |  |  |  | 
|                                                            | MINCO SILVER CORPORATION |                  |                 |                  |  |  | 
|(An exploration stage enterprise)                          
|Consolidated Balance Sheets                                
|(Expressed in Canadian Dollars)                            
|                                                            |                          | December 31 2007 |                 | December 31
2006
|                                                            |                          |                  |                 |                 
|ASSETS                                                      |                          |                  |                 |                 
|                                                            |                          |                  |                 |                 
|Current assets                                              |                          |                  |                 |                 
|Cash and cash equivalents                                   | $                        | 2,647,546        | $               | 85,764          
|Short-term investments (Note 3)                             |                          | 14,219,920       |                 | 20,285,576      
|Receivables                                                 |                          | 193,022          |                 | 158,402         
|Due from Minco Gold (Note 8(a))                             |                          | 1,929,893        |                 | -               
|Prepaid expenses and deposits                               |                          | 22,704           |                 | 34,003          
|                                                            |                          |                  |                 |                 
|Total current assets                                        |                          | 19,013,085       |                 | 20,563,745      
|                                                            |                          |                  |                 |                 
|Plant, property and equipment(Note 5)                       |                          | 244,084          |                 | 80,519          
|                                                            |                          |                  |                 |                 
|Total assets                                                | $                        | 19,257,169       | $               | 20,644,264      
|                                                            |                          |                  |                 |                 
|LIABILITIES                                                 |                          |                  |                 |                 
|                                                            |                          |                  |                 |                 
|Current liabilities                                         |                          |                  |                 |                 
|Accounts payable and accrued liabilities                    | $                        | 968,279          | $               | 1,382,322       
|Due to Minco China (Note 8(b))                              |                          | 4,639,788        |                 | 442,404         
|                                                            |                          |                  |                 |                 
|Total liabilities                                           |                          | 5,608,067        |                 | 1,824,726       
|Commitments and contingencies (Notes 4, 10 and 12)          |                          |                  |                 |                 
|                                                            |                          |                  |                 |                 
|SHAREHOLDERS' EQUITY                                        |                          |                  |                 |                 
|Share capital(Note 6(a))                                    |                          | 21,804,252       |                 | 21,266,071      
|                                                            |                          |                  |                 |                 
|Contributed surplus(Note 6(c))                              |                          | 6,260,998        |                 | 4,694,498       
|                                                            |                          |                  |                 |                 
|Deficit accumulated during the exploration stage            |                          | (14,416,148)     |                 | (7,141,031)     
|                                                            |                          |                  |                 |                 
|Total shareholders equity                                  |                          | 13,649,102       |                 | 18,819,538      
|                                                            |                          |                  |                 |                 
|Total liabilities and shareholders equity                  | $                        | 19,257,169       | $               | 20,644,264      
|See accompanying notes to consolidated financial statements |                          |                  |                 |                 
|                                                            |                          |                  |                 |                 
|                                                            |                          |                  |                 |                 
|On behalf of the Board:                                     | Chan-Seng Lee          |                  | William Meyer
|                                                            | Chan-Seng Lee            |                  | William Meyer  
|                                                           
|Director                                         Director  



145





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|                                                                         |   |                              |   |                              |   |                                                                  |  |  |  |  |  | 
|------------------------------------------------------------------------ | - | ---------------------------- | - | ---------------------------- | - | ---------------------------------------------------------------- |  |  |  |  |  | 
|MINCO SILVER CORPORATION                                                 |   |                              |   |                              |   |                                                                 
|(An exploration stage enterprise)                                       
|Consolidated Statements of Operations and Comprehensive Loss and Deficit
|(Expressed in Canadian Dollars)                                          |   |                              |   |                              |   |                                                                 
|                                                                         |   | Year ended
December 31, 2007 |   | Year ended
December 31, 2006 |   | Cumulative from August 20, 2004 (inception) to
December 31, 2007
|                                                                         |   |                              |   |                              |   |                                                                 
|                                                                         |   |                              |   |                              |   |                                                                 
|Exploration permits                                                      | $ | -                            | $ | -                            | $ | 1,739,594                                                       
|Other exploration costs(Note 4)                                          |   | 4,783,545                    |   | 1,701,709                    |   | 6,847,004                                                       
|Total exploration costs                                                  |   | 4,783,545                    |   | 1,701,709                    |   | 8,586,598                                                       
|                                                                         |   |                              |   |                              |   |                                                                 
|Administrative expenses                                                  |   |                              |   |                              |   |                                                                 
|Accounting and audit                                                     |   | 65,386                       |   | 130,342                      |   | 268,784                                                         
|Amortization                                                             |   | 26,533                       |   | 10,830                       |   | 44,324                                                          
|Consulting                                                               |   | 66,965                       |   | 88,263                       |   | 202,779                                                         
|Directors fees (Note 8 (c))                                             |   | 56,833                       |   | 41,250                       |   | 98,083                                                          
|Foreign exchange loss (gain)                                             |   | (233,629)                    |   | (44,934)                     |   | (273,760)                                                       
|Investor relations                                                       |   | 532,169                      |   | 422,655                      |   | 1,172,747                                                       
|Legal                                                                    |   | 32,269                       |   | 44,455                       |   | 226,539                                                         
|Regulatory and filing                                                    |   | 72,742                       |   | 50,138                       |   | 207,976                                                         
|Rent and other office expenses                                           |   | 347,556                      |   | 272,087                      |   | 783,814                                                         
|Property investigation                                                   |   | 104,445                      |   | 127,475                      |   | 323,280                                                         
|Salaries and benefits                                                    |   | 483,140                      |   | 284,781                      |   | 806,356                                                         
|Stock based compensation (Note 6(d))                                     |   | 1,707,000                    |   | 1,448,000                    |   | 3,206,000                                                       
|                                                                         |   |                              |   |                              |   |                                                                 
|                                                                         |   | 3,261,409                    |   | 2,875,342                    |   | 7,066,922                                                       
|                                                                         |   |                              |   |                              |   |                                                                 
|Operating loss                                                           |   | (8,044,954)                  |   | (4,577,051)                  |   | (15,653,520)                                                    
|                                                                         |   |                              |   |                              |   |                                                                 
|Write down of short-term investments                                     |   | (19,352)                     |   | -                            |   | (19,352)                                                        
|Interest and sundry income                                               |   | 789,189                      |   | 319,790                      |   | 1,256,724                                                       
|                                                                         |   |                              |   |                              |   |                                                                 
|Loss for the year                                                        |   | (7,275,117)                  |   | (4,257,261)                  |   | (14,416,148)                                                    
|                                                                         |   |                              |   |                              |   |                                                                 
|Deficit,beginning of year                                                |   | (7,141,031)                  |   | (2,883,770)                  |   | -                                                               
|                                                                         |   |                              |   |                              |   |                                                                 
|Deficit,end of year                                                      | $ | (14,416,148)                 | $ | (7,141,031)                  | $ | (14,416,148)                                                    
|                                                                         |   |                              |   |                              |   |                                                                 
|Loss per share - basic and diluted                                       | $ | (0.23)                       | $ | (0.16)                       | $ | (0.57)                                                          
|                                                                         |   |                              |   |                              |   |                                                                 
|Weighted average number of common shares outstanding                     |   |                              |   |                              |   |                                                                 
|- basic and diluted                                                      |   | 31,054,523                   |   | 25,917,233                   |   | 25,419,729                                                      



See accompanying notes to consolidated financial statements







-146 -



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|                                                                    |   |                              |   |                              |   |                                                                 
|------------------------------------------------------------------- | - | ---------------------------- | - | ---------------------------- | - | ----------------------------------------------------------------
|MINCO SILVER CORPORATION                                            |   |                              |   |                              |   |                                                                 
|(An exploration stage enterprise)                                   |   |                              |   |                              |   |                                                                 
|Consolidated Statements of Cash Flows                               |   |                              |   |                              |   |                                                                 
|(Expressed in Canadian Dollars)                                     |   |                              |   |                              |   |                                                                 
|                                                                    |   | Year ended
December
31, 2007 |   | Year ended
December
31, 2006 |   | Cumulative from August 20, 2004 (inception) to
December 31, 2007
|Cash flows from (used in) operating activities                      |   |                              |   |                              |  
|Net loss for the year                                               | $ | (7,275,117)                  | $ | (4,257,261)                  | $ | (14,416,148)                                                    
|Adjustment for items not involving cash:                            |   |                              |   |                              |   |                                                                 
|- exploration permits                                               |   | -                            |   | -                            |   | 484,000                                                         
|- exploration costs                                                 |   | -                            |   | -                            |   | 63,331                                                          
|- stock-based compensation (Note 6(d))                              |   | 1,707,000                    |   | 1,448,000                    |   | 3,206,00                                                        
|- amortization                                                      |   | 26,533                       |   | 12,881                       |   | 44,324                                                          
|- foreign exchange gain                                             |   | -                            |   | (24,000)                     |   | (24,000)                                                        
|Changes in non-cash working capital items:                          |   |                              |   |                              |   |                                                                 
|- increase in receivables                                           |   | (34,620)                     |   | (121,411)                    |   | (193,022)                                                       
|- decrease (increase) in prepaid expenses 
    and deposits         |   | 11,299                       |   | 27,844                       |   | (22,704)                                                        
|- payment of 2nd installment of Fuwan Exploration     Permit        |   | -                            |   | (436,000)                    |   | -                                                               
|- increase (decrease) in accounts payable and  accrued  liabilities |   | (414,043)                    |   | 732,752                      |   | 508,279                                                         
|                                                                    |   |                              |   |                              |   |                                                                 
|                                                                    |   | (5,978,948)                  |   | (2,617,195)                  |   | (10,349,940)                                                    
|                                                                    |   |                              |   |                              |   |                                                                 
|Cash flows from financing activities                                |   |                              |   |                              |   |                                                                 
|Proceeds from issuance of shares and warrants (Note 6(a))           |   | 397,681                      |   | 15,300,813                   |   | 24,795,919                                                      
|Advances from Minco China (Note 8(b))                               |   | 2,267,491                    |   | 323,167                      |   | 2,709,895                                                       
|                                                                    |   |                              |   |                              |   |                                                                 
|                                                                    |   | 2,665,172                    |   | 15,623,980                   |   | 27,505,814                                                      
|                                                                    |   |                              |   |                              |   |                                                                 
|Cash flows from (used in) investing activities                      |   |                              |   |                              |   |                                                                 
|Acquisition of equipment                                            |   | (190,098)                    |   | (51,338)                     |   | (288,408)                                                       
|Decrease (increase) in short-term investments                       |   | 6,065,656                    |   | (12,960,672)                 |   | (14,219,920)                                                    
|                                                                    |   |                              |   |                              |   |                                                                 
|                                                                    |   | 5,875,558                    |   | (13,012,010)                 |   | (14,508,326)                                                    
|                                                                    |   |                              |   |                              |   |                                                                 
|Increase (decrease) in cash and cash equivalents                    |   | 2,561,782                    |   | (5,225)                      |   | 2,647,546                                                       
|                                                                    |   |                              |   |                              |   |                                                                 
|Cash and cash equivalents, beginning of year                        |   | 85,764                       |   | 90,989                       |   | -                                                               
|                                                                    |   |                              |   |                              |   |                                                                 
|Cash and cash equivalents, end of year                              | $ | 2,647,546                    | $ | 85,764                       | $ | 2,647,546                                                       
|                                                                    |   |                              |   |                              |   |                                                                 
|Supplemental disclosure of cash flow information                    |   |                              |   |                              |   |                                                                 
|Interest paid in cash                                               | $ | -                            | $ | -                            | $ | -                                                               
|Income taxes paid in cash                                           | $ | -                            | $ | -                            | $ | -                                                               

See accompanying notes to consolidated financial statements



-147 -



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1.

Nature of Business and Basis of Presentation

Minco Silver Corporation was incorporated on August 20, 2004 under the laws of British Columbia, Canada. Its principal business activities include the acquisition and exploration of silver mineral properties. At December 31, 2007, Minco Gold Corporation (formerly Minco Mining & Metals Corporation) (Minco Gold) owned a 41.75% equity interest in Minco Silver Corporation.

Minco Silver Corporation (the Company) is exploring and evaluating silver mineral properties and projects in the Peoples Republic of China (China) and has not yet determined whether these properties contain ore reserves that are economically recoverable. The ability of the Company to meet its commitments as they become payable, the exploration and development of mineral properties and projects, and the underlying value of the mineral properties are entirely dependent upon the existence of economically recoverable reserves, the ability of the Company to arrange appropriate financing to complete the exploration and development of its properties, the receipt of necessary permits and upon achieving future profitable production or receiving proceeds from the disposition of the properties. The timing of such events occurring, if at all, is not yet determinable. The Company is considered to be an exploration stage enterprise as it has not yet generated any revenue from operations.

2.

Significant Accounting Policies

a.

Basis of Presentation

These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles. These consolidated financial statements include the accounts of Minco Silver Corporation and its interest in the Fuwan Property. All material inter-company accounts and transactions have been eliminated upon consolidation.

b.

Use of Estimates

The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and revenues and expenses during the period reported. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant.  Actual results could differ from those estimates.

c.

Cash and cash equivalents

Cash and cash equivalents includes those short-term money market instruments which are highly-liquid investments and readily convertible into cash with a term to maturity of 90 days or less when acquired. As of December 31, 2007 and 2006, cash and cash equivalents consisted of cash only.

d.

Short-term Investments

Short-term investments comprise marketable securities, highly liquid investment grade bonds, and guaranteed investment certificates with remaining terms to maturity of greater than 90



148





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2.

Significant Accounting Policies(continued)

days when acquired. Short-term investments are classified as held-for-trading financial instruments in accordance with the new requirements of Canadian Institute of Chartered Accountants (CICA) Handbook Section 3855 Financial Instruments, adopted by the Company on January 1, 2007.  These investments are recorded at fair value.

Prior to 2007, short-term investments were carried at the lower of original cost or market.

e.

Plant, property and equipment

Plant, property and equipment are recorded at cost and amortization is provided as follows:

Computer equipment30% per year, declining-balance basisLeasehold improvements5 year, straight-line basisMining equipment30% per year, declining-balance basisMotor vehicles30% per year, declining-balance basisOffice equipment and furniture20% per year, declining-balance basis


Amortization is provided at half the annual rate in the year of acquisition.

f.

Revenue Recognition

Interest income on cash and cash equivalents and short-term investments is recognized as it is earned.

g.

Loss Per Share

Basic loss per share is computed using the weighted average number of common shares outstanding during the year. Diluted loss per share amounts are calculated giving effect to the potential dilution that would occur if securities or other contracts to issue common shares were exercised or converted to common shares using the treasury stock method.  The treasury stock method assumes that proceeds received from the exercise of stock options and warrants are used to repurchase common shares at the prevailing market rate.  As the Company incurred net losses during the period, the special warrants and options as disclosed in Note 6 were not included in the computation of loss per share as their inclusion would be anti-dilutive.

h.

Translation of Foreign Currencies

The Companys functional currency is the Canadian dollar. The Company follows the temporal method of accounting for the translation of its integrated foreign operation and for foreign currency transactions. Under this method, transactions denominated in foreign currencies are translated into Canadian dollars at the exchange rates prevailing at the transaction dates.  At year-end, monetary assets and liabilities are re-measured at the year-end exchange rates, and non-monetary assets and liabilities denominated in foreign currencies are translated to Canadian dollars at their historical exchange rates. The exchange gains and losses on translation are charged to operations.

i.

Acquisition, Exploration and Development of Mineral Interests

Mineral property and mineral rights acquisition costs are capitalized until the viability of the mineral interest is determined. If a mineral ore body is discovered, capitalized costs will be



Page 149 of 174



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2.

Significant Accounting Policies(continued)

amortized over their estimated useful lives following the commencement of production. Otherwise, capitalized acquisition costs are expensed when it is determined that the mineral property has no future economic value. Capitalized amounts (including capitalized development costs) are written down if future cash flows, including potential sales proceeds, related to the mineral property are estimated to be less than the propertys total carrying value. Management of the Company reviews the carrying value of each mineral property periodically, and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Reductions in the carrying value of a property are recorded to the extent that the total carrying value of the mineral property exceeds its estimated fair value.

Exploration permit acquisition and other exploration costs are expensed as incurred. When it is determined that a mining deposit can be economically and legally extracted or produced based on established proven and probable reserves, further exploration costs and development costs incurred after such determination will be capitalized. The establishment of proven and probable reserves is based on results of final feasibility studies which indicate whether a property is economically feasible. Upon commencement of commercial production, capitalized costs will be transferred to the appropriate asset categories and amortized over their estimated useful lives. Capitalized costs, net of salvage values, relating to a deposit which is abandoned or considered uneconomic for the foreseeable future will be written off.

j.

Asset Retirement Obligations

The Company recognizes the fair value of liabilities for asset retirement obligations in the period in which they are incurred and in which a reasonable estimate of such costs can be made.  The asset retirement obligation is recorded as a liability with a corresponding increase to the carrying amount of the related asset and depreciated over the life of the asset. Over time, the liability is increased to reflect an interest element (accretion expenses) considered in its initial measurement at fair value. The amount of liability will be subject to re-measurement at each reporting period. It is possible that the Companys estimates of its ultimate reclamation and closure liabilities could change as a result of changes in regulations, the extent of environmental remediation required, and the means of reclamation or cost estimates. Changes in estimates are accounted for prospectively from the period the estimate is revised.

As at December 31, 2007 and 2006, the Company did not have any asset retirement obligations.

k.

Income Taxes

The Company follows the liability method of accounting for income taxes.  Under this method, future income tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities, measured using substantially enacted tax rates and laws that will be in effect when the differences are expected to reverse.

l.

Stock-Based Compensation

The Company follows the fair value method, as determined using the Black-Scholes option valuation model, of accounting for stock-based compensation as recommended by the Canadian Institute of Chartered Accountants Handbook Section 3870, Stock-based compensation and other stock-based payments.





Page 150 of 174



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2.

Significant Accounting Policies(continued)

Under the fair value method, compensation cost is measured at fair value at the date of grant and is expensed over the awards vesting period.

(n)

Comprehensive Income and Equity



Effective January 1, 2007, the Company adopted the new recommendations of the CICA Handbook Section 1530, Comprehensive Income and Section 3251, Equity. These new accounting standards apply to fiscal years beginning on or after October 1, 2006.



·

Section 1530 provides standards for reporting and display of comprehensive income, which is the change in equity, from transactions and other events and circumstances from non-owner sources. Other comprehensive income refers to items recognized in comprehensive income that are excluded from net income calculated in accordance with Canadian GAAP.



·

Section 3251 establishes standards for the presentation of equity and changes in equity during the reporting period. The requirements in Section 3251 are in addition to Section 1530.



The adoption of these new Handbook sections had no impact on the financial statements for the period ended December 31, 2007.



(o)

Financial Instruments



Effective January 1, 2007, the Company also adopted the new recommendations of the CICA Handbook Section 3855, Financial Instruments  Recognition and Measurement and Section 3861, Financial Instruments  Disclosure and Presentation. These new accounting standards, which apply to fiscal years beginning on or after October 1, 2006, provide comprehensive requirements for the recognition, measurement, disclosure and presentation of financial assets, financial liabilities and non-financial derivatives. Under the new standards, policies followed for periods prior to the effective date generally are not reversed and therefore, the comparative figures have not been restated.



·

Section 3855 requires financial instruments be classified into one of five categories: held-for-trading, held-to-maturity, loans and receivables, available-for-sale financial assets, or other financial liabilities. All financial instruments , including derivatives, are measured on the balance sheet at fair value except for loans and receivables, held-to-maturity investments and other financial liabilities which are measured at amortized cost. Subsequent measurement and changes in fair value will depend on their initial classification. Held-for-trading financial assets are measured at fair value and changes in fair value are recognized in net income. Available-for-sale financial instruments are measured at fair value with changes in fair value recorded in other comprehensive income until the investment is derecognized or impaired at which time the amounts would be recorded in net income.  Transaction costs are included in the initial carrying amount of financial instruments except for held-for-trading items in which case they are expensed as incurred. Section 3855 also requires that the embedded derivatives to be identified and separated from the related host contract and be measured at fair value. Subsequent changes in fair value of embedded derivatives are recognized in the statement of operations in the period the change occurs.





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2.

Significant Accounting Policies(continued)



·

Section 3861 establishes the requirements for presentation and disclosure of financial instruments and non-financial derivatives.



Upon adoption of these new standards, the Company has classified cash and cash equivalents and short-term investments as held-for-trading, receivables as loans and receivables, and accounts payable and accrued liabilities as other financial liabilities.  Since the Company has no financial instruments other than cash, short-term investments, accounts receivable and accounts payable, there is little change from current accounting. Therefore, the adoption of these new Handbook sections had minimal impact on the financial statements for the period ended December 31, 2007.



(p)

Accounting Changes



In July 2006, the CICA revised Section 1506, Accounting Changes, which now requires that: (i) a voluntary change in accounting principles can be made if, and only if, it is required by a primary source of GAAP or the changes result in more reliable and relevant information, (ii) changes in accounting policies are accompanied with disclosures of prior period amounts and justification for the change, and (iii) for changes in estimates, the nature and amount of the change should be disclosed. The revised section is effective for the Companys financial year beginning January 1, 2007. The adoption of this section does not have an impact on the Companys financial statements for the period ended December 31, 2007.



(q)

Comparative Figures

Certain comparative figures have been reclassified to conform with the presentation as at and for the year ended December 31, 2007.

(r)

Future Accounting Standards

During the fourth quarter of 2006, the CICA issued three new accounting standards: CICA Handbook Section 1535 Capital Disclosures, CICA Handbook Section 3863 Financial Instruments  Presentation and CICA Handbook Section 3862 Financial Instruments  Disclosure. These standards are effective for interim and annual financial statements for the Companys reporting periods beginning on January 1, 2008.

Capital Disclosures section describes the standards for disclosing information about a companys objectives, policies and processes for managing capital, quantitative data about what a company regards as capital and whether a company has complied with any capital requirements and, if not, the consequences of such non-compliance. Financial Instruments  Presentation carries forward the guidance under Section 3861 with little change and Financial Instruments  Disclosures requires disclosure on the face of the balance sheet of each of the financial instrument categories as well as additional disclosure regarding credit, market and liquidity risk faced by the Company.

The Company is currently assessing the impact of these new accounting standards on its financial statements.

3.

Short-term Investments

As at December 31, 2007, short-term investments consist of cashable guaranteed investment



Page 152 of 174



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3.        Short-term Investments(continued)



certificates, corporate bonds, provincial bonds and bankers acceptances. The yields on these investments were 3.75% to 6.75%.

As at December 31, 2006, short-term investments consist of cashable guaranteed investment certificates and provincial bonds. The yields on these investments were 3.80% to 4.35% per year.

4.

Mineral Interests

Guangdong Province, China



On April 16, 2004, Minco Gold entered into a preliminary joint venture agreement, superseded by a formal joint venture agreement dated September 28, 2004, with other third parties to explore and develop a mineral property known as the Changkeng Property in Guangdong Province, China.  The target mineral in the Changkeng Property is gold but the property is known to also contain silver mineralization.  The gold and silver zones on the Changkeng Property are geologically distinct and can be mined as separate entities without interference. The silver zone is hereafter referred to as the Changkeng Silver Interest.



On August 20, 2004, Minco Gold transferred the following mineral interests to the Company in exchange for 14,000,000 common shares:



a.

The right to earn a 51% interest in the Changkeng Silver Interest;

b.

A preliminary joint venture agreement in relation to the exploration and development of the Fuwan silver deposit ( the Fuwan Silver Project); and

c.

New exploration permits acquired or to be acquired in respect of certain mineral properties adjoining the Fuwan and Changkeng properties and known as the Guanhuatang, Luoke-Jilinggang, Guyegang-Sanyatang and Dadinggang properties.



Minco Gold was the sole shareholder of the Company and the two companies had common management at the time of the transaction.  As at the date of transfer, Minco Gold had expended $63,331 in preliminary exploration costs. The Companys right to the Changkeng Silver Interest is derived from the Changkeng Exploration Permit. As the transfer occurred between a parent and wholly-owned subsidiary, these financial statements reflect the parents continuity of interest in the assets transferred. Accordingly, the mineral interests have been reflected retroactively in these financial statements at the parent companys carrying value of $nil and the exploration costs incurred by the parent have also been reflected in these financial statements as an expense within exploration costs in the period from August 20, 2004 (inception) to December 31, 2004. The shares issued by the Company have been recorded at $63,331.



On September 28, 2004, the Company signed a joint venture agreement with Guangdong Geological Exploration and Development Corporation (GGEDC) for the exploration and development of the Fuwan Silver Project. The joint venture agreement provided for the Company and GGEDC to incorporate a Sino-Foreign joint venture company with equity interests of 70% and 30%, respectively.  The joint venture company was never formed and the Company has been providing all of the funding to explore and develop the Fuwan Silver Project. On January 10, 2006, the Company and GGEDC agreed that the joint









Page 153 of 174



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4.        Mineral Interests(continued)



venture will no longer be pursued and the Company should assume a 100% interest in the Fuwan Silver Project. Consequently, the Company is now responsible for all of the exploration and development expenditures on the property.  GGEDC will, however, continue to provide professional services and technical assistance to the Company in relation to the Companys mining activities in Guangdong Province, China in return for a 10% net profit interest in the Fuwan Silver Project.



The cost of the exploration permit in respect of the Fuwan Silver Project (the Fuwan Exploration Permit) has been independently appraised at approximately $1.47 million (RMB10,330,000). On July 20, 2005, the Ministry of Land and Resources, China, approved the transfer of the Fuwan Exploration Permit to Minco Mining (China) Corporation (Minco China), a wholly-owned subsidiary of Minco Gold. As of December 31, 2007, the total amount of the exploration permit had been fully paid.



On April 7, 2005, the Company acquired three additional silver exploration permits in China, referred to as the Guanhuatang Property, the Luoke-Jilinggang Property and the Guyegang-Sanyatang Property; and paid $219,594 (RMB1,500,000) for the three permits in September 2005.



The permit application for Dadinggang Property was approved by the Ministry of Lands and Resources in China in December 2006. The Dadinggang area, which covers the northeast extension of the Fuwan Silver Project, has been added to the Luoke-Jilinggang exploration permit.

The following is a summary of other exploration costs incurred by the Company:

Year ended
December 31, 2007Year ended
December 31, 2006Cumulative from August 20, 2004 (inception) to
December 31, 2006Consulting fees$         635,427$         223,157$      1,060,291Drilling2,862,6901,342,4774,248,511Labor costs277,33853,229363,892Other exploration costs1,008,09082,8461,174,310$      4,783,545$      1,701,709$      6,847,004




The exploration permits owned by the Company are held through Minco China for and on behalf of the Company.  Although the Company has taken steps to verify the title to mineral properties in which it has an interest in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Companys title.  Property title may be subject to unregistered prior agreements or transfers and title may be affected by undetected defects. Further, the Companys interest in the silver mineralization in the Changkeng Property is dependent upon Minco Gold maintaining its interests in the Changkeng Property in accordance with the terms of a joint venture agreement, to which the Company is not a party.  In the event that Minco



Gold loses or alienates any or all of its interest in the Changkeng Property, the Companys interest in the silver mineralization underlying the Changkeng Property will be lost.



On February 8, 2007, Minco China signed a joint venture agreement with another three Chinese





Page 154 of 174



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4.        Mineral Interests(continued)



partners to form a joint venture company called Guangzhou Mingzhong Mining CO., Ltd. (Mingzhong). Under the terms of the joint venture agreement, Minco Gold may earn up to a 51% interest in the joint venture provided that it invests approximately $425,000 (RMB 3.06 million) in the joint venture.  To maintain its 51% interest, Minco Gold must continue to fund 51% of future expenditures.  In the event that Minco Gold ceases to make its investment contributions, its interest in the joint venture will be subject to dilution. The Company is not responsible to Minco Gold for any of its current commitments as those are designated for the exploration of gold deposits in the Changkeng property. The Company will only be responsible for 51% of any commitments made by the joint venture to explore silver deposits in the Changkeng Property. As of December 31, 2007, the joint venture had not made any commitments to explore the silver deposits in the Changkeng Property. As of December 31, 2007, Minco China has paid approximately RMB 3 million (approximately $417,000). (See Note 12).

5.

Plant, Property and Equipment

December 31, 2007AccumulatedNet BookCostAmortizationValueComputer equipment$    85,921$    26,361$    59,560Leasehold improvements25,4455,06220,383Mining equipment2,7355992,136Motor vehicles146,9299,620137,309Office equipment and furniture29,4994,80324,696$  290,529$    46,445$  244,084




December 31, 2006AccumulatedNet BookCostAmortizationValueComputer equipment$    51,484$    11,392$   40,092Leasehold improvements8,9661,6217,345Mining equipment1,262293969Motor vehicles32,8675,08927,778Office equipment and furniture5,7821,4474,335$  100,361$    19,842$   80,519




Page 155 of 174



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6.

Share Capital and Special Warrants

(a)

Common Shares

Authorized:  Unlimited number of common shares without par value.

Issued:

SharesAmountBalance, December 31, 200525,196,000$      9,059,258Share purchase warrants exercised at $1.25 per share, including $40,000 contributed surplus recognized on the issuance of warrants111,700179,625Stock option exercised at $1.25 per share, including $11,000 contributed surplus recognized on the issuance of options16,66731,834Common shares issued pursuant to 2006 financing (net of share issuance costs of $1,488,606)5,528,20014,990,354Fair value of 2,500,000 prospectus warrants issued in connection with 2006 financing allocated to contributed surplus-(2,995,000)Balance, December 31, 200630,852,56721,266,071Stock option exercised at $1.25 per share, including $78,500 contributed surplus attributed to stock-based compensation recognized116,665224,331Share purchase warrants exercised at $1.50 per share, including $62,000 contributed surplus recognized on the issuance of warrants167,900313,850Balance, December 31, 200731,137,132$  21,804,252




In October 2005, the Company, Computershare Trust Company of Canada (the Escrow Agent) and the principals of the Company (Principals) signed an escrow agreement. Pursuant to the escrow agreement, the Principals agreed to deposit an aggregate of 19,190,000 common shares in escrow (the Escrowed Securities) with the Escrow Agent.  The escrow agreement provides that the Escrowed Securities will be released as follows: (i) 25% on the date of listing of the Companys shares on a Canadian exchange (the Listing Date); (ii) 25% six months after the Listing Date; (iii) 25% twelve months after the Listing Date; and (iv) 25% eighteen months after the Listing Date. As at December 31, 2007, all common shares have been released from escrow.





Page 156 of 174



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6.         Share Capital and Special Warrants (continued)

The Company has entered into a strategic alliance agreement with Silver Standard Resources Inc. (Silver Standard) to jointly pursue silver opportunities in China.  Silver Standard is related to the Company as Silver Standard is a shareholder in the Company and the companies have one common director. Pursuant to the strategic alliance, Silver Standard participated in the November 24, 2004 and May 10, 2005 special warrant offerings. In this regard, Silver Standard paid $3,200,000 to the Company in exchange for 4,960,000 special warrants, which were subsequently converted to common shares.  Silver Standard has preferential purchase rights to participate in the Companys future financings in order to increase its equity interest up to 30%.

On November 24, 2004, the Company closed a non-brokered private placement of 6,000,000 special warrants at $0.50 each for gross proceeds of $3 million. Each special warrant entitled the holder, upon the exercise or deemed exercise, and without payment of any additional consideration, to receive one common share of the Company. The warrants were fully exercised on December 2, 2005.

On May 10, 2005, the Company issued 4,276,000 special warrants at $1.25 each for gross proceeds of $5,345,000. Of this amount, $2,345,000 was raised on a brokered basis and $3,000,000 was raised by the Company on a non-brokered basis. Each special warrant entitled the holder to be issued one common share of the Company. The Company paid cash commission of $187,600 for the funds raised on the brokered portion of the placement, an underwriting fee of $15,000, and legal and other costs of $46,608. The warrants were fully exercised on December 2, 2005.

In connection with the May 2005 offering, the Company issued options to its broker entitling the holder to receive share purchase warrants (the broker warrants) allowing the broker to purchase up to 187,600 common shares for a term of 18 months following the closing of the initial public offering under the prospectus, exercisable at a price of $1.25 per common share during the first twelve months of the term and a price of $1.50 per common share during the last six months of the term.  The estimated fair value of the broker warrants using the Black-Scholes model, being $73,498, has been recorded as an issue cost for the year ended December 31, 2005.

On December 1, 2005, the Company received approval of its application to list its common shares on the Toronto Stock Exchange (TSX). The Companys common shares began trading on the TSX on December 2, 2005. The Companys trading symbol is MSV. The Company converted 10,276,000 special warrants to common shares. The Company also completed its initial public offering of 920,000 common shares at a price of $1.25 per common share (the IPO) for gross proceeds of $1,150,000. The broker was paid a cash commission equal to $92,000 or 8% of the proceeds from the sale of common shares pursuant to the IPO and an underwriting and agency fee of $45,000.  Legal and other costs in relation to the issue amounted to a total of $11,367. Following the conversion and IPO, the Company had 25,196,000 common shares outstanding as at December 31, 2005.



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6.         Share Capital and Special Warrants (continued)

As additional consideration in connection with the IPO and a previously completed special warrant offering, the Company also granted warrants to the agent and members of its selling group entitling them to purchase an additional 92,000 common shares at an exercise price of $1.25 per common share for a period of 12 months from the IPO closing date and thereafter at a price of $1.50 per common share for an additional six months.

The estimated fair value of the broker warrants, being $28,000, has been recorded in contributed surplus for the year ended December 31, 2005.

The fair value of the broker warrants was calculated using the Black-Scholes option pricing model using a risk-free interest rate of 3.85%, dividend yield of 0% and volatility of 59%.

On November 17, 2006, the Company completed a public offering (the Offering) of 5,000,000 units at a price of $3.00 per unit for gross proceeds of $15,000,000. Each unit consisted of one common share and one-half of one common share purchase warrant. Each warrant is exercisable at $3.45 per share until May 17, 2008. The Offering was completed by way of a short form prospectus through a syndicate of underwriters (the Underwriters).



On December 1, 2006, the Company completed an additional 528,200 common shares at a price of $2.80 per common share and an additional 375,000 common share purchase warrants (the Warrant) at a price of $0.40 per Warrant for gross proceeds of $1,628,960 pursuant to the exercise of an over-allotment option (the Over-Allotment Option) by the Underwriters. Each Warrant is exercisable at $3.45 per share until May 17, 2008.



The estimated fair value of the 2,500,000 Warrants, being $2,995,000, has been recorded in contributed surplus for the year ended December 31, 2006. The fair value of the Warrant was calculated using the Black-Scholes option pricing model using a risk-free interest rate of 3.81%, dividend yield of 0% and volatility of 154%. The fair value of the additional 375,000 Warrants, being $150,000, has been recorded in contributed surplus for the year ended December 31, 2006.



The Company paid an underwriting fee of $997,738 or 6% of the proceeds from the sale of the Offering and the Over-Allotment Option, and legal and other costs in relation to the issue amounted to a total of $490,868.

(b)

Share Purchase Warrants

In 2006, the Company issued 2,875,000 warrants, exercisable at a price of $3.45 per common share expiring May 17, 2008.  A summary of the outstanding warrants is as follows:







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6.         Share Capital and Special Warrants (continued)

Number ofWeighted AverageWarrantsExercise PriceOutstanding at December 31, 2005279,600$    1.25Issued2,875,0003.45Exercised(111,700)1.25Outstanding at December 31, 20063,042,9003.33Exercised(167,900)1.50Outstanding at December 31, 20072,875,000$    3.45




(c)

Contributed Surplus

Summary of contributed surplus is as follows:

Balance at December 31, 2005$       152,4982006 stock-based compensation expense1,448,000Transfer to share capital on exercise of share purchase warrants(40,000)Transfer to share capital on exercise of stock options(11,000)Fair value of 2,500,000 prospectus warrants issued in connection with 2006 financing2,995,000Fair value of 375,000 warrants issued in connection with
Over-Allotment Option of 2006 financing150,000Balance at December 31, 20064,694,4982008 stock-based compensation388,141Transfer to share capital on exercise of share purchase warrants(183,666)Transfer to share capital on exercise of stock options(6,240)Balance at December 31, 2007$     6,459,233




(d)

Stock Options

The Company may grant options to its directors, officers, employees and consultants under its stock option plan.  The maximum number of common shares reserved for issuance is 15% of the issued and outstanding shares. The Company expenses stock options over their vesting period, with stock options typically vesting in various increments and having a maximum term of five years.

In 2007, the Company granted 1,704,000 stock options to its directors, officers, employees and consultants at the price range from $2.10 to $3.25 per share. The Company recorded $1,707,000 of stock-based compensation expense in the year.











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6.         Share Capital and Special Warrants (continued)

A summary of the status of options granted by the Company is as follows:

Weighted AverageNumberExercise PriceOptions outstanding at December 31, 20052,740,000$       1.25Granted725,0003.39Exercised(16,667)1.25Forfeited(335,000)1.59Options outstanding at December 31, 20063,113,3331.71Granted1,704,0002.40Exercised(116,665)1.25Forfeited(795,000)2.98Options outstanding at December 31, 20073,905,668$ 1.77




The weighted average fair value of options granted during the year ended December 31, 2007 was $2.17. Each option entitles the holders to purchase one common share.

Options OutstandingOptions ExercisableRange of
Exercise
PricesNumber
OutstandingWeighted
Average
Remaining
Contractual
Life (yr)Weighted
Average
Exercise
PriceNumber
ExercisableWeighted
Average
Exercise
Price$1.00  1.302,201,6682.92$1.251,443,336$1.25$2.10 - $3.671,704,0004.38$2.44258,333$2.843,905,6683.56$1.771,701,669$1.49




The Company used the Black-Scholes option pricing model to determine the fair value of the options with the following assumptions:

20072006Risk-free interest rate4.02% - 4.67%3.86% - 4.21%Dividend yield0%0%Volatility148%154%Approximate expected lives5 years5 years


Option pricing models require the use of highly subjective estimates and assumptions including the expected stock price volatility.  Changes in the underlying assumptions can materially affect the fair value estimates and therefore, in managements opinion, existing models do not necessarily provide a reliable measure of the fair value of the Companys stock options.





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7.

Income Taxes

The Company has two branches in China, Beijing Silver and Fuwan for Canadian tax purposes.  The operating results of these two branches are included in the Companys tax reporting for Canadian tax purposes.   From a Chinese tax reporting perspective, the operating result of these two branches is included in Minco Chinas operating results.

On March 16, 2007, the National Peoples Congress (NPC) of China approved the new Corporate Income Tax Law, which will become effective on January 1, 2008.  The new law establishes a unified 25% tax rate for both domestic enterprises and foreign invested enterprises (FIEs).  This change of the Chinese tax law will have impact to the extent of the Companys business operation in China when the Company becomes profitable in China.

Income tax expense differs from the amount that would result from applying the Canadian federal and provincial income tax rates to earnings before income taxes.  These differences result from the following items:

2007200634.12%34.12%Income tax recovery at statutory rates$    (2,482,270)$    (1,452,577)Deductible expenditures(150,048)(128,713)Non-deductible expenditures590,113505,158Unrecognized benefits of foreign exploration and development expenditures1,141,968527,530Unrecognized benefits of losses carried forward202,362446,842Impact of federal income tax rate change697,875101,760$                     -$                     -




Future income taxes arise from temporary differences in the recognition of income and expenses for financial reporting and tax purposes. The significant components of future income tax assets and liabilities at December 31 are as follows:



2007200627%31%Future income tax assets:Non-capital losses$    942,240$    739,598Unused cumulative foreign exploration and development expenses2,301,2821,159,314Capital assets12,5216,151Write down of securities2,614-Share issue costs284,092443,123$ 3,542,749$ 2,348,186Less:  valuation allowance(3,542,749)(2,348,186)Total future income tax assets$               -$               -




The net amount which would give rise to a future income tax asset has not been recognized as realization is not considered more likely than not. Due to the uncertainty of future taxable income, all deferred tax assets have been fully valued against.







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7.

Income Taxes (continued)

The Company has $3,489,777 of non-capital losses carry-forward for Canadian income tax purposes of which $52,974 expires in 2014, $891,400 expires in 2015, $1,442,327 expires in 2016 and $1,103,076 expires in 2017. The Company also has $8,523,268 (2006-$3,739,723) of cumulative foreign resource expenses for Canadian income tax purposes which can be carried forward indefinitely and used to reduce future taxable income in Canada.



As explained in note 12(a) and (b) there is some risk to the Companys ownership in all of its mineral interest in China as it does not hold its interests directly as described in note 12(a). If such risk materializes, the basis on which the future income tax assets have been recorded may change and as such the company may lose the tax deductions and future income tax assets related to the mineral interest in China.

8.

Related Party Transactions

a.

Accounts receivable at December 31, 2007 include $1,929,893 (December 31, 2006  $363,889 due to) due from Minco Gold. The amount due from Minco Gold is unsecured, non-interest bearing and payable on demand.

b.

Due to Minco China at December 31, 2007 was $4,639,788 (December 31, 2006  $78,515), used for expenditures on the Fuwan Property, new silver projects investigation, and shared office expenses in Minco China. The amount due to Minco China, a wholly-owned subsidiary of Minco Gold, is unsecured, non-interest bearing and payable on demand.

c.

In 2007, the Company paid consulting fees of $177,187 (December 31, 2006  $164,075) to companies controlled by the CEO of the Company. These consulting fees are included in exploration costs, property investigation, management fees and investor relations. The Company also paid directors fees of $56,833 to three independent directors (December 31, 2006 - $41,250).

d.

In 2007, the Company paid or accrued $67,141 (December 31, 2006  $55,216) in respect of rent, $237,179 (December 31, 2006  $155,169) in respect of exploration costs, and $732,441 (December 31, 2006  $779,518) in respect of shared office expenses to Minco Gold.

e.

As disclosed in Note 6 (a), the Company entered into a strategic alliance with Silver Standard, a company which is a shareholder of the Company and which is related by one common director.

The above transactions are conducted in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the parties.











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9.

Geographical Information

The Companys business is considered as operating in one segment, mineral exploration and development. The geographical division of the Companys assets and liabilities and net loss is as follows:

December 31,December 31,20072006Current AssetsCanada$        18,959,458$        20,505,205China53,62758,540$        19,013,085$        20,563,745Long-term AssetsCanada$               67,734$               32,932China176,35047,587$             244,084$               80,519Current LiabilitiesCanada$          4,872,518$          1,038,394China735,549786,332$          5,608,067$          1,824,726




Year ended
December 31, 2007Year ended
December 31, 2006Net LossCanada$        (2,492,865)$        (2,336,044)China(4,782,252)(1,921,217)$        (7,275,117)$        (4,257,261)


10.

Commitments

(a)

The Company has commitments in respect of office leases requiring minimum payments of $53,564, as follows:

2008$ 25,96720097,66720106,27720115,20420124,02420134,426$ 53,564




(b)

The Company has committed $351,564 (December 31, 2006 - $440,000) for drilling programs on the Fuwan Property.





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11.

Financial Instruments

Fair value  The fair values of receivables, accounts payable and accrued liabilities  approximates their carrying values due to the short-term nature of these financial instruments.

Foreign exchange risk  The Company operates in China and many of its exploration expenditures are payable in either U.S. dollars or the Chinese currency RMB and are therefore subject to foreign currency risk arising from changes in exchange rates with the Canadian dollar.

Interest rate risk  The Company is exposed to interest rate risk on its short-term investments.

Credit risk  The Company generally places its short-term investment funds into government and Canadian bank debt securities and is therefore subject to minimal credit risk with regard to temporary investments.

12.

Contingencies

(a)

The Companys interest in the Changkeng Property relates to the assignment to it by Minco Gold of Minco Golds right to earn up to a 51% interest in the Changkeng Propertys silver mineralization pursuant to the Preliminary Changkeng Joint Venture (JV) Agreement dated April 16, 2004, superseded by the formal joint venture agreement dated September 28, 2004.  On February 28, 2007 Minco China signed a joint venture agreement with the JV partners to form Guangdong Mingzhong Mining Corporation (Mingzhong). Mingzhong received its business license on March 30, 2007.  The original Changkeng exploration permit, which expired in September 2006, has been renewed until September 10, 2008 and was held by No. 757 Exploration Team.  Mingzhong has signed an exploration permit transfer agreement with No. 757 Exploration Team and Mingzhong received the exploration permit subsequent to the end of the year. The Companys interest in the silver mineralization of the Changkeng Property is entirely dependent on: (i) the Changkeng JV (or Minco Gold directly) maintaining the Changkeng Permit; and (ii) Minco Gold acquiring and maintaining a 51% interest in the Changkeng JV (or in the Changkeng Property).

(b)

There is some risk to the Companys ownership in all of its mineral interests in China as it does not hold its interests directly. The Company, Minco China and Minco Gold have confirmed pursuant to the Second Confirmation Agreement that Minco China holds the Fuwan Permits on behalf of and in trust for the Company on a temporary basis, until such time as the Company has established a new Chinese corporation, majority controlled by the Company. When the Chinese subsidiary has been established, the Company will direct the permits to be transferred, subject to government approval, from Minco China to the newly established subsidiary. The Company has the sole authority to direct Minco China in the future as to any transfer or other transaction relating to the Fuwan Permits. Minco Gold and Minco China agreed in the Second Confirmation Agreement not to transfer, sell, pledge, grant security interests in, or otherwise encumber, in any manner whatsoever, the Fuwan Permits. In addition, Minco Gold agreed pursuant to the Second Confirmation Agreement not to transfer or sell any of its ownership or equity interest in Minco China or encumber its interest in any way if any of the foregoing, individually or in combination, would have the effect of Minco Gold holding at any point in time less than, on an actual or a fully-diluted calculation basis, a 75% unencumbered ownership interest in Minco China. Likewise, Minco China agreed pursuant to the Second Confirmation Agreement not to enter into any agreement or grant any option or right for the purchase, sale, transfer or issuance of any ownership or equity interests in Minco China if any of the foregoing, individually or in combination, would have the effect of Minco Gold holding at any point in time less than, on an actual or a fully-diluted calculation basis, a 75% unencumbered ownership interest in Minco China.



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See Note 4 also.

13.

Reconciliation of Canadian and United States Generally Accepted Accounting Principles

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Canada (Canadian GAAP). These consolidated financial statements also conform, in all material respects, with generally accepted accounting principles in the United States of America (United States GAAP) with respect to recognition, measurement and presentation except as described and quantified below.

(a)

Effective January 1, 2006, the Company adopted SFAS 123(R) Share-Based Payment for US GAAP purposes. SFAS 123(R) requires that stock-based compensation expense be based on awards that are ultimately expected to vest. The adoption of SFAS 123(R) did not result in a significant difference from the stock-based compensation expense that would have been recognized under SFAS 123.

(b)

Comprehensive income:

Generally accepted accounting principles in the United States require that the Company classify items of other comprehensive income by their nature in a financial statement and display the accumulated balance of other comprehensive income separately from retained earnings (deficit) and contributed surplus in the equity section of the balance sheet.

All of the Companys short-term investments were classified as available-for-sale securities under US GAAP up to December 31, 2006. Available-for-sale securities are recorded at market value. Unrealized holding gains and losses on available-for sale securities are excluded from income and charged toaccumulated other comprehensive income as a separate component of shareholders equity until realized. Starting from January 1, 2007, the Company changed the classification for all new short-term investments to held-for-trading.  Held-for-trading financial assets are recorded at market value and any unrealized gains or losses on held-for-trading financial assets are included in net income.  Any securities acquired prior to January 1, 2007 and still held as at December 31, 2007 would still be classified as available-for-sale. There were no securities acquired in 2006 that were still held by the company as at December 31, 2007 and hence, all short-term investments as at December 31, 2007 were classified as held-for-trading.

(c)

Income Tax Uncertainty:

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, on January 1, 2007. No future income tax asset has been recognized as realization is not considered more likely than not, due to the uncertainty of future taxable income.  There is no difference between the Companys treatment of income taxes under Canadian GAAP versus US GAAP.

(d)

Reconciliation of consolidated balance sheet items:

There were no reconciling items between US GAAP and Canadian GAAP identified for the years ended December 31, 2007 and 2006.



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13.

Reconciliation of Canadian and United States Generally Accepted Accounting Principles (continued)

(e)

Reconciliation of consolidated statement of operations items:

There were no reconciling items between US GAAP and Canadian GAAP identified for the years ended December 31, 2007, 2006 and for the life-to-date period ended December 31, 2007.

(f)

Recent accounting pronouncements:

In December 2007, the FASB issued SFAS No. 160, "Non-controlling Interests in Consolidated Financial Statements, an Amendment of ARB No. 51". This statement amends ARB 51 to establish accounting and reporting standards for the non-controlling interest (minority interest) in a subsidiary and for the deconsolidation of a subsidiary. Upon its adoption, effective as of the beginning of the Company's fiscal 2010, non-controlling interests will be classified as equity in the Company's balance sheet and income and comprehensive income attributed to the non-controlling interest will be included in the Company's income and comprehensive income. The provisions of this standard must be applied prospectively upon adoption except for the presentation and disclosure requirements.



In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations" ("SFAS No. 141(R)"). SFAS No. 141(R) establishes principles and requirements for how an acquirer in a business combination recognizes and measures the assets acquired, liabilities assumed, and any non-controlling interest in the acquiree. The provisions of SFAS No. 141(R) will become effective for the Company's business combinations occurring on or after January 1, 2009.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS 159"). SFAS 159 permits entities
to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected will be reported in earnings. SFAS 159 is effective for fiscal years beginning after November 15, 2007. The Company currently is assessing the impact of SFAS 159 on its' consolidated financial position or results of operation.

In September 2006, FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS 157"). The objective of SFAS 157 is to increase consistency and comparability in fair value measurements and to expand disclosures about fair value measurements. SFAS 157 defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS 157 applies under otheraccounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. The provisions of SFAS 157 are effective for fair value measurements made in fiscal years beginning after November 15, 2007. The Company has not determined the effect, if any, that the adoption of SFAS 157 will have on the Company's consolidated financial position or results of operations.

In February 2008, the FASB released FSP No. FAS 157-2. FSP No. FAS 157-2 defers the effective date of SFAS 157 for one year for non-financial assets and non-financial liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis. It does not defer recognition and disclosure requirements for financial assets and financial liabilities, or for non-financial assets and non-financial liabilities that are remeasured at least annually.



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14.

Subsequent Event

Subsequent to the end of the year, Mingzhong received the Changkeng exploration permit from the No. 757 Exploration Team.



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SIGNATURES



The registrant hereby certifies that it meets all of the requirements for filing this Annual Report on Form 20-F and that it has duly caused the undersigned to sign this Annual Report on its behalf.



MINCO GOLD CORPORATION



Dated:

June 29, 2008

Ken Z. Cai

Ken Z. Cai, President







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EXHIBIT 12.1

CERTIFICATION

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002



I, Ken Z. Cai, certify that:

|    |  |                                                                                                                                                                                                                                                                                                                                                                             |  | 
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|    |  |                                                                                                                                                                                                                                                                                                                                                                             |  | 
|1.  |  | I have reviewed this annual report on Form 20-F of Minco Gold  Corporation;                                                                                                                                                                                                                                                                                                
|2.  |  | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;                                                                 
|3.  |  | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;                                                                                       
|4.  |  | The companys other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:                                          
|(a) |  | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|(b) |  | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;    
|(c) |  | Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and                                                                                           
|(d) |  | Disclosed in this report any change in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and                                                                       
|5.  |  | The companys other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions):                                                                                  
|(a) |  | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and                                                                                                     
|(b) |  | Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting.                                                                                                                                                                                                    



Date:  June 30, 2008

Ken Z. Cai

Ken Z. Cai, President





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EXHIBIT 12.2

CERTIFICATION

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002



I, Ken Z. Cai,                                                                I Garnet Clark, certify that:

|    |  |                                                                                                                                                                                                                                                                                                                                                                             |  | 
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
|    |  |                                                                                                                                                                                                                                                                                                                                                                             |  | 
|1.  |  | I have reviewed this annual report on Form 20-F of Minco Gold  Corporation;                                                                                                                                                                                                                                                                                                
|2.  |  | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;                                                                 
|3.  |  | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;                                                                                       
|4.  |  | The companys other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:                                          
|(a) |  | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|(b) |  | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;    
|(c) |  | Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and                                                                                           
|(d) |  | Disclosed in this report any change in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and                                                                       
|5.  |  | The companys other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions):                                                                                  
|(a) |  | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and                                                                                                     
|(b) |  | Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting.                                                                                                                                                                                                    



Date:  June 30, 2008

Garnet Clark

Garnet Clark, Chief Financial Officer





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Exhibit 13.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 20-F of Minco Gold Corporation for the year ended December 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the Annual Report), I hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:



|   |                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                               
|1. | The Annual Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and                      
|2. | The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the registrant.





Date:  June 30, 2008





Ken Z. Cai

Ken Z. Cai President

















































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Exhibit 13.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Annual Report on Form 20-F of Minco Gold Corporation for the year ended December 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the Annual Report), I hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:



|   |                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                               
|1. | The Annual Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and                      
|2. | The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the registrant.





Date:

June 30, 2008





Garnet Clark

Garnet Clark, Chief Financial Officer















































Page 172 of 174



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Exhibit 14.1



CONSENT OF P & E MINING CONSULTANTS INC.





We consent to the reference to our firm under the caption "Experts" and to the use of our amended and revised updated Technical Report entitled Technical Report and Resource Estimate on The Fuwan Property, Guangdong Province, China for Minco Silver Corporation, dated November 7, 2006,  and the use of our Technical Report entitled Technical Report and Resource Estimate on the Changkeng Gold Property Guangdong Province, China for Minco Gold Corporation (the Reports) all prepared in compliance with National Instrument 43-101 and Form 43-101F1 in the Annual Registration Statement (Form 20-F) of Minco Mining & Metals Corporation (the Company).



We have read the Annual Registration Statement (Form 20-F), the National Instrument 43-101 (the "Instrument"), the Companion Policy 43-101CP, and Form 43-101F1 (the "Form 43-101F1"), and confirm that:



(a)

we have no reason to believe that there are any misrepresentations in the information contained in the Annual Registration Statement (Form 20-F) derived from The Reports or that is within our knowledge as a result of the investigations and enquiries made by us in connection with the preparation of the Repors;



(b)

the Reports complies with the requirements of the Instrument and Form 43-101F1.



Further, we hereby confirm our consent to the Company's use of the Annual Registration Statement (Form 20-F) for its regulatory filing purposes and its disclosure to the public.







[minco20f071708010.gif]                                           
[minco20f071708012.gif]



________________________

Eugene Puritch, P.Eng

Tracy Armstrong, P.Geo

President

Sr. Associate Geologist

P&E Mining Consultants Inc.

P&E Mining Consultants Inc.





[minco20f071708013.jpg]

_____________________

Antoine Yassa, P.Eng

P&E Mining Consultants Inc.





Brampton, Ontario, Canada

June 30,  2008











Page 173 of 174



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Exhibit 14.2



CONSENT OF PETER FOLK

Professional Engineer





I consent to the reference of myself under the caption "Experts" and to the use of my Technical Report entitled Report on the Jinniushan Gold Project Yuanling County, Hunan Province Peoples Republic of China, dated December 28, 2006 (the Report) for Minco Mining & Metals Corporation prepared in compliance with National Instrument 43-101 and Form 43-101F1 in the Annual Registration Statement (Form 20-F) of Minco Gold Corporation (the Company).



I have read the Annual Registration Statement (Form 20-F), the National Instrument 43-101 (the "Instrument"), the Companion Policy 43-101CP, and Form 43-101F1 (the "Form 43-101F1"), and confirm that:



(c)

we have no reason to believe that there are any misrepresentations in the information contained in the Annual Registration Statement (Form 20-F) derived from The Report or that is within our knowledge as a result of the investigations and enquiries made by us in connection with the preparation of the Report;



(d)

the Report complies with the requirements of the Instrument and Form 43-101F1.



Further, we hereby confirm our consent to the Company's use of the Annual Registration Statement (Form 20-F) for its regulatory filing purposes and its disclosure to the public.





[minco20f071708014.jpg]



Peter Folk, P.Eng









Mayne Island, British Columbia, Canada

June 30, 2008























Page 174 of 174