**U.S.
      SECURITIES & EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**








**Amendment
      No. 1**


of


**FORM
      20-F/A**





(Mark
      One)





 ̈
            
            REGISTRATION
                STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE
                ACT
                OF 1934ORx
            
            ANNUAL
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934For
                the fiscal year ended December 31, 2006OR ̈
            
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934For
                the transition period from _____________ to _____________








Commission
      File Number: 0-29336








**ATNA
      RESOURCES LTD.**


(Exact
      name of registrant as specified in its charter)








**Province
      of British Columbia (Canada)**


(Jurisdiction
      of incorporation or organization)








**510
      - 510 Burrard Street**


**Vancouver,
      British Columbia V6C 3A8**


**Canada**


(Address
      of principal executive offices)








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


None





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


Common
      Shares Without Par Value





Securities
      for which there is a reporting obligation pursuant to Section 15(d) of the
      Act:


None






I




Indicate
      the number of outstanding shares of each of the Registrant's classes of capital
      or common stock as of the close of the period covered by the annual
      report:





Title
                of Each Class
            Issued
                and Outstanding as at March 16, 2007Common
                Shares without par value
            64,376,838Preferred
                Shares without par value
            Nil





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


[  ]
      Yes     [ X ] No








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     [ X } No





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


[
      X ]
      Yes     [  ] No





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


[
      X ]
      Item 17     [  ] Item 18





If
      this
      report is an annual report, indicate by check mark whether the registrant is
      a
      shell company (as defined in Rule 12b-2 of the Securities Exchange Act of
      1934):


[  ]
      Yes     [ X ] No





Indicate
      by check mark whether the registrant is a large accelerated filer, or a
      non-accelerated filer.  See definition of “accelerated filer and large
      accelerated filer” in Rule 12b-2 of the Exchange Act.


[  ]
      Large accelerated filer    [  ] Accelerated
      filer     [ X ] Non-accelerated filer


II





**Explanatory
      Notes:**  Atna Resources Ltd. (the “Registrant”) is a Canadian
      issuer eligible to file its Annual Report pursuant to Section 13 of the
      Securities Exchange Act of 1934 (the “1934 Act”) on Form 20-F.  The
      Registrant is a “foreign private issuer” as defined in Rule 3b-4 under the 1934
      Act and in Rule 405 under the Securities Act of 1933.  Equity
      securities of the Registrant are accordingly exempt from Sections 14(a), 14(b),
      14(c), 14(f) and 16 of the 1934 Act pursuant to Rule 3a12-3.





The
      Registrant is filing this Amendment No. 1 to its Annual Report on Form 20-F/A
      for the year ended December 31, 2006 (“Original Filing”) for the following
      purposes:





·
            To
                amend the disclosure in ITEM 5.D - Trend
                Information;





·
            To
                number the pages of the financial statements; to amend Note 12 of
                the
                Financial Statements to include the Canadian/U.S. GAAP cash flow
                statement
                reconciliation; to correct an inconsistency between the 2006 “Closing
                deficit under Canadian GAAP” with the corresponding amount presented on
                the face of the balance sheet; and, to correct a compilation error
                that
                was found in Item (b) Operations;





·
            To
                replace Exhibit 12.1 - Officers’ Certifications, with corrected
                certifications;





·
            To
                add the following cautionary language to the Registrant’s web site with
                regards to disclosure about adjacent or other properties on which
                the
                Registrant has no right to explore or
                mine:





*“This
      web site contains information about adjacent properties on which we have no
      right to explore or mine.  We advise U.S. investors that the SEC’s
      mining guidelines strictly prohibit information of this type in documents filed
      with the SEC.  U.S. investors are cautioned that mineral deposits on
      adjacent properties are not indicative of mineral deposits on our
      properties.”*





·
            To
                insert small scale maps in ITEM 4.D - Property, Plant and Equipment,
                to
                show the location and access of the Registrant’s significant mineral
                properties; and, to amend reported results of sampling and chemical
                analysis to comply with the guidance provided for preparing meaningful
                disclosure about mineralization of existing or potential economic
                significance on the Registrant’s properties;
                and





·
            To
                remove all references in ITEM 4.D - Property, Plant and Equipment,
                *History and Previous Exploration*, to mines, adjacent or other
                properties, deposits, occurrences or exploration activities conducted
                by
                other companies that are unrelated and do not pertain to the Registrant’s
                property interests.





This
      Amendment does not amend or restate any information contained in the Original
      Filing other than as noted in the Explanatory Notes.  This Amendment
      does not purport to update any recent events or developments to the date of
      the
      Original Filing.   III


**TABLE
                  OF CONTENTS****PART
                  I**
              
              **1**ITEM
                  2.
              OFFER
                  STATISTICS AND EXPECTED TIMETABLE
              1ITEM
                  3.
              KEY
                  INFORMATION
              1ITEM
                  4.
              INFORMATION
                  ON THE COMPANY
              5ITEM
                  5.
              OPERATING
                  AND FINANCIAL REVIEW AND PROSPECTS
              22ITEM
                  6.
              DIRECTORS,
                  SENIOR MANAGEMENT AND EMPLOYEES
              27ITEM
                  7.
              MAJOR
                  SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
              37ITEM
                  8.
              FINANCIAL
                  INFORMATION
              38ITEM
                  9.
              THE
                  OFFERING AND LISTING
              39ITEM
                  10.
              ADDITIONAL
                  INFORMATION
              40ITEM
                  11.
              QUANTITATIVE
                  AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
              51ITEM
                  12.
              DESCRIPTION
                  OF SECURITIES OTHER THAN EQUITY SECURITIES
              51**PART
                  II**
              
              **51**ITEM
                  13.
              DEFAULTS,
                  DIVIDEND ARREARAGES AND DELINQUENCIES
              51ITEM
                  14.
              MATERIAL
                  MODIFICATIONS TO THE RIGHTS OF SECURITY
                  HOLDERS
                    AND USE OF PROCEEDS
              51ITEM
                  15.
              CONTROLS
                  AND PROCEDURES
              53ITEM
                  16.
              AUDIT
                  COMMITTEE FINANCIAL EXPERT AND CODE OF ETHICS
              53**PART
                  III**
              
              **55**ITEM
                  17.
              FINANCIAL
                  STATEMENTS
              55ITEM
                  18.
              FINANCIAL
                  STATEMENTS
              55ITEM
                  19.
              EXHIBITS
              55
 
   
  i


**CAUTIONARY
      STATEMENT REGARDING FORWARD-LOOKING
      STATEMENTS**





This
      Annual Report on Form 20-F included herein contain forward-looking statements
      concerning the Company’s Nevada projects including the Jarbidge, Pinson,
      Beowawe, and other projects located in the United States, Canada and
      Chile.  These statements relate to analyses and other information that
      are based on forecasts of future results, estimates of amounts not yet
      determinable and assumptions of management.





Statements
      concerning mineral resource estimates may also be deemed to constitute
      forward-looking statements to the extent that they involve estimates of the
      mineralization that will be encountered if the property is developed. Any
      statements that express or involve discussions with respect to predictions,
      expectations, beliefs, plans, projections, objectives, assumptions or future
      events or performance (often, but not always, using words or phrases such as
      “expects”, “is expected”, “anticipates”, “plans”, “projects”, “estimates”,
“assumes”, “intends” “strategy”, “goals”, “objectives”, “potential” or
      variations thereof or stating that certain actions, events or results “may”,
“could”, “would”, “might” or “will” be taken, occur or be achieved, or the
      negative of any of these terms and similar expressions)
      are not statements of historical fact and may be “forward-looking statements.”
Forward-looking statements are subject to a variety of known and unknown risks,
      uncertainties and other factors that could cause actual events or results to
      differ from those reflected in the forward-looking statements, including,
      without limitation:





·
            uncertainty
                of production at the Company’s mineral exploration
                properties;


·
            risks
                related to the Company’s ability to commence production and generate
                material revenues or obtain adequate financing for its planned exploration
                and development activities;


·
            uncertainty
                of capital costs, operating costs, production and economic
                returns;


·
            risks
                related to the Company’s ability to finance the development of its mineral
                properties;


·
            permitting
                risks;


·
            risks
                and uncertainties relating to the interpretation of drill results,
                the
                geology, grade and continuity of the Company’s mineral
                deposits;


·
            commodity
                price fluctuations;


·
            risks
                related to the Company’s current intention not to use hedging
                arrangements;


·
            currency
                fluctuations; risks related to governmental regulations, including
                environmental regulations; risks related to reclamation activities
                on the
                Company’s properties;


·
            the
                Company’s ability to attract and retain qualified
                management;


·
            the
                Company’s lack of infrastructure;


·
            mining
                and development risks, including risks related to accidents, equipment
                breakdowns, labor disputes or other unanticipated difficulties with
                or
                interruptions in production; uncertainty related to title to the
                Company’s
                mineral properties;


·
            the
                Company’s history of losses and expectation of future
                losses;


·
            the
                possible dilution of the Company’s interest in the Pinson Mine property;
                and


·
            increased
                competition in the mining industry.





This
      list
      is not exhaustive of the factors that may affect any of the Company's
      forward-looking statements. Forward-looking statements are statements about
      the
      future and are inherently uncertain, and actual achievements of the Company
      or
      other future events or conditions may differ materially from those reflected
      in
      the forward-looking statements due to a variety of risks, uncertainties and
      other factors, including, without limitation, those referred to in the Annual
      Report on Form 20-F, under the heading "Risk Factors'' and elsewhere. The
      Company's forward-looking statements are based on the beliefs, expectations
      and
      opinions of management on the date the statements are made, and the Company
      does
      not assume any obligation to update forward-looking statements if circumstances
      or management's beliefs, expectations or opinions should change. For the reasons
      set forth above, investors should not place undue reliance on forward-looking
      statements.


ii








**RESOURCE
      DISCLOSURE**





Terms
      used in this Annual Report relating to mineral reserves and mineral resources
      are Canadian mining terms as defined in accordance with National Instrument
      43-101 under the guidelines set out in Canadian Institute of Mining, Metallurgy
      and Petroleum (“CIM”) Standards on Mineral Resources and Mineral Reserves
      Definitions and Guidelines as adopted by the CIM Council. Under CIM Standards,
      the terms “mineral resource”, “measured mineral resource”, “indicated mineral
      resource” and “inferred mineral resource” have the following
      meanings:








**Mineral
                resource**
            The
                term “mineral resource”, under CIM Standards, refers to 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 form specific
                geological evidence and knowledge. Under CIM Standards, mineral resources
                are categorized as follows:





**Measured
                mineral resource**refers to that part of a mineral resource for
                which a quantity grade or quality, density, shape and physical
                characteristics are so well established that they can be estimated
                with
                confidence sufficient to allow the appropriate application of technical
                and economic parameters, to support production planning and evaluation
                of
                the economic viability of the deposit. The estimate is based on detailed
                and reliable exploration, sampling and testing information gathered
                through appropriate techniques from locations such as outcrops, trenches,
                pits, workings and drill holes that are spaced closely enough to
                confirm
                both geological and grade
                continuity.





**Indicated
                mineral resource** refers to that part of a mineral resource for
                which quantity grade or quality, density, shape and physical
                characteristics can be estimated with a level of confidence sufficient
                to
                allow the appropriate application of technical and economic parameters
                to
                support mine planning and evaluation of the economic viability of
                the
                deposit. The estimate is based on detailed and reliable exploration
                and
                testing information gathered through appropriate techniques from
                locations
                such as outcrops, trenches, pits, workings and drill holes that are
                spaced
                closely enough for geological and grade continuity to be reasonably
                assumed.





**Inferred
                mineral resource** refers to that part of a mineral resource for
                which quantity and grade or quality can be estimated on the basis
                of
                geological evidence and limited sampling and reasonably assumed,
                but not
                verified, geological and grade continuity. The estimate is based
                on
                limited information and sampling gathered through appropriate techniques
                from locations such as outcrops, trenches, pits, workings and drill
                holes.





**Cautionary
      Note to U.S. Investors Concerning Estimates of Mineral Reserves and Mineral
      Resources:**





We
      advise
      U.S. investors that the definitions of the terms “mineral reserve,” “proven
      mineral reserve” and “probable mineral reserve” under CIM Standards are
      different than the definitions adopted to the U.S. Securities and Exchange
      Commission (the “SEC”) and applicable to U.S. companies filing reports with the
      SEC pursuant to Guide 7. It is the view of the SEC’s staff that:


·
            A
                “final” or “bankable” feasibility study is required to meet the
                requirements to designate reserves under Guide
                7.


·
            A
                historic three year average price is to be used in any reserve or
                cash
                flow analysis to designate
                reserves.


·
            To
                meet the “legal” part of the reserve definition, the primary environmental
                analysis or document should have been submitted to governmental
                authorities.





In
      addition, while the terms “mineral resource,” “measured mineral resource,”
“indicated mineral resource,” and “inferred mineral resource” are recognized and
      required to be reported by Canadian regulations, the SEC does not recognize
      them. As such, information contained in this Annual Report concerning
      descriptions of mineralization, resources and reserves under Canadian standards
      may not be comparable to similar information made public by U.S. companies
      subject to the reporting and disclosure requirements of the SEC. “Indicated
      mineral resource” and “inferred mineral resource” have a great amount of
      uncertainty as to their existence and a great uncertainty as to their economic
      and legal feasibility. It cannot be assumed that all or any part of an
“indicated mineral resource” or “inferred mineral resource” will ever be
      upgraded to a higher category. **U.S. investors are cautioned not to
      assume that any part or all of an inferred resource exists, or is economically
      or legally mineable.**





iii





**PART
      I**








**ITEM
                1.**
            **IDENTITY
                OF DIRECTORS, SENIOR MANAGEMENT AND
                ADVISORS**





This
      Form
      20F is being filed as an annual report under the Exchange Act and, as such,
      there is no requirement to provide any information under this item.








**ITEM
                2.**
            **OFFER
                STATISTICS AND EXPECTED
                TIMETABLE**





This
      Form
      20F is being filed as an annual report under the Exchange Act and, as such,
      there is no requirement to provide any information under this item.








**ITEM
                3.**
            **KEY
                INFORMATION**





**A.**
            **Selected
                Financial Data**





The
      following table summarizes certain financial information, which is derived
      from
      and should be read in conjunction with the audited consolidated financial
      statements included elsewhere herein. These consolidated financial statements
      include the accounts of the Company and its wholly owned subsidiary Atna
      Resources, Inc., incorporated in the State of Nevada, U.S.A.  The
      audited financial statements have been prepared in accordance with Generally
      Accepted Accounting Practices (‘GAAP’) in Canada and conform in all material
      respects with accounting principles generally accepted in the U.S.A. except
      as
      stated in Note 13 of the notes thereto. The following information should be
      read
      in conjunction with these financial statements and notes thereto, included
      in
      Item 19 of this report.  All monetary data herein is stated in
      Canadian dollars.  See Exchange Rates Data in this
      section.





**Year
                ended**
              **12/31/06**
            **Year
                ended**
              **12/31/05**
            **Year
                ended**
              **12/31/04**
              **$**
            **Year
                ended**
              **12/31/03**
              **$**
            **Year
                ended**
              **12/31/02**
              **$**Interest
                income
            543,053
            384,406
            115,315
            65,167
            97,209Other
                income
            Nil
            2,000
            4,000
            4,000
            4,000Operating
                revenue
            Nil
            Nil
            Nil
            Nil
            NilNet
                Loss
            727,509
            1,203,836
            4,522,611
            1,764,935
            5,273,769Net
                Loss per common share
            0.01
            0.03
            0.14
            0.08
            0.24Total
                Assets
            33,832,542
            33,746,201
            14,258,164
            13,547,416
            13,031,685Long-term
                Debt
            Nil
            Nil
            Nil
            Nil
            NilNet
                Assets
            33,050,634
            32,019,896
            13,286,976
            13,482,199
            12,678,906Capital
                Stock
            60,839,308
            51,286,111
            40,795,561
            36,524,790
            34,051,138Cash
                dividends per common share
            Nil
            Nil
            Nil
            Nil
            NilNumber
                of shares
            64,176,838
            55,429,067
            38,950,872
            30,194,667
            21,757,037


(1)  U.S.
      readers should refer to Note 13 of the audited consolidated financial statements
      contained in this report for an explanation of the material differences between
      Canadian and U.S. generally accepted accounting principles, and a presentation
      of figures derived by a hypothetical application of U.S. accounting principles
      to those financial statements.


(2)  Loss
      per share has been calculated using the weighted-average number of common shares
      outstanding during the period.





1





Exchange
      Rate Data





Unless
      otherwise indicated, all monetary references herein are denominated in Canadian
      Dollars.  The exchange rates used herein were obtained from Bank of
      Canada; however, they cannot be guaranteed.





As
      at
      March 16, 2006, the noon rate as quoted by Bank of Canada was Cdn$1.1740 equals
      US $1.00.





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





High
                for Period
            
            Low
                for PeriodFebruary
                2007
            1.1854
            
            1.1597January
                2007
            1.1825
            
            1.1640December
                2006
            1.1664
            
            1.1394November
                2006
            1.1473
            
            1.1255October
                2006
            1.1393
            
            1.1179September
                2006
            1.1274
            
            1.10473





The
      following table sets forth the average exchanges rates for the past five years,
      expressed as Canadian dollars per U.S. dollars.





Year
            
            Average2002
            
            1.57032003
            
            1.40152004
            
            1.30152005
            
            1.21162006
            
            1.1364





**B.**
            **Capitalization
                and Indebtedness**





This
      Form
      20F is being filed as an annual report under the Exchange Act and, as such,
      there is no requirement to provide any information under this item.





**C.**
            **Reasons
                for the Offer and Use of
                Proceeds**





This
      Form
      20F is being filed as an annual report under the Exchange Act and, as such,
      there is no requirement to provide any information under this item.





**D.**
            **Risk
                Factors**





The
      securities of the Company are considered speculative due to the nature of the
      Company’s business and the present stage of its development.  A
      prospective investor should consider carefully the following
      factors:





*Precious
      and Base Metal Price Fluctuations*





The
      profitability of the Company's operations is dependent upon the market price
      of
      certain precious and base metals.  The price of such metals or
      interest related thereto has fluctuated widely and is affected by numerous
      factors beyond the control of the Company.  These factors include
      international economic and political conditions, expectations of inflation,
      international currency exchange rates, interest rates, global or regional
      consumptive patterns, speculative activities, levels of supply and demand,
      increased production due to new mine developments and improved mining and
      production methods, availability and costs of metal substitutes, metal stock
      levels maintained by producers and others and inventory carrying
      costs.  The exact effect of these factors cannot be accurately
      predicted, but the combination of these factors may result in the Company not
      receiving an adequate return on invested capital or the investment not retaining
      its value.





2





*Operating
      Hazards and Risks*





Mining
      operations generally involve a high degree of risk, which even a combination
      of
      experience, knowledge and careful evaluation may not be able to
      overcome.  Hazards such as unusual or unexpected formations and other
      conditions are involved.  Operations in which the Company has a direct
      or indirect interest will be subject to all the hazards and risks normally
      incidental to exploration, development and production of precious and base
      metals, any of which could result in work stoppages, damage to or destruction
      of
      mines and other producing facilities, damage to life and property, environmental
      damage and possible legal liability for any or all damage.  The
      Company maintains liability insurance in an amount that it considers adequate
      for its operations; however, the Company may become subject to liability for
      pollution, cave-ins or hazards against which it cannot insure or against which
      it may elect not to insure.  The payment of such liabilities may have
      a material adverse effect on the Company's financial position.





*Exploration
      and Development*





There
      is
      no known body of commercial ore on the Company's mineral
      properties.  Development of the Company's properties will only follow
      upon obtaining satisfactory exploration results.  Mineral exploration
      and development involves a high degree of risk and few properties explored
      ultimately are developed into producing mines. There is no assurance that the
      Company's mineral exploration and development activities will result in any
      discoveries of bodies of commercial ore.  The long-term profitability
      of the Company's operations will be in part directly related to the cost and
      success of its exploration programs, which may be affected by a number of
      factors.





Substantial
      expenditures are required to establish reserves through drilling, to develop
      metallurgical processes to extract metal from ore 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 the funds required for development can be obtained on a
      timely basis.





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





*Calculation
      of Reserves and Mineralization and Precious and Base Metal
      Recovery*





There
      is
      a degree of uncertainty attributable to the calculation of reserves and
      mineralization and corresponding grades being mined or dedicated to future
      production.  Until reserves or mineralization are actually mined and
      processed, quantity of mineralization and grades must be considered as estimates
      only.  In addition, the quantity of reserves and mineralization may
      vary depending on metal prices.  Any material change in quantity of
      reserves, mineralization, grade or stripping ratio may affect the economic
      viability of the Company's properties.  In addition, there can be no
      assurance that precious or other metal recoveries in small-scale laboratory
      tests will be duplicated in larger scale tests under on-site conditions or
      during production.





*Government
      Regulation*





Operations,
      development and exploration on the Company's properties are affected to varying
      degrees by government regulations relating to such matters as environmental
      protection, health, safety and labour; mining law reform; restrictions on
      production; price controls; tax increases; maintenance of claims; tenure; and
      expropriation of property.  There is no assurance that future changes
      in such regulation, if any, will not adversely affect the Company's
      operations.





*Environmental
      Factors*





All
      phases of the Company's operations are subject to environmental regulation
      in
      the various jurisdictions in which it operates.  Environmental
      legislation is evolving in a manner which will require stricter standards and
      enforcement, increased fines and penalties for non-compliance, more stringent
      environmental assessments of proposed projects and a heightened degree of
      responsibility for companies and their officers, directors and
      employees.  There is no





3





assurance
      that future changes in environmental regulation, if any, will not adversely
      affect the Company's operations. Environmental hazards may exist on the
      Company's properties unknown to the Company at present, which have been caused
      by previous or existing owners or operator of the properties.





*Competition
      and Agreements with Other Parties*





The
      mining industry is intensely competitive at all phases, and the Company competes
      with many companies possessing greater financial resources and technical
      facilities.  Competition in the mining business could adversely affect
      the Company's ability to acquire suitable producing properties or prospects
      for
      mineral exploration in the future.





The
      Company may, in the future, be unable to meet its share of costs incurred under
      agreements to which it is a party and the Company may have its interest in
      the
      properties subject to such agreements reduced as a
      result.  Furthermore, if other parties to such agreements do not meet
      their share of such costs, the Company may be unable to finance the cost
      required to complete recommended programs.





*Cash
      Flow*





The
      Company has no source of operating cash flow to fund all of its exploration
      and
      development projects.  Any further significant work would likely
      require additional equity or debt financing.  The Company has limited
      financial resources and there is no assurance that additional funding will
      be
      available to allow the Company to fulfil its obligations on existing exploration
      or joint venture properties.  Failure to obtain additional financing
      could result in delay or indefinite postponement of further exploration and
      the
      possible, partial or total loss of the Company's interest in certain
      properties.





*Conflict
      of Interest*





Certain
      directors and officers of the Company are officers and/or directors of, or
      are
      associated with other natural resource companies that acquire interest in
      mineral properties.  Such associations may give rise to conflicts of
      interest from time to time.  The directors are required by law,
      however, to act honestly and in good faith with a view to the best interests
      of
      the Company and its shareholders and to disclose any personal interest which
      they may have in any material transactions which is proposed to be entered
      into
      with the Company and to abstain from voting as a director for the approval
      of
      any such transaction.





*Title
      to Assets*





Although
      the Company has or will receive title opinions for any properties in which
      it
      has a material interest in Canada and the U.S., there is no guarantee that
      title
      to such properties will not be challenged or impugned.  The Company
      has not conducted surveys of the claims in which its holds direct or indirect
      interests and therefore, the precise area and location of such claims may be
      in
      doubt.  The Company's claims may be subject to prior unregistered
      agreements or transfers or native land claims and title may be affected by
      undetected defects.  Native land claim settlements are more advanced
      in the Yukon Territory than they are in British Columbia, and none of the
      Company's properties in the Yukon Territory cover areas where the Federal Crown
      proposes to transfer mineral rights to the First Nations.  However,
      there is no guarantee that this will not change before settlements are
      finalized.  Mineral claim title in Chile is less certain than in
      Canada and the U.S.  The Chilean government makes no effort to
      establish true claim ownership and allows recording of claims that may be
      layered on top of pre-existing claims.  An underlying claim may or may
      not lapse with non-payment of taxes.  As a result, establishing
      certainty of claim ownership is a difficult procedure and there is no guarantee
      that claims the Company acquires in Chile will not be challenged or
      impugned.





*Dividends*





The
      Company has not, since the date of its incorporation, declared or paid any
      dividends on its Common Shares and does not currently intend to pay
      dividends.  Earnings, if any, will be retained to finance further
      growth and development of the business of the Company.





*Resale
      of Shares*





4








The
      continued operation of the Company will be dependent upon its ability to
      generate operating revenues and to procure additional
      financing.  There can be no assurance that any such revenues can be
      generated or that other financing can be obtained.  If the Company is
      unable to generate such revenues or obtain such additional financing, any
      investment in the Company may be lost.  In such event, the probability
      of resale of the shares purchased would be diminished.





*Joint
      Ventures*





Certain
      of the properties in which Company has an interest are operated through joint
      ventures with other mining companies.  In particular, the Company
      holds an interest in the Pinson Mining Property with the remaining interest
      held
      by PMC. The Company’s interest in the Pinson Mining Property is subject to the
      risks normally associated with the conduct of joint ventures.  The
      existence or occurrence of one or more of the following circumstances and events
      could have a material adverse impact on the viability of the Company interests
      held through joint ventures and on the Company’s future cash flows, earnings,
      results of operations and financial condition: (i) disagreement with joint
      venture partners on how to develop and operate mines efficiently; (ii) inability
      of joint venture partners to meet their obligations to the joint venture or
      third parties; and (iii) litigation between joint venture partners regarding
      joint venture matters.





*Potential
      Litigation*





From
      time
      to time, during the ordinary course of business, the Company is threatened
      with,
      or is named as a defendant in, various actions, disputes, and legal proceedings,
      including claims of breach of contract, lost profits or other consequential
      damage claims. A significant judgment against the Company or a failure to settle
      any dispute on terms satisfactory to the Company could have a material adverse
      effect on the Company’s ability to continue operations.








**ITEM
                4.**
            **INFORMATION
                ON THE COMPANY**





**A.**
            **History
                and Development of the
                Company**





Atna
      Resources Ltd. was incorporated under the *Company Act* (British
      Columbia) on May 30, 1984, by registration of its Memorandum and Articles under
      its present name.  The Company was extra-territorially registered in
      the Yukon Territory on April 13, 1995.





The
      Company formed Atna Resources, Inc., (the “US subsidiary”), a wholly owned
      subsidiary, to act as its operating arm for mineral interests in the United
      States.  The U.S. subsidiary was incorporated under and by virtue of
      the General Corporation Laws of the State of Nevada on December 8, 1987, and
      its
      principal office is located at 115 - 1575 Delucchi Lane, Reno, Nevada, USA,
      89502.





Unless
      the context otherwise requires, the term “Company” in this report means Atna
      Resources Ltd. together with its U.S. subsidiary.





The
      head
      office of the Company is located at 510-510 Burrard Street, Vancouver, B.C.
      Canada V6C 3A8.  The address of the registered and records offices of
      the Company is 1600 – 925 West Georgia Street, Vancouver, British Columbia, V6C
      3L2.





During
      the past three years, the Company’s capital and exploration expenditures have
      been incurred on projects located in the United States, with a substantial
      amount of the expenditures occurring on the Pinson Mine Property located in
      Humboldt County, Nevada.  The Company has spent aggregate, net
      proceeds of $18,856,600 on exploration over the past three years with
      $16,661,569 being spent on the Pinson property and the balance spent on
      exploration and maintenance of the Company’s other US and Canada
      projects.  This exploration has been financed primarily from equity
      financings, the exercise of warrants and the exercise stock options in 2004
      totaling $3,648,758, $458,460 and $109,500, respectively; from equity
      financings, the exercise of warrants and the exercise of stock options in 2005
      totaling $5,128,107, $5,074,192 and $243,225, respectively; and from equity
      financings, the





5





exercise
      of warrants and the exercise of stock options in 2006 totaling $8,730,587,
      $459,795 and $286,125, respectively.





The
      Company’s exploration focus has shifted from the Pinson project to the Jarbidge
      and other Nevada projects as a result of Pinson Mining Company’s (PMC) election
      in April 2006 to back-in on the Pinson project.  As a requirement of
      the back-in PMC must spend US$30 million before April 2009 if it is to earn
      back
      a 40% in the project from the Company, thereby increasing PMC’s project interest
      from 30% to 70%.





The
      Company has sufficient working capital for property maintenance requirements
      and
      administrative overhead for the next 12 months.





**B.**
            **Business
                Overview**





Atna
      Resources Ltd. commenced operations in 1984.  The Company is a mineral
      resource exploration company engaged in the business of acquiring and exploring
      resource properties with a particular focus on precious metal
      deposits.  Since 2002, the Company has focused its efforts on gold
      exploration and development in the State of Nevada.  The Company has
      property interests in Arizona, British Columbia, Yukon Territory, and Chile.
      The
      Company's properties are at various stages of exploration and
      development.  The Company’s projects have no reserves and no cash
      flow.  The Company's properties are not subject to any mortgages and
      management is not aware of any encumbrances on any property.





**C.**
            **Organizational
                Structure**





The
      Company owns all of the issued and outstanding shares of the common stock of
      Atna Resources, Inc., U.S.A., a Nevada corporation.





**D.**
            **Property,
                Plant and Equipment**





**Jarbidge,
      Nevada, USA**





*Terms
                of Acquisition*





By
      an
      agreement dated December 5, 2003, the Company obtained an option to acquire
      a
      100% interest in 273 Jarbridge unpatented lode claims and 4 patented lode claims
      located in Elko County, Nevada, by paying a total of US$600,000 (US$10,000
      paid)
      to the Optionor by December 5, 2009, and incurring aggregate exploration
      expenditures of US$300,000 by December 5, 2006.  The property is
      subject to a NSR ranging from 1.5-2.5%.  During the year ended
      December 31, 2006 the Company staked nine mineral claims adjacent to this
      property and within the area of interest of the agreement.  The claims
      are registered in the name of the Company and are subject to the terms of the
      agreement..





By
      an
      agreement dated December 15, 2004, the Company obtained an option to acquire
      100% interest in 10 unpatented lode mining claims situated in the Jarbidge
      Mining District, Elko County, Nevada, referred to as the Pavlak Group
      Option.  The agreement calls for an initial payment of US$2,100 upon
      execution (paid) and graduated annual payments from $4,200 on the first
      anniversary to US$9,000 on the forth and future anniversary
      dates.  The Company may purchase the property and all retained royalty
      interest at anytime for US$375,000.  All annual payments apply to the
      purchase price as do any production royalty payment due under the
      agreement.  The property is subject to a 2.5% NSR production royalty,
      until such time as the option to purchase is exercised by the
      Company.





By
      an
      agreement dated February 4, 2005, the Company leased 8 patented lode mining
      claims located in the Jarbidge Mining District, Elko County, Nevada, from
      Century Gold LLC.  The agreement calls for an initial payment to the
      property owner of US$5,000 (paid) and annual lease payments ranging from
      US$5,000 on the first anniversary up to US$25,000 per year on the eighth
      anniversary and thereafter.  The mining lease calls for a 5% NSR
      royalty and the Company has the option of purchasing one-half (2.5%NSR) of
      the
      retained production royalty within the first ten years of the agreement for
      US$2,000,000.





By
      an
      agreement dated February 4, 2005, the Company obtained an option to acquire
      100%
      interest in 6 unpatented lode mining claims located in the Jarbidge Mining
      District, Elko County, Nevada, from the Big Ledge
      Group.  The





6





agreement
      calls for gradually escalating annual payments ranging from an initial payment
      due on execution of US$1,500 (paid) to US$6,000 on the forth anniversary date
      and thereafter.  The Company may purchase 100% interest in the
      property for $500,000 and all annual payments are considered advanced royalty
      payments and recoupable from any actual production royalty payments due to
      the
      owner.  The property is subject to a variable royalty of 1.5% NSR on
      gold sales below $350 per ounce gold up to a maximum of 3.0% NSR when gold
      is
      sold at greater than $400 per ounce.





*Location,
                Size and Access*





The
      Jarbidge property is located in northeast Nevada within Elko County,
      approximately 160 road kilometres north-northeast of the town of Elko,
      Nevada.  Access is provided by state and county maintained paved and
      gravel roads to the small town of Jarbidge located in the centre of the mining
      district.










The
      project includes 12 patented lode, mining claims and 289 unpatented lode claims
      encompassing an area of approximately 1,271.0 hectares (3,140.4
      acres).  This includes 1,200.1 hectares (2965.2 acres) of unpatented
      lode mining claims and 70.9 hectares (175.2 acres) of patented lode mining
      claim





*History
                and Previous Exploration*





The
      Jarbidge District was discovered in 1909.  Total historic gold
      production, between 1910 and 1932, is estimated to be over 400,000 ounces of
      gold and 1.2 million ounces of silver.  Incomplete production records
      indicate the district was the source of approximately 818,181 tonnes of ore
      (900,000 short tons) with a recovered grade of 16.7g/t gold (0.486 ounce
      gold/ton) and 49g/t silver (1.43 ounces silver/ton).





Since
      the
      1930s, little attention has been given to the district other than reconnaissance
      exploration efforts for large, low-grade bulk minable gold-silver
      deposits.  The district is a classic example of a bonanza-grade,
      low-sulfidation, epithermal, volcanic hosted vein system comparable to the
      Tertiary-age volcanic-hosted gold-silver Midas District in





7





Nevada.





Drilling,
      in the district was completed by Freeport McMoran Exploration in the early
      1980’s directed towards the discovery of a bulk minable disseminated gold
      deposit.  Freeport abandoned its efforts in 1982 after drilling six
      holes (1,441 meters).  Freeport’s only significant intercept was 2.2
      g/t gold and 22.7 g/t silver over a length of 10.7 meters.  Following
      Freeport’s efforts, Moly Corp. entered the district and conducted an evaluation
      for bulk minable gold deposits.  Moly Corp. drilled 13 holes, totaling
      1,414 meters in 1984.  The only significant interval intercepted by
      Moly Corp was 1.5 meters grading approximately 0.180 ppm gold.





Mr.
      John
      D. Bernt entered the district in the 1980’s and began prospecting and acquiring
      land and developed a number of quartz-chalcedony vein targets with supporting
      assay data from surface sampling.  The Company’s rock sampling
      includes detected gold and silver mineralized, banded quartz-chalcedony vein
      in
      outcrop, float and dump sampling.  Reconnaissance sampling of vein
      exposures in the district was performed by the Company’s field crews in
      2003.  The Company’s work program for 2004 included detailed surface
      soil and rock sampling and geologic and structural mapping of the district
      to
      determine the character of the historic ore shoots and the potential for
      undiscovered on-strike extensions.  A permit application was submitted
      to the United States Forest Service to allow the Company to drill at up to
      36
      drill sites for a total of 72 drill holes totalling over 15,000 meters of
      drilling.  The permits were designed to allow significant follow-up to
      an initial phase of drill testing.





During
      2005, the Company conducted permitting related activities on the
      property.  This work included the finalization of the detailed
      archaeological survey required under US Forest Service (USFS)
      regulations.  Subsequent to the close of business in 2005, this survey
      was submitted to the USFS and the State Historical Preservation Office
      (SHPO).  SHPO must approve the work contained within the permit after
      a 30-day notice period, unless the work includes the destruction of significant
      archaeological sites.





Drill
      permits were granted late in field season in 2006 resulting in the completion
      of
      only a small portion of the planned drilling program before terminating due
      to
      winter weather.  A total of 2,260 feet in five holes were completed
      out of a planned 10,500 foot program. The drilling intersected numerous
      silicified structures and veins but returned no significant gold
      values.  Pervasive, intense argillic alteration intersected in the
      Longhike area suggests potential for precious metals to occur several hundred
      feet below.





The
      first
      five drill holes ranged in depth from 190 feet to 625 feet.  Three
      target areas were tested with one drill setup at each target.  All
      drill holes intersected classic epithermal textured veins within strong fault
      structures showing potential for the system to host gold and silver
      mineralization similar to that historically mined in the
      district.  Permits are in place to complete drilling at previously
      laid out targets and to follow-up on the structures intersected during the
      fourth quarter.





Detailed
      structural mapping and vein sampling conducted during the season outlined new
      drill targets and yielded significant geochemical results which will require
      follow-up drilling in the spring. Two hundred and sixty five rock chip samples
      from various areas on the property were collected during the
      season.  Forty two samples were highly anomalous, with assays equal to
      or greater than 0.03 oz/t gold (1 g/t Au), including twelve samples greater
      than
      0.25 oz/ton gold (8.6 g/t Au), and eight samples greater than 0.5 oz/ton gold
      (17.1 g/t Au).  Several of the existing target areas were extended
      along strike of the veins and new prospective targets were
      identified.





*Proposed
                Exploration Work*





The
      2006
      exploration program outlined new drill targets and yielded significant
      geochemical results which will require follow-up drilling in the spring of
      2007.  Exploration at the property during 2007 will focus on drilling
      the targets identified in the last several years of exploration on currently
      permitted drill sites.  Additionally, an environmental assessment will
      be completed as part of the second phase of permitting to allow drill access
      to
      new target areas not yet covered by the existing U.S. Forest Service
      permits.





*Underground
                and Surface Plant and
                Equipment*





There
      is
      no underground or surface, plant or equipment of commercial value on the
      Jarbidge property, nor is there any known commercial ore body.





8





***Pinson
      Mine Property, Humboldt County, Nevada***.





*Terms
      of Acquisition*





The
      Company entered into in an agreement effective August 12, 2004, with Pinson
      Mining Company (“PMC”) (a Nevada general partnership comprised of Homestake
      Mining Company of California, a California corporation, and Barrick Holding
      Co.,
      a California corporation), whereby the Company may acquire up to 100% interest
      in the Pinson Mine Property (the “Earn-in Agreement”).  The Company
      may acquire an initial 70% interest in the Pinson Property by spending US$12
      million over 4 years with a commitment to spend US$1.5 million in the first
      year. Upon the Company’s vesting with a 70% interest in the project and
      delivering a preliminary feasibility study, Pinson may elect to: (i) back-in
      to
      a 70% interest by spending an additional US$30 million on the project over
      a
      3-year period; (ii) form a 70:30 joint venture, with the Company holding a
      70%
      interest as Operator and each party contributing its share of further
      expenditures; (iii) offer to sell its remaining 30% interest to the Company
      for
      US$15 million, thus bringing the Company’s interest in the project to
      100%.





In
      January 2006, the Company vested its 70% earn-in on the Pinson project by
      completing expenditures of US$12 million and delivering an economic evaluation
      of the property to PMC.  The Company’s earn-in triggered an election
      by PMC to back-in to the project by spending an additional US$30 million to
      advance exploration and development of the project over a 3-year
      period.  PMC notified the company that it would elect to back into the
      property on April 6th,
      2006.  Completion of qualifying expenditures by PMC, on or before
      April 5th, 2009
      would result in the formation of a 70:30 joint venture with PMC holding a 70%
      interest.  If PMC fails to make US$30 million of qualifying
      expenditures within 3 years the Company will retain a 70% interest in the
      project and again become operator.





*Location,
      Size, and Access.*





The
      Pinson Mine property is located in Humboldt County, Nevada about 30 miles east
      of Winnemucca.  It is accessible by an all weather road leading about
      10 miles north of the Golconda Exit from Interstate Highway 80 within the
      Getchell Gold Belt in north-central Nevada.





9














The
      Pinson property is made up of a number of property parcels that are either
      wholly owned by Pinson Mining Company or under lease/option by Pinson Mining
      Company and therefore subject to the Earn-in Agreement.  The property
      includes 3,800 acres of patented fee lands wholly owned by Pinson Mining
      Company, 360 acres of leased patented fee lands, 8,496 acres of federal
      unpatented lode mining claims wholly owned by Pinson Mining Company, 1,362
      acres
      of leased federal unpatented lode claims.  A total of 553 unpatented
      federal lode mining claims (both owned and leased by Pinson Mining Company)
      are
      included in the property position.  Total acreage controlled by Pinson
      Mining Company and subject to the Earn-in Agreement is 14,018
      acres.





The
      Pinson property package is made up of 38 property parcels and nearly all are
      burdened by one or more retained mineral production royalties.  Each
      parcel’s royalty agreement (or agreements) is structured slightly different than
      others and therefore the royalty for any given parcel is likely to be slightly
      different than an adjacent parcel.  The following is a summary of the
      royalty burden on all parcels as understood by the Company as of the date hereof
      based on information provided to the Company by Pinson Mining
      Company:








**Parcel
                Location**
            **Property
                Description**
            **Acreage**
            **Royalty
                Description**Township
                38 North, Range 41 EastSection
                36
            18-lode
                claims-PMC
            360
            5.0%
                Net Smelter Return (“NSR”); and $0.50 per ton of ore
                produced.Township
                38 North, Range 42 EastSection
                16
            12-lode
                claims
            264
            5.5%
                NSR3-lode
                claims
            56
            5.0%
                NSR





10








Section
                20
            28-lode
                claims
            460
            No
                Royalty Burden5-lode
                claims
            102
            4
                -5% NSR on precious metals, 2.5% NSR on base metals, & $1.00 to
                $1.50/ton for barite or barium based on specific gravity of
                ore.4-lode
                claims
            78
            5.5%
                NSRSection
                21
            640
                acres of private land
            640
            5.5%
                NSRSection
                22
            18-lode
                claims
            360
            5.0%
                NSRSection
                23
            640
                acres of private land
            640
            7.5%
                NSR.Section
                24
            36-lode
                claims
            640
            2.5%
                NSR
              1.0%
                NSR capped at $135,000Section
                25
            480
                acres of private land
            480
            7.5%
                NSRSection
                26
            36-lode
                claims
            640
            2.5%
                NSR)
              1.0%
                NSR capped at $135,000Section
                27
            640
                acres of private land
            640
            7.5%
                NSR.Section
                28
              (see
                footnote 1)
            23-lode
                claims
            400
            5.0%
                NSR7-lode
                claims
            120
            5.5%
                NSR120
                acres, private land
            50
                (net)
            2.0%
                NSR70
                (net)
            5.0%
                NSRSection
                29
              (see
                footnote 1)
            640
                acres of private land
            640
            5.5%
                NSRSection
                30
            32-lode
                claims- PMC
            545
            No
                Royalty burden5-lode
                claims-PMC
            95
            5.0%
                NSRSection
                32
              (see
                footnote 1)
            18-lode
                claims
            370
            2.0%
                NSR20-lode
                claims
            270
            5.0%
                NSRSection
                33
              (see
                footnote 1)
            640
                acres of private land
            640
            7.5%
                NSRSection
                34
            36-lode
                claims
            640
            2.5%
                NSR
              1.0%
                NSR capped at $135,000Section
                36
            18-lode
                claims
            320
            2.5%
                NSR
              1.0%
                NSR-capped at $135,000Township
                38 North, Range 43 EastSection
                30
            36-lode
                claims
            640
            2.5%
                NSR
              1.0%
                NSR-capped at $135,000Township
                37 North, Range 41 EastSection
                12
            25-lode
                claims
            450
            5.0%
                NSR
              $0.50
                per ton of ore producedSection
                13
            40-acre
                fee land
            40
            5.0%
                - 5.5% NSR320-acre
                fee land
            320
            5.0%
                - 5.5% NSRSection
                14
            24-lode
                claims
            438
            5.0%
                NSR and
              $0.50
                per ton of ore producedTownship
                37 North, Range 42 EastSection
                4
            10-lode
                claims
            200
            No
                Royalty burden20-lode
                claims
            320
            5.0%
                NSR8-lode
                claims
            120
            5.0%
                NSRSection
                6
            36-lode
                claims
            640
            5.0%
                NSRSection
                8
            30-lode
                claims
            520
            5.0%
                NSR6-lode
                claims
            120
            No
                RoyaltySection
                16
            3-lode
                claims
            50
            5.0%
                NSR





11








Section
                18
            18-lode
                claims
            360
            5.0%
                NSR and
              $0.50
                per ton of ore produced18-lode
                claims
            280
            2.5%
                NSR
              1.0%
                NSR - capped at $135,000**Total
                Acreage**
            **14,018**


(1)  The
      resource announced in February 2005 by Atna Resources Ltd. for the Pinson
      project and supported by the Pinson Gold Property Technical Report (filed in
      March 2005 with SEDAR) is located within four (4) square miles highlighted
      in
      the land/royalty table above (Sections 28, 29, 32, and 33 of Township 38 North,
      Range 42 East).  Due to the relatively high-level of uncertainty for
      resource-level tonnage and grade calculations, particularly when the majority
      of
      the resource is categorized as “Inferred”, Atna has not yet broken down the
      resource into individual property parcels.  Ultimately, should a
      minable reserve be established, Atna will determine exactly what resource blocks
      are located on which parcels such that an accurate mine plan, royalty payment
      burden, and cash flow model for the project may be established as part of a
      full
      feasibility study on the project’s mineral resources and or reserves (if
      reserves are established in the future).





*History
      and Previous Exploration*





The
      Pinson Mine property is located at the north end of the Battle Mountain –
Eureka/Cortez trend where it intersects the Getchell trend.  The
      Pinson Mine produced over 987,000 ounces of gold from relatively low-grade
      oxidized ore by open pit mining methods, prior to 2000.  Gold
      production came from decalcified, locally silicified and/or argillized,
      fine-grained, limy sedimentary rocks of the Cambrian aged, Comus
      Formation.  Mineralization is focused along and adjacent to the
      Getchell Fault zone.





Between
      1997 and 2003, Pinson and its predecessors drilled over 200 diamond and rotary
      drill holes (>70,000 meters) on the property exploring for extensions of
      mineralization exposed at the bottom of the mine’s several open
      pits.  This work resulted in a number of encouraging gold intercepts
      in several target areas.





*Exploration
      Work*





The
      Company is exploring potential for the underground development of several known
      zones of gold mineralization that dip below the Pinson open pit mines, where
      production ceased in 2000.  Samples of mineralized intersections from
      approximately 65 holes drilled over the past 20 years were reassayed to enable
      integrating assay data into a systematic database with appropriate standards
      and
      quality control.





A
      drill
      program began at the end of August, 2004, to define a resource and to acquire
      geotechnical data in two target areas from near surface to a depth of 1,500
–
2,000 feet.  Drilling focused more intensively on the relatively
      shallow portions of the CX zone, which extends from the base of the CX pit
      and
      on the Range Front zone, which dips below both the CX and the Mag
      pits.  A total of 30 holes, including about 20,000 feet of reverse
      circulation pre-collars and 10,000 feet of core tails were completed by the
      end
      of February, 2005.





A
      resource estimate was carried out in March 2006 resulting in 1,692,300 tons
      of
      measured plus indicated mineral resources  containing approximately
      712,000 ounces gold at a 0.20 opt cut-off.  An additional 3,097,000
      tons of an inferred mineral resource is estimated to contain 1,052,980 ounces
      gold also at a 0.20 opt cut-off.  The resource is summarized at 0.20
      and 0.25 oz/ton Au cut-off grades in the following tables:





**Range
      Front and CX Zones, Resource Estimate(1)**





**Cautionary
      Note to U.S. Investors concerning estimates of Measured and Indicated Resources.
      This section uses the terms “measured” and “indicated resources.” We advise U.S.
      investors that while those terms are recognized and required by Canadian
      regulations, the U.S. Securities and Exchange Commission does not recognize
      them. U.S. investors are cautioned not to assume that any part or all of mineral
      resources in these categories will ever be converted into
      reserves.**








**0.20
                Au opt cut-off(2)**
            0.25
                Au opt cut-off




**Tons**
              **(x
                1,000)**
            **Grade**
              **Au
                opt**
            **Contained**
              **oz
                Au**
            Tons
              (x
                1,000)
            Grade
              Au
                opt
            Contained
              oz
                AuMeasured
            **696.4**
            **0.413**
            **287,613**
            506.0
            0..483
            244,398Indicated
            **995.9**
            **0.427**
            **425,249**
            739.7
            0..497
            367,631Measured+Indicated
            **1,692.3**
            **0.421**
            **712,862**
            1,245.7
            0.491
            612,029


(1)  Mineral
      resources which are not mineral reserves do not have demonstrated economic
      viability.


(2)  Base
      case.





**Cautionary
      Note to U.S. Investors concerning estimates of Inferred Resources. This section
      uses the term “inferred resources.” We advise U.S. investors that while this
      term is recognized and required by Canadian regulations, the U.S. Securities
      and
      Exchange Commission does not recognize it. “Inferred resources” have a great
      amount of uncertainty as to their existence, and great uncertainty as to their
      economic and legal feasibility. It cannot be assumed that all or any part of
      an
      Inferred Mineral Resource will ever be upgraded to a higher category. Under
      Canadian rules, estimates of Inferred Mineral Resources may not form the basis
      of feasibility or pre-feasibility studies, except in rare cases. U.S. investors
      are cautioned not to assume that part or all of an inferred resource exists,
      or
      is economically or legally minable.**





**0.20
                Au opt cut-off(2)**
            0.25
                Au opt cut-off**Tons**
              **(x
                1,000)**
            **Grade**
              **Au
                opt**
            **Contained**
              **oz
                Au**
            Tons
              (x
                1,000)
            Grade
              Au
                opt
            Contained
              oz
                AuInferred
            **3,097.0**
            **0.340**
            **1,052,980**
            2,435.0
            0.371
            903,385


(1)  Mineral
      resources which are not mineral reserves and do not have demonstrated economic
      viability.


(2)  Base
      case.





While
      the
      economic viability of all mineral resource estimates, which are not classified
      as minable reserves, cannot be assured, the Company has based its resource
      analysis on operating mines in Northern Nevada, with similar ore type,
      exploitation method, metallurgical and milling characteristics.  The
      key assumptions are as follows:





1)
      Underground mining utilizing underhand, drift-and-fill exploitation methods.
      Cost estimated at US$50/ton of ore mined (inclusive of backfill
      costs).  These costs are based upon the Company’s initial negotiations
      of contract rates for mining and development work with Small Mine Development
      (“SMD”).


2)
      Access
      to the mineralized zones will be via ramp/decline beginning from the bottom
      of
      the existing CX-pit floor.


3)
      The
      daily production rate from the combined Range Front and CX zones is estimated
      to
      be 700 tons per day.


4)
      Carlin-type, refractory gold ore (similar to Getchell, Meikle, Jerritt Canyon,
      Deep Star mines), with recoveries estimated to be 93%.


5)
      Processed by toll milling at third-party mill (Newmont’s Twin Creeks, Gold
      Quarry, or Lone Tree mills; Barrick’s Goldstrike complex; and/or Queenstake’s
      Jerritt Canyon mill).  Toll milling costs are estimated to be $25/ton
      milled, including transportation.  This is based on initial
      discussions between Atna and the third-party operators and assumes that 100%
      of
      Pinson ore will require either autoclave or roaster processing.


6)
      Site
      indirect and administrative costs (General and Administrative costs) are
      estimated to be approximately $7/ton.


7)
      Projected gold price of $450/oz.





Following
      the Company’s earn-in in January 2007 the property was put on care and
      maintenance by PMC.





*Surface
      Plant and Equipment*





A
      variety
      of equipment remains on the property including a building complex which includes
      offices, work area and dry, water pipelines, and an electrical sub
      station.  The Company completed, prior to vesting in its 70% interest,
      a small office/dry/warehouse building to support further work at the
      property.








***Triple
                Junction/Dixie Fork, Nevada,
                USA***





*Terms
                of Acquisition*




The
      Company owns a 100% interest in the property, subject to a 3% NSR (uncapped)
      and
      an obligation to pay the vendor 5% of any cash proceeds received by the Company,
      to a maximum of US$500,000, in the event that the Company transfers any part
      of
      its interest in the property to any arm’s length third party.





Through
      an agreement dated September 7, 2004, the Company optioned the properties to
      Sage Gold Inc. whereby Sage may earn a 55% interest in the properties by
      drilling a minimum of 10,000 feet by November 30, 2007, and may increase its
      interest to 70% by completing a feasibility study on the
      property.  The Company retains the right to participate with either a
      45 or 30 percent interest, depending on Sage’s election.





*Location,
                Size and Access*





The
      Triple Junction/Dixie Fork property is located at the south end of the Carlin
      Trend 50 km SW of Elko in north central Nevada, USA and consists of 31 lode
      claims for approximately 251 hectares (620 acres).  The Triple
      Junction property is located approximately 6 km south east of Dixie Fork and
      is
      comprised of 36 lode claims for approximately 259 hectares (640
      acres).  Access to both properties is by 4-wheel drive roads off
      secondary highways.










*History
                and Previous Exploration*





**Dixie
      Fork**





There
      is
      no record of exploration or mining at Dixie Fork, prior to acquisition by the
      Company.





The
      Dixie
      Fork property is located in the Pinon Range, 19 km (12 miles) SSW of the Newmont
      Mining Company’s Rain/Tess/Saddle Mine complex, in Elko County,
      Nevada.  The property is situated along a major, WNW-trending, Rain
      Fault-parallel high-angle graben fault structure.  This structure
      separates younger, down-dropped Upper Plate black shales in the interior of
      the
      graben from Lower Plate sandy strata of the Mississippian Chainman
      Formation.  Felsic dikes cut the Chainman strata near the bounding
      graben faults.  Mineralization is present at Dixie Fork in
      the





14





form
      of
      argillically altered and pyritized wallrocks, local barite, and anomalous
      pathfinder element geochemistry.  The main gold target is the contact
      of Mississippian Webb Formation with underlying Devonian Devil’s Gate Limestone,
      adjacent to the graben fault structures.





**Triple
                Junction**





Westmont
      Gold staked claims over the Triple Junction area in the late 1980’s, and made a
      generalized outcrop geologic map of the region in 1988.  They first
      drilled 12 shallow rotary exploration holes into area targets in 1990-1991,
      and
      8 holes in 1992.  Westmont’s drilling intercepted 50 feet containing
      0.045 ounce per ton gold, in hole JW-90-08.  Cameco acquired the
      property in the late 1990’s and drilled several holes.  No subsequent
      exploration is known at Triple Junction, prior to its acquisition by the
      Company.





The
      Triple Junction property is located in the Pinon Range, 22.5 km (14 miles)
      SSW
      of the Newmont Mining Company’s Rain/Tess/Saddle Mine complex, in Elko County,
      Nevada.  Triple Junction is situated along a major, NNW trending,
      high-angle graben fault structure.  This structure separates younger,
      down-dropped conglomerates of the Lower Plate Diamond Peak Formation on the
      west
      side of the structure from uplifted, conglomerate-bearing, silty to sandy strata
      of the Mississippian Chainman-Diamond Peak Undivided complex to the
      east.  Felsic dikes/plugs and barite veins cut the Chainman strata
      near the bounding graben faults.  Mineralization is present at Triple
      Junction in the form of strong, argillically-altered wallrocks with local
      pyritization and barite.  Surface rock sampling returned gold assay
      values of 5.7ppm over a width of 6 meters.  Anomalous pathfinder
      element geochemistry (mercury, arsenic, and antimony) is noted in rocks and
      soils.  The main gold target is the contact of Mississippian Webb
      Formation with the underlying Devonian Devil’s Gate Limestone, adjacent to the
      NNW-trending control fault structure.





Mapping
      and geochemical sampling in 2003 further defined the stratigraphy and alteration
      zones.  A gravity survey delineated areas of relatively shallow
      basement (Devil’s Gate) stratigraphy and fault structures.  No work
      was carried out in 2004 by the Company or 2005 by Sage Reources, the Company’s
      venture partner on the property.





No
      significant work was conducted on the property during 2006.





***Beowawe,
                Nevada, USA***





*Terms
                of Acquisition*





In
      an
      agreement dated November 7, 2002, the Company obtained an option from Carl
      Pescio to acquire a 100% interest in 95 Beowawe lode claims, subject to a 3%
      royalty on gold revenue, less US$15 per realized ounce.  To exercise
      this option, the Company has to pay to the optionor an aggregate of US$80,000
      (US$40,000 paid) in cash, allot and issue to the optionor up to 150,000 (100,000
      shares issued) common shares in three separate tranches of 50,000 shares each,
      and carry out a combined minimum 20,000 feet (7,150 feet drilled) of exploratory
      drilling on the Beowawe and/or Golden Cloud properties prior to November 6,
      2005. Following the exercise of the option, the Company will have to make annual
      advance royalty payments of US$50,000 and US$75,000, respectively, for the
      first
      two years and US$100,000 each subsequent year until the commencement of
      commercial production.  A finder’s fee is payable to a third party,
      equal to 5% of the first US$500,000 expenditures and payments made by the
      Company during the first 2 years of the agreement, and 3% of all expenditures
      and payments that are in excess of US$500,000 during the first two years of
      the
      agreement.  The finder’s fee is capped at US$500,000.  In an
      amending agreement dated August 20, 2005, for a consideration of US$50,000
      paid
      to the optionor, the exploratory drilling commitment has been reduced to an
      additional 6,000 feet of drilling (over and above the 7,150 feet already
      drilled) before November 6, 2006.  All other terms and conditions of
      the agreement remain unchanged.





In
      an
      agreement dated March 26, 2003, the Company obtained an option to acquire a
      100%
      interest on 40 acres of fee land adjacent to the main Beowawe claim group,
      subject to a 3% royalty on gold revenue, which can be purchased for US$250,000
      or 700 ounces of gold, whichever is greater, per percentage point. To exercise
      this option, the Company has to pay the optionor an aggregate of US$42,500
      (US$5,000 paid) in cash on or before December 1, 2006.  Thereafter,
      the Company will pay a minimum royalty of US$5,000 on every December 1st
      anniversary.





15





In
      a
      separate agreement dated June 5, 2003, the Company obtained an exclusive lease
      and option to acquire a 100% interest in 40 acres of fee land adjacent to the
      main Beowawe claim group, subject to a 1% NSR royalty.  The lease
      agreement requires the Company to pay advance royalties of US$500 (paid) on
      signing the agreement, US$1,000 (paid) prior to June 2004 and US$2,000 each
      subsequent year until the commencement of commercial production.  The
      Company has the right to buy a 100% interest in the property, including surface
      and mineral rights, at any time for US$250,000.





The
      Company entered into an agreement with Apolo Gold & Energy Inc. (“Apolo”) in
      September, 2005.  Apolo has the option to acquire a 55% interest in
      the Beowawe property by issuing a 100,000 restricted shares (received) to the
      Company upon execution of the Joint Venture Agreement and by issuing an
      additional 50,000 restricted shares or $50,000 worth of restricted shares,
      whichever, is greater on the first anniversary of the agreement and by spending
      US$1,700,000 on exploration over a four-year period.  Upon completion
      of the work commitment, Apolo may increase its interest to 70% by completing
      a
      bankable feasibility study.  If the Company does not participate in
      project financing after tabling of the feasibility study, the Company will
      dilute to a 15% Net Profits Interest.





On
      February 16, 2007 the Company terminated the agreement with Apolo as a result
      of
      a default of its obligations under the Agreement.  Through the
      execution of a Quitclaim and Release, Apolo has relinquished any and all rights
      to the property in favor of the Company.





*Location,
                Size and Access*





The
      Beowawe property is located in Eureka and Lander Counties, Nevada, within the
      central part of the Northern Nevada Rift, 105 km SE of Winnemucca and consists
      of 100 unpatented lode claims and two patented, fee-land parcels for an
      approximate total area of 749 hectares (1,850 acres).











Access
      to
      the property is by all weather gravel roads off secondary Highway 306 that
      originates at Interstate 80.





16





*History
      and Previous Exploration*





At
      least
      50 geothermal test holes were drilled in the Beowawe area during the period
      1959
      to 1985.  The prime purpose of these holes was to identify geothermal
      energy resources at the Beowawe geothermal field. The geothermal exploration
      work culminated in the construction of an electrical generating plant in
      1985.  The plant currently produces 16 MW of electricity from a field
      with a total capacity of 200 MW.





During
      the period 1983 to 1996, the project area was explored for gold mineralization,
      with a total of 39 drill holes by Chevron, Bow Valley, WFD Limited, and North
      in
      the White Canyon area.  In 2000, Balaclava Mines Ltd. completed four
      holes on the property and in 2002 the property was staked by Carl
      Pescio.





The
      Beowawe project is located in the central part of the Northern Nevada Rift,
      near
      the Mule Canyon and Fire Creek deposits.  The property covers the
      intersection of the Northern Nevada Rift and the more locally prominent Malpais
      range-front fault zone, both of which are normal faults active since the
      Miocene.  The Malpais fault zone controls the location of the Beowawe
      geothermal field near the western margin of the project area.





Several
      partly eroded and/or buried hot-spring sinter deposits, closely associated
      with
      multiple zones of intense silicification and anomalous in gold and mercury,
      are
      exposed in the footwall of the Malpais Fault, east of the hot
      springs.  The east-west target trend is comprised of a combination of
      sinter, silicification, extensive geochemical anomalies (Au-Hg-As), and hot
      spring-type hydrothermal alteration along a seven-kilometer structural trend
      east of the active hot springs including the previously mined Red Devil mercury
      deposit.  Previous operators intersected wide sections of anomalous
      gold at shallow levels, including 0.502 ppm gold over 16.8 meters, and 0.130
      ppm
      gold over 106 meters.  Brecciated quartz-chalcedony veins, as wide as
      3.0 meters wide and trending ENE - WSW, are exposed at surface.  The
      Company will target ‘bonanza’ style mineralization within these veins at
      depth.





Work
      programs in 2003 included detailed mapping, sampling, and data
      compilation.  The Company conducted an induced polarization
      geophysical survey (IP), to evaluate areas of alluvial or post-mineral volcanic
      cover, identifying several bonanza-grade epithermal vein targets.





*Exploration
                Work*





In
      2004,
      a total of three holes were drilled to test the geothermal well gold anomalies
      and targets in the White Canyon area.  There was no encouragement
      warranting follow-up near the geothermal wells.  Geochemically
      anomalous mineralization and alteration were intersected at White
      Canyon.  No drilling was conducted during 2005 or in 2006. A drill
      program of 6,000 feet of reverse circulation rotary drilling is planned and
      will
      be completed prior to July 2007.





*Underground
      and Surface Plant and Equipment*





There
      is
      no underground or surface plant or equipment on the Beowawe property, nor is
      there any known commercial ore body.





***Clover,
                Nevada, USA***





Terms
                of Acquisition





In
      an
      agreement dated March 11, 2003, the Company obtained an option to acquire a
      100%
      interest in 22 claims on the Clover property, subject to a 3% NSR royalty,
      which
      can be purchased for US$1,000,000 per percentage point.  Terms of the
      agreement include cumulative total payments to the vendor of US$305,000
      (US$50,000 paid) over 7.5 years.  In addition, the Company agreed to
      retain the vendor as an independent consultant to perform services on the
      property at a daily rate of US$400 for at least 10 days per year during the
      first two years.  The Clover property is subject to a Finder’s
      Agreement dated February 10, 2003, amended April 22, 2003, whereby the Company
      agreed to pay a finder’s fee of $5,000 (paid) upon execution of the acquisition
      agreement, and US$10,000 (paid) and US$20,000, respectively, for the first
      two
      years after the agreement and US$30,000 on each subsequent anniversary until
      the
      commencement of commercial production.  The finder’s fee is capped at
      a maximum of US$500,000.





17





The
      Company entered into an agreement in June, 2005, with New Sleeper Gold
      Corporation (“New Sleeper”).  New Sleeper has the option to acquire a
      100% interest in the property, subject to a 3% NSR royalty, which can be
      purchased for US$1,000,000 per percentage point.  New Sleeper can
      acquire the property by making cumulative cash payments of US$305,000 (US$50,000
      paid) over 7.5 years.   Subsequent to the 2005 year end, the
      agreement was terminated.





The
      Company entered into an earn-in agreement in November, 2006 with Meridian
      Minerals Corp. (“Meridian”).  Meridian has the right to acquire a 51%
      interest in the property by making cumulative cash payments of US$635,000
      (US$95,000 paid) and cumulative exploration expenditures of US$3.3 million
      over
      a period of four year.  At such a time as the earn-in commitments have
      been made a Meridian (51%)/Atna (49%) joint venture will be
      formed.  After formation of the joint venture Meridian will have the
      right to increase its participation interest in the joint venture from 51%
      to
      70% by delivering a pre-feasibility study to the Company within 30 months of
      making the initial earn-in contribution.





*Location,
                Size and Access*





The
      Clover property is situated 68 km northeast of Winnemucca in Elko County,
      north-central Nevada, and consists of 110 unpatented lode claims covering
      approximately 809 hectares (2,000 acres).











Access
      is
      via all weather gravel roads off Nevada State Route 18 and accessed from
      Interstate 80 at the Golconda exit.  Driving time from Winnemucca is
      approximately 45 minutes.  A series of poorly maintained dirt roads
      provide access to most areas of the property.  The topography on the
      property is moderate, rising to 6,400 feet above sea level off the 5,000 feet
      above sea level pediment covered valley bottom.





*History
                and Previous Exploration*





Prior
      to
      1982, no record exists of historical exploration and/or development on the
      property, although scattered





18





prospecting
      pits and shallow shafts are seen within the claim area.  In 1982,
      Nassau Minerals had claims in the area and completed geological mapping, rock
      geochemical sampling, and drilled 8, shallow, reverse-circulation (RC) holes
      totaling 1,535 feet.  Amax Gold joint-ventured the property from
      Nassau in 1987 and during 1988 completed additional geological/geochemical
      surveys and drilled 16 RC holes totaling 6,835 feet.  Nassau joint
      ventured the property with Touchstone from 1989 to 1992 and completed 3 RC
      holes
      totaling 970 feet.  Nassau dropped the claims in 1993.





Gold
      Fields/Santa Fe held claims in the property area in 1994 and conducted extensive
      sampling and drilled 10 holes before dropping the property.  Echo Bay
      acquired the property in 1995 and completed geological mapping, rock and soil
      geochemical sampling, ground magnetic and IP geophysical surveys, and drilled
      24
      RC holes for 12,762 feet in 1996.  In 1997, Romarco Nevada Inc. joint
      ventured the property with Echo Bay, and in 1998 drilled 17 RC and diamond
      holes
      for 9,471.5 feet.





The
      Clover prospect is a low sulfidation epithermal, vein-hosted gold prospect,
      in a
      similar geologic setting to Newmont Mining’s Ken Snyder mine.





Clover
      is
      situated along the northern margin of the Midas trough, on the southwest flank
      of the Snowstorm Mountains.  The property is underlain by mid-Miocene
      aged, bi-modal volcanic rocks on the western margin of the Northern Nevada
      Rift.  These rocks are the stratigraphic equivalents to the units that
      host bonanza veins in the Midas district.  Altered rhyolitic
      volcaniclastic rocks exposed throughout the property contain anomalous gold
      (0.020-0.070 ppm).





Gold
      mineralization occurs within a north-northwest trending, structurally complex
      corridor named the Jake Creek trend.  Drilling by previous operators
      intersected mineralized and veined breccias and shear zones, with gold bearing
      intercepts including 9.7 meters grading 25.3 g/t gold, and 3m grading 10.0
      g/t
      gold. Additional drilling will be necessary to fully understand the significance
      of these mineralized drill hole intercepts.  Mineralization occurs
      within two zones that are largely open along strike and down-dip, associated
      with north-northwest striking reverse fault breccias, as well as sub-vertical
      structures.   Altered and mineralized float boulders have also
      been discovered on the property approximately two kilometers north-northwest
      of
      the drilling along the trend.





Following-up
      a regional airborne geophysical survey, Newmont Exploration conducted a ground
      CSAMT geophysical survey across an extension of the north-northwest trending
      structural zone hosting mineralization at the project.  The survey
      included three geophysical test lines oriented perpendicular to the trend of
      mineralized structures found in drill holes in the southern portion of the
      property.  Results of this survey indicate the possible presence of
      altered rocks along the fault zone with potential for additional zones of
      mineralization.  Newmont did not drill test the geophysical
      anomaly.





*Drilling
      by New Sleeper Gold*





During
      2005, New Sleeper Gold permitted drill access roads and completed three diamond
      drill holes totaling 2,733 feet.  The drilling was conducted near
      previous drilling at Clover Hill where previous results included significant
      gold intercepts.  No significant gold intercepts were cut in the New
      Sleeper drilling.





*2006
      Work program*





No
      exploration work was conducted on the property during 2006.  Meridian
      Gold is required to spend $300,000 on exploration prior to November 28, 2007
      to
      maintain its earn-in agreement in good standing.





*Underground
                and Surface Plant and
                Equipment*





There
      is
      no underground or surface plant or equipment on the Clover property, nor is
      there any known commercial ore body.





***Wolverine
                Properties, Watson Lake Mining District, Yukon
                Territory***





The
      Company sold its 39.4% interest in the Wolverine properties to its former joint
      venture partner, Yukon Zinc Corporation (“Yukon Zinc”) (previously named
      Expatriate Resources Ltd.) on May 31, 2004.  The Company





19





received
      $2,000,000 in cash payments, 10,000,000 common shares of Yukon Zinc, 5,000,000
      warrants exercisable for 2 years at a price of $0.32 per share, and a net
      smelter royalty on revenues from precious metals indexed to the price of
      silver.  The Company’s royalty is 4% at a price of US$5.00 per ounce
      of silver, increasing to 10% if the price of silver exceeds US$7.50 per
      ounce.  During 2005 and 2006, the Company exercised the 5,000,000
      warrants and sold an aggregate of 13,500,000 common shares of Yukon
      Zinc.





20

















***Marg
                Property, Yukon
                Territory***





*Terms
                of Acquisition*





The
      Company purchased a 66.7% interest in the Marg property for $250,000 in cash
      on
      January 20, 2000, with Cameco Corporation (“Cameco”) owning the remaining 33.3%
      interest.  During 2004, the Company purchased the remaining 33.3%
      interest in the property from Cameco for a payment of CDN$80,000, bringing
      the
      Company’s total interest to 100%.





On
      March
      1, 2005, the Company sold its 100% interest in the property to Yukon Gold
      Corporation Inc. (“Yukon Gold”) for cash payments totaling CDN$1,600,000 and
      400,000 common shares in Yukon Gold.  The Company received an initial
      payment of $150,000 and 133,333 common shares in Yukon
      Gold.  Subsequent payments are scheduled as follows: $50,000 cash and
      133,333 common shares on or before December 12, 2005 (cash and shares received);
      $100,000 cash and an additional 133,334 common shares on or before December
      12,
      2006; $100,000 on or before December 12, 2007; and $200,000 on or before
      December 12, 2008, payable as a combination of cash or common
      shares.  Upon the commencement of commercial production, Yukon Gold
      shall pay the Company an additional $1,000,000 in a combination of cash and
      common shares.





***Other
                Properties***





The
      Company owns some other properties in the British Columbia, Yukon Territory,
      Nevada and Chile that are at an





21





early
      stage of exploration.  The Company also conducts research into areas
      believed to have favourable geology and carries out reconnaissance exploration
      in target areas where the potential for making significant discoveries is
      high.








**ITEM
                5.**
            **OPERATING
                AND FINANCIAL REVIEW AND
                PROSPECTS**





The
      following discussion of the financial condition, changes in financial condition,
      and results of operations, of the Company for each of the years in the
      three-year period ended December 31, 2006, should be read in conjunction with
      the financial statements of the Company included in Item 17 - Financial
      Statements.





The
      Company's financial statements are presented in Canadian dollars and have been
      prepared in accordance with Canadian generally accepted accounting principles
      (“GAAP”).  Material differences between Canadian and U.S. GAAP, as
      applicable to the Company, are set forth in Note 13 to the financial statements
      of the Company included in Item 17 - Financial Statements.





**A.**
            **Operating
                Results**





The
      Company has financed its operations principally through the sale of its equity
      securities.  As the Company does not have any producing mineral
      properties, its only revenue source is interest income earned from amounts
      on
      deposit.  Interest income earned is dependent on the amount of funds
      available for deposit and changes in the interest rates.  Unless the
      Company is able to acquire one or more advanced-stage properties with the
      potential to generate near term profit and cash flow, or is able to obtain
      additional funds through the sale of its equity securities, the amount of
      interest income earned is expected to decrease as the Company continues to
      expend funds exploring its existing mineral properties.





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





During
      the year, the Company incurred an operating loss of $742,509 (2005 - $1,203,836;
      2004 - $4,522,611) resulting in a basic and diluted loss per share of $0.01
      (2005 - $0.03; 2004 - $0.15).  The operating loss was comprised of
      general and administrative expenses of $2,642,354 (2005 - $1,537,754; 2004
      -
      $1,097,019) and other income and expenses of $742,509 (2005 - $1,203,836; 2004
      -
      $4,522,611).  The increase in general and administrative expenses was
      primarily attributed to the following items: (i) an increase in stock based
      compensation (a non-cash item) to $1,018,572 (2005 - $146,866; 2004 - $94,770)
      as a result of the number of stock options vested during the year and as a
      result of the recorded fair market value of the agents’ warrants issued in
      regards to the special warrant brokered private placement completed in February
      2006; (ii) an increase in wages and benefits to $435,490 (2005 - $232,593;
      2004
      - $202,546) as a result of hiring an additional full-time employee, an increase
      in salaries, the granting of bonuses to management and employees and a change
      in
      the allocations in reporting salaries and wages from the previous period; (iii)
      an increase in exploration and business development to $249,904 (2005 - $84,503;
      2004 - $208,268) as a result of the Company’s ongoing investigation of merger
      and acquisition opportunities; (iv) an increase in amortization (a non-cash
      item) to $119,534 (2005 - $26,343; 2004 - $7,929) the majority of which was
      for
      the amortization of the building on the Pinson property; and (v) an increase
      in
      insurance costs to $49,741 (2005 - $18,109; 2004 – 1,956) as a result of
      increasing the limits of liability on directors’ and officers’ liability and an
      increase in the cost of general liability insurance.





During
      the year, the Company incurred other expenses and income comprised primarily
      of
      the following: (i) an increase in the gain on sales of marketable securities
      to
      $1,684,206 (2005 - $411,877; 2004 - $45,858) as a result of the gain on sale
      of
      Yukon Zinc Corp., Pacifica Resources Corp. and Silver Quest Resources shares;
      (ii) an increase in mineral property transactions to $253,168 (2005 – Nil; 2004
– Nil) as the result of shifting proceeds received for the Marg property to the
      income statement, which resulted in a net decrease in resource property
      write-downs of $122,357 (2005 - $315,809; 2004 - $1,881,155); and (iii) an
      increase of $185,000 (2005 – Nil; 2004 – 300,000) relating to the sharing of
      revenue from the sale of the Wolverine project.





The
      Company completed a special warrant private placement financing in the amount
      of
      $8,730,587 (2005 – $5,128,107; 2004 - $3,648,758) by converting 7,450,000
      special warrants to 7,450,000 common shares at a price of $1.35 per special
      warrant; received aggregate proceeds of $459,795 (2005 - $5,074,192; 2004 -
      $458,460) from the exercise of share purchase warrants; and received aggregate
      proceeds of $286,125 (2005 - $243,225; 2004 -





22





$109,500)
      from the exercise of stock options.





The
      Company received investment and miscellaneous income of $543,053 (2005 -
      $386,406; 2004 - $119,315) as a result of having a greater amount of funds
      on
      deposit and through the investment of a certain portion of the funds in longer
      term financial instrument





The
      Company incurred exploration expenditures of $3,659,090 (2005 - $12,126,554;
      2004 - $3,073,956).  The costs were attributed to exploration
      expenditures of $2,578,256 with cost recoveries of ($999,640) on the Pinson
      property; exploration expenditures of $753,537 on the Jarbidge property;
      exploration expenditures of $131,462 with cost recoveries of ($351,635) on
      the
      Beowawe property; exploration expenditures of $28,047 with cost recoveries
      of
      ($67,866) on the Clover property; exploration expenditures of $167,792,
      acquisition costs of $12,647, cost recoveries of ($10,487) and receipt of option
      payments of ($256,171) on other properties located in the USA, Canada and Chile;
      and an aggregate of $122,357 for the write-down of the Sno property, Nevada,
      White Bull property, BC, and the Ty, Tree and Marg properties,
      Yukon.





*Year
      Ended December 31, 2005 Compared to Year Ended December 31,
      2004*





The
      Company incurred a loss of $1,203,836 (2004 - $4,522,611; 2003 - $1,764,935)
      resulting in basic and diluted loss per share of $0.03 (2004 - $0.15; 2003
      -
      $0.08).  The loss was primarily attributed to a write-off of mineral
      property costs of $315,809 (2004 - $1,881,448; 2003 - $743); a write-down of
      marketable securities of $233,244 (2004 - $Nil; 2003 - $32,799); a gain on
      sale
      of marketable securities of $411,877 (2004 - $45,858; 2003 - $38,492); and
      a
      loss on the sale of properties of $Nil (2004 - $1,615,809; 2003 -
      $4,586).





The
      Company completed a brokered and non-brokered private placement financing on
      August 4, 2005 and August 11, 2005, respectively, receiving aggregate net
      proceeds in the amount of $5,128,107 (2004 - $3,648,758; 2003 - $2,099,277)
      by
      issuing 7,000,000 common shares at a price of $0.80 per share; completed a
      Special Warrants financing on December 16, 2005, receiving net proceeds of
      $9,331,663 by issuing 7,450,000 special warrants at a price of $1.35 per special
      warrant with each special warrant convertible to one common share of the Company
      upon qualification by a short form prospectus; received aggregate proceeds
      of
      $243,225 (2004 - $109,500; 2003 - $99,250) from the exercise of stock options;
      and received aggregate proceeds of $5,074,192 (2004 - $458,460; 2003 - $Nil)
      from the exercise of share purchase warrants.





The
      Company received interest and other income of $386,406 (2004 - $119,315; 2003
      -
      $69,167).  The increase was due to having a greater amount of funds on
      deposit and the investment of a certain portion of the funds in longer term
      financial instruments.





The
      Company incurred general and administrative expenses of $1,537,754 (2004 -
      $1,097,019; 2003 - $1,547,269).  The increase was primarily attributed
      to an increase in consulting fees to $193,781 (2004 - $5,459; 2003 - $23,824)
      as
      a result of fees paid for financial consulting; an increase in office and
      miscellaneous expenses to $178,123 (2004 - $49,316; 2003 - $62,935) as a result
      of setting up and operating an office for the Pinson project**;**an increase in legal and audit costs to $132,157 (2004 -
      $40,169; 2003
      - $45,773) as a result of additional professional services rendered due to
      the
      operation of the Pinson project and an increase in stock-based compensation
      to
      $148,866 (2004 - $94,770; 2003 - $94,576) as a result of the number of stock
      options that were vested over the period..





The
      Company incurred exploration costs of $12,126,554 (2004 - $3,073,956; 2003
      -
      $694,915).    The costs were attributed to exploration
      expenditures of $11,696,872, acquisition costs of $20,485 and an asset
      retirement obligation of $247,000 on the Pinson property; exploration
      expenditures of $113,692 and acquisition costs of $12,085 on the Jarbidge
      property; exploration expenditures of $27,920, acquisition costs of $87,013
      and
      cost recoveries of ($119,001) on the Beowawe property; exploration expenditures
      of $37,382, acquisition costs of $60,425 and costs recoveries of ($77,042)
      on
      the Clover property; and exploration expenditures of $15,634, acquisition costs
      of $55,131 and cost recoveries of ($604,475) on other properties located in
      the
      USA, Canada and Chile. Of the exploration expenditures incurred on the Pinson
      property, $2,617,696 was incurred on reserve definition, $1,871,915 on
      underground development, $3,516,822 on surface drilling; $1,557,929 on surface
      infrastructure, $1,922,923 on administration and $209,587 on
      other.  It is anticipated that the Company will incur exploration
      expenditures of approximately $1,500,000 on exploration properties other than
      the Pinson project in 2006.  Exploration expenditures on the Pinson
      project for 2006 will be determined after a decision is made by Pinson Mining
      Company as to their participation in the project.





23








*Year
      Ended December 31, 2004 Compared to Year Ended December 31,
      2003*





The
      Company incurred a loss of $4,522,611 ($1,764,935 - 2003; $5,273,769 - 2002),
      resulting in basic and diluted loss per share of $0.14 ($0.08 - 2003; $0.24
      -
      2002).  The loss is inclusive of $1,359,561 loss from the sale of
      Wolverine property ($nil - 2003; $nil - 2002); a write down of $40,537 ($191,267
      – 2003; $nil – 2002) in Chile’s value-added tax receivable; a write-down of
      $1,881,155 ($743 – 2003; $1,824,956 – 2002) in mineral property costs; and a
      $nil ($32,799 - 2003; $485,455 – 2002) write down of holdings in marketable
      securities.  The Company completed the sale of its minority stake in
      the Wolverine Joint Venture to Expatriate Resources Ltd. (“Expatriate”) in
      October 2004, for $2 million cash, 10,000,000 units of Expatriate and a NSR
      on
      precious metals indexed to the price of silver.





The
      Company raised a net amount of $3,648,757 ($2,099,277 – 2003; $nil - 2002) in a
      private placement equity financing during the fiscal 2004, by issuing 7,280,000
      units.  Each unit was comprised of one common share and one-half of
      one transferable share purchase warrant.  Each one whole warrant
      entitles the holder to purchase one additional common share of the Company
      for a
      period of 12 months, at a price of $0.70 per share.  The Company
      received an aggregate amount of $109,500 ($99,250 - 2003; $nil - 2002) from
      the
      exercise of employees’ stock options and $458,460 ($nil – 2003; $nil – 2002)
      from the exercise of share purchase warrants.





Interest
      and other income for the 2004 fiscal year was $119,315 ($69,167 – 2003; $101,209
– 2002).  The increase in interest and other income was the result of
      the new investment policy adopted by the Company in late 2004.  The
      Company now invests a certain portion of its investments in bond and income
      trusts funds instead of investing in short-term deposits only.





General
      and administrative expenses for the 2004 fiscal year decreased to $896,057
      ($929,001 – 2003; $1,072,641 - 2002).  During 2003, $175,175 of the
      expenses related to the termination of employment agreements with three
      employees who were paid out by the issuance of 761,630 treasury
      shares.  During 2002, $378,356 of the 2002 expenses related to a
      one-time severance expense in relation to the termination of four
      employees.  If the severance expenses were excluded, the general and
      administrative expenses for the 2004 fiscal year were increased by $142,231
      over
      2003, and by $59,541 over 2002.  The increase was primarily attributed
      to the shareholder communications which increased to $363,859 ($176,922 – 2003
      and $185,495 – 2002) by the Company employing an external consultant to
      facilitate its promotional activities in Europe and the increase in attending
      the various promotional exhibitions; the wages and benefits of $202,546
      ($139,464 – 2003 and $180,637 – 2002) includes a one-time bonus of $33,000 paid
      to its President.





During
      2003, the Company elected the early adoption of the CICA released amendments
      to
      Section 3870 which resulted in a $94,770 ($94,576 - 2003; $nil – 2002) in
      stock-based compensation expense to the current fiscal year.  The
      Company previously disclosed stock-based compensation of $24,023 in 2002 as
      pro
      forma information.





Exploration
      and business development for the 2004 fiscal year was $208,268 ($717,756 – 2003;
      $1,906,424 - 2002).  The reduction mainly reflects the Company’s
      change in focus from regional exploration to specific projects in exploring
      its
      gold properties in Nevada.  Expenses include the internal allocation
      of Company salaries based on time spent on this activity, fees charged by
      outside consultants and engineering firms, and travel expenses related to due
      diligence activities.  Of the 2002 amount, $1,194,212 incurred in due
      diligence expenses related to copper prospects in Chile, and $463,643 incurred
      in due diligence expenses related to a project in Spain.





The
      Company incurred $3,073,956 ($694,915 – 2003; $1,053,169 - 2002) in deferred
      exploration and acquisition costs, which were partially offset by an amount
      of
      $331,000 received as option payments; and  a $28,006 received as
      management fees and reimbursement from third parties on Nevada properties in
      2004.  Deferred exploration and acquisitions costs were offset by
      $70,050 received as option payments on Nevada properties in
      2003.  Offsets in 2002 totalled $319,774 including $295,402 received
      from its partner and spent on the Chañarcillo exploration program in
      Chile.





**B.**
            **Liquidity
                and Capital Resources**





The
      Company has financed its operations principally through the sale of its equity
      securities.  As the Company does not have any producing mineral
      properties, its only revenue source is interest income earned from amounts
      on





24





deposit.  Interest
      income earned is dependent on the amount of funds available for deposit and
      changes in interest rates.  Unless the Company is able to obtain
      additional funding through the sale of its equity securities, the amount of
      interest income earned is expected to decrease as the Company continues
      exploring its existing mineral properties.





The
      Company expects to obtain financing in the future primarily through joint
      venturing its properties, equity financing, and/or debt
      financing.  There can be no assurance that the Company will succeed in
      obtaining additional financing, now or in the future.  Failure to
      raise additional financing on a timely basis could cause the Company to suspend
      its operations and eventually to forfeit or sell its interests in its
      properties.





The
      Company had a net working capital position of $13,665,357 at December 31, 2006
      (2005 - $14,998,365; 2004 - $8,079,661).  The Company's current
      working capital position provides it with sufficient liquidity to provide it
      with adequate working capital for property maintenance requirements and
      administrative overhead for the next 12 months.





At
      December 31, 2006, outstanding stock options represented a total of 2,140,000
      shares.  The exercise of these securities is completely at the
      discretion of the holders and the Company has had no indication that any of
      these securities will be exercised.  At December 31, 2006, the company
      had no outstanding share purchase warrants.





**US
      GAAP Reconciliation with Canadian GAAP**





Under
      Canadian GAAP, mineral properties, including exploration, development and
      acquisition costs, are carried at cost and written down if the properties are
      abandoned, sold or if management decides not to pursue the properties. Under
      US
      GAAP, all expenditures relating to mineral interests prior to the completion
      of
      a definitive feasibility study, which establishes proven and probable reserves,
      must be expensed as incurred. Once a final feasibility study has been completed,
      additional costs incurred to bring a mine into production are capitalized as
      development costs.





Under
      United States GAAP, Statements of Financial Accounting Standards No. 123,
“Accounting for Stock-based Compensation” (“SFAS 123”) requires companies
      to establish a fair market value based method of accounting for stock-based
      compensation plans.  Effective January 2004, the Company elected to
      follow the fair value method of accounting for stock-based
      compensation.





**Canadian
      GAAP Conflict in Accounting for Mineral Property Interests and Deferred
      Exploration Costs**





In
      March
      2000, the Accounting Standards Board of the Canadian Institute of Chartered
      Accountants (“CICA”) issued Accounting Guideline No. 11 “Enterprises in the
      Development Stage” (“AcG 11”). AcG 11 addresses three distinct issues: i) the
      capitalization of costs/expenditures; ii) impairment; and iii) disclosure.
      Prior
      to its issuance, development stage entities were exempt from following certain
      aspects of Canadian GAAP. AcG 11 requires that all companies account for
      transactions based on the underlying characteristics of the transaction rather
      than the maturity of the enterprise. In addition, AcG 11 requires specific
      disclosure of information by development stage companies and is effective no
      later than fiscal periods beginning on or after April 1, 2000, which in the
      case
      of the Company, is the year ended December 31, 2001.





In
      March
      2002, the Emerging Issues Committee (“EIC”) of the CICA issued EIC-126
“Accounting by Mining Enterprises for Exploration Costs” (“EIC-126”) which
      interprets how AcG 11 affects mining companies with respect to the deferral
      of
      exploration costs. EIC-126 refers to CICA Handbook Section 3061 “Property, Plant
      and Equipment” (“HB 3061”), paragraph .21, which states that for a mineral
      property interest, the cost of the asset includes exploration costs if the
      enterprise considers that such costs have the characteristics of property,
      plant
      and equipment.





EIC-126
      then states that a mining enterprise that has not established mineral reserves
      objectively, and therefore does not have a basis for preparing a projection
      of
      the estimated cash flow from the mineral property interest, is not precluded
      from considering the exploration costs to have the characteristics of property,
      plant and equipment. EIC-126 also sets forth the EIC’s consensus that a mining
      enterprise in the development stage is not required to consider the conditions
      in AcG 11 regarding impairment in determining whether exploration costs may
      be
      initially capitalized. With respect to impairment of capitalized exploration
      costs, EIC-126 sets forth the EIC’s consensus that a mining enterprise in the
      development stage that has not established mineral reserves objectively, and,
      therefore, does not have a basis for preparing a projection of theestimated
      cash flow from the property, is not obliged to conclude that





25





capitalized
      costs have been impaired. However, such an enterprise should consider the
      conditions set forth in AcG 11 and HB 3061 in determining whether a subsequent
      write-down of capitalized exploration costs related to mineral property interest
      is required.





As
      disclosed above, the Company considers that its mineral property interests
      and
      deferred exploration costs have the characteristics of property, plant and
      equipment, and, accordingly, the Company has chosen to classify its mineral
      property interests and deferred exploration costs as tangible assets in
      accordance with its interpretation of Canadian GAAP.





Consult
      the Company’s audited annual consolidated financial statements for the year
      ended December 31, 2006 for the differences if the Company had chosen to account
      for these costs as intangible assets under HB 1581 and HB 3062.





**C.**
            **Research
                and Development, Patents and Licenses,
                etc.**





As
      the
      Company is a mineral exploration company with no research and development,
      the
      information required by this section is not applicable.





**D.**
            **Trend
                Information**





The
      Company’s main activity is the exploration of its mineral
      properties.  It has no production, sales or inventory in the
      conventional sense.  The Company’s financial success will be dependent
      upon the extent to which it can demonstrate mineralization and the economic
      viability of developing such properties.  Such development may take
      years to complete and the amount of resulting income, if any, is difficult
      to
      demonstrate with any certainty.  The sales value of any mineralized
      discovery by the Company is largely dependent upon factors beyond the Company’s
      control such as the market value of metals produced.





The
      Company is not aware of any trends, uncertainties, demands, commitments or
      events which are reasonably likely to have a material effect upon the Company’s
      income from continuing operations, profitability, liquidity or capital
      resources, or that would cause reported financial information to not necessarily
      be indicative of future operating results or financial condition.





**E.**
            **Off-Balance
                Sheet Arrangements**





The
      Company does not have any off-balance sheet arrangements that have or are
      reasonably likely to have a current or future effect on the Company’s financial
      conditions, changes in financial condition, revenues or expenses, results of
      operations, liquidity, capital expenditures or capital resources that is
      material to investors.





**F.           Tabular
      Disclosure of Contractual Obligations**





The
      Company has no contractual obligations to disclose for the fiscal year ended
      December 31, 2006 as the majority of the Company’s expenditures on its
      properties are of a discretionary with the majority of expenditures falling
      under the responsibility of joint venture partners.





26





.





**ITEM
                6.**
            **DIRECTORS,
                SENIOR MANAGEMENT AND
                EMPLOYEES**





**A.**
            **Directors
                and Senior Management**








The
      members of the board of directors and officers of the Company as at March 16,
      2007, are as follows:





**Name
                and Position in the Registrant**
            **Other
                Principal Directorships**
            **Principal
                Business Activities Outside the Company****Glen
                D. Dickson**(1)(2)
              Chairman
                and Director
            Gold-Ore
                Resources Ltd.; Cumberland Resources Ltd.; Red Dragon Resources
                Ltd.
            Chairman
                and CEO of Gold-Ore Resources Ltd.**David
                H. Watkins**
              President,
                Chief Executive Officer and Director
            Maudore
                Minerals Ltd.; Golden Goose Resources Inc.; EURO Resources
                S.A.
            None**William
                J. Coulter**(1)(2)
              Director
            Commander
                Resources Ltd.; Galore Resources Inc.
            Independent
                Investor**James
                K.B. Hesketh**(1)(2)
              Director
            Canyon
                Resources Corp.; Apogee Minerals Ltd.
            President
                and CEO of Canyon Resources Corporation**Wilson
                J. Barbour**(1)
              Director
            None
            Independent
                financial consultant**William
                R. Stanley**
              Vice
                President, Exploration
            None
            None**G.
                Ross McDonald**
              Chief
                Financial Officer
            Corriente
                Resources Inc.; Frontier Pacific Mining Corp.; Fjordland Explorations
                Ltd.; Landmark Resources Corp.; Miranda Gold Corp.; Crescent Resources
                Corp.
            Self-employed
                Chartered Accountant**Bonnie
                L. Whelan**
              Corporate
                Secretary
            None
            None


(1)  Member
      of the Audit Committee.


(2)  Member
                of the Compensation Committee.





There
      are
      no family relationships between any of the directors and officers of the
      Company.  There are no arrangements or understandings with major
      shareholders, customers, suppliers or others, pursuant to which any person
      referred to above was selected as a director or member of senior
      management.





The
      business experience, functions and areas of experience of each director and
      officer, including activities performed outside the Company are as
      follows:





**Glen
      D. Dickson -**Mr. Dickson obtained his B.Sc. (Advanced) degree in
      Geology in 1974 and has been involved in mineral exploration continuously since
      then with a variety of Canadian major and junior exploration companies. As
      Senior Geologist with Asamera Minerals Inc. from 1987 to 1992, Mr. Dickson
      was
      responsible for the discovery of two large developing gold projects in northern
      Canada. In 1993, he successfully acquired the projects for Cumberland Resources
      Ltd. and joined that Company as President and Chief Executive Officer until
      2002. He was instrumental in raising approximately $30 million for Cumberland
      and advancing the projects to the beginning of feasibility.  Mr.
      Dickson is currently the Chief Executive Officer of Gold-Ore Resources Ltd.,
      a
      junior exploration company focusing on early stage precious metal projects
      in
      Central America.





**David
      H. Watkins -**Mr. Watkins is an international mining executive with 38
      years experience in exploration and development, acquisitions and mergers,
      and
      mining operations.  Mr. Watkins was President of Cyprus
      Exploration





27





and
      Development Corporation and Senior Vice President, Exploration for Cyprus Amax
      Minerals Company for six years prior to joining the Company.  Cyprus
      Amax (acquired by Phelps Dodge Corporation in 1999) was a U.S. based, Fortune
      500, multi-national mining company, which produced copper, molybdenum, gold,
      lithium, and coal, and had annual revenue of US $3.2 billion.





Mr.
      Watkins joined Falconbridge Copper Ltd. as an Exploration Geologist in 1977
      and
      became Chief Geologist responsible for exploration in Quebec and mine operations
      at Lake Dufault and Opemiska in 1980.  Mr. Watkins was appointed Vice
      President, Exploration in 1986 and rose to the position of President of Minnova
      Inc., the successor company to Falconbridge Copper, in 1991.  Minnova
      was a base metal and gold mining company with five operating underground and
      open pit mines with 2,000 employees in Quebec, Ontario and British
      Columbia.  During Mr. Watkins tenure at Minnova, the Company
      experienced rapid growth and achieved a market capitalization of $500
      million.





During
      the early part of his career, Mr. Watkins worked with Newmont Mining and with
      Noranda as an exploration geologist in various parts of the world, including
      Australia, Mexico, Ecuador, and Canada.  He graduated with a M.Sc.
      degree in Geology from Carleton University in Ottawa in 1970 and a B.A. in
      Geology from Queen's University at Kingston in 1967.





**William
      J. Coulter -**Mr. Coulter has more than 40 years experience in the
      mineral resource sector.  He has served as founding director,
      management, and shareholder of numerous junior mining, exploration and
      hydrocarbon companies, and has extensive experience in financing, mergers and
      acquisitions.





**James
      K.B. Hesketh -**Mr. Hesketh has held the positions
      of****President, CEO and Director of Canyon Resources since
      August 2, 2005.  He has had a 27 year career in the mining industry which
      has spanned positions in mining finance, operations, consulting, business
      development and engineering with companies including: RMB Resources, NM
      Rothschild & Sons, Cyprus Amax; Pincock, Allen & Holt, and Dresser
      Industries.  This experience has included both domestic and
      international postings.  Mr. Hesketh holds degrees in Mining
      Engineering and Mineral Economics from the Colorado School of
      Mines.  Mr. Hesketh is a non-executive director of the Company and
      Apogee Minerals Limited.





**Wilson
      J. Barbour -**Mr. Barbour worked as a senior executive officer with the
      Noranda organization for 25 years.  He was responsible for the
      management of investment funds, and gold and currency hedging
      programs.  From 1987 to 1990, Mr. Barbour was CFO of the Hemlo Gold
      Mines and shared responsibility for financings, mergers and
      acquisitions.  Mr. Barbour is presently a consultant to mining
      companies, where he advises on gold and currency hedging
      strategies.





**William
      R. Stanley -**Mr. Stanley is a mineral exploration geologist with over
      26 years experience in the mining industry.  While the vast majority
      of Mr. Stanley’s exploration experience is in the Western United States, he has
      also developed and led international exploration efforts in Mexico, Chile,
      and
      New Zealand.   Mr. Stanley holds a Bachelor of Science degree in
      Geology, from Central Washington University, a Master of Business Administration
      from Arizona State University, and is a licensed professional geologist in
      the
      State of Washington, USA.





Mr.
      Stanley held increasing levels of responsibility with Homestake Mining Company
      from 1979 through 1993 and was responsible for several gold deposit discoveries,
      two of which were commercially viable and placed into production by
      Homestake.  From 1993 through 2000, he was employed by Cyprus Amax
      Minerals Company as its United States Exploration Manager where he was
      responsible for exploration in the Great Basin, Alaska, and
      Mexico.  Immediately prior to joining the Company in January 2004, Mr.
      Stanley was an independent mining consultant providing services to both major
      and junior exploration firms.





**G.
      Ross McDonald -**Mr. McDonald is a self-employed chartered accountant
      with over 36 years of experience providing audit and tax services to small
      and
      medium sized businesses primarily in the mining industry.  As Chief
      Financial Officer, Mr. McDonald will provide the Company with best practices
      in
      terms of financial reporting, internal controls and corporate
      governance.





**Bonnie
      L. Whelan -**Ms. Whelan has a number of years experience in the public
      resource sector in positions of senior officer, director and upper
      management.  As the corporate secretary of the Company, Ms. Whelan is
      engaged





28





in
      public
      company administration which includes maintaining corporate compliance,
      regulatory filings, and office systems development and
      implementation.





**(B)**
            **Compensation**





The
      Company has four officers.





Information
      specified in this Item for individually named directors and senior officers
      incorporates by reference the Management Information Proxy Circular dated March
      16, 2007, prepared in connection with the Company’s Annual General Meeting to be
      held on April 26, 2007 (see Exhibit 15.1).





The
      following table and accompanying notes set forth all compensation paid by the
      Company to its directors and senior management for the fiscal year ended
      December 31, 2006:





Annual
                Compensation
            Long
                Term CompensationAwards
            PayoutsName
                and Principal Position
            Year(1)
            Salary
              ($)
            Bonus
              ($)(2)
            Other
                Annual Compensation
              ($)
            Securities
                Under Options / SARs(3)
                granted
              ($)
            Restricted
                Shares or Restricted Share Units
              ($)
            LTIP(4)
                payouts
              ($)
            All
                Other Compensation ($)**David
                H. Watkins**
              President,
                Chief Executive Officer and Director
            2006
            176,000
            64,000
            Nil
            150,000(5)
            Nil
            Nil
            n/a**William
                J. Coulter**
              Director
            2006
            n/a
            Nil
            Nil
            75,000(5)
            Nil
            Nil
            n/a**James
                K.B. Hesketh**
              Director
            2006
            n/a
            Nil
            Nil
            75,000(5)
            Nil
            Nil
            n/a**Glen
                D. Dickson**
              Chairman and
                Director
            2006
            n/a
            Nil
            Nil
            75,000(5)
            Nil
            Nil
            n/a**Wilson
                J. Barbour**
              Director
            2006
            n/a
            Nil
            Nil
            75,000(5)
            Nil
            Nil
            n/a**William
                R. Stanley**
              VP
                Exploration
            2006
            145,000
            40,000
            Nil
            125,000(5)
            Nil
            Nil
            n/a**G.
                Ross McDonald**
              Chief
                Financial Officer
            2006
            31,500
            3,000
            Nil
            20,000(5)
            Nil
            Nil
            n/a**Bonnie
                L. Whelan**
              Corporate
                Secretary
            2006
            105,000
            10,000
            Nil
            50,000(5)
            Nil
            Nil
            n/a


(1)  Financial
                year for the period January 1 to December
                31.


(2)  Bonus
      amounts are paid in cash in the year following the fiscal year in which they
      were earned.


(3)  Stock
      appreciation rights.


(4)  Long-term
      incentive plan.


(5)  Stock
      Options are exercisable at a price of $2.01 per share prior to January 30,
      2009.





No
      part
      of this compensation was paid pursuant to a material bonus or profit sharing
      plan.  There was no amount set aside for a pension, retirement or
      similar benefits plans for any director or officer.





29





**C.           Board
      Practices**





***Date
                of Expiration of the Current Term of
                Office***





The
      Company's Board of Directors is divided into three classes and the directors
      in
      each class have different terms of office.  The directors in each
      class are elected at an annual general meeting to hold office for a term of
      three years or until their successors are duly elected or appointed, unless
      such
      office is earlier vacated in accordance with the Articles of the Company or
      a
      director becomes disqualified to act as a director.  The authority to
      determine the number of directors of the Company rests with the
      shareholders.





The
      Articles of the Company provide that the number of directors, excluding
      additional directors, may be fixed or changed from time to time by ordinary
      resolution whether previous notice thereof has been given or
      not.  Management proposes to determine the number of directors
      comprising the Board of Directors at five and the approval of the shareholders
      is therefore being sought at the Company’s next Annual and Special Meeting (the
“Meeting”) to be held on April 26, 2007.





*Election
      of Directors*





The
      Company's Board of Directors presently has five members.  At the
      Meeting to be held on April 26, 2007, one director is to be elected, to hold
      office for the term expiring at the Annual General Meeting in 2010 or until
      his
      successor is duly elected or appointed, unless his office is earlier vacated
      in
      accordance with the Articles of the Company or he becomes disqualified to act
      as
      a director.





The
      terms
      of office of the other four directors who are not nominees for election expire
      at the Annual General Meetings in 2008 and 2009, respectively.





The
      information in the following table has been provided by the respective
      directors:





**Name,
                Country of Ordinary Residence**
            **Present
                principal Occupation, business or employment and, if not elected
                a
                director by a vote of security holders, occupation, business or employment
                during the past 5 years**(2)
            **First
                and Present Position with the Company**(1)
            **Approx.
                no. of voting securities beneficially owned, directly or indirectly
                or
                over which direction or control is exercised**(3)**Nominees
                for Election – Directors whose terms of office will expire at the Annual
                General Meeting in 2010****David
                H. Watkins**
              British
                Columbia, Canada
            President,
                Chief Executive Officer and Director of the Company.
            President
                and Chief
              Executive
                Officer, Mar.22/2000 to date
            939,880**Directors
                whose terms of office will expire at the Annual General Meeting in
                2008****William
                J. Coulter**(4)(5)
              Ontario,
                Canada
            Independent
                Investor; Binjas Holdings Ltd., and The Jay Willy Trading Co.
                Ltd.
            Director,
                Jun.01/1984 to date
            192,000(6)**James
                K.B. Hesketh**(4)(5)
              Colorado,
                United States
            President
                & CEO, Canyon Resources Corporation,
            Director,
                Sep.20/2001 to date
            35,000**Directors
                whose terms of office will expire at the Annual General Meeting in
                2009****Glen
                D. Dickson******(4)(5)
              British
                Columbia, Canada
            Geologist;
                Chairman and Chief Executive Officer, Gold-Ore Resources
                Ltd.
            Chairman
                and Director, Dec.05/2002 to date
            245,000**Wilson
                J. Barbour**(4)
              Ontario,
                Canada
            Independent
                Financial Consultant.
            Director,
                May 20/2003 to date
            100,000


(1)  For
      the purposes of disclosing positions held in the Company, "Company" shall
      include the Company and/or a parent or subsidiary thereof.


(2)  Each
      of the directors is an elected director by a vote of security
      holders.





30





(3)
      In
      aggregate, the Director and officers of the Company owns directly, indirectly
      or
      beneficially, or exercise control or direction over, a total of 1,511,880 common
      shares of the Company.  This figure represents approximately 3% of the
      total number of issued and outstanding common shares of the Company as at March
      16, 2007.  These figures, not being within the knowledge of the
      Company, have been furnished by each of the respective Directors and officers.
      This column shows the common shares of the Company beneficially owned, directly
      or indirectly, or over which control or direction is exercised as of March
      16,
      2006.


(4)   Member
                of Audit Committee.


(5)   Member
                of the Compensation Committee.


(6)  50,000
      of these shares are registered in the name of Binjas Holdings Ltd. and 22,000
      of
      these shares are registered in the name of The Jay Willy Trading Co. Ltd.,
      both
      non-reporting companies, controlled by William J. Coulter.





***Termination
      of Employment, Change in Responsibilities and Employment
      Contracts***





During
      the fiscal year ended December 31, 2006, there were no employment contracts
      between the Company and any of its subsidiaries and its senior
      management.





The
      Company entered into change in control agreements on January 11, 2007 (the
      “Agreements”) with each of David H. Watkins, William R. Stanley, Bonnie L.
      Whelan and Kendra A. Johnston.  For the purposes of the Agreements, a
“change of control” is deemed to have occurred in the following
      circumstances:





The
                acquisitions by any person or any group of persons acting jointly
                or in
                concert (as defined in the Securities Act (British Columbia)) whether
                directly or indirectly, of voting securities of the Company which,
                together with all other voting securities of the Company held by
                such
                person or persons, constitutes, in the aggregate, more than 35% of
                all
                outstanding voting securities of the
                Company;




The
                sale, lease, or other disposition of all or substantially all of
                the
                assets of the Company to another person other than a subsidiary of
                the
                Company; or




An
                amalgamation, arrangement or other form of business combination of
                the
                Company with another company which results in the holders of voting
                securities of that other company holding in the aggregate more than
                35% of
                all of the outstanding voting securities of the company resulting
                from the
                business combination.




Pursuant
      to the terms of the Agreements, upon the occurrence of both a change in control
      and the termination of employment within 12 months following the change in
      control, other than for cause, or resignation from employment from the Company
      for good reason (as defined in the Agreements), the terminated or resigning
      party will be entitled to a termination payment that will include a payment
      of:
      (i) from one to two times the annual base salary depending upon the employee;
      (ii) one to two times the annual bonus depending upon the employee; and (iii)
      all vacation pay due and any unpaid bonus’ as at the last day of employment. Mr.
      Watkins, Ms. Whelan and Ms. Johnston are also entitled to two times the annual
      cost to the Company of all benefits received as at the last day of employment,
      or the Company may, at its option, continue such coverage for a 24-month
      period.





There
      were no compensatory plans or arrangements, including payments to be received
      from the Company or any of its subsidiaries, with respect to its senior
      management save and except as set forth below:





***Description
                of Board Committees***





The
      Board
      has established two full-time committees, an Audit Committee and a Compensation
      Committee.  These committees are comprised entirely of unrelated
      directors.  The Board has adopted a charter with respect to its Audit
      and Compensation Committees and a Code of Ethics for Officers, as more fully
      set
      forth below:





31





*Audit
      Committee Charter*





**Purpose**





The
      Committee serves as the representative of the Board for the general oversight
      of
      the Company’s affairs relating to:





·
            the
                internal controls and management information systems of the
                Company


·
            the
                quality and integrity of the Company’s financial
                statements


·
            the
                Company’s compliance with legal and regulatory
                requirements


·
            the
                auditor’s qualifications and independence;
                and


·
            the
                performance of the Company’s internal audit function and
                auditors.





Through
      its activities, the Committee facilitates open communication among directors,
      auditors and management by meeting in private sessions regularly with these
      parties.





The
      Committee also provides oversight regarding significant financial matters,
      including borrowing, currency exposure, dividends, share issuance and
      repurchases, and the financial aspects of the Company’s benefit
      plans.





**Committee
      Membership**





The
      Audit
      Committee of the Board of Directors (the “Board”) shall consist of at least
      three directors.  Each member of the Audit Committee shall meet the
      listing standards relating to independence of the Toronto Stock Exchange (the
      “Exchange”) and all other applicable regulatory authorities.  Under
      the Sarbanes-Oxley Act, at least one member of the Committee must be a
“financial expert”, whose qualifications include financial literacy,
      independence and accounting or related financial expertise.  The Audit
      Committee shall report to the Board.  A majority of the members of the
      Committee shall constitute a quorum.  The members of the Audit
      Committee shall be appointed and replaced by the Board.





**Meetings
      and Procedures**





The
      Audit
      Committee shall convene at least four times a year.





It
      shall
      endeavor to determine that auditing procedures and controls are adequate to
      safeguard Company assets and to assess compliance with Company policies and
      legal requirements.





**Responsibilities**





The
      Audit
      Committee shall:





1.
            
            Have
                the sole authority to select, compensate, oversee, evaluate and,
                where
                appropriate, replace the auditor.


2.
            
            Annually review the management arrangements for
                the
                Company.


3.
            Annually
                review and approve the proposed scope of each fiscal year’s internal and
                outside audit at the beginning of each new fiscal
                year.


4.
            
            Review
                and approve any audit and non-audit services and fees to be provided
                by
                the Company’s auditor.


5.
            At,
                or shortly after the end of each fiscal year, review with the auditor
                and
                management, the audited financial statements and related opinion
                and costs
                of the audit of that year.


6.
            Review
                funding and investment policies, implementation of funding policies
                and
                investment performance of the Company’s benefit
                plans.


7.
            Provide
                any recommendations, certifications and reports that may be required
                by
                the Exchange or applicable regulatory authorities including the report
                of
                the Audit Committee that must be included in the Company’s annual proxy
                statement.


8.
            Review
                and discuss the annual audited financial statements and quarterly
                financial statements with management and the
                auditor.


9.
            Have
                the authority to engage independent counsel and other advisers as
                it
                determines necessary to carryout its duties.  The Company shall
                provide for appropriate funding, as determined by the Audit Committee,
                in





32





its
                capacity as a committee of the Board, for payment of compensation
                to any
                advisers employed by the Audit committee and to the auditor employed
                by
                the Company for the purpose of rendering or issuing an audit
                report.


10.
            Discuss
                with management and the auditor the Company’s policies with respect to
                risk assessment and risk
                management.


11.
            
            Meet
                separately, periodically, with management and the
                auditor.


12.
            In
                consultation with the auditor and management, review the integrity
                of the
                Company’s financial reporting
                process.


13.
            Review
                periodically the effect of regulatory and accounting initiatives,
                as well
                as off-balance sheet structures, on the financial statements of the
                Company.


14.
            Review
                with the auditor:


(a)           any
      audit problems or other difficulties encountered by the auditor in the course
      of
      the audit process, including any restrictions on the scope of the auditor’s
      activities or on access to requested information, and any significant
      disagreements with management; and


(b)
            management’s
                responses to such matters.


15.
            Review
                and discuss with the auditor the responsibility, budget and staffing
                of
                the Company’s internal audit
                function.


16.
            Report
                regularly to the Board.  Such report to the Board may take the
                form of an oral report by the Chairman or any other member of the
                Audit
                Committee designated by the Audit Committee to make such
                report.


17.
            Perform
                a review and evaluation, at least annually, of the performance of
                the
                Audit committee.  In addition, the Audit Committee shall review
                and reassess, at least annually, the adequacy of this Charter and
                recommend to the Board any improvements to this Charter that the
                Audit
                Committee considers necessary or valuable.  The Audit Committee
                shall conduct such evaluations and reviews in such manner as it deems
                appropriate.





*Compensation
      Committee Charter*





**Purpose**





The
      Compensation Committee is appointed by the Board to discharge the Board’s
      responsibilities relating to compensation to the Company’s
      executive.  The Compensation Committee has overall responsibility for
      approving and evaluation the management, the compensation plans, policies and
      programs of the Company.  The Compensation Committee is also
      responsible for producing an annual report on executive compensation for
      inclusion in the Company’s proxy statement, in accordance with applicable rules
      and regulations.





**Committee
      Membership**





The
      Compensation Committee shall consist of no fewer than three members, each of
      whom shall be a director of the Company.  Each member of the
      Compensation Committee shall meet the listing standards relating to independence
      of The Toronto Stock Exchange and all other applicable regulatory
      authorities.  The Compensation Committee shall report to the
      Board.  A majority of the members of the Compensation Committee shall
      constitute a quorum.  The members of the Compensation Committee shall
      be appointed and replaced by the Board.





**Committee
      Authority and Responsibilities**





1.
            The
                Compensation Committee shall annually review and approve corporate
                goals
                and objectives relevant to compensation, evaluate management’s performance
                in light of those goals and objectives, and determine management’s
                compensation levels based on this evaluation.  In determining
                the long-term incentive component of management compensation, the
                Compensation Committee will consider the Company’s performance and
                relative shareholder return, the value of similar incentive awards
                to
                management at comparable companies, the awards given to management
                in past
                years, and other factors it deems
                appropriate.





2.
            The
                Compensation Committee shall have the sole authority to retain and
                terminate any compensation consultant to be used to assist in the
                evaluation of management compensation and shall have sole authority
                to
                approve the consultant’s fees and other retention terms, all at the
                Company’s expense.





33








3.
            The
                Compensation Committee shall annually review and determine the
                compensation of management, including incentive-compensation plans
                and
                equity-based plans.





4.
            The
                Compensation Committee shall annually review and approve, for management
                of the Company:





(a)
            the
                annual base salary level;


(b)
            the
                annual incentive opportunity level;


(c)
            the
                long-term incentive opportunity
                level;


(d)
            the
                terms of any employment agreements, severance arrangements, and change
                in
                control agreements/provisions, in each case as, when and if appropriate;
                and


(e)
            any
                special or supplemental benefits.





5.
            The
                terms of any employment agreements or contracts, including those
                for new
                hire, temporary employees or consultants, should be reviewed and
                approved
                by the Compensation Committee.





6.
            The
                Compensation Committee may form and delegate authority to subcommittees,
                when appropriate.








7.
            
            The
                Compensation Committee shall make regular reports to the
                Board.





8.
            The
                Compensation Committee shall review and reassess the adequacy of
                this
                Charter annually and recommend any proposed changes to the Board
                for
                approval.  The Compensation Committee shall annually evaluate
                its own performance.





9.
            The
                Compensation Committee, and each member of the Compensation Committee
                in
                his or her capacity as such, shall be entitled to rely, in good faith,
                on
                information, opinions, reports or statements, or other information
                prepared or presented to them by:





(a)
            officers
                and other employees of the Company, whom such member believes to
                be
                reliable and competent in the matters presented;
                and


(b)
            counsel,
                public accountants or other persons as to matters, which the member
                believes to be within the professional competence of such
                person.





**D.           Employees**





During
      the fiscal year ended December 31, 2004, the Company had four full-time
      employees.





**E.**
            **Share
                Ownership**





The
      following table sets forth the share ownership of those persons listed in
      subsection 6.B above and includes details of all options or warrants to purchase
      of the Company held by such persons at March 16, 2007:





**Name**
            **#
                of Common Shares Held**
            **Number
                of Stock Options**
            **Number
                of  Warrants**
            **Exercise
                Price**
              **$**
            **Expiry
                Date**David
                H. Watkins
            939,880
            100,000
              300,000
              150,000
              183,000
            -
              -
              -
              -
            0.325
              0.70
              2.01
              1.36
            Apr
                20/21007
              Apr
                18/2008
              Jan
                30/09
              Jan
                11/2010William
                J. Coulter
            192,000(1)
            75,000
              75,000
              91,500
            -
              -
              -
            0.70
              2.01
              1.36
            Apr
                18/2008
              Jan
                30/2009
              Jan
                11/2010James
                K.B. Hesketh
            35,000
            75,000
              75,000
              91,500
            -
              -
              -
            0.70
              2.01
              1.36
            Apr
                18/2008
              Jan
                30/2009
              Jan
                11/2010





34








Glen
                D. Dickson
            245,000
            100,000
              75,000
              61,500
            -
              -
              -
            0.70
              2.01
              1.36
            Apr
                18/2008
              Jan
                30/2009
              Jan
                11/2010Wilson
                J. Barbour
            100,000
            75,000
              75,000
              91,500
            -
              -
              -
            0.70
              2.01
              1.36
            Apr
                18, 2008
              Jan
                30/2009
              Jan
                11/2010William
                R. Stanley
            150,000
            50,000
              150,000
              125,000
              152,500
            -
              -
              -
              -
            0.325
              0.70
              2.01
              1.36
            Apr
                20/2007
              Apr
                18/2008
              Jan
                30/2009
              Jan
                11/2010G.
                Ross McDonald
            -
            50,000
              20,000
              24,400
            -
              -
              -
            0.59
              2.01
              1.36
            Feb
                8/2009
              Jan
                30/2009
              Jan
                11/2010Bonnie
                L. Whelan
            15,000
            100,000
              50,000
              61,000
            -
              -
              -
            0.59
              2.01
              1.36
            Feb
                8/2008
              Jan
                30/2009
              Jan
                11/2010


(1)  50,000
      of these shares are registered in the name of Binjas Holdings Ltd. and 22,000
      of
      these shares are registered in the name of the  Jay Willy Trading Co.
      Ltd., both non-reporting companies, controlled by William Coulter.





***Incentive
      Stock Options Plan***





In
      1996,
      the Company previously adopted, with approval from the Company’s shareholders,
      an incentive stock option plan (the “1996 Plan”) pursuant to the policies of the
      Toronto Stock Exchange (the “TSX”).  The 1996 Plan has been amended on
      a number of occasions, including most recently at the Annual and Special Meeting
      of the Company held on April 20, 2006.





The
      1996
      Plan, as amended does not comply with the policy outlined in the TSX Company
      Manual with respect to security based compensation arrangements.  As a
      result, on March 16 16, 2007, the Board of Directors of the Company approved
      the
      adoption of a new stock option plan (the “2007 Plan”), subject to shareholder
      and regulatory approval.  The 2007 Plan will replace the 1996 Plan
      and, consequently, no new options will be granted under the 1996
      Plan.  Options granted under the 1996 Plan prior to the adoption of
      the 2007 Plan will survive until exercise, lapse or termination in accordance
      with the provisions of the 1996 Plan.





Key
      provisions of the 2007 Plan include:





(a)
            the
                maximum number of common shares issuable pursuant to options granted
                under
                the 2007 Plan will be a number equal to 10% of the issued and outstanding
                common shares on a non-diluted basis at any
                time;




(b)
            a
                restriction that no more than 10% of the total number of issued and
                outstanding common shares on a non-diluted basis may be issuable
                to
                insiders of the Company pursuant to options granted to insiders under
                the
                2007 Plan;




(c)
            a
                restriction that no more than 10% of the total number of issued and
                outstanding common shares  on a non-diluted basis are issued to
                insiders of the Company within any one-year period pursuant to options
                granted to insiders under the 2007
                Plan;




(d)
            the
                option price per common share is to be determined by the Board of
                Directors provided that such exercise price is not less than the
                market
                price on the date of grant of such options or such other minimum
                price as
                may be required by the TSX;




(e)
            the
                vesting period of all options shall be determined by the
                Board;







35





(f)
            options
                may be exercisable for a period of up to a maximum term of five years,
                subject to a blackout period allowance, such period to be determined
                by
                the Board of Directors of the Company, and the options are
                non-transferable;




(g)
            options
                held by individuals who are terminated without cause are subject
                to an
                accelerated expiry term for those options which requires that options
                held
                by those individuals expire on the earlier of: (a) the original expiry
                term of such options; (b) 30 days after the Optionee ceases active
                employment with the Company; or (c) 30 days after the date of delivery
                of
                written notice of retirement, resignation or
                termination;




(h)
            options
                held by an individual who ceases to be employed by the Company for
                cause
                or is removed from office or becomes disqualified from being a director
                will terminate immediately;




(i)
            options
                which expire unexercised or are otherwise cancelled will be returned
                to
                the 2007 Plan and may be made available for future option grant pursuant
                to the provisions of the 2007 Plan;




(j)
            optionees
                may, rather than exercise their options, elect to terminate such
                option,
                in whole or in part, and receive either an equivalent number of common
                shares or cash payment in lieu thereof;
                and




(k)
            the
                Board may, from time to time, subject to applicable law and the prior
                approval, if required, of the TSX or any other applicable regulatory
                body,
                suspend, terminate, discontinue or amend the 2007 Plan and the Board
                may
                amend the 2007 Plan or options granted under it without shareholder
                approval.




Provisions
      of the 2007 Plan described in items (d), (e), (f) and (i) listed above are
      consistent with the provisions contained in the 1996 Plan.  Provisions
      of the 2007 Plan described in items (a), (g) and (k) in the 2007 Plan differ
      from the analogous provisions in the 1996 Plan.  There are no
      provisions in the 1996 Plan analogous to the provision in the 2007 Plan
      described in items (b), (c), (h) and (j) above.  The full text of the
      2007 Plan can be found in  Appendix A of  the Management
      Information Proxy Circular dated March 16, 2007.





**Purpose
      of the 2007 Plan**





The
      adoption of the 2007 Plan is intended to further the purpose of the 1996 Plan,
      which is to permit the Company to motivate and reward individuals who contribute
      to the Company’s profitability and to provide those individuals with a
      proprietary interest in the long term growth and financial success of the
      Company.  The Board believes that the 2007 Plan will enhance the
      ability of the Company to continue to attract and retain talented individuals
      in
      a highly competitive industry.





**Changes
      to the 1996 Plan**





The
      2007
      Plan contains changes designed to conform certain provisions in the 2007 Plan
      to
      the TSX rules and regulations relating to security based compensation
      arrangements, as well as changes to the 1996 Plan which the Board considers
      to
      be in the best interests of the Company.





***Maximum
      Shares Available***





As
      of the
      date of this Information Circular, 2,903,800 stock options remain outstanding
      under the 1996 Plan, representing approximately 4.3% of the issued and
      outstanding common shares on a fully diluted basis, and 42,564  common
      shares of the Company remain available for future stock option awards under
      the
      1996 Plan, representing less than 1% of the issued and outstanding common shares
      on a fully diluted basis,.  The maximum number of common shares of the
      Company that may be issuable under the 2007 Plan is a number equal to 10% of
      the
      number of issued and outstanding common shares of the Company on a non-diluted
      basis at any time.





***Maximum
      Shares Available to Insiders***





To
      ensure
      that insiders of the Company have the opportunity to vote on certain approvals
      listed in Section 613(a) of the TSX Company Manual, the 2007 Plan restricts
      the
      maximum number of common shares of the Company that under the 2007 Plan are
      issued, or that may be issuable, to insiders (as defined under applicable
      securities law).





36





Under
      the
      2007 Plan, no more than 10% of the total number of issued and outstanding common
      shares on a non-diluted basis may be: (i) issuable to insiders of the Company
      pursuant to options granted to insiders under the 2007 Plan; or (ii) issued
      to
      insiders of the Company within any one year period pursuant to options granted
      to insiders under the 2007 Plan, in both cases together with all of the
      Company’s previously established and outstanding or proposed share compensation
      arrangements.





***Share
      Appreciation Rights***





The
      2007
      Plan introduces the concept of share appreciation rights, which is not provided
      for in the 1996 Plan.  Under the share appreciation rights, optionees
      have the right to receive a certain number of common shares calculated pursuant
      to the difference between the fair value of a common share and the option
      exercise price upon exercise or, subject to the consent of the Company, cash
      payment calculated pursuant to section 4.11(b) of the 2007 Plan in lieu of
      purchasing common shares of the Company upon the exercise of the
      option.  The cash settlement alternative provides optionees with an
      alternative means to exercise their options and provides the Company with a
      means of reducing the dilution normally associated with option
      exercises.





***Amending
      Provisions***





The
      amending provisions in the 2007 Plan provide that the Board of Directors of
      the
      Company may, from time to time, subject to the 2007 Plan, applicable law and
      the
      prior approval, if required, of the TSX or any other regulatory body having
      authority, or of the shareholders of the Company, suspend, terminate,
      discontinue or amend the 2007 Plan.  The Board may not amend the 2007
      Plan without the approval of the shareholders of the Company and the TSX with
      respect to the following; (a) altering the maximum number of shares available
      under the 2007 Plan;  (b) amending the terms of an option granted to
      an insider of the Company; (c) extend the expiration term from a blackout period
      allowance; (d) making a change to the class of eligible participants which
      would
      have the potential of broadening or increasing participation by insiders; (e)
      adding any form of financial assistance; or (f) adding a deferred or restricted
      share unit or any other provision which results in an eligible participant
      receiving Shares while no cash consideration is received by the
      Company.








**ITEM
                7.**
            **MAJOR
                SHAREHOLDERS AND RELATED PARTY
                TRANSACTIONS**





**A.**
            **Major
                Shareholders**





To
      the
      knowledge of the Directors and senior officers of the Company, and based upon
      the Company’s review of the records maintained by Pacific Corporate Trust
      Company, electronic filings with the System for Electronic Document Analysis
      and
      Retrieval (“SEDAR”) and insider reports filed with System for Electronic
      Disclosure by Insiders (SEDI), as at March 16, 2007,  only the
      following shareholder beneficially owned, directly or indirectly, or exercised
      control or direction over more than 10% of the voting rights attached to the
      common shares of the Company:





**Name**
            **Number
                of Shares**
            **Percentage****Anglo
                Pacific Group plc**
              London,
                England
            7,183,100
            11.16%





Tabled
      below is the distribution of the registered shareholders of the Company at
      December 31, 2006, as provided by the Company’s transfer agent, Pacific
      Corporate Trust Company:





**Country**
            **Total
                Holders**
            **%**
            **Total
                Holdings**
            **%**USA
              Canada
              Other
                Countries
            21
              3
              -
            41.18
              58.82
              -
            2,460,777
              61,716,061
              -
            3.83
              96.17
              -








37





**B.           Related
      Party Transactions**





There
      were no related party transactions for the last fiscal year.





***Indebtedness
      to Company of Directors, Executive Officers and Senior
      Officers***





No
      directors or senior officers of the Company are indebted to the Company or
      have
      been indebted to the Company since the beginning of the last financial year
      of
      the Company.





**C.**
            **Interests
                of Experts and Counsel**





This
      Form
      20F is being filed as an annual report under the Exchange Act and, as such,
      there is no requirement to provide any information under this item.





None
      of
      SIM Geological Inc. or Robert C. Sim, being the company and the person,
      respectively, involved in the preparation of the technical report relating
      to
      the Pinson Mine Property, or any director, officer or employee thereof, as
      applicable, received or has received a direct or indirect interest in the
      property of the Company or of any associate or affiliate of the
      Company.  As at the date hereof, the directors, officers and
      employees, as applicable, of the aforementioned company do not beneficially
      own,
      directly or indirectly, in the aggregate, more than one percent of the
      securities of the Company and its associates and affiliates.




DeVisser
      Gray, auditors of the Company, has advised the Company that it is independent
      within the Rules of Professional Conduct of the Institute of Chartered
      Accountants of British Columbia and within the meaning of applicable securities
      laws of Canada.




Neither
      the aforementioned person, nor any director, officer, employee or partner,
      as
      applicable, of the aforementioned company or partnership is currently expected
      to be elected, appointed or employed as a director, officer or employee of
      the
      Company or of any associate or affiliate of the Company.








**ITEM
                8.**
            **FINANCIAL
                INFORMATION**





**A.**
            **Consolidated
                Statements and Other Financial Information Financial
                Statements**





Attached
      hereto are the audited financial statements of the Company for the fiscal years
      ended December 31, 2006 and 2005.  The financial statements are
      accompanied by auditors' reports and related notes.  See “Item 17.
      Financial Statements”.





***Legal
      Proceedings***





The
      Company has assigned its full interest in the Jarbidge claims to Atna Resources,
      Inc. (ARI), its wholly owned Nevada subsidiary.  ARI has been joined
      to a lawsuit pending in the Fourth Judicial District Court of Elko County,
      Nevada.  The Plaintiff is the underlying owner of the Jarbidge claims,
      which are held under option by ARI.  The action seeks to condemn a
      right of way on an existing road across certain patented claims to provide
      access to the mineral claims held under option by ARI.  ARI is
      pursuing the action as well as exploring alternate means to settle the
      litigation.  The Management of the Company believes that the lawsuit
      has no significant effects on the Company’s financial position.  The
      lawsuit was dismissed on November 1, 2005, with no charge or claim against
      Plaintiff or the Company.





**B.**
            **Significant
                Changes**





No
      significant changes have occurred since the date of the annual financial
      statements included in this Annual Statement.








38





ITEM
      9.                      THE
      OFFERING AND LISTING





**A.**
            **Offer
                and Listing Details**





The
      high
      and low closing prices in Canadian Dollars for the Company’s common stock on the
      Toronto Stock Exchange are set forth below.





***For
      the five most recent full financial years: the annual high and low market
      closing prices:***





**High
                - $**
            **Low
                - $**2002
            0.51
            0.192003
            0.62
            0.212004
            0.95
            0.292005
            2.56
            0.552006
            2.41
            0.95





***For
      the two most recent full financial years and any subsequent period: the high
      and
      low market closing prices for each full financial
      quarter:***





**High
                - $**
            **Low
                - $***Fiscal
                2005*First
                Quarter, ended 03/31/05
            0.73
            .067Second
                Quarter, ended 06/30/05
            0.77
            0.75Third
                Quarter, ended 09/30/05
            1.08
            1.03Fourth
                Quarter, ended 12/31/05
            2.00
            1.95*Fiscal
                2006*First
                Quarter, ended 03/31/06
            2.41
            1.82Second
                Quarter, ended 06/30/06
            2.36
            1.01Third
                Quarter, ended 09/30/06
            1.48
            1.02Fourth
                Quarter, ended 12/31/06
            1.46
            0.95*Fiscal
                2007*First
                Two Months, ended 02/28/07
            1.71
            1.30





***For
      the most recent 12 months: the high and low market closing prices and the
      average trading volumes for each month:***





**High
                - $**
            **Low
                - $**
            **Average
                Volume**March
                1-15, 2007
            1.55
            1.26
            145,400February
                2007
            1.71
            1.45
            222,900January
                2007
            1.58
            1.30
            207,700December
                2006
            1.46
            1.25
            196,900November
                2006
            1.31
            1.09
            168,000October
                2006
            1.24
            0.95
            155,400September
                2006
            1.25
            1.02
            176,400August
                2006
            1.49
            1.22
            117,000July
                2006
            1.50
            1.21
            133,100June
                2006
            1.28
            1.00
            239,500May  2006
            1.67
            1.21
            484,000April
                2006
            2.41
            1.46
            807,400March
                2006
            2.55
            1.80
            249,800








39





B.           Plan
      of Distribution





This
      Form
      20F is being filed as an annual report under the Exchange Act and, as such,
      there is no requirement to provide any information under this item.





**C.**
            **Markets**





The
      Company’s common shares have been listed and traded in Canada on the Toronto
      Stock Exchange under the symbol “ATN” since March 14, 1996.  In
      addition, the shares of Common Stock were listed and traded on the Vancouver
      Stock Exchange on September 12, 1986, however, at the request of the Company,
      due to relatively low trading volumes, they were de-listed from trading on
      the
      Vancouver Stock Exchange on January 31, 1997.





**D.**
            **Selling
                Shareholders**





This
      Form
      20F is being filed as an annual report under the Exchange Act and, as such,
      there is no requirement to provide any information under this item.





**E.**
            **Dilution**





This
      Form
      20F is being filed as an annual report under the Exchange Act and, as such,
      there is no requirement to provide any information under this item.





**F.**
            **Expenses
                of the Issue**





This
      Form
      20F is being filed as an annual report under the Exchange Act and, as such,
      there is no requirement to provide any information under this item.








**ITEM
                10.**
            **ADDITIONAL
                INFORMATION**





**A.**
            **Share
                Capital**





At
      the
      Company’s last Annual and Extraordinary General Meeting held on April 14, 2005
      the shareholders approved a special resolution to replace the previous
*Company Act* (British Columbia) with the *Business Corporations
      Act* (British Columbia) (the “BCBCA”) as legislated by the Province of
      British Columbia on March 29, 2004.  As now permitted by the BCBCA,
      the Company altered the Articles of the Company to increase the authorized
      capital from 150,000,000 Shares divided into 100,000,000 Common Shares without
      par value (the "Common Shares") and 50,000,000 Preferred shares without par
      value (the “Preferred Shares”) to an unlimited number of Common Shares without
      par value and an unlimited number of Preferred Shares.





The
      table
      presented below reports on the current authorized capital of the
      Company.





Designation
                of Security
            Authorized
            Outstanding
                as at Dec. 31, 2006
            Outstanding
                as at March 16, 2007Common
                Shares
            Unlimited
            $60,839,308
              (64,176,838
                shares)
            $60,921,808
              (64,376,838shares)Preferred
                Shares
            Unlimited
            Nil
            Nil





As
      at
      March 16, 2007, the Company had outstanding stock options to purchase a total
      of
      2,903,800 common shares, exercisable at prices ranging from $0.325 to $2.01
      per
      share prior to January 11, 2010.





The
      following table sets out a history of the Company's share capital for the three
      most recently completed fiscal years to the date of this document:





40








2006
            
            2005
            
            2004Number
                of
              Shares
            
            Amount
              $
            
            Number
                of
              Shares
            
            Amount
              $
            
            Number
                of
              Shares
            
            Amount
              $Opening
                balance
            55,429,067
            
            51,286,111
            
            38,950,872
            
            40,795,561
            
            30,194,667
            
            36,524,790Issued
                for:Private
                placement
            7,450,000
            
            8,730,587
            
            7,000,000
            
            5,128,107
            
            7,280,000
            
            3,648,757Warrants
            502,771
            
            459,795
            
            8,538,195
            
            5,074,192
            
            1,036,205
            
            458,461Exercise
                of stock options
            795,000
            
            286,125
            
            940,000
            
            243,225
            
            410,000
            
            147,653Property
            -
            
            -
            
            -
            
            -
            
            30,000
            
            15,900Severance
                settlement
            -
            
            -
            
            -
            
            -
            
            -
            
            -Stock-based
                compensation
            -
            
            76,690
            
            -
            
            45,026
            
            -
            
            38,153Closing
                balance
            64,176,838
            
            60,839,308
            
            55,429,067
            
            51,286,111
            
            38,950,872
            
            $40,795,561





**B.**
            **Memorandum
                and Articles of
                Association**





The
      Company was incorporated as Atna Resources Ltd. under the Province of British
      Columbia *Company Act* by registration of a Memorandum and Articles.
 On April 12, 1996, the Company adopted a revised Memorandum pursuant
      to
      which the authorized capital was increased from 20,000,000 to 100,000,000 common
      shares.  On May 20, 2003, the Company adopted a revised Memorandum
      pursuant to which the authorized capital was altered and increased to
      150,000,000 Shares, divided into 100,000,000 Common Shares without par value
      and
      50,000,000 Preferred Shares without par value.  The said Common and
      Preferred Shares shall have attached thereto the Special Rights and Restrictions
      as set forth in the Articles of the Company.  On April 14, 2005, the
      Company adopted the *Business Corporations Act* (British Columbia) (the
“BCBCA”) as legislated by the Province of British Columbia on March 29,
      2004.  Under the BCBCA, the Company adopted new Articles consistent
      with the terms and provisions of the BCBCA pursuant to which the authorized
      capital was increased to an unlimited amount.





**C.**
            **Material
                Contracts**





The
      following is a chronological summary of all material mineral property
      acquisitions and dispositions by the Company for the two years immediately
      preceding publication of this document.





**2005**





By
      an
      agreement dated February 4, 2005, the Company leased eight (8) patented lode
      mining claims located in the Jarbidge Mining District, Elko County, Nevada,
      from
      Century Gold LLC.  The agreement calls for an initial payment to the
      property owner of US$5,000 (paid) and annual lease payments ranging from
      US$5,000 on the first anniversary up to US$25,000 per year on the eighth
      anniversary and thereafter.  The mining lease calls for a 5% NSR
      royalty and the Company has the option of purchasing one-half (2.5%NSR) of
      the
      retained production royalty within the first 10 years of the agreement for
      US$2,000,000.





By
      an
      agreement dated February 4, 2005, the Company obtained an option to acquire
      100%
      interest in six (6) unpatented lode mining claims located in the Jarbidge Mining
      District, Elko County, Nevada, from the Big Ledge Group.  The
      agreement calls for gradually escalating annual payments ranging from an initial
      payment due on execution of US$1,500 (paid) toUS$6,000 on the forth anniversary
      date and thereafter.  The Company may purchase 100% interest in the
      property for $500,000 and all annual payments are considered advanced royalty
      payments and recoupable from any actual production royalty payments due
      owner.  The property is subject to a variable royalty of 1.5% NSR on
      gold sales below $350 per ounce gold up to a maximum of 3.0%NSR when gold is
      sold at greater than $400 per ounce.





On
      March
      1, 2005, the Company sold its 100% interest in the property to Yukon Gold
      Corporation Inc. (“Yukon Gold”) for cash payments totaling CDN$1,600,000 and
      400,000 common shares in Yukon Gold.  The Company





41





received
      an initial payment of $150,000 and 133,333 common shares in Yukon
      Gold.  Subsequent payments are scheduled as follows: $50,000 cash and
      133,333 common shares on or before December 12, 2005 (cash and shares received);
      $100,000 cash and an additional 133,334 common shares on or before December
      12,
      2006; $100,000 on or before December 12, 2007; and $200,000 on or before
      December 12, 2008, payable as a combination of cash or common
      shares.  Upon the commencement of commercial production, Yukon Gold
      shall pay the Company an additional $1,000,000 in a combination of cash and
      common shares.





The
      Company entered into an agreement in June, 2005, with New Sleeper Gold
      Corporation (“New Sleeper”).  New Sleeper has the option to acquire a
      100% interest in the property, subject to a 3% NSR royalty, which can be
      purchased for US$1,000,000 per percentage point.  New Sleeper can
      acquire the property by making cumulative cash payments of US$305,000 (US$50,000
      paid) over 7.5 years.   Subsequent to the 2005 year end, the
      agreement was terminated.





The
      Company entered into an agreement with Apolo Gold & Energy Inc. (‘Apolo) in
      September, 2005.  Apolo has the option to acquire a 55% interest in
      the Beowawe property by issuing a 100,000 restricted shares (received) to the
      Company upon execution of the Joint Venture Agreement and by issuing an
      additional 50,000 restricted shares or $50,000 worth of restricted shares,
      whichever, is greater on the first anniversary of the agreement and by spending
      US$1,700,000 on exploration over a four-year period.  Upon completion
      of the work commitment, Apolo may increase its interest to 70% by completing
      a
      bankable feasibility study.  If the Company does not participate in
      project financing after tabling of the feasibility study, the Company will
      dilute to a 15% Net Profits Interest.





**2006**





The
      Company entered into an earn-in agreement in November, 2006 with Meridian
      Minerals Corp. (“Meridian”).  Meridian has the right to acquire a 51%
      interest in the property by making cumulative cash payments of US$635,000
      (US$95,000 paid) and cumulative exploration expenditures of US$3.3 million
      over
      a period of four year.  At such a time as the earn-in commitments have
      been made a Meridian (51%)/Atna (49%) joint venture will be
      formed.  After formation of the joint venture Meridian will have the
      right to increase its participation interest in the joint venture from 51%
      to
      70% by delivering a pre-feasibility study to the Company within 30 months of
      making the initial earn-in contribution.





A
      draft
      lease agreement is in place between the Company and Compania Cielo Azul Limitada
      (“CCAL”) whereby CCAL may lease the property for a period twenty years by making
      the following lease payments to the Company: US$10,000 upon execution of an
      agreement (received); US$10,000 on the first anniversary of the agreement;
      US$25,000 on the second anniversary of the agreement; and $US$50,000 on the
      third anniversary of the agreement and on all subsequent anniversary dates
      thereafter.  The property will be subject to a 2.5% NSR
      royalty.  A formal agreement is yet to be executed by the Company and
      CCAL.





**D.**
            **Exchange
                Controls**





There
      is
      no law or 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.





There
      is
      no limitation imposed by Canadian law or by the constituent documents of the
      Company on the right of a non-resident to hold or vote Common Shares, other
      than
      are provided in the Investment Canada Act (Canada).  The following
      summarizes the material features of the Investment Canada Act
      (Canada).





The
      Investment Canada Act (Canada) requires certain “non-Canadian” individuals,
      governments, corporations or other entities who wish to acquire a “Canadian
      business” (as defined in the Investment Canada Act), or establish a “new
      Canadian business” (as defined in the Investment Canada Act) to file either a
      notification or an application for review with a governmental agency known
      as
“Investment Canada”.  The Investment Canada Act requires that certain
      acquisitions of control of a Canadian business by a “non-Canadian” must be
      reviewed and approved by the Minister responsible for the Investment Canada
      Act
      to ensure that the Minister is satisfied that the acquisition is “likely to be
      of net benefit to Canada”, such a determination based upon certain criteria set
      forth in the Investment Canada Act.  Only acquisitions of control are
      reviewable under the Investment Canada Act; however, the Investment Canada
      Act
      provides detailed rules for the determination of whether control has been
      acquired and, pursuant to those





42





rules,
      the acquisition of one-third or more of the voting shares of a corporation
      may,
      in some circumstances, be considered to constitute an acquisition of
      control.  Certain reviewable acquisitions of control may not be
      implemented before being approved by the Minister; if the Minister does not
      ultimately approve a reviewable acquisition which has been completed, the
      acquired Canadian business be divested. Failure to comply with the review
      provisions of the Investment Canada Act could result in, among other things,
      an
      injunction or a court order directing disposition of assets or
      shares.





**E.**
            **Taxation**





**U.S.
      Federal Income Tax Consequences**




The
      following is a summary of the anticipated material U.S. federal income tax
      consequences to a U.S. Holder (as defined below) arising from and relating
      to
      the acquisition, ownership, and disposition of Common Shares.





This
      summary is for general information purposes only and does not purport to be
      a
      complete analysis or listing of all potential U.S. federal income tax
      consequences that may apply to a U.S. Holder as a result of the acquisition,
      ownership, and disposition of Common Shares.  In addition, this
      summary does not take into account the individual facts and circumstances of
      any
      particular U.S. Holder that may affect the U.S. federal income tax consequences
      of the acquisition, ownership, and disposition of Common
      Shares.  Accordingly, this summary is not intended to be, and should
      not be construed as, legal or U.S. federal income tax advice with respect to
      any
      U.S. Holder.  Each U.S. Holder should consult its own financial
      advisor, legal counsel, or accountant regarding the U.S. federal income, U.S.
      state and local, and foreign tax consequences of the acquisition, ownership,
      and
      disposition of Common Shares.





**Scope
      of this Summary**





Authorities





This
      summary is based on the Internal Revenue Code of 1986, as amended (the “Code”),
      Treasury Regulations (whether final, temporary, or proposed), published rulings
      of the Internal Revenue Service (the “IRS”), published administrative positions
      of the IRS, the Convention Between Canada and the United States of America
      with
      Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended
      (the “Canada-U.S. Tax Convention”), and U.S. court decisions that are applicable
      and, in each case, as in effect and available, as of the date of this Annual
      Report.  Any of the authorities on which this summary is based could
      be changed in a material and adverse manner at any time, and any such change
      could be applied on a retroactive basis.  This summary does not
      discuss the potential effects, whether adverse or beneficial, of any proposed
      legislation that, if enacted, could be applied on a retroactive
      basis.





U.S.
      Holders





For
      purposes of this summary, a “U.S. Holder” is a beneficial owner of Common Shares
      that, for U.S. federal income tax purposes, is (a) an individual who is a
      citizen or resident of the U.S., (b) a corporation, or any other entity
      classified as a corporation for U.S. federal income tax purposes, that is
      created or organized in or under the laws of the U.S. or any state in the U.S.,
      including the District of Columbia, (c) an estate if the income of such
      estate is subject to U.S. federal income tax regardless of the source of such
      income, or (d) a trust if (i) such trust has validly elected to be
      treated as a U.S. person for U.S. federal income tax purposes or (ii) a
      U.S. court is able to exercise primary supervision over the administration
      of
      such trust and one or more U.S. persons have the authority to control all
      substantial decisions of such trust.





Non-U.S.
      Holders





For
      purposes of this summary, a “non-U.S. Holder” is a beneficial owner of Common
      Shares other than a U.S. Holder.  This summary does not address the
      U.S. federal income tax consequences of the acquisition, ownership, and
      disposition of Common Shares to non-U.S. Holders.  Accordingly, a
      non-U.S. Holder should consult its own financial advisor, legal counsel, or
      accountant regarding the U.S. federal income, U.S. state and local, and foreign
      tax consequences (including the potential application of and operation of any
      income tax treaties) of the acquisition, ownership, and disposition of Common
      Shares.





43





U.S.
      Holders Subject to Special U.S. Federal Income Tax Rules Not
      Addressed





This
      summary does not address the U.S. federal income tax consequences of the
      acquisition, ownership, and disposition of Common Shares to U.S. Holders that
      are subject to special provisions under the Code, including the following U.S.
      Holders:  (a) U.S. Holders that are tax-exempt organizations,
      qualified retirement plans, individual retirement accounts, or other
      tax-deferred accounts; (b) U.S. Holders that are financial institutions,
      insurance companies, real estate investment trusts, or regulated investment
      companies; (c) U.S. Holders that are dealers in securities or currencies or
      U.S. Holders that are traders in securities that elect to apply a mark-to-market
      accounting method; (d) U.S. Holders that have a “functional currency” other
      than the U.S. dollar; (e) U.S. Holders that are liable for the alternative
      minimum tax under the Code; (f) U.S. Holders that own Common Shares as part
      of a straddle, hedging transaction, conversion transaction, constructive sale,
      or other arrangement involving more than one position; (g) U.S. Holders
      that acquired Common Shares in connection with the exercise of employee stock
      options or otherwise as compensation for services; (h) U.S. Holders that
      hold Common Shares other than as a capital asset within the meaning of
      Section 1221 of the Code; or (i) U.S. Holders that own (directly,
      indirectly, or constructively) 10% or more, by voting power or value, of the
      outstanding shares of the Company.  U.S. Holders that are subject to
      special provisions under the Code, including U.S. Holders described immediately
      above, should consult their own financial advisor, legal counsel or accountant
      regarding the U.S. federal income, U.S. state and local, and foreign tax
      consequences of the acquisition, ownership, and disposition of Common
      Shares.





If
      an
      entity that is classified as a partnership (or “pass-through” entity) for U.S.
      federal income tax purposes holds Common Shares, the U.S. federal income tax
      consequences to such partnership (or “pass-through” entity) and the partners of
      such partnership (or owners of such “pass-through” entity) generally will depend
      on the activities of the partnership (or “pass-through” entity) and the status
      of such partners (or owners).  Partners of entities that are
      classified as partnerships (or owners of “pass-through” entities) for U.S.
      federal income tax purposes should consult their own financial advisor, legal
      counsel or accountant regarding the U.S. federal income tax consequences of
      the
      acquisition, ownership, and disposition of Common Shares.





Tax
      Consequences Other than U.S. Federal Income Tax Consequences Not
      Addressed





This
      summary does not address the U.S. state and local, U.S. federal estate and
      gift,
      or foreign tax consequences to U.S. Holders of the acquisition, ownership,
      and
      disposition of Common Shares.  Each U.S. Holder should consult its own
      financial advisor, legal counsel, or accountant regarding the U.S. state and
      local, U.S. federal estate and gift, and foreign tax consequences of the
      acquisition, ownership, and disposition of Common Shares.





**U.S.
      Federal Income Tax Consequences of the Acquisition, Ownership, and Disposition
      of Common Shares**




Distributions
      on Common Shares





***General
      Taxation of Distributions***





A
      U.S.
      Holder that receives a distribution, including a constructive distribution,
      with
      respect to the Common Shares will be required to include the amount of such
      distribution in gross income as a dividend (without reduction for any Canadian
      income tax withheld from such distribution) to the extent of the current or
      accumulated “earnings and profits” of the Company.  To the extent that
      a distribution exceeds the current and accumulated “earnings and profits” of the
      Company, such distribution will be treated (a) first, as a tax-free return
      of capital to the extent of a U.S. Holder’s tax basis in the Common Shares and,
      (b) thereafter, as gain from the sale or exchange of such Common
      Shares.  (See more detailed discussion at “Disposition of Common
      Shares” below).





***Reduced
      Tax Rates for Certain Dividends***





For
      taxable years beginning after December 31, 2002 and before January 1, 2009,
      a
      dividend paid by the Company generally will be taxed at the preferential tax
      rates applicable to long-term capital gains if (a) the Company is a
“qualified foreign corporation” (as defined below), (b) the U.S. Holder
      receiving such dividend is an individual, estate, or trust, and (c) such
      dividend is paid on Common Shares that have been held by such U.S. Holder for
      at
      least 61 days during the 121-day period beginning 60 days before the
“ex-dividend date.”





The
      Company generally will be a “qualified foreign corporation” under
      Section 1(h)(11) of the Code (a “QFC”) if





44





(a) the
      Company is incorporated in a possession of the U.S., (b) the Company is
      eligible for the benefits of the Canada-U.S. Tax Convention, or (c) the
      Common Shares are readily tradable on an established securities market in the
      U.S.  However, even if the Company satisfies one or more of such
      requirements, the Company will not be treated as a QFC if the Company is a
      “passive foreign investment company” (as defined below) for the taxable year
      during which the Company pays a dividend or for the preceding taxable
      year.  In 2003, the U.S. Department of the Treasury (the “Treasury”)
      and the IRS announced that they intended to issue Treasury Regulations providing
      procedures for a foreign corporation to certify that it is a
      QFC.  Although these Treasury Regulations have not yet been issued,
      the Treasury and the IRS have confirmed their intention to issue these Treasury
      Regulations.  It is expected that these Treasury Regulations will
      obligate persons required to file information returns to report a dividend
      paid
      by a foreign corporation as a dividend from a QFC if the foreign corporation
      has, among other things, certified under penalties of perjury that the foreign
      corporation was not a “passive foreign investment company” for the taxable year
      during which the foreign corporation paid the dividend or for the preceding
      taxable year.





As
      discussed below, the Company believes that it was a “passive foreign investment
      company” for the taxable year ended December 31, 2006.  (See more
      detailed discussion at “Additional Rules that May Apply to U.S. Holders—Passive
      Foreign Investment Company” below).  Accordingly, the Company does not
      believe that it was a QFC for the taxable year ended December 31,
      2006.





If
      the
      Company is not a QFC, a dividend paid by the Company to a U.S. Holder, including
      a U.S. Holder that is an individual, estate, or trust, generally will be taxed
      at ordinary income tax rates (and not at the preferential tax rates applicable
      to long-term capital gains).  The dividend rules are complex, and each
      U.S. Holder should consult its own financial advisor, legal counsel, or
      accountant regarding the dividend rules.





***Distributions
      Paid in Foreign Currenc**y*





The
      amount of a distribution paid to a U.S. Holder in foreign currency generally
      will be equal to the U.S. dollar value of such distribution based on the
      exchange rate applicable on the date of receipt.  A U.S. Holder that
      does not convert foreign currency received as a distribution into U.S. dollars
      on the date of receipt generally will have a tax basis in such foreign currency
      equal to the U.S. dollar value of such foreign currency on the date of
      receipt.  Such a U.S. Holder generally will recognize ordinary income
      or loss on the subsequent sale or other taxable disposition of such foreign
      currency (including an exchange for U.S. dollars).





***Dividends
      Received Deduction***





Dividends
      paid on the Common Shares generally will not be eligible for the “dividends
      received deduction.”  The availability of the dividends received
      deduction is subject to complex limitations that are beyond the scope of this
      discussion, and a U.S. Holder that is a corporation should consult its own
      financial advisor, legal counsel, or accountant regarding the dividends received
      deduction.





***Disposition
      of Common Shares***





A
      U.S.
      Holder will recognize gain or loss on the sale or other taxable disposition
      of
      Common Shares in an amount equal to the difference, if any, between (a) the
      amount of cash plus the fair market value of any property received and
      (b) such U.S. Holder’s tax basis in the Common Shares sold or otherwise
      disposed of.  Any such gain or loss generally will be capital gain or
      loss, which will be long-term capital gain or loss if the Common Shares are
      held
      for more than one year.  Gain or loss recognized by a U.S. Holder on
      the sale or other taxable disposition of Common Shares generally will be treated
      as “U.S. source” for purposes of applying the U.S. foreign tax credit
      rules.   (See more detailed discussion at “Foreign Tax Credit”
below).





Preferential
      tax rates apply to long-term capital gains of a U.S. Holder that is an
      individual, estate, or trust.  There are currently no preferential tax
      rates for long-term capital gains of a U.S. Holder that is a
      corporation.  Deductions for capital losses are subject to significant
      limitations under the Code.





***Foreign
      Tax Credit***





A
      U.S.
      Holder that pays (whether directly or through withholding) Canadian income
      tax
      with respect to dividends paid on the Common Shares generally will be entitled,
      at the election of such U.S. Holder, to receive either a





45





deduction
      or a credit for such Canadian income tax paid.  Generally, a credit
      will reduce a U.S. Holder’s U.S. federal income tax liability on a
      dollar-for-dollar basis, whereas a deduction will reduce a U.S. Holder’s income
      subject to U.S. federal income tax.  This election is made on a
      year-by-year basis and applies to all foreign taxes paid (whether directly
      or
      through withholding) by a U.S. Holder during a year.





Complex
      limitations apply to the foreign tax credit, including the general limitation
      that the credit cannot exceed the proportionate share of a U.S. Holder’s U.S.
      federal income tax liability that such U.S. Holder’s “foreign source” taxable
      income bears to such U.S. Holder’s worldwide taxable income.  In
      applying this limitation, a U.S. Holder’s various items of income and deduction
      must be classified, under complex rules, as either “foreign source” or “U.S.
      source.”  In addition, this limitation is calculated separately with
      respect to specific categories of income (including “passive income,” “high
      withholding tax interest,” “financial services income,” “general income,” and
      certain other categories of income).  Dividends paid by the Company
      generally will constitute “foreign source” income and generally will be
      categorized as “passive income” or, in the case of certain U.S. Holders,
“financial services income.”  However, for taxable years beginning
      after December 31, 2006, the foreign tax credit limitation categories are
      reduced to “passive income” and “general income” (and the other categories of
      income, including “financial services income,” are eliminated).  The
      foreign tax credit rules are complex, and each U.S. Holder should consult its
      own financial advisor, legal counsel, or accountant regarding the foreign tax
      credit rules.





***Information
      Reporting; Backup Withholding Tax***





Payments
      made within the U.S., or by a U.S. payor or U.S. middleman, of dividends on,
      or
      proceeds arising from the sale or other taxable disposition of, Common Shares
      generally will be subject to information reporting and backup withholding tax,
      at the rate of 28%, if a U.S. Holder (a) fails to furnish such U.S.
      Holder’s correct U.S. taxpayer identification number (generally on Form W-9),
      (b) furnishes an incorrect U.S. taxpayer identification number, (c) is
      notified by the IRS that such U.S. Holder has previously failed to properly
      report items subject to backup withholding tax, or (d) fails to certify,
      under penalty of perjury, that such U.S. Holder has furnished its correct U.S.
      taxpayer identification number and that the IRS has not notified such U.S.
      Holder that it is subject to backup withholding tax.  However, U.S.
      Holders that are corporations generally are excluded from these information
      reporting and backup withholding tax rules.  Any amounts withheld
      under the U.S. backup withholding tax rules will be allowed as a credit against
      a U.S. Holder’s U.S. federal income tax liability, if any, or will be refunded,
      if such U.S. Holder furnishes required information to the IRS.  Each
      U.S. Holder should consult its own financial advisor, legal counsel, or
      accountant regarding the information reporting and backup withholding tax
      rules.





**Additional
      Rules that May Apply to U.S. Holders**





If
      the
      Company is a “controlled foreign corporation” or a “passive foreign investment
      company” (each as defined below), the preceding sections of this summary may not
      describe the U.S. federal income tax consequences to U.S. Holders of the
      acquisition, ownership, and disposition of Common Shares.





***Controlled
      Foreign Corporation***





The
      Company generally will be a “controlled foreign corporation” under
      Section 957 of the Code (a “CFC”) if more than 50% of the total voting
      power or the total value of the outstanding shares of the Company is owned,
      directly or indirectly, by citizens or residents of the U.S., domestic
      partnerships, domestic corporations, domestic estates, or domestic trusts (each
      as defined in Section 7701(a)(30) of the Code), each of which own, directly
      or indirectly, 10% or more of the total voting power of the outstanding shares
      of the Company (a “10% Shareholder”).





If
      the
      Company is a CFC, a 10% Shareholder generally will be subject to current
      U.S. federal income tax with respect to (a) such 10% Shareholder’s pro rata
      share of the “subpart F income” (as defined in Section 952 of the Code) of
      the Company and (b) such 10% Shareholder’s pro rata share of the
      earnings of the Company invested in “United States property” (as defined in
      Section 956 of the Code).  In addition, under Section 1248
      of the Code, any gain recognized on the sale or other taxable disposition of
      Common Shares by a U.S. Holder that was a 10% Shareholder at any time
      during the five-year period ending with such sale or other taxable disposition
      generally will be treated as a dividend to the extent of the “earnings and
      profits” of the Company that are attributable to such Common
      Shares.  If the Company is both a CFC and a “passive foreign
      investment company” (as defined below), the Company generally will be treated as
      a CFC (and not as a “passive foreign investment company”) with respect to any
      10% Shareholder.





46








The
      Company does not believe that it has previously been, or currently is, a
      CFC.  However, there can be no assurance that the Company will not be
      a CFC for the current or any subsequent taxable year.





**Passive
      Foreign Investment Company**





The
      Company generally will be a “passive foreign investment company” under
      Section 1297 of the Code (a “PFIC”) if, for a taxable year, (a) 75% or
      more of the gross income of the Company for such taxable year is passive income
      or (b) 50% or more of the assets held by the Company either produce passive
      income or are held for the production of passive income, based on the fair
      market value of such assets (or on the adjusted tax basis of such assets, if
      the
      Company is not publicly traded and either is a “controlled foreign corporation”
or makes an election).  “Passive income” includes, for example,
      dividends, interest, certain rents and royalties, certain gains from the sale
      of
      stock and securities, and certain gains from commodities
      transactions.





For
      purposes of the PFIC income test and asset test described above, if the Company
      owns, directly or indirectly, 25% or more of the total value of the outstanding
      shares of another foreign corporation, the Company will be treated as if it
      (a) held a proportionate share of the assets of such other foreign
      corporation and (b) received directly a proportionate share of the income
      of such other foreign corporation.  In addition, for purposes of the
      PFIC income test and asset test described above, “passive income” does not
      include any interest, dividends, rents, or royalties that are received or
      accrued by the Company from a “related person” (as defined in
      Section 954(d)(3) of the Code), to the extent such items are properly
      allocable to the income of such related person that is not passive
      income.





The
      Company believes that it was a PFIC for the taxable year ended December 31,
      2005, and expects that it may be a PFIC for subsequent taxable
      years.  The determination of whether the Company was, or will be, a
      PFIC for a taxable year depends, in part, on the application of complex U.S.
      federal income tax rules, which are subject to differing
      interpretations.  In addition, whether the Company will be a PFIC for
      each subsequent taxable year depends on the assets and income of the Company
      over the course of each such taxable year and, as a result, cannot be predicted
      with certainty as of the date of this Annual Report.  Accordingly,
      there can be no assurance that the IRS will not challenge the determination
      made
      by the Company concerning its PFIC status.





***Default
      PFIC Rules Under Section 1291 of the Code***





If
      the
      Company is a PFIC, the U.S. federal income tax consequences to a U.S. Holder
      of
      the acquisition, ownership, and disposition of Common Shares will depend on
      whether such U.S. Holder makes an election to treat the Company as a “qualified
      electing fund” or “QEF” under Section 1295 of the Code (a “QEF Election”)
      or a mark-to-market election under Section 1296 of the Code (a
“Mark-to-Market Election”).  A U.S. Holder that does not make either a
      QEF Election or a Mark-to-Market Election will be referred to in this summary
      as
      a “Non-Electing U.S. Holder.”





A
      Non-Electing U.S. Holder will be subject to the rules of Section 1291 of
      the Code with respect to (a) any gain recognized on the sale or other
      taxable disposition of Common Shares and (b) any excess distribution paid
      on the Common Shares.  A distribution generally will be an “excess
      distribution” to the extent that such distribution (together with all other
      distributions received in the current taxable year) exceeds 125% of the average
      distributions received during the three preceding taxable years (or during
      a
      U.S. Holder’s holding period for the Common Shares, if shorter).





Under
      Section 1291 of the Code, any gain recognized on the sale or other taxable
      disposition of Common Shares, and any excess distribution paid on the Common
      Shares, must be ratably allocated to each day in a Non-Electing U.S. Holder’s
      holding period for the Common Shares.  The amount of any such gain or
      excess distribution allocated to prior years of such Non-Electing U.S. Holder’s
      holding period for the Common Shares (other than years prior to the first
      taxable year of the Company beginning after December 31, 1986 for which the
      Company was not a PFIC) will be subject to U.S. federal income tax at the
      highest tax applicable to ordinary income in each such prior year.  A
      Non-Electing U.S. Holder will be required to pay interest on the resulting
      tax
      liability for each such prior year, calculated as if such tax liability had
      been
      due in each such prior year.  Such a Non-Electing U.S. Holder that is
      not a corporation must treat any such interest paid as “personal interest,”
which is not deductible.  The amount of any such gain or excess
      distribution allocated to the current year of such Non-Electing U.S. Holder’s
      holding period for the Common Shares will be treated as ordinary income in
      the
      current year, and no interest charge will be incurred with respect to the
      resulting tax liability for the current year.





47








If
      the
      Company is a PFIC for any taxable year during which a Non-Electing U.S. Holder
      holds Common Shares, the Company will continue to be treated as a PFIC with
      respect to such Non-Electing U.S. Holder, regardless of whether the Company
      ceases to be a PFIC in one or more subsequent years.  A Non-Electing
      U.S. Holder may terminate this deemed PFIC status by electing to recognize
      gain
      (which will be taxed under the rules of Section 1291 of the Code discussed
      above) as if such Common Shares were sold on the last day of the last taxable
      year for which the Company was a PFIC.





***QEF
      Election***





A
      U.S.
      Holder that makes a QEF Election generally will not be subject to the rules
      of
      Section 1291 of the Code discussed above.  However, a U.S. Holder
      that makes a QEF Election will be subject to U.S. federal income tax on such
      U.S. Holder’s pro rata share of (a) the net capital gain of the Company,
      which will be taxed as long-term capital gain to such U.S. Holder, and
      (b) and the ordinary earnings of the Company, which will be taxed as
      ordinary income to such U.S. Holder.  Generally, “net capital gain” is
      the excess of (a) net long-term capital gain over (b) net short-term
      capital loss, and “ordinary earnings” are the excess of (a) “earnings and
      profits” over (b) net capital gain.  A U.S. Holder that makes a
      QEF Election will be subject to U.S. federal income tax on such amounts for
      each
      taxable year in which the Company is a PFIC, regardless of whether such amounts
      are actually distributed to such U.S. Holder by the Company.  However,
      a U.S. Holder that makes a QEF Election may, subject to certain limitations,
      elect to defer payment of current U.S. federal income tax on such amounts,
      subject to an interest charge.  If such U.S. Holder is not a
      corporation, any such interest paid will be treated as “personal interest,”
which is not deductible.





A
      U.S.
      Holder that makes a QEF Election generally (a) may receive a tax-free
      distribution from the Company to the extent that such distribution represents
      “earnings and profits” of the Company that were previously included in income by
      the U.S. Holder because of such QEF Election and (b) will adjust such U.S.
      Holder’s tax basis in the Common Shares to reflect the amount included in income
      or allowed as a tax-free distribution because of such QEF
      Election.  In addition, a U.S. Holder that makes a QEF Election
      generally will recognize capital gain or loss on the sale or other taxable
      disposition of Common Shares.





The
      procedure for making a QEF Election, and the U.S. federal income tax
      consequences of making a QEF Election, will depend on whether such QEF Election
      is timely.  A QEF Election will be treated as “timely” if such QEF
      Election is made for the first year in the U.S. Holder’s holding period for the
      Common Shares in which the Company was a PFIC.  A U.S. Holder may make
      a timely QEF Election by filing the appropriate QEF Election documents at the
      time such U.S. Holder files a U.S. federal income tax return for such first
      year.  However, if the Company was a PFIC in a prior year, then in
      addition to filing the QEF Election documents, a U.S. Holder must elect to
      recognize (a) gain (which will be taxed under the rules of
      Section 1291 of the Code discussed above) as if the Common Shares were sold
      on the qualification date or (b) if the Company was also a CFC, such U.S.
      Holder’s pro rata share of the post-1986 “earnings and profits” of the Company
      as of the qualification date.  The “qualification date” is the first
      day of the first taxable year in which the Company was a QEF with respect to
      such U.S. Holder.  The election to recognize such gain or “earnings
      and profits” can only be made if such U.S. Holder’s holding period for the
      Common Shares includes the qualification date.  By electing to
      recognize such gain or “earnings and profits,” such U.S. Holder will be deemed
      to have made a timely QEF Election.  In addition, under very limited
      circumstances, a U.S. Holder may make a retroactive QEF Election if such U.S.
      Holder failed to file the QEF Election documents in a timely
      manner.





A
      QEF
      Election will apply to the taxable year for which such QEF Election is made
      and
      to all subsequent taxable years, unless such QEF Election is invalidated or
      terminated or the IRS consents to revocation of such QEF Election.  If
      a U.S. Holder makes a QEF Election and, in a subsequent taxable year, the
      Company ceases to be a PFIC, the QEF Election will remain in effect (although
      it
      will not be applicable) during those taxable years in which the Company is
      not a
      PFIC.  Accordingly, if the Company becomes a PFIC in another
      subsequent taxable year, the QEF Election will be effective and the U.S. Holder
      will be subject to the QEF rules described above during any such subsequent
      taxable year in which the Company qualifies as a PFIC.  In addition,
      the QEF Election will remain in effect (although it will not be applicable)
      with
      respect to a U.S. Holder even after such U.S. Holder disposes of all of such
      U.S. Holder’s direct and indirect interest in the Common
      Shares.  Accordingly, if such U.S. Holder reacquires an interest in
      the Company, such U.S. Holder will be subject to the QEF rules described above
      for each taxable year in which the Company is a PFIC.





48





Each
      U.S.
      Holder should consult its own financial advisor, legal counsel, or accountant
      regarding the availability of, and procedure for making, a QEF
      Election.  U.S. Holders should be aware that there can be no assurance
      that the Company will satisfy record keeping requirements that apply to a QEF,
      or that the Company will supply U.S. Holders with information that such U.S.
      Holders require to report under the QEF rules, in event that the Company is
      a
      PFIC and a U.S. Holder wishes to make a QEF Election.





***Mark-to-Market
      Election***





A
      U.S.
      Holder may make a Mark-to-Market Election only if the Common Shares are
      marketable stock.  The Common Shares generally will be “marketable
      stock” if the Common Shares are regularly traded on a qualified exchange or
      other market.  For this purpose, a “qualified exchange or other
      market” includes (a) a national securities exchange that is registered with
      the Securities and Exchange Commission, (b) the national market system
      established pursuant to section 11A of the Securities and Exchange Act of 1934,
      or (c) a foreign securities exchange that is regulated or supervised by a
      governmental authority of the country in which the market is located, provided
      that (i) such foreign exchange has trading volume, listing, financial
      disclosure, surveillance, and other requirements designed to prevent fraudulent
      and manipulative acts and practices, remove impediments to and perfect the
      mechanism of a free, open, fair, and orderly market, and protect investors
      (and
      the laws of the country in which the foreign exchange is located and the rules
      of the foreign exchange ensure that such requirements are actually enforced)
      (ii) the rules of such foreign exchange effectively promote active trading
      of listed stocks.  If the Common Shares are traded on such a qualified
      exchange or other market, the Common Shares generally will be “regularly traded”
for any calendar year during which the Common Shares are traded, other than
      in
      de minimis quantities, on at least 15 days during each calendar
      quarter.





A
      U.S.
      Holder that makes a Mark-to-Market Election generally will not be subject to
      the
      rules of Section 1291 of the Code discussed above.  However, if a
      U.S. Holder makes a Mark-to-Market Election after the beginning of such U.S.
      Holder’s holding period for the Common Shares and such U.S. Holder has not made
      a timely QEF Election, the rules of Section 1291 of the Code discussed
      above will apply to certain dispositions of, and distributions on, the Common
      Shares.





A
      U.S.
      Holder that makes a Mark-to-Market Election will include in ordinary income,
      for
      each taxable year in which the Company is a PFIC, an amount equal to the excess,
      if any, of (a) the fair market value of the Common Shares as of the close
      of such taxable year over (b) such U.S. Holder’s tax basis in such Common
      Shares.  A U.S. Holder that makes a Mark-to-Market Election will be
      allowed a deduction in an amount equal to the lesser of (a) the excess, if
      any, of (i) such U.S. Holder’s adjusted tax basis in the Common Shares over
      (ii) the fair market value of such Common Shares as of the close of such
      taxable year or (b) the excess, if any, of (i) the amount included in
      ordinary income because of such Mark-to-Market Election for prior taxable years
      over (ii) the amount allowed as a deduction because of such Mark-to-Market
      Election for prior taxable years.





A
      U.S.
      Holder that makes a Mark-to-Market Election generally also will adjust such
      U.S.
      Holder’s tax basis in the Common Shares to reflect the amount included in gross
      income or allowed as a deduction because of such Mark-to-Market
      Election.  In addition, upon a sale or other taxable disposition of
      Common Shares, a U.S. Holder that makes a Mark-to-Market Election will recognize
      ordinary income or loss (not to exceed the excess, if any, of (a) the
      amount included in ordinary income because of such Mark-to-Market Election
      for
      prior taxable years over (b) the amount allowed as a deduction because of
      such Mark-to-Market Election for prior taxable years).





A
      Mark-to-Market Election applies to the taxable year in which such Mark-to-Market
      Election is made and to each subsequent taxable year, unless the Common Shares
      cease to be “marketable stock” or the IRS consents to revocation of such
      election.  Each U.S. Holder should consult its own financial advisor,
      legal counsel, or accountant regarding the availability of, and procedure for
      making, a Mark-to-Market Election.





***Other
      PFIC Rules***





Under
      Section 1291(f) of the Code, the IRS has issued proposed Treasury
      Regulations that, subject to certain exceptions, would cause a U.S. Holder
      that
      had not made a timely QEF Election to recognize gain (but not loss) upon certain
      transfers of Common Shares that would otherwise be tax-deferred (e.g., gifts
      and
      exchanges pursuant to corporate reorganizations).  However, the
      specific U.S. federal income tax consequences to a U.S. Holder may vary based
      on
      the manner in which Common Shares are transferred.





49








Certain
      additional adverse rules will apply with respect to a U.S. Holder if the Company
      is a PFIC, regardless of whether such U.S. Holder makes a QEF
      Election.  For example under Section 1298(b)(6) of the Code, a
      U.S. Holder that uses Common Shares as security for a loan will, except as
      may
      be provided in Treasury Regulations, be treated as having made a taxable
      disposition of such Common Shares.





The
      PFIC
      rules are complex, and each U.S. Holder should consult its own financial
      advisor, legal counsel, or accountant regarding the PFIC rules and how the
      PFIC
      rules may affect the U.S. federal income tax consequences of the acquisition,
      ownership, and disposition of Common Shares.





**F.**
            **Dividends
                and Paying Agents**





This
      Form
      20F is being filed as an Annual Report under the Exchange Act and, as such,
      there is no requirement to provide any information under this
      section.





**G.**
            **Statement
                by Experts**





This
      Form
      20F is being filed as an Annual Report under the Exchange Act and, as such,
      there is no requirement to provide any information under this
      section.





**H.**
            **Documents
                on Display**





Documents
      referred to in this Annual Report may be inspected at the head office of the
      Company at Suite 510 - 510 Burrard Street, Vancouver, B.C. Canada V6C 3A8 or
      the
      Company's registered office at 1600 – 925 West Georgia Street, Vancouver,
      British Columbia, Canada V6C 3L2 during normal business hours.





The
      Company is subject to the information requirements of the Securities Exchange
      Act of 1934, as amended (the “Exchange Act”) and, to the extent required of
      Canadian companies, will file periodic reports and other information with the
      Commission.  All such reports and information may be ready and copied
      at the public reference facilities listed below.  The Company intends
      to give its shareholders annual reports containing audited financial statements
      and a report thereon from its independent chartered accountants and quarterly
      reports for the first three quarters of each year containing unaudited interim
      financial information.





The
      Company’s SEC filing, and the exhibits thereto, are available for inspection and
      copying at the public reference facilities maintained by the Commission in
      Judiciary Plaza, 100 F Street, NE, Room 1580, Washington, DC
      20549.  Copies of these filings may be obtained from these offices
      after the payment of prescribed fees.  Please call the Commission at
      (202) 551-8090 for further information on the public reference
      rooms.





The
      Company will also provide its shareholders with proxy statements prepared
      according to Canadian law.  As a Canadian company, the Company is
      exempt from the Exchange Act rules about prescribing the furnishing and content
      of proxy statements to share holders and is also exempt from the short-swing
      profit recovery and disclosure regime of section 16 of the Exchange
      Act.





50





**ITEM
      11.                      QUANTITATIVE
      AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK**





The
      Company anticipates its primary market risk, if any, to be related to
      fluctuations in exchange rates.  Exchange rate risk may arise if the
      Company is required to use different currencies for various aspects of its
      operations.  The Company uses the Canadian dollar as its reporting
      currency and is therefore exposed to foreign exchange movements in Chile and
      the
      United States where the Company is conducting exploration
      activities.





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
      foreign operations.  Based on prior years, the Company does not
      believe that it is subject to material foreign exchange
      fluctuations.  However, no assurance can be given that this will not
      occur in the future.








**ITEM
                12.**
            **DESCRIPTION
                OF SECURITIES OTHER THAN EQUITY
                SECURITIES**





This
      Form
      20F is being filed as an Annual Report under the Exchange Act and, as such,
      there is no requirement to provide any information under this
      section.








**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**





The
      Company has a Shareholder Rights Plan (the “Rights Plan”), which was confirmed
      by the shareholders at the Annual and Extraordinary General Meeting held on
      June
      8, 2001 and at the Annual and Extraordinary General Meeting held on April 14,
      2005.





The
      following is a summary of the terms of the Shareholder Rights Plan.





***General***





The
      rights have been issued pursuant to a shareholder rights plan agreement dated
      February 12, 2001 between the Company and Pacific Corporate Trust Company as
      the
      rights agent.  Each right will entitle the holder to purchase from the
      Company one Common Share at the exercise price of $30 per share, subject to
      adjustments, at any time after the separation time (defined
      below).  However, if a flip-in event (defined below) occurs, each
      right will entitle the holder to receive, upon payment of the exercise price,
      Common Shares having a market value equal to two times the exercise
      price.  The rights are non-exercisable until the separation
      time.





***Trading
      of Rights***





51








Until
      the
      separation time, the rights will be evidenced by the outstanding certificates
      for Common Shares and the rights will be transferred with, and only with, the
      Common Shares.  As soon as practicable following the separation time,
      separate certificates evidencing the rights will be mailed to holders of record
      of Common Shares as of the close of business at the separation time and the
      separate rights certificates will thereafter evidence the rights.





***Separation
      Time and Acquiring Person***





The
      rights will separate and trade apart from the Common Shares and become
      exercisable at the separation time.  "Separation time" generally means
      the close of business on the tenth trading day following the commencement or
      announcement of the intent of any person to commence a take-over bid, other
      than
      a permitted bid or a competing bid, but under certain circumstances can mean
      the
      eighth trading day after a person becomes an "acquiring person" by acquiring
      20%
      or more of the voting shares of any class.





***Flip-in
      Event***





A
      "flip-in event" will, in general terms, occur when a person becomes an acquiring
      person.  Upon the occurrence of a flip-in event, each right will
      entitle the holder to acquire, on payment of the exercise price, that number
      of
      Common Shares having a market value equal to two times the exercise
      price.  However, any rights beneficially owned by an acquiring person
      or by any direct or indirect transferees of such person, will be
      void.  The term "beneficial ownership" is defined to include, under
      certain circumstances, shares owned indirectly through affiliates, associates,
      trusts and partnerships, other situations of ownership deemed by operation
      of
      law, shares subject to acquisition or voting agreements and shares owned by
      persons acting jointly or in concert.  There are several exceptions,
      including exceptions directed towards investment managers, trust companies,
      and
      independent managers of pension plans who are not participating in a take-over
      bid.





***Permitted
      Bids***





Permitted
      bids are exempted from the operation of the Shareholder Rights
      Plan.  In summary, a permitted bid is a take-over bid made by way of
      take-over bid circular which complies with the following
      provisions:





(a)
            
            It
                is made to all holders of voting shares of the Company of a particular
                class and for all those voting
                shares.


(b)
            No
                voting shares can be taken up and paid for before the close of business
                on
                a date not less than 60 days following the date of the take-over
                bid and
                unless more than 50% of voting shares held by shareholders independent
                of
                the offeror are tendered and not
                withdrawn.


(c)
            Voting
                shares may be tendered at any time during such 60-day period and
                may be
                withdrawn until taken up and paid
                for.


(d)
            If
                the condition described in (b) above is met, there will be a public
                announcement and the take-over bid will be open for a further period
                of 10
                business days.





The
      Shareholder Rights Plan contains provisions designed to ensure that, if
      considered appropriate, the time for tendering to two or more competing
      permitted bids will occur on the same date.





***Exchange
      Option***





Under
      certain circumstances, the board of directors of the Company can, on exercise
      of
      a right and payment of the exercise price, issue other securities or assets
      of
      the Company in lieu of Common Shares.  The board of directors of the
      Company can also determine to issue in exchange for the rights, but without
      payment of the exercise price, Common Shares having a value equal to the
      exercise price or other securities or assets of the Company having the same
      value.





***Adjustments***





The
      exercise price, the number and kind of shares subject to purchase upon exercise
      of each right and the number of rights outstanding are subject to adjustment
      from time to time to prevent dilution in the event that the Company takes
      certain actions involving the Company's share capital which would otherwise
      have
      a dilutive effect.





52





***Redemption***





At
      any
      time before the occurrence of a flip-in event, the board of directors may elect
      to redeem the rights in whole at a redemption price of $0.00001 per
      right.





***Waiver***





The
      board
      of directors may waive the application of the Shareholder Rights Plan to any
      flip-in event if it determines that a person became an acquiring person by
      inadvertence, conditional upon such person having, within 10 days after the
      determination by the board of directors, reduced its beneficial ownership of
      shares such that it is no longer an acquiring person.  The board of
      directors may also, until a flip-in event has occurred, waive the application
      of
      the Shareholder Rights Plan to any particular flip-in event, but in that event,
      the board of directors must waive the application of the Shareholder Rights
      Plan
      to any other flip-in event occurring within 75 days after the initial
      waiver.





***Amendments***





The
      board
      of directors may amend the Shareholder Rights Plan to correct clerical or
      typographical errors, to maintain the validity of the plan as a result of any
      changes in any applicable legislation or to increase or decrease the exercise
      price.  Any amendments required to maintain the validity of the
      Shareholder Rights Plan must be submitted to the shareholders of the Company
      or,
      after the separation time, to the holders of the rights for
      confirmation.





Other
      amendments can only be made with the approval of the shareholders of the Company
      or, after the separation time, the holders of the rights.  Any
      supplements or amendments to the Shareholder Rights Plan require the prior
      written consent of The Toronto Stock Exchange.





***Term***





The
      Shareholder Rights Plan has a term of 10 years.  However, if it is not
      subsequently confirmed at the shareholders’ meetings on the fourth and seventh
      anniversaries of such confirmation, it will terminate at the end of each such
      shareholders’ meeting.








**ITEM
                15.**
            **CONTROLS
                AND PROCEDURES**





Evaluation
      of disclosure controls and procedures.  The Company’s principal
      executive officer and its principal financial officer, after evaluating the
      effectiveness of the Company’s disclosure controls and procedures (as defined in
      Exchange Act Rules 13a-15(e) and 15d-15(e) on December 31, 2006, concluded
      that,
      as of such date, the Company’s disclosure controls and procedures were adequate
      and effective.





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








**ITEM
                16.**
            **AUDIT
                COMMITTEE FINANCIAL EXPERT AND CODE OF
                ETHICS**





**A.**
            **Audit
                Committee Financial Expert**





The
      Company’s Board of Directors has determined that it has at least one audit
      committee financial expert (as such term is defined in the rules and regulations
      of the U.S. Securities Commission (the “SEC”)) serving on its Audit
      Committee.  Mr. Wilson Barbour has been determined to be such audit
      committee financial expert and is independent.  The SEC has indicated
      that the designation of an audit committee financial expert does not make
      Mr.





53





Barbour
      an “expert” for any purpose, impose on him any duties, obligations or liability
      that are greater than the duties, obligations or liability imposed on him as
      a
      member of the Audit Committee and the Board of Directors in absence of such
      designation, or affect the duties, obligations or liability of any other member
      of the Audit Committee or Board of Directors.





**B.**
            **Code
                of Ethics**





The
      Company has adopted the following code of ethics that applies to all the
      Company’s Officers, including the Chief Executive Officer and the Chief
      Financial Officer:





It
      is the
      policy of the Company that all officers, including the Chief Executive Officer
      and the Chief Financial Officer, adhere to and advocate the following principles
      governing their professional and ethical conduct in the fulfillment of their
      responsibilities:





1.
            Act
                with honesty and integrity, avoiding actual or apparent conflicts
                between
                his or her personal, private interest and the interest of the Company,
                including receiving improper personal benefits as a result of his
                or her
                position.





2.
            Provide
                stakeholders with information that is accurate, complete, objective,
                relevant, timely and
                understandable.





3.
            Comply
                with laws of federal, provincial and local governments applicable
                to the
                Company, and the rules and regulations of private and public regulatory
                agencies having jurisdiction over the
                Company.





4.
            Act
                in good faith, responsibly, with due care, and diligence, without
                misrepresenting or omitting material facts or allowing independent
                judgment to be compromised.





5.
            Respect
                the confidentiality of information acquired in the course of the
                performance of his or her responsibilities except when authorized
                or
                otherwise legally obligated to disclose.  Do not use
                confidential information, acquired in the course of the performance
                of his
                or her responsibilities, for personal advantage.  Do not compete
                directly or indirectly with the
                Company.





6.
            Proactively
                promote ethical behavior among subordinates and
                peers.





7.
            Use
                corporate assets and resources employed or entrusted in a responsible
                manner.





8.
            Advance
                the Company’s legitimate interest and proactively promote high integrity
                as a responsible member of his or her business team and/or in his
                or her
                work environment.





**C.**
            **Principal
                Accountant Fees and
                Services**





Fees





For
      the
      years ended December 31, 2005 and 2004, fees payable to the Company’s external
      auditors, De Visser Gray, Chartered Accountants, of Vancouver British Columbia,
      for audit services and for non-audit services were estimated and accrued as
      follows.  During the years ended December 31 2005 and 2004, De Visser
      Gray was the Company’s only external auditor.





December
                31, 2006
              $
            December
                31, 2005
              $Audit
                and related fees
              Tax
                fees
            30,000(1)
              2,000
            25,000
              1,750


(1)  Audit
      fees estimated and accrued for 2006








54





Audit
      Committee’s Pre-Approval Polices and Procedures





The
      Company’s Audit Committee Charter incorporates the Company’s pre-approval
      policies and procedures.  All of the services rendered.  All
      services rendered by De Visser Gray during 2006 were approved by the Audit
      Committee pursuant to the pre-approval policies and procedures contained in
      the
      Audit Committee Charter.





**D.**
            **Exemption
                From the Listing Standards for Audit
                Committees**





Disclosure
      not required.





**E.**
            **Purchases
                of Equity Securities by the Issuer and Affiliated
                Purchasers**





The
      Company did not repurchase any of its shares in the fiscal year ended December
      31, 2006.








**PART
      III**








**ITEM
                17.**
            **FINANCIAL
                STATEMENTS**





See
      the
      Financial Statements and Exhibits listed in Item 19 hereof and filed as part
      of
      this annual report.





These
      financial statements were prepared in accordance with Canadian GAAP and are
      expressed in Canadian dollars.  There are material differences between
      United States and Canadian GAAP.  A reconciliation of the financial
      statements to United States GAAP is set forth in Note 13 to the financial
      statements and in ITEM 5 entitled, “Liquidity and Capital Resources”, under
“.  For a history of exchange rates in effect for Canadian dollars as
      against U.S. dollars, see ITEM 3,





**ITEM
                18.**
            **FINANCIAL
                STATEMENTS**





Not
      applicable.








**ITEM
                19.**
            **EXHIBITS**





Financial
                Statements (see Exhibit 15.2, filed as part of this annual
                report):





(i)
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations.


for
      the
      years ended December 31, 2006, 2005 and 2004. (1)





**(ii)**
            Auditors’
                Report dated March 16, 2007**.
                (2)**





(iii)
            Consolidated
                Balance Sheets as at December 31, 2006 and 2005.
                (2)





(iv)
            Consolidated
                Statements of Operations and Deficit for the years ended December
                31,
                2006, 2005 and 2004. (2)





(v)
            Consolidated
                Statements of Cash Flows for the years ended December 31, 2006, 2005,
                and
                2004. (2)





(vi)
            Notes
                to the Consolidated Financial Statements
                (2)





(vii)
            Financial
                Statement Schedules are omitted because they are not applicable,
                not
                required or because the required information is included in the
                consolidated financial statements or notes thereto filed
                herein.





55











12.1
            Section
                302 Certifications by the Chief Executive and Chief Financial officers
                required by rule 13a-14(a) or Rule 15d-14(a).
                (2)





13.1
            906
                Certifications by the Chief Executive and Chief Financial officers
                required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of
                Chapter
                63 of Title 18 of the United States code.
                (2)





14.1         Consent
      of Independent Auditor. (1)





15.1
            Management
                Information Circular dated March 16, 2007.
                (1)




(1)    Incorporated
      by reference to the Registrant's Form 20-F filed on March 30, 2006.


(2)    Attached
      hereto.





56





**SIGNATURES**








Pursuant
      to the requirements of Section 12 of the Securities Exchange Act of 1934, the
      Registrant certifies that it meets all the requirements for filing on Form
      20-F
      and has duly caused this registration statement to be signed on its behalf
      by
      the undersigned, thereunto duly authorised.








**ATNA
      RESOURCES LTD.**





/s/
      *David H. Watkins*





David
      H.
      Watkins


President
      & Chief Executive Officer





January
      3, 2008





57