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**UNITED STATES**SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-KSB

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
  SECURITIES EXCHANGEACT OF 1934

For the fiscal year ended **April 30, 2006**

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

For the transition period from _________ to ____________

Commission File No. **000-31501**

QUINCY ENERGY CORP.(formerly Quincy Gold Corp.) (Name of small business issuer in its charter)

|**Nevada**                                                           | **980218264**                             
|-------------------------------------------------------------------- | ------------------------------------------
|(State or other jurisdiction of
      incorporation or organization) | (I.R.S. Employer
      Identification No.)
|                                                                     |                                           
|**Suite 1238 -- 200 Granville Street, Vancouver,
      B.C.**        | **V6C 1S4**                               
|(Address of principal executive offices)                             | (Zip Code)                                

Issuer's telephone number: **(604) 684-9007**

Securities registered under to Section 12(b) of the Exchange
  Act:**None**

Securities registered under to Section 12 (g) of the Exchange
  Act:**Common Stock**

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

Check if there is no disclosure of delinquent filers in response
  to Item 405 of Regulation S-B is not
  contained in this form, and no disclosure will be contained, to the best of
  registrant's knowledge, in
  definitive proxy or information statements incorporated by reference in Part
  III of this Form 10-KSB or any
  amendment to this Form 10-KSB. [X]

Revenues for fiscal year ended April 30, 2006 were $0.

The aggregate market value of the voting stock held by non-affiliates
  computed by reference to the last
  reported sale price of such stock as of August 1, 2006 was: Nil.

The number of shares of the issuer's Common Stock outstanding
  as of August 1, 2006 was 51,962,997.

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

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**EXPLANATORY NOTE**

This report is being filed by Energy Metals Corporation pursuant
  to Rule 12g-3(g) under the Securities Exchange Act of 1934.

On July 10, 2006, Energy Metals Corporation acquired Quincy
  Energy Corporation by way of Plan of Merger whereby Quincy Energy Corporation
  merged with a wholly owned subsidiary of Energy Metals Corporation. As a result
  of the acquisition, the common stock of Energy Metals Corporation was deemed
  to be registered under Section 12(g) of the United States Securities Exchange
  Act of 1934, as amended, pursuant to Rule 12g-3(a) thereunder. As of this date,
  Energy Metals Corporation is subject to the reporting requirements of the Securities
  Exchange Act of 1934 and will file reports and other information with the United
  States Securities and Exchange Commission as a successor registrant to Quincy
  Energy Corporation in accordance with the Securities Exchange Act of 1934.

Energy Metals Corporation is a “foreign private issuer”
  as defined in Rule 405 of Regulation C under the Securities Act of 1933 and
  will file reports with the SEC on Forms 40-F and 6-K.

ii

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|         |          |                                                                                                                        | Page
|-------- | -------- | ---------------------------------------------------------------------------------------------------------------------- | ----
|Part I   |          | 3                                                                                                                     
|         | Item 1.  | Description of Business                                                                                                | 3   
|         | •        | Hansen, Hosta Butte and McKinley Properties                                                                            | 6   
|         | •        | Crownpoint Property                                                                                                    | 15  
|         | •        | Aurora Property                                                                                                        | 21  
|         | •        | Arizona Strip Breccia Properties                                                                                       | 24  
|         | •        | Elliott Lake Property                                                                                                  | 32  
|         | •        | Rattlesnake Hills and Lewiston Properties                                                                              | 33  
|         | •        | Silver Bow Property                                                                                                    | 42  
|         | •        | Lantern Property                                                                                                       | 46  
|         | •        | Quartz Mountain Property                                                                                               | 52  
|         | •        | Miller Property                                                                                                        | 59  
|         | •        | Seven Troughs Property                                                                                                 | 62  
|         | •        | Atlas Database                                                                                                         | 63  
|         | Item 2.  | Description of Property                                                                                                | 70  
|         | Item 3.  | Legal Proceedings                                                                                                      | 70  
|         | Item 4.  | Submission of Matters to a Vote of Securities Holders                                                                  | 70  
|         |          |                                                                                                                        |     
|Part II  |          | 71                                                                                                                    
|         | Item 5.  | Market for Common Equity and Related Stockholder Matters                                                               | 71  
|         | Item 6.  | Managements Discussion and Analysis or Plan of Operation                                                              | 74  
|         | Item 7.  | Financial Statements                                                                                                   | 78  
|         | Item 8.  | Changes In and Disagreements with Accountants on Accounting
      and Financial Disclosure                             | 102 
|         | Item 8A. | Controls and Procedures                                                                                                | 102 
|         |          |                                                                                                                        |     
|Part III |          | 102                                                                                                                   
|         | Item 9.  | Directors, Executive Officers, Promoters and Control Persons;
      Compliance with Section 16 (a) of the Exchange Act | 102 
|         | Item 10. | Executive Compensation                                                                                                 | 104 
|         | Item 11. | Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters                   | 106 
|         | Item 12. | Certain Relationships and Related Transactions                                                                         | 108 
|         | Item 13. | Exhibits                                                                                                               | 109 
|         | Item 14. | Principal Accountant Fees and Services                                                                                 | 110 
|         |          |                                                                                                                        |     
|         |          | Signatures                                                                                                             | 112 

iii

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PART I

ITEM 1. DESCRIPTION OF BUSINESS

General

We were incorporated in the State of Nevada on May 5, 1999 with
an authorized capital of 200,000,000 shares of common stock, par value $0.001 as
Quincy Resources, Inc. On July 7, 2004 we changed our name to Quincy Gold
Corp. and on May 16, 2005 we changed our name to Quincy Energy Corp. We own
interests in several mineral properties as well as a natural resource mineral
database. Our corporate head office is located at Suite 1238 -- 200 Granville
Street, Vancouver, British Columbia V6C 1S4. Our telephone number is (604)
684-9007.

On March 9, 2006, we entered into an Agreement and Plan of
Merger with Energy Metals Corporation and EMC Acquisition Corp., a wholly-owned
subsidiary of Energy Metals, whereby, subject to the approval of the
stockholders of our company and Energy Metals, and subject to regulatory
approval, we would merge with and into EMC Acquisition Corp., with our company
becoming a wholly owned subsidiary of Energy Metals. The Agreement and Plan of
Merger was subsequently amended on April 5, 2006 and June 28, 2006.

Pursuant to the Agreement and Plan of Merger:

| | (a) | each share of our company would be converted into the
      right to receive 0.20 shares of common stock of Energy Metals rounded up
      to the nearest whole share of Energy Metals;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (b) | each stock option granted under our companys stock
      option plan would be converted into a stock option to acquire common
      shares of Energy Metals on the same terms as the original stock options
      except that (i) each such stock option will become immediately exercisable
      for the number of shares that were issuable upon exercise of such stock
      option multiplied by 0.20 rounded down to the nearest whole number of
      shares, (ii) the per share exercise price will be equal to the quotient
      determined by dividing the exercise price at which such stock option was
      exercisable by 0.20, rounded up to the nearest whole cent, and (iii) stock
      options held by persons whose involvement with our company or Energy
      Metals is terminated on or prior to the consummation of the merger, will
      expire after a period of ninety (90) days from the consummation of the
      merger; and
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | (c) | each share purchase warrant issued by our company would
      continue and would allow the holder to acquire common shares of Energy
      Metals on the same terms as the original share purchase warrant except
      that (i) each share purchase warrant will be exercisable (or will become
      exercisable in accordance with its terms) for that number of common shares
      of Energy Metals equal to the product of the number of shares that were
      issuable upon exercise of such share purchase warrant multiplied by 0.20,
      rounded down to the nearest whole number of shares and (ii) the per share
      exercise price will be equal to the quotient determined by dividing the
      exercise price per share purchase warrant, rounded up to the nearest whole
      cent.                                                                                                                                                    

On July 10, 2006, the requisite shareholder and regulatory
approvals having been obtained, we closed the business combination with Energy
Metals Corporation pursuant to the Agreement and Plan of Merger and our company
became a wholly-owned subsidiary of Energy Metals Corporation.

1

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On July 13, 2006 we filed a notice with the U.S. Securities and
Exchange Commission (SEC) that we intended to terminate our U.S. reporting
status. The termination of reporting status takes effect 90 days after filing of
the notice, subject to any comments from the SEC resulting in a withdrawal of
the notice.

Effective July 28, 2006 we were granted an order terminating
our reporting status in the Provinces of Alberta, British Columbia and Ontario,
and accordingly are no longer a reporting company in any jurisdiction of Canada.

As of July 10, 2006, the common stock of Energy Metals
Corporation was deemed to be registered under Section 12(g) of the United States
Securities Exchange Act of 1934, as amended, pursuant to Rule 12g-3 thereunder.
As of this date, Energy Metals Corporation is subject to the reporting
requirements of the Exchange Act of 1934 and will file reports and other
information with the United States Securities and Exchange Commission as a
successor registrant to our company in accordance with the Exchange Act of 1934.
Notwithstanding the preceding, we are filing this report on Form 10-KSB for the
year ended April 30, 2006 to comply with Energy Metals Corporations reporting
obligations under the United States Securities Exchange Act of 1934, as amended.

We were organized for the purpose of acquiring and developing
mineral properties. We own interests in several sets of mineral claims located
in the western United States and Ontario, Canada. We are not in the development
or production stage nor do we have any mineral resources as recognized by the
SEC.

We are in the exploration stage and will continue to be in the
exploration stage until we achieve significant revenues from operations. In an
exploration stage company, management devotes most of its activities in
acquiring and developing mineral properties. There is no assurance that a
commercially viable mineral deposit exists on any of our properties. Further
exploration will be required before a final evaluation as to the economic and
legal feasibility is determined. Our ability to emerge from the exploration
stage with respect to our planned principal business activity is dependent upon
our ability to attain profitable operations. There is no guarantee that we will
be able to identify, acquire or develop mineral properties that will produce
profitability. Moreover, if a potential mineral property is identified which
warrants acquisition or participation, additional funds may be required to
complete the acquisition or participation, and we may not be able to obtain such
financing on terms which are satisfactory to us.

Principal Product

Our principal product is the exploration, and if warranted,
sale of precious minerals, base metals and uranium. Since our properties have
only undergone early stage exploration there is no guarantee any ore body will
ever be found.

Cyclical Nature of our Products

The two primary commodities of our exploration, and hence
business, focus are gold and uranium. Both of these commodities exhibit cyclical
and volatile price histories as illustrated in the following two charts.

2

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General Statement Regarding our Mineral Properties

All of our mineral properties are at the exploration stage
consequently any work program we recommend is exploratory in nature. None of our
mineral properties have known mineral reserves. We have no physical plant or
equipment on any of our properties. All of our properties have access to sources
of electricity and water, at varying distances and costs. We do not require
electric power for our proposed exploration plans. Other than for specific
exploration activities, we are not subject to any reclamation bonding
requirements from any government agency. We obtain exploration permits and
submit reclamation bonds on a property by property basis depending on our level
of exploration activity. Some of our properties have undergone historic
exploration staged work by previous operators. While the data from this historic
work may, or may not, be available in some cases, the total extent of such work,
and the costs incurred to perform this work, are generally lost to history.

3

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Hansen, Hosta Butte and McKinley Properties

We have entered into a definitive option agreement with NZ
Uranium LLC dated March 18, 2005 pursuant to which we can earn up to a 65%
interest in three separate uranium properties, namely the Hosta Butte and
McKinley properties in New Mexico and the Hansen (Tallahassee Creek) property in
Colorado.

As consideration for the options, we have agreed to issue to NZ
Uranium LLC 3,000,000 shares of common stock. In order to exercise the options,
we will be required to spend a total of USD $4,150,000 on exploration and
development of the properties over a four year period, of which USD $400,000 is
a firm commitment, and issue to NZ Uranium LLC an additional 1,050,000 shares of
common stock per property, all as follows:

|                   | Exploration and Development |                      
|------------------ | --------------------------- | ---------------------
|On or
      Before | Expenditures                | Shares (per Property)
|September 18, 2006 | $400,000                    | Nil                  
|September 18, 2007 | $750,000                    | 350,000              
|September 18, 2008 | $1,250,000                  | 350,000              
|September 18, 2009 | $1,750,000                  | 350,000              

We have the right to increase our interest in any or all of the
properties to 80% if we elect to fund one or more of the properties to a
bankable feasibility study for the intended mining and processing operation, in
which case we would be required to issue to NZ Uranium LLC an additional 250,000
shares of common stock per property.

The agreement is subject to our receiving an acceptable title
report and the finalization of a formal operating agreement to govern the
relationship of the parties on exercise of the options on or before August 31,
2005.

As part of the option agreement, we have also agreed to appoint
Robert M. Worsley, the principal of NZ Uranium, LLC to our board of directors.
Mr. Worsley is also the principal of New Mexico and Arizona Land Company, LLC.
Mr. Worsley was previously a principal of SkyMall, Inc., the largest in-flight
catalogue company in the United States, which he founded in 1989. From 1985 to
1989, Mr. Worsley was a principal of ExecuShare, Inc., an executive services
firm that provided time-shared financial executives for small companies and from
1980 to 1985 he was an Audit Manager with Price Waterhouse. Mr. Worsley received
a bachelor's degree in accounting from Brigham Young University in 1980. We also
agreed to grant to Mr. Worsley an option to acquire 100,000 shares of our common
stock at a price of CAD $0.72 per share, subject to vesting over two years and
expiring in 2010.

The Hosta Butte and McKinley properties in New Mexico are
located on lands that may be the subject to claims by the Navajo Nation. On
April 26, 2005, Navajo Nation President Joe Shirley Jr. signed the Dine Natural
Resources Protection Act of 2005, a measure that outlaws uranium mining and
processing on the Navajo reservation that covers parts of Arizona, New Mexico
and Utah. We are currently assessing the impact of this development on our
properties in consultation with our legal counsel.

The agreement is subject to the resolution of certain
outstanding title issues and the finalization of a formal operating agreement to
govern the relationship of the parties on exercise of the options.

4

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Our company and NZ Uranium LLC have reached a tentative
agreement to extend the deadlines stated above for Exploration and Development
Expenditures and Share Issuances from September 18 to December 31 of each year
and are in the process of documenting this agreement.

We have paid to NZ Uranium LLC $125,000 as consideration for
this extension. NZ Uranium has also tentatively agreed to accept shares of EMC
in place of the Quincy shares to be issued to it, subject to the appropriate
adjustments.

Our company and NZ Uranium LLC are also in the process of
completing the form of operating agreement and addressing several other
consequential amendments to the existing agreement, including an amendment which
would allocate obligations and awards in the event that we are unable to conduct
exploration and development activities on the properties due to the Navajo
moratorium and commenced a takings case.

Hansen Property

The Hansen Property is comprised of 2,560 acres of fee-simple
  lands of which NZ Uranium, LLC maintains a 49% interest. These lands cover four
  sections: Sections 21, 22, 27 and 28 of Township 17 S, Range 73 W, 6th P. Meridian,
  Fremont County, Colorado. South T-Bar Ranch, LLC, a property developer, owns
  the surface rights and the remaining 51% of the mineral rights covering the
  property.

Hansen Property  Location and Access

The Hansen Property is located approximately 70 miles southwest
of Denver, Colorado as shown on the following map. Access to the Property is by
light duty roads connecting with State Highway 9 and U.S. Highway 50 about 30
miles to the southeast.

5

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6

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Hansen Property  Climate and Physiography

The Hansen Property is located at 8,250 feet elevation in the
open, grassy mountain valley of Middle Tallahassee Creek. The southwestern two
thirds of the Hansen Property lies primarily in a flat alluvial plain while the
northeastern third lies on a small, flat plateau above the alluvial plain. A
small portion of the Property also lies on the steep slope between these two
physiographic features.

Hansen Property  History

The Hansen Property has a long history under Cyprus Minerals,
having been named after James Hansen, a former Sr. V.P. of Mineral Exploration.
In 1978 Cyprus sold a 49% interest in the property to Wyoming Mineral Corp., a
wholly owned subsidiary of Westinghouse Electric Corp. The Property was not put
into production due to the drop in uranium prices in the early 1980s. In 1996
New Mexico and Arizona Land Company, the parent company of NZ Uranium LLC,
bought Wyoming Mineral Corp.s interest in the Hansen Property and that interest
was subsequently transferred to NZ Uranium LLC.

Hansen Property  Geology and Mineralization

We justified the acquisition of this property because it shares
several characteristics of sandstone-hosted uranium deposits of Utah and New
Mexico. Collectively these areas have produced more than 350 million pounds of
U3O8.

Uranium mineralization at the Hansen Property is hosted by the
Eocene age Echo Park Formation. In the vicinity of the Property, these rocks
consist primarily of interbedded sandstone siltstone, claystone and conglomerate
of fluvial origin. Thickness of the Echo Park Formation varies from 0 to more
than 800 feet. Also present locally at the Hansen Property are all three members
of the Tallahassee Creek conglomerate, which can be seen, deposited in scour
channels within the Echo Park members.

Uranium mineralization occurs as stratiform lenses within
clayey sandstones, sandy mudstones and pebble to boulder conglomerates belonging
to the lower members of the Echo Park Formation. The Hansen Property is
historically described as a roll front type uranium deposit but does not display
the typical crescent shape of a reduction-oxidation (redox) boundary, that is
sometimes observed in these types of deposits. In general the mineralization is
reduced but is surrounded by oxidized sediments.

The Hansen Property will require considerable further
evaluation, which our management and consultants intend to carry out in due
course. The information and statements on the historical estimates herein were
provided by Art Ettlinger, Ph.D., P. Geo. Dr. Ettlinger is a Registered
Professional Geologist in the Province of British Columbia, has a doctorate
degree in geology from Washington State University and is the Chief Geologist of
EMC .

Hansen Property  Proposed Work Program and Budget

We have not performed any work to date on the Hansen Property.
Our current plans for the Property are limited to compilation of historical work
as there are over 140 reports written about the Hansen Property. We expect that
this compilation work will be performed coincidentally with

7

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our compilation work for the Hosta Butte and McKinley
Properties, with a cumulative estimated budget of $400,000. These costs will be
paid out of our working capital. We expect this program to be completed in 2007
at which time we will be in a better position to evaluate whether further work
is justified. This compilation will be under the supervision of Art Ettlinger,
Ph.D., P. Geo. Dr. Ettlinger is a Registered Professional Geologist in the
Province of British Columbia, has a doctorate degree in geology from Washington
State University and is the Chief Geologist of EMC.

Hosta Butte Property  Location and Access

The Hosta Butte Property is comprised of 1,920 acres of
fee-simple mineral rights covering three sections of land: Sections 3, 9 and 11
of Township 16 N, Range 13 W, New Mexico P. Meridan, McKinley County, New
Mexico. However the ore body is largely confined to Section 3.

Surface ownership is held by the United States federal
government in trust for the Navajo Nation. The Hosta Butte Property is located 3
miles southwest of the town of Crownpoint, New Mexico as shown on the following
map and is accessible from State Highway 57. Access to the Property traverses
Indian Allotted and Tribal Trust surface rights consequently permission for
access to the property must therefore be obtained.

8

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9

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Hosta Butte Property  Climate and Physiography

The Hosta Butte Property is arid with approximately half of the
mean annual precipitation (10.22 inches) falling in the months of July, August
and September. The site is located on a relatively flat plateau area at the top
of a steep escarpment. Locally, the area has a rough topography with narrow
valley floors and steep ridges.

Hosta Butte Property  History

Uranium mineralization was first discovered at Hosta Butte in
1968 by Western Nuclear. Conoco further delineated several uranium trends just
north of the Hosta Butte Property in the 1970s and along with Urangesellschaft,
drilled over 200 holes into the Hosta Butte area between 1977 through 1980.
Uranium mineralization was then delineated in Section 3 by 134 drill holes
drilled on 400 by 400 foot centers. This work resulted in a historic resource of
approximately 13 to 14 million pounds of in-place uranium. The information and
statements on the historical estimates herein were provided by Dr. Art D.
Ettlinger, P. Geo., the Chief Geologist of EMC and a Qualified Person as defined
by NI 43-101.

After the price of uranium collapsed in 1980, no further work
was performed on the property although other operators such as Mobil Oil Company
and Hydro Resources Inc. worked on bringing their uranium resources, located
within five miles of Hosta Butte, into production.

Hosta Butte Property  Geology and Mineralization

We justified the acquisition of this property because it is
located within the Grants Uranium district whose historic U3O8production exceeds 340 million pounds. The Morrison Formation is the
primary host to uranium mineralization in the Grants district and the host to
known uranium mineralization on the Hosta Butte Property; hence we deem the
property to be highly prospective for uranium.

The Hosta Butte Property is located northeast of the Zuni
Uplift on the Chaco slope of the San Juan Basin. Stratigraphic units of concern
at Hosta Butte include the Jurassic Morrison Formation through the Cretaceous
Dakota Sandstone, Mancos shale, and the Mesa Verde Group.

Uranium mineralization is found in sandstones and thin
inter-bedded mudstones belonging to the Westwater Canyon Member of the Morrison
Formation. This zone contains an average total thickness of 300 feet. Underlying
and overlying the Westwater Canyon Member are the Recapture and Brushy Basin
Members, respectively, which are anticipated to act as aquitards to the
uraniferous leach solutions from the ore zone. The Recapture Member is comprised
of approximately 250 feet of siltstones, mudstones and sandstones while the
Brushy Basin Member is characterized by 100 to 150 feet of bentonitic mudstones
and interbedded lenses of siltstone and sandstone.

An historic resource of 13-14 million pounds of in-place
uranium potentially amenable to in situleaching (ISL) was calculated in
the early 1990s by Uranium Resources Inc. This resource estimate is considered
to be relevant but has not been independently confirmed by our Company.
Accordingly, this historical estimate should not be relied upon. The Hosta Butte
Property will require considerable further evaluation which our management and
consultants intend to carry out in due course.

10

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Hosta Butte Property  Proposed Work Program and Budget

We have not performed any work to date on the Hosta Butte
Property. Our current plans for the Property are to compile all of the existing
data on the resource and bring this asset into compliance with modern resource
estimate disclosure standards, following which we will be able to determine
whether to proceed with a feasibility study and initiate the permitting process.
We expect that this compilation and resource estimate work will be performed
coincidentally with our compilation work for the Hansen and McKinley Properties,
with an estimated budget of $150,000, to be paid for through our working
capital, and will be completed in 2007.

McKinley Property  Location and Access

The McKinley Properties cover portions of seven townships in
the northwestern part of New Mexico. Several U.S. and State Highways as well as
local roads traverse the area. The properties aggregate 12,800 acres in twenty
sections of land within McKinley County as follows:

|Township | Range | Meridian | Section(s)                                                                     
|-------- | ----- | -------- | -------------------------------------------------------------------------------
|15N      | 12W   | N.M.P.M. | 33                                                                             
|15N      | 13W   | N.M.P.M. | 5, 19, 21, 25 and 27                                                           
|15N      | 14W   | N.M.P.M. | 3                                                                              
|16N      | 13W   | N.M.P.M. | 5 and 13                                                                       
|16N      | 14W   | N.M.P.M. | 1, 3, 25, 27 and 35                                                            
|16N      | 15W   | N.M.P.M. | 3, 5 and 7                                                                     
|17N      | 12W   | N.M.P.M. | 23, 35, Southeast Quarter of 33 and East Half and
      Southwest Quarter of 35

11

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12

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McKinley Property  Climate and Physiography

The area of New Mexico in which the McKinley Property is
located is generally arid with a mean annual rainfall of about 10 inches.
Topography in the area is rough and variable with flat plateau areas surrounded
by steep escarpments. Steep slopes and ridges surround local narrow valleys.

McKinley Property  History

There are no known uranium reserves or significant resources on
the McKinley Property. Extensive exploration for uranium in the Crownpoint area
is well documented and includes the area surrounding the Hosta Butte Property.
These areas received intensive exploration by numerous operators during the
uranium boom of the 1970s but this work quickly subsided as the uranium price
dropped in the early 1980s.

McKinley Property  Proposed Work Program and Budget

The McKinley Property is deemed to be prospective for the
discovery of uranium resources because of its location within the Grants Uranium
District and its proximity to the Crownpoint and Hosta Butte Properties. We have
not performed any work to date on the McKinley Property. Our current plans for
the Property are to compile known geologic information and prepare for initial
field investigations in 2006. We expect that this compilation and fieldwork work
will be performed coincidentally with similar work for the Hosta Butte and
Hansen properties, with a cumulative estimated budget of $400,000.

Crownpoint Property

On May 12, 2005 we entered into a definitive Option Agreement
with NZ Uranium to earn a 65% interest in the Crownpoint property located in
McKinley County, New Mexico.

As consideration for the option, we have issued to NZ Uranium
LLC 3,000,000 shares of common stock and paid to NZ Uranium LLC $350,000. In
order to exercise the option, we will be required to spend a total of $4,000,000
on exploration and development of the properties over a four year period, of
which $500,000 is a firm commitment, and issue to NZ Uranium LLC an additional
3,150,000 shares of common stock per property, all as follows:

|On or
      Before | Exploration and Development Expenditures | Shares          
|------------------ | ---------------------------------------- | ----------------
|May 12, 2006       | $500,000                                 | 400,000 (Issued)
|May 12, 2007       | $750,000                                 | 600,000         
|May 12, 2008       | $1,250,000                               | 1,000,000       
|May 12, 2009       | $1,500,000                               | 1,150,000       

We have the right to increase our interest in the Crownpoint
property to 80% if we elect to fund the property to a bankable feasibility study
for the intended mining and processing operation, in which case we would be
required to issue to NZ Uranium LLC an additional 750,000 shares of common
stock.

13

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The Crownpoint property is located on lands that may be the
subject to claims by the Navajo Nation. On April 26, 2005, Navajo Nation
President Joe Shirley Jr. signed the Dine Natural Resources Protection Act of
2005, a measure that outlaws uranium mining and processing on the Navajo
reservation that covers parts of Arizona, New Mexico and Utah. We are currently
assessing the impact of this development on our Crownpoint property in
consultation with our legal counsel.

The agreement provides that, in the event that we are unable to
conduct exploration and development activities on the Crownpoint property due to
the Navajo moratorium, our obligations under the agreement will be suspended. In
addition, We have the right (but not the obligation) to pursue a takings case,
in which case we would bear all of the costs incurred in pursuing such a case
and any award (net of costs) would be split between our company and NZ Uranium
LLC 35/65.

The agreement is subject to the resolution of certain
outstanding title issues and the finalization of a formal operating agreement to
govern the relationship of the parties on exercise of the options. Our company
and NZ Uranium LLC have reached a tentative agreement to extend the deadlines
stated above for Exploration and Development Expenditures and Share Issuances
for an additional year from May 12 and are in the process of documenting this
agreement.

We have paid to NZ Uranium LLC $125,000 as consideration for
this extension. NZ Uranium has also tentatively agreed to accept shares of EMC
in place of the Quincy shares to be issued to it, subject to the appropriate
adjustments.

Our company and NZ Uranium LLC are also in the process of
completing the form of operating agreement and addressing several other
consequential amendments to the existing agreement.

Crownpoint Property  Location and Access

The Crownpoint Property is comprised of 1,099.24 acres in three
sections of land: Sections 19 and 29 of Township 17 N, Range 12 W and Section
24, of Township 17 N, Range 13 W, New Mexico P. Meridan, McKinley County, New
Mexico as follows:

|Township | Range | Meridian | Section(s)                                                                                                            
|-------- | ----- | -------- | ----------------------------------------------------------------------------------------------------------------------
|17 N     | 12 W  | N.M.P.M. | 19                                                                                                                    
|         |       |          |                                                                                                                       
|17 N     | 12 W  | N.M.P.M. | W 1⁄2 of Section 29                                                                                                     
|         |       |          |                                                                                                                       
|17 N     | 13 W  | N.M.P.M. | N 1⁄2 NE 1⁄4 SE 1⁄4; N
      1⁄2 SE 1⁄4 NE 1⁄4 SE 1⁄4; SW 1⁄4 NE 1⁄4 SE 1⁄4; N 1⁄2 NW 1⁄4 SE 1⁄4 SE 1⁄4; S 1⁄2 SE 1⁄4 SE 1⁄4; W 1⁄2
      SE 1⁄4 of Sec. 24.

NZ Uranium LLC maintains a 60% fee-simple interest in the
mineral rights conveyed under the agreement in Section 24 and a 100% fee-simple
interest in the mineral rights conveyed under the agreement in Secstions 19 and
29. Surface rights to these lands are held by various private individual and
state or federal jurisdictions.

The Crownpoint property is located at the town of Crownpoint,
New Mexico and is accessible by all season road approximately one mile to the
west of State Highway 371 as shown on the following map:

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15

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Crownpoint Property  Climate and Topography

Crownpoint is located at 6,971 feet elevation and has an arid
climate with approximately half of the mean annual precipitation (about 10
inches) falling in the months of July, August and September. The site is located
in a low-lying area surrounded by rugged valley walls and flat-topped mesas.
Locally, the area has a rough topography with narrow valley floors and steep
ridges.

Crownpoint Property  History

Conoco and Mobil first discovered uranium mineralization in the
Crownpoint area during the 1970s. Conoco began engineering studies for an
underground operation in the late 1970s and completed three shafts in 1982.

After the price of uranium collapsed in the early 1980s, no
further work was performed on the property although other operators in the
Crownpoint area such as Mobil Oil Company and Hydro Resources Inc. worked on
bringing their uranium resources into production.

Crownpoint Property  Geology and Mineralization

Crownpoint is located northeast of the Zuni Uplift on the Chaco
slope of the San Juan Basin. The principle stratigraphic unit of concern at
Crownpoint is the Jurassic Morrison Formation, which hosts most of the known
uranium deposits in the basin. Uranium mineralization is found in sandstones and
thin interbedded mudstones belonging to the Westwater Canyon Member of the
Morrison Formation. As the Morrison Formation is the primary host to uranium
mineralization in the Grants district, we deem the Crownpoint property as a
justified acquisition and to be highly prospective for uranium.

Crownpoint Property  Proposed Work Program and Budget

We have not performed any work to date on the property. As
such, it is our intention to first compile all of the existing data on the
resource and bring this asset into modern compliance standards. Once this is
completed a decision to perform a feasibility study may be made. The permitting
process can also be initialized at the time of feasibility. Present cost
estimates for the compilation work and resource estimates are approximately
$150,000 to be paid for out of our working capital. It is anticipated this
compilation work will be completed during the first half of 2006.

This compilation and resource evaluation will be under the
supervision of Gregory Myers, Ph.D., P. Geo. Dr. Myers is a paid consultant
hired by our company.

Crownpoint Property  Technical Report

We have completed a NI 43-101 Technical Report covering the
majority of the SE 1⁄4 of Section 24, T17N R13W New Mexico Prime Meridian
(approximately 140 acres) (the Section 24 Property), in which NZ Uranium LLC
has a 60% interest in the property. The technical report calculates an Indicated
Resource of 9.966 million pounds of eU3O8 at a grade of 0.1048 % eU3O8 for such
section. This new resource estimate is based on 316,750 feet of drilling in 157
holes drilled by Conoco during the 1970s. Metallurgical testing by Conoco has
also demonstrated the Crownpoint deposit is amenable to ISL mining.

16

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We plan to complete a separate technical report on the
remaining 960 acres comprising the Crownpoint Property, in which NZ Uranium LLC
has a 100% interest, in the near future. The Crownpoint Section 24 Technical
Report dated March 2, 2006 is authored by Dr. Greg Myers, P. Geo. (Washington
State), a member and chartered professional of the AusIMM and a Qualified Person
as defined by NI 43-101.

Methodology

Measurement of the uranium concentration in drill holes was
made with radiometric logging of the drill holes throughout the entire resource
area. Natural gamma (counts/second, or cps), self potential (millivolts), and
resistance (ohms) were recorded at 1⁄2 foot increments on magnetic tape and then
processed by computer to graphically reproducible form. The eU3O8 %
conversions from the gamma log data were then calculated using the raw natural
gamma counts and the sample quality is considered to be acceptable and
representative of uranium values within the range of acceptable analytical
error. Conoco collected the down hole geophysical survey data on the 1/2 foot
intervals regardless of rock type or alteration, eliminating any sampling bias.
High-grade intervals exist and extend with fairly consistent values laterally
for several hundred feet; these high-grade values have not been cut or weighted
for the calculation of the average grade of a bench.

The database consists of more than 28,800, 1⁄2 foot original
gamma probe readings, which were used by Dr. Myers to calculate the resource
model. Dr. Myers calculated the grade of the mineralized zone as an average,
bench by bench, and did not utilize any weighting factors in the calculations.
The pounds of eU3O8 for each bench were tabulated along with the area and
calculated volume for each bench. The total number of tons contained in the
mineralized zones and the total number of pounds of eU3O8 was summed and
the average grade of the entire mineralized zone was calculated from these
results. The calculated grade of 0.1048% eU3O8 is below the statistical
average of 0.132% eU3O8 for the sample population above the 0.04% cutoff
because of internal waste, which cannot be separated from ore in an ISL mining
scenario. The calculated grade utilized the average grade of the 10-foot bench
composites and includes 1/2-foot intervals below the 0.04% cutoff grade.

2006 Crownpoint Section 24 Resource Statement using a 0.04%
  U3O8 grade cutoff

|                   | Million Ton | Grade,eU3O8% | ContainedeU3O8  
|------------------ | ----------- | ------------ | ----------------
|                   |             |              | (Million Pounds)
|Indicated Resource | 4.75        | 0.1048       | 9.966           

Other historic resource calculations on the Section 24 Property
include 1.8 million tons grading 0.15% eU3O8 containing 6.48 million
pounds eU3O8 by Conoco in 1979, based on underground mining, and 11.78
million pounds of eU3O8 by Hydro Resources Inc. in 1997.

Data Verification

The percentage of eU3O8 contained in drill holes was
calculated from the down hole gamma logs at the time of drilling and geophysical
surveying under the supervision of Conoco. Original data was collected on 1/2
foot intervals and converted to eU3O8%. The data available for this
analysis were the original gamma logs and grade summary tables for each drill
hole. The original logs and the tabulated data were compared to verify the
values and there is a reasonable correlation in values. The tabulated data was
scanned and entered into an ACCESS database along with collar location data. The
scanned data was checked and confirmed and the current database is estimated

17

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to be essentially error free. Further verification and
correction of the data was completed during sectional interpretations. While the
original down hole gamma logs have been reviewed in detail, core samples from
the original drilling were not available for check assaying.

Conoco conducted three disequilibrium studies to confirm the
eU3O8% values calculated from the gamma logs. Their conclusions in a 1979
summary report showed a range from a slight chemical depletion (3%) to a
moderate enrichment (13%) of the eU3O8%. Conoco ultimately concluded that
the gamma log values tend to underestimate the actual chemical grade.

Cutoff Grades

The mineralized zone was defined as mineralization above the
selected cutoff grade of 0.04% eU3O8 over a ten foot composite. The selection of
a 0.04% eU3O8 cutoff grade by the author considered ISL recovery factors,
maximizing the tonnage of mineralization and maintaining strong positive value
at current uranium prices. As the concentration of U in the ISL solution is a
function of the grade of the body being leached and leaching is more effective
in zones with a higher concentration, the highest possible cutoff grade is
preferred. For the Report, it was assumed that an average grade of 0.1% U3O8
would be a reasonable lower limit for the average grade of a mineralized body
being subjected to ISL mining.

Volume Determination of Mineralized Zone

Orthogonal north-south and east-west cross sections were
completed on 200-foot spacings in the mineralized zone utilizing known features
of the geologic controls on mineralization. Cross sections with drill hole
eU3O8% values and limited geologic information were generated in the
Rockworks 2004 software program from the ACCESS database. The cross sections
were then interpreted by hand on a section-by-section basis and digitized. The
sectional data was transferred to bench plans, spaced every 10 feet, and the ore
zones were interpreted and digitized in order to accurately measure the area of
the mineralized body outline. The surveyed drill hole locations in the ore zones
were used to adjust the mineralized body shapes. The measured area and volumes
calculated from the benches were used to calculate the tons contained on each
bench.

Conoco and Hydro Resources Inc. estimated density factors of 16
ft3/ton and 15.8 ft3/ton, respectively for use in their tonnage calculations.
The lower density factor of 15.8 ft3/ton was used by the author in the technical
report.

Grade Continuity

A co-variogram was calculated for the 10-foot bench centered on
the 4830 level using 39 mineralized drill hole averages. The continuity of grade
between drill holes is good at values of eU3O8 below the sill limit of
0.6% . The linear correlation of grade is limited to about 300 feet for this
bench, indicating that generating a krigged average of grades above about 0.6%
beyond 280 feet would bias the calculated average. The data population greater
than 0.6% eU3O8 is minimal. The use of an inverse distance squared
average will also have limitations when averaging groups of adjoining drill
holes. Resource modeling for the report calculated a simple average grade for
each 10 foot bench, equally weighting each drill hole to limit biasing.
Clustering of drill hole data is insignificant and does not bias the bench
average.

A competitor company is currently in the permitting process to
initiate ISL production in the area of the Section 24 Property. They have
completed the permit applications and Environmental

18

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Impact Statements required and are waiting for final approval.
In April 2005 the Navajo Nation imposed a moratorium on uranium development and
mining on the Navajo Reservation and on Indian Country. However the definition
of Indian Country is not clear and the moratoriums impact on our plans for
further work at Crownpoint is unknown at this time. No other limitations or
other negative impacts due to environmental permitting or other political
issues, which will have an affect on the mineral resource, are known to exist.

We are now evaluating the recommendations contained in Dr.
Myers Report including the design of further work programs to further confirm
the earlier drilling and metallurgical work completed by Conoco.

For complete details on the Crownpoint Property, please refer
to the Technical Report dated March 2, 2006 filed on SEDAR (www.sedar.com) on
March 3, 2006.

Aurora Property

Pursuant to the terms of an Option Agreement dated May 18, 2005
with Energy Metals Corporation (formerly Clan Resources Ltd.) and its wholly
owned subsidiary Energy Metals Corporation (US) (collectively EMC) we have
acquired an option to earn up to a 51% interest in 18 unpatented Federal lode
claims covering an area of approximately 146 hectares located in Sections 3, 4,
9 and 10, Township 41 South, Range 41 East, WBM, Malheur County, State of Oregon
and known as the Aurora Property. The Aurora Property is subject to a 1.5% Net
Smelter Returns royalty.

As consideration for the option, we have issued to EMC
1,000,000 shares and paid to EMC $25,000.

In order to exercise the option, we must incur cumulative
exploration expenditures of $2,000,000 on the Aurora Property and issue to EMC
1,000,000 shares as follows:

|                   | Exploration and Development |        
|------------------ | --------------------------- | -------
|On or
      Before | Expenditures                | Shares 
|May 18, 2006       | $200,000                    | Nil    
|May 18, 2007       | $400,000                    | 333,333
|May 18, 2008       | $600,000                    | 333,333
|May 18, 2009       | $800,000                    | 333,334

The initial exploration and development expenditure commitment
of $200,000 is a firm commitment. All other exploration expenditures and share
commitments are optional.

Upon exercise of the option Quincy and EMC will be deemed to
have entered into a joint venture with Quincy as operator. We have the right to
earn an additional 24% interest in the Aurora Property by funding the
development of the Aurora Property through feasibility.

William M. Sheriff, a member of our board of directors and a
significant shareholder of ours, is also a director and significant shareholder
of Energy Metals Corporation. Accordingly, the acquisition of the Aurora
Property is not an arms length transaction. At the directors meeting at which
the option agreement in respect of the Aurora Property was approved, Mr. Sheriff
declared his interest in the transaction and abstained from voting thereon.

19

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The unpatented Federal claims comprised in the Aurora Property
are registered in the name of EMC and are described as follows:

|Claim Name | County Instrument | BLM
      Serial #
|---------- | ----------------- | ------------------
|New U #11  | 97-8460           | 153217            
|New U #12  | 97-8461           | 153218            
|New U #13  | 97-8462           | 153219            
|New U #14  | 97-8463           | 153220            
|New U #15  | 97-8464           | 153221            
|New U #16  | 97-8465           | 153222            
|New U #17  | 97-8466           | 153223            
|New U #18  | 97-8467           | 153224            
|New U #19  | 97-8468           | 153225            
|New U #20  | 97-8469           | 153226            
|New U #21  | 97-8470           | 153227            
|New U #22  | 97-8471           | 153228            
|New U #23  | 97-8472           | 153229            
|New U #24  | 97-8473           | 153230            
|New U #25  | 97-8474           | 153231            
|New U #26  | 97-8475           | 153232            
|New U #27  | 97-8476           | 153233            
|New U #28  | 97-8477           | 153234            
|New U #29  | 2006-2238         | 160405            
|New U #30  | 2006-2239         | 160406            
|New U #31  | 2006-2240         | 160407            
|New U #32  | 2006-2241         | 160408            
|New U #33  | 2006-2242         | 160409            
|New U #34  | 2006-2243         | 160410            
|New U #35  | 2006-2244         | 160411            
|New U #36  | 2006-2245         | 160412            
|New U #37  | 2006-2246         | 160413            
|New U #38  | 2006-2247         | 160414            
|New U #39  | 2006-2248         | 160415            
|New U #40  | 2006-2249         | 160416            
|New U #41  | 2006-2250         | 160417            
|New U #42  | 2006-2251         | 160418            
|New U #43  | 2006-2252         | 160419            
|New U #44  | 2006-2253         | 160420            
|New U #45  | 2006-2254         | 160421            
|New U #46  | 2006-2255         | 160422            
|New U #47  | 2006-2256         | 160423            
|New U #48  | 2006-2257         | 160424            

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|Claim Name | County Instrument | BLM
      Serial #
|---------- | ----------------- | ------------------
|New U #49  | 2006-2258         | 160425            
|New U #50  | 2006-2259         | 160426            
|New U #51  | 2006-2260         | 160427            
|New U #52  | 2006-2261         | 160428            
|New U #53  | 2006-2262         | 160429            
|New U #54  | 2006-2263         | 160430            
|New U #55  | 2006-2264         | 160431            
|New U #56  | 2006-2265         | 160432            
|New U #57  | 2006-2266         | 160433            
|New U #58  | 2006-2267         | 160434            
|New U #59  | 2006-2268         | 160435            
|New U #60  | 2006-2269         | 160436            
|New U #61  | 2006-2270         | 160437            
|New U #62  | 2006-2271         | 160438            

On an annual basis, each of these claims requires a rental
payment of $125 to the Federal Government, payable by August 31. In the event
this payment is not made in any year, the Company may lose title to each claim
for which the rental is not paid.

Aurora Property - Location and Access

The Aurora Property is comprised of 146 hectares located in
Sections 3, 4, 9 and 10, Township 41 South, Range 41 East, WBM, Malheur County,
Oregon. As shown on the following map, the Aurora Property is located 15 km
northwest of McDermitt, NV, a border town that has undergone considerable
historic mining for mercury and gold. The claims are accessible by good gravel
road leading from an electrical substation located 5 km to the west of
McDermitt.

21

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22

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Aurora Property - Climate and Topography

The Aurora Property has an arid climate that is typical of the
Basin and Range environment. Winters are relatively cold with temperatures as
low -35oC and summers having high temperatures up to
35-40oC. Precipitation is variable with nominal amounts of 10-20 cms
during the months of December and January as snow and from 10-20 mm per month
during the summer months. Flash flooding is not common but requires proper
provision for secure gully crossings.

The claims are located within the northern end of the McDermitt
Caldera Complex. This is expressed as a series of low interlocking circular
mountain ranges. Elevations on the property range between 1,500 and 1,775
meters. The deposit is cut by Bretz Gulch and is drained by Little Cottonwood
Creek. The deposit area is covered with a network of gravel roads that cross
rolling hills dissected by steep gullies.

Aurora Property - History

Placer Amex first explored the area encompassing the Aurora
Property for mercury mineralization from 1973-1974. After no significant mercury
was found, uranium exploration was initiated by the Cordex Syndicate in late
1977, early 1978. Drilling in May 1978 encountered flat lying uranium
mineralization on the property and approximately 90 holes were drilled by Locke
Jacobs through September 1978 when Placer Amex took over exploration of the
Property.

From late 1978 through the early 1980s Placer Amex completed
approximately 36,400 m of rotary drilling in some 450 holes and 1,800 m of
diamond drilling. In addition, Placer Amex initiated the process for an
Environmental Assessment Study (EAS), completed an internal pre-feasibility
study, and calculated Mining Reserves at two cutoff grades: 0.03% and 0.025%
U3O8.With the collapse in the uranium price
during the early 1980s, however, Placer Amex abandoned their plans to bring
Aurora into production and let the claims expire.

Aurora Property  Geology and Mineralization

The Aurora Property is located within the large, McDermitt
caldera (volcanic) system. This caldera consists of at least five, nested ring
fracture systems that are associated with several types of mineralization
including mercury, uranium, gold, and lithium. These mineralizing events are
related to the well-developed hydrothermal activity associated with the volcanic
complex with uranium most commonly associated with rhyolitic domes. The presence
of multiple mineral events, abundant structures, underlying rhyolitic rocks, and
a well-developed hydrothermal system gave us justification for acquiring this
property.

At Aurora, a sequence of gravels deposited on tuffaceous lake
sediments, overlie the uranium bearing volcanic rocks. These overlie an
irregular surface of rhyolitic rocks, which may represent an elongated flow dome
through which the lava flows were erupted. The uranium bearing lavas are a
sequence of dark colored flows with vesicular flow tops and interlayered
breccia. Vesicular and breccia layers are commonly much altered in areas with
uranium mineralization. Alteration mineralogy includes clays and zeolites,
together with pyrite. The flows vary from 6 to 15 meters in thickness.

Uranium mineralization occurs mostly within the permeable and
porous layers of the volcanic

23

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sequence and less commonly along steeply dipping fracture zones
in the lavas and into the underlying rhyolitic rocks. Uraninite and coffinite,
with some autunite and phosphuranylite are the dominant uranium-bearing mineral
phases within Placer Amexs proposed mining area. Associated with mineralization
are pyrite, some smectite clays, chlorite, leucoxene and opal with minor amounts
of gypsum, fluorite, calcite, marcasite and arsenopyrite also identified.

Aurora Property  Proposed Work Program and Budget

Subsequent to completion of the Aurora Technical Report, as
discussed below, we are now in a position to initiate modern metallurgical
studies of the Aurora ore. In early 2006 a metallurgical audit was commissioned
in order to review the historic metallurgical work performed at Aurora and
recommend a work program and budget designed to select the optimum extractive
technique for the ore. It is estimated this initial metallurgical review will
cost less than $20,000. Based on the recommendations therein, additional
metallurgical test work in support of process design work is anticipated at a
cost to be determined based on recommendations within the current review.

Aurora Property  Technical Report

The Aurora uranium project is the subject of a technical report
  dated Sept. 1, 2005. In the report by Dr. Gregory Myers, a Qualified Person
  as defined by NI 43-101, an indicated resource of 18.3 million pounds of eU3O8
  at a grade of 0.0518% eU3O8 is calculated. As Aurora was also the subject of
  more than $6 million of exploration expenditures by Placer Amex during the period
  1977-1980, it is our opinion that a new and modern metallurgical review of the
  deposit is warranted. In this regard, we have commissioned a metallurgical audit
  of the property. It is anticipated that this work will be completed during the
  first quarter of 2006. For complete details on the Aurora Property, please refer
  to the Technical Report dated September 1, 2005 filed on SEDAR (www.sedar.com)
  on September 19, 2005.

Arizona Strip Breccia Properties

Pursuant to the terms of an Option Agreement effective November
9, 2004 with Energy Metals Corporation and its wholly owned subsidiary Energy
Metals Corporation (US) (collectively referred to as EMC) we acquired an option
to earn up to a 50% interest in eight mineral properties (the "Arizona Strip
Breccia Properties") located in Coconino and Mohave Counties in northern
Arizona.

24

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25

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As consideration for the option, we have issued to EMC 125,000
shares and paid to EMC $10,000.

In order to exercise the option, we must incur cumulative
exploration expenditures of $1,500,000 on the Arizona Strip Breccia Properties
and issue to EMC 525,000 shares as follows:

|                   | Exploration and Development |        
|------------------ | --------------------------- | -------
|On or
      Before | Expenditures                | Shares 
|December 31, 2005  | $150,000                    | 40,000 
|December 31, 2006  | $150,000                    | 85,000 
|December 31, 2007  | $300,000                    | 100,000
|December 31, 2008  | $400,000                    | 125,000
|December 31, 2009  | $500,000                    | 175,000

The initial exploration and development expenditure and share
commitments of $150,000 and 40,000 shares (which have been incurred and issued,
respectively) are firm commitments. All other exploration expenditures and share
commitments are optional.

Upon exercise of the option Quincy and EMC will be deemed to
have entered into a joint venture with Quincy as operator. We have the right to
earn an additional 20% interest in the Arizona Strip Breccia Properties by
funding the development of the Arizona Strip Breccia Properties through
feasibility.

The binding letter agreement requires that we enter into a
formal option agreement with EMC. Certain of the properties were acquired by EMC
from William Sheriff, our largest shareholder, and a director. We are of the
opinion that the terms of the acquisition were the result of arms length
negotiation

The unpatented Federal claims comprised in the Arizona Strip
Breccia Properties are registered in the name of EMC and are described as
follows:

Name
    Date Recorded BLM
    BLM Serial Number
    Expiry DateAZ 97-102
    11/12/2004
    363117-363122
    9/1/2006AZ 342-352
    11/12/2004
    363099-363108
    9/1/2006AZ 103-108/248-250
    11/12/2004
    363123-363139
    9/1/2006AZ 109-116
    11/12/2004
    363129-363136
    9/1/2006AZ 284-289/117-118
    11/12/2004
    363140-363147
    9/1/2006AZ 327-332
    11/12/2004
    363157-363161
    9/1/2006


On an annual basis, each of these claims requires a rental
payment of $135 to the Federal Government, payable by August 31. In the event
this payment is not made in any year, the Company may lose title to each claim
for which the rental is not paid.

The Arizona State Leases comprising the Arizona Strip Breccia
Property are known as the Rose Pipe and the 4 1⁄2 Pipe, and are registered in the
name of William M Sheriff and Ronald Driscoll.

26

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The leases are described as follows:

Lease #
    Township
    Range
    Section08-109997
    30N
    4W
    27 N 1/208-109971
    28N
    6W
    24 S 1/2


On an annual basis, each of these claims require a lease
payment equivalent to $10 per acre plus $100 lease renewal fee made payable to
the State of Arizona. In the event this payment is not made in any year, the
Company may lose title to each claim for which the rental is not paid.

Arizona Strip Breccia Properties - Location and Access

The Arizona Strip Breccia Properties are located in Coconino
and Mohave Counties, Arizona. Access to the Arizona Strip Breccia Properties is
by good gravel or dirt road from either Kanab, Utah for the pipe projects north
of the Grand Canyon or from Williams for the projects south of the Grand Canyon.

Arizona Strip Breccia Properties - Climate and Physiography

The area is considered to be transitional between high desert
terrain and mountainous terrain although all of the project areas are relatively
flat lying. Summer temperatures can reach over 100 degrees F with winter lows
dipping below zero on occasion. The area is semi-arid with a few days of heavy
precipitation in an average year. Vegetation consists principally of desert
cactus, sage, and locally pine trees do occur.

Arizona Strip Breccia Properties - History

In the 1970s and 1980s Energy Fuels Corp. (predecessor to
International Uranium Corporation) recognized the potential of the area for
small high-grade uranium ore bodies as a result of the earlier work in the
district by Western Nuclear. After purchasing Western Nuclears properties
throughout the district in 1978 Energy Fuels Corp. was able to put together a
substantial land package before the competition became active. Energy Fuels
Corp. also acquired Gulf's land package in 1982. Pathfinder, Rocky Mountain
Energy and Uranerz were also actively exploring the district in the mid 1980s.
Past production of high grade uranium ore is known from several pipes in the
district.

In the early 1990s virtually all exploration and development
work ceased due to the falling price of uranium. During the 1990s, Energy Fuels
dropped much of their extensive land holdings, retaining only a core group of
claims surrounding previously identified targets. After acquiring the assets of
Energy Fuels from bankruptcy court, International Uranium continued to pare down
their claim holdings due to the decreasing economic outlook for uranium. In 2001
and 2002 most of these core groups were dropped as the price of uranium
yellowcake fell to below $8.00 per pound. These properties lay dormant until
2004 when they were relocated by Energy Metals Corporation (US).

Arizona Strip Breccia Properties  Geology and
Mineralization

The exploration target throughout the district is uranium
mineralization in solution collapse breccia pipes. Early prospecting in northern
Arizona resulted in the discovery of a number of breccia pipes exposed by
erosion along the flanks of the Colorado River drainage system.

27

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However, it is also not unusual for a breccia pipe to exhibit a
circular topographic feature identifiable through air photo interpretation.
Based on this relationship and the success of previous exploration, hundreds of
breccia pipes are now known. Additionally, this work has shown that contrary to
the earliest discoveries, numerous pipe structures also exist away from the main
river drainage system.

A breccia pipe consists of a circular, chimney-like mass of
highly fragmented rock resulting from the subsidence of large rock segments into
a throat-like void created by solution activity in a lower formation. Continued
subsidence causes fragmentation or "brecciation" of the large rock segments as
the solution void fills with collapsed debris. Concentric fracturing and
faulting are common to the outer edge of the pipe throat as a component of rock
stress created by subsidence within the pipe. This feature, called the annular
ring, will occur immediately adjacent to the throat or in an uneven pattern
radiating out from the structure by tens of meters. Thus, pipe structures vary
considerably in size and pattern, but most are identifiable by the common
structural features of brecciation and an annular ring.

Uranium mineralization usually occurs in association with other
minerals in the highly fractured breccia zone or the area influenced by the
annular ring. Occasionally, mineralization occurs as bedded deposits in
undisturbed rock beyond the annular ring. Vertical and horizontal zonation of
minerals is evident in the known mineralized pipes. Both primary and secondary
minerals are present.

The presence of previously identified and uranium-bearing
breccia pipes on several of the Arizona Strip Breccia properties gave our
company sufficient justification to acquire these leases and claims.

Northwestern Arizona, including portions of Coconino and Mohave
Counties, contains a prolific district of these mineralized solution collapse
breccia pipes. These vertically elongated pipes present a compact and high-grade
exploration target generally grading from 0.40 -0.75% U3O8 that may extend up to
3000 feet vertically as reported in 2005 by the Arizona Dept. of Mines and
Mineral Resources Open File Report 05-22. In total, 17.25 million pounds of U3O8
have been produced from Arizona breccia pipes with 40 million pounds having been
discovered during the 1980s (Arizona Dept. of Mines and Mineral Resources OFR
05-22).

The Rose pipe is known to be mineralized with uranium as a result
  of previous work by Energy Fuels Nuclear (a subsidiary of Energy Fuels Corp.)
  during the second half of the 1980s. Drilling by EFN in 1986 returned
  intermittent anomalous uranium values between the depths of 1148.5 feet (350.2
  metres) and 1866.0 feet (568.9 metres) with the following highlights, based
  on a 0.10% eU3O8 cutoff, as reported in the Arizona State
  Minerals Department files:

Historic Deep Drill Intercept  Energy Fuels Nuclear (1986)Rose Pipe

Interval, feet
    Length
    ***e*U3O8**
    **Pounds per ton, U3O8**(metres)1281.0-1292.5
    11.5
    1.064
    21.28(390.5-394.1)
    (3.5)1295.0-1295.5
    0.5
    0.168
    3.36(394.8-395.0)
    (0.2)1310.0-1322.0
    12.0
    0.130
    0.260(399.4-403.0)
    (3.7)1330.0-1332.5
    2.5
    0.105
    0.210(405.5-406.3)
    (0.8)


28

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1436.0-1440.5
    4.5
    0.124
    2.48(437.8-439.2)
    (1.4)1790.5-1800.0
    9.5
    0.161
    3.22(545.9-548.8)
    (2.9)


Similarly, mineralization is known to occur at the more heavily
explored 4 1⁄2 Pipe. At least 7 short holes used for geophysical definition were
drilled between 1984 and 1986. The data for this pipe and the other Arizona pipe
targets has yet to be compiled.

Arizona Strip Breccia Properties  Results of Exploration
Activities

We recently completed an exploratory drill program on the Rose
breccia pipe in Coconino County, Arizona, which identified two mineralized
zones, one 49.5 foot section that averaged 0.14% eU3O8 and one 10 foot zone that
averaged 0.065% eU3O8.

Procedure

A total of 1928 feet (587.8 m) were drilled in one vertical
hole located above the interpreted surface projection of the throat of the pipe.
This hole was setup as a 25 foot offset to the north of EFNs earlier deep drill
hole for which historical data has been recovered, and it is thought to lie
approximately 25 feet to the south of a second deep drill hole by EFN whose
exact location is not known but for which historical data have been recovered.
No other deep drill holes are known to exist on the Rose pipe.

The hole was drilled using a tri-cone bit to 687 feet (209.5 m)
and a diamond drill bit from 687 feet to the end of the hole at 1928 feet. Two
separate intervals, comprising an aggregate of thirteen samples, representing
zones of high radiation response (approximately 10 times background) on a
handheld scintillometer were selected for further geochemical analyses. Our
companys personnel delivered the split core samples to ALS Chemex of Reno, NV
for ICPAES analysis of a suite of 30 trace elements including uranium, which is
detectable in the range from 50 ppm  5%.

Natural gamma ray and resistivity geophysical logging of the
entire drill hole was completed by Century Geophysical Corp. of Tulsa, OK. An
estimate of in situ uranium grade, expressed as equivalent U3O8 (eU3O8) can be
calculated using the digital natural gamma ray values acquired by down hole
logging. Chemical assays of composited samples of drill core recovered from two
mineralized zones were also completed and serve as a check on the calculated
radiometric uranium grades (eU3O8). The following table presents a comparison of
equivalent uranium as measured by the gamma ray log (% eU3O8) and chemical
uranium (% cU3O8) as determined by the chemical assays. The average grade of
Mineralized Zone 1, which is 50 feet thick, is 0.140% as determined by the gamma
ray log compared to an average of 0.11% as determined by chemical assay. The
average grade of Mineralized Zone 2 (10 feet thick) is 0.065% as determined by
the gamma ray log and 0.060% as determined by chemical assays.

The above procedure was under the supervision of Dr. Art
Ettlinger, P. Geo., and is part of our quality assurance and quality control
procedures for exploration projects.

29

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Mineralized Zone 1
    
    
    Mineralized Zone 2Interval,
      feet
    %
      eU3O8
    %
      cU3O8
    Interval, feet
    %
      eU3O8
    %
      cU3O81401.5-1406.5
    0.129
    0.050
    1756.0-1761.0
    0.061
    0.0461406.5-1411.5
    0.211
    0.131
    1761.0-1766.0
    0.069
    0.0731411.5-1415.0
    0.145
    0.1001415.0-1420
    0.253
    0.1771420.0-1424.0
    0.222
    0.2181424.0-1429.0
    0.163
    0.0671429.0-1432.0
    0.134
    0.1681432.0-1437.0
    0.093
    0.1131436.0-1442.0
    0.088
    0.0791442.0-1447.0
    0.070
    0.0781447.0-1451.0
    0.023
    0.044


In addition to encountering anomalous uranium values, the drill
hole also encountered anomalously high values of other heavy metals including
2.77% nickel and 0.5% cobalt in one 5-foot composited sample.

Interpretation

Based on core examination, the drill hole is interpreted to
have entered the throat of the breccia pipe at a depth of 1,330 feet (405.5
meters). As a result of drill hole deviation and irregularity along the edge of
the pipe, the drill hole intermittently exited and reentered the throat of the
pipe at several points along its north-northwestern edge before finally exiting
the pipe for good at a depth of about 1,700 feet (518.3 meters).

The drill hole encountered intermittent zones of anomalous
radioactivity, which is related to uranium mineralization, between depths of 749
feet (235 meters) and 1,922 feet (600 meters). Mineralization was encountered in
a variety of environments associated with the breccia pipe and generally
correlates with zones of anomalous mineralization encountered in the two deep
holes drilled by EFN.

The recently completed drill hole is encouraging both as to the
grade and thickness of the mineralization encountered and the fact that it
demonstrated continuity of mineralization in broad zones between drill holes
within and peripheral to the pipe. The geology of this breccia pipe is similar
to that encountered in other breccia pipes of commercial interest on the Arizona
Strip both as to breccia composition and mineralized environments. Based on the
results encountered in this drill hole, additional drilling is clearly justified
to assess the limits of the pipe and its resource potential.

Arizona Strip Breccia Properties  Proposed Work Program and
Budget

As we recently completed an exploratory drill program on the
Rose pipe, we currently do not have any further plans for exploration. Upon
completion of our evaluation of the drilling results, however, we may propose
further work on the Rose pipe or some of the other claims and mineral leases we
hold under the Agreement.

Elliott Lake Property

On February 10, 2005 we acquired an option to earn up to 75%
interest in ten Provincial mineral claims with known uranium mineralization
located in Buckles Township, Ontario from Canada Enerco Corp.

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Township
    Claim Number
    Recording Date
    Claim Due DateBuckles
    SSM 3009179
    October 19, 2004
    October 19, 2006Buckles
    SSM 3009180
    October 19, 2004
    October 19, 2006Buckles
    SSM 3009181
    October 19, 2004
    October 19, 2006Buckles
    SSM 3009182
    October 19, 2004
    October 19, 2006Buckles
    SSM 3009183
    October 19, 2004
    October 19, 2006Buckles
    SSM 3009192
    October 19, 2004
    October 19, 2006Buckles
    SSM 3015364
    October 19, 2004
    October 19, 2006Buckles
    SSM 3015365
    October 19, 2004
    October 19, 2006Buckles
    SSM 3015366
    October 19, 2004
    October 19, 2006Buckles
    SSM 4201526
    November 16, 2004
    November 16, 2006


The Province of Ontario requires that assessment work be
performed on the claims on an annual basis. In the event this work is not
completed in any year, the Company may lose title to these claims.

As consideration for the option, we paid to Canada Enerco
CAD$100,000 and issued 300,000 shares of our common stock. In order to earn a
50% interest, we must incur exploration expenditures of CAD$850,000 on the
property by September 1, 2008 and pay Canada Enerco Corp. an additional
CAD$150,000 and 300,000 shares as follows:

|                  | Exploration and |         |        
|----------------- | --------------- | ------- | -------
|                  | Development     | Cash    |        
|On or Before      | Expenditures    |         | Shares 
|September 1, 2006 | $100,000        | Nil     | None   
|February 8, 2007  | Nil             | $50,000 | 100,000
|September 1, 2007 | $250,000        | Nil     | None   
|February 8, 2008  | Nil             | $50,000 | 100,000
|September 1, 2008 | $500,000        | Nil     | None   

We will earn a 60% interest if we incur aggregate exploration
expenditures of CDN$1,850,000 by September 1, 2009. We can earn an additional
15% interest if we agree to fund a bankable feasibility study on the Elliott
Lake Property.

Canada Enerco has agreed to accept shares of EMC in place of
the Quincy shares to be issued to it, subject to the appropriate
adjustments.

Elliott Lake Property - Location and Access

The Elliott Lake Property located in Buckles Township, Ontario
as shown on the following map. Access to the Elliott Lake Property is via
Provincial Highway 17 and Highway 108 and from there by gravel road.

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32

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Elliott Lake Property - History

The Elliott Lake Property covers areas previously held by the
Panel Mine, Conecho, and Roche Long Lac (North Rock Explorations). These three
companies drilled 31 holes on the Property, of which 18 were used in determining
a historic U3O8resource. The resource calculation was
prepared in accordance with generally accepted practices used at the time the
mines were in production. The figures are for in place tonnages and pounds of
U3O8with no allowance made for pillars, mining dilution
or mill tailings loss.

In a report furnished to us by Canada Enerco the following historic
  resources are reported: 1,274,600 tons grading 1.316 pounds of U3O8per ton in the mine indicated resource category; 5,302,000 tons grading
  1.274 pounds of U3O8 per ton in the drill indicated category;
  and 10,881,600 tons grading 1.135 pounds of U3O8per ton
  in the possible category. Based on these figures the total resource is 17,458,200
  tons averaging 1.206 pounds per ton and containing approximately 20,787,200
  pounds of U3O8.

The Elliott Lake district has produced a total of 140 million
tons at an average grade of 1.8 pounds of U3O8per ton for
a total of more than 250 million pounds of U3O8.

Elliott Lake Property - Geology and Mineralization

Our Elliott Lake Property is deemed to be a valid geologic
target because of its location within the historic Elliott Lake uranium
district, which has produced approximately 320 million pounds of
U3O8 throughout its history. The property is situated on
the north limb of the Quirke Lake Syncline and is underlain by an eastern
extension of the uranium-bearing Matinenda quartz pebble conglomerates. This is
the favored host rock for the district and was the host of uranium
mineralization mined from both the nearby Panel and Can Met Mine properties.

Elliott Lake Property  Proposed Work Program and Budget

An exploration program and budget for the Elliott Lake Property
has yet to be developed. However, we envision that following a full data review
we would formulate a drill program to further define the existing resource and
bring the historic resource figures into compliance with current disclosure
requirements. The cost of the data review is estimated to be less than $50,000,
it will be completed by mid-2006 and it will be paid for out of the Companys
working capital.

This data review will be under the supervision of Art
Ettlinger, Ph.D., P. Geo., Chief Geologist of EMC.

Rattlesnake Hills and Lewiston Properties

Pursuant to the terms of an Option Agreement dated October 14,
2004 with Bald Mountain Mining Co. (Bald Mountain) we acquired options to earn
up to a 100% interest in each of the Rattlesnake Hills and Lewiston Properties,
subject to certain royalties. The general location of the Rattlesnake Hills and
Lewiston Properties is shown on the following map.

33

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34

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We are also required to maintain the Rattlesnake Hills and
Lewiston Properties in good standing during the currency of the agreement and to
pay the obligations of Bald Mountain to the underlying owner of the Rattlesnake
Hills Property.

As consideration for the granting of the options, we paid to
Bald Mountain Mining Co. the sum of $50,000 and issued to Bald Mountain Mining
Co. 100,000 shares of our common stock. The option consideration was paid as
follows: $35,000 and 50,000 shares on execution of the option agreement and
$15,000 and 50,000 shares in April, 2005.

In order to exercise our option to acquire the Rattlesnake
Hills Property, we are required to spend a total of $5,000,000 on exploration of
the property over five years as follows:

- $150,000 on or before October 14, 2005;
- $350,000 on or before October 14, 2006;
- $500,000 on or before October 14, 2007;
- $1,000,000 on or before October 14, 2008; and
- $3,000,000 on or before October 14, 2009.

We will earn an incremental interest in the Rattlesnake Hills
Property of 10% for each $500,000 expended on exploration of the Rattlesnake
Hills Property.

In order to exercise our option to acquire the Lewiston
Property, we are required to spend a total of $1,000,000 on exploration of the
property over four years as follows:

- $100,000 on or before October 14, 2005;
- $150,000 on or before October 14, 2006;
- $250,000 on or before October 14, 2007; and
- $500,000 on or before October 14, 2008.

We will earn an incremental interest in the Lewiston Property
of 10% for each $100,000 expended on exploration of the Lewiston Property.

On December 14, 2005 the option agreement was amended such that
all work commitment anniversary dates have been pushed back from October 14
until August 14 of the following year, thus giving us an additional ten months
to perform the required work. As consideration for this amendment, we have paid
Bald Mountain Mining Co. $50,000.

Bald Mountain Mining Co. has agreed to accept shares of EMC in
place of the Quincy shares to be issued to it, subject to the appropriate
adjustments.

Pursuant to the mining lease under which Bald Mountain acquired
part of the Rattlesnake Hills Property, Bald Mountain is required to pay a 4%
NSR to the owners of the property, with an annual advance royalty payment of
$20,000 and to maintain the property in good standing. We have agreed to assume
these obligations during the currency of our agreement with Bald Mountain.

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Thirty of the unpatented mining claims comprised in the
Rattlesnake Hills Property are subject to a 4% NSR and 22 of the unpatented
mining claims comprised in the Rattlesnake Hills Property are subject to a 3%
NSR. The Lewiston Property is subject to a 3% NSR.

The acquisition of the Rattlesnake Hills Property was based on
a review of the results of a number of exploration programs that were carried
out in the past, notably those by American Copper and Nickel Company (ACNC) and
Newmont Exploration Inc (Newmont) by Mr. Thomas Skimming, P.Eng., a former
member of our board of directors and former Vice President, Exploration. The
review also included discussions with highly qualified technical people familiar
with the property and two on-site visits by Mr. Skimming who concluded that the
Rattlesnake Hills Property was one of considerable merit, that it exhibited
significant, untested potential for a commercial gold occurrence and as a
result, recommended to our management that an agreement to acquire the property
be negotiated with Bald Mountain.

The acquisition of the Lewiston Property was based on a number
of factors including a study of the results of previous work carried out on the
property, a thorough review of proprietary and government technical reports on
the Lewiston district provided by Bald Mountain but principally on an on-site
visit to the property by Mr. Skimming, who concluded that the property was one
that exhibited considerable exploration potential for a comparatively
high-grade, shear-hosted gold deposit. We believe that the terms of the
acquisition of the Rattlesnake Hills and Lewiston Properties was the result of
arms length negotiation.

Certain of the Federal claims comprised in the Rattlesnake
Hills Property are registered in the name of David R. Miller and/or Lyle D.
Fruchey on behalf of Bald Mountain and are described as follows:

|Name                 | Date Recorded BLM | BLM Serial Number                   | Expiry Date
|-------------------- | ----------------- | ----------------------------------- | -----------
|                     |                   |                                     |            
|MG #1-3, 5-6         | 10/25/2004        | WMC247272-74, WMC247276-77          | 9/1/2006   
|                     |                   |                                     |            
|BIF #8-14, 25-28, 45 | 10/25/2004        | WMC221912-15, 19
      WMC221924-30 | 9/1/2006   
|                     |                   |                                     |            
|GM #83-84            | 10/25/2004        | WMC244849-50                        | 9/1/2006   

The remainder of the Federal claims comprising the Rattlesnake
Hills Property are registered in the name of Bald Mountain and are described as
follows:

|Name                                               | Date Recorded BLM | BLM Serial Number | Expiry Date
|-------------------------------------------------- | ----------------- | ----------------- | -----------
|                                                   |                   |                   |            
|CP #1-2,5-6, 9-10,13-14, 16-17                     | 10/25/2004        | WMC260419-28      | 9/1/2006   
|                                                   |                   |                   |            
|LM 16-17, 21-22, 26-27, 33-34, 37-39,
      41-42, | 10/25/2004        | WMC260362-39      | 9/1/2006   

On an annual basis, each of these claims requires a rental
payment of $125 to the Federal Government, payable by August 31. In the event
this payment is not made in any year, the Company may lose title to each claim
for which the rental is not paid.

The Federal claims comprised in the Lewiston Property are registered
  in the name of Bald Mountain and are described as follows:

36

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|Name                       | Date Recorded BLM | BLM Serial Number     | Expiry Date
|-------------------------- | ----------------- | --------------------- | -----------
|W No 1-15, 19, 21-28,30-36 | 16/07/204         | WMC260391-404         | 9/1/2006   
|BM 1-13, 13A, 16-54, 56-60 | 14/07/2004        | WMC260296-- WMC260353 | 9/1/2006   
|W No 37-63                 | 10/25/2004        | WMC261134-60          | 9/1/2006   
|BMW 1-17                   | 10/25/2004        | WMC261117-33          | 9/1/2006   
|BM 65-105                  | 10/25/2004        | WMC261076-116         | 9/1/2006   

On an annual basis, each of these claims requires a rental
payment of $125 to the Federal Government, payable by August 31. In the event
this payment is not made in any year, the Company may lose title to each claim
for which the rental is not paid.

Rattlesnake Hills Property  Location and Access

The Rattlesnake Hills Property is located in Natrona County,
approximately 50 air miles west of Casper in the geographic center of the State
of Wyoming. Seasonal access is available from the towns of Riverton or Casper.
From Riverton, access to the property is east along Highway 136 to the end of
pavement at the Gas Hills Uranium Mining District, then easterly along an
unimproved gravel road for 7 miles to Dry Creek County Road, then southerly for
approximately 5 miles to Goat Mountain, which is situated at the southwest end
of the property.

Rattlesnake Hills Property - History

The first serious, sustained effort to explore for gold in the
Rattlesnake Hills district was in 1982 when W. Dan Hausel et al. of the Wyoming
Geological Survey conducted a field investigation to search for disseminated
gold mineralization as part of a grant provided by the University of Wyomings
Mining and Mineral Resource and Research Institute. Anomalous gold was found
associated with a pyritiferous metachert in close proximity to a Tertiary
alkalic intrusive dome. Subsequently, the area was visited and staked by local
geologist Dick Fruchey in 1985 who then optioned the property to ACNC.

From 1985 to 1987, a total of 32 reverse circulation holes
aggregating 9,825 feet were drilled by ACNC. Two targets were tested: an Archean
Iron Formation and Tertiary trachyte and phonolite intrusive stocks. Significant
gold mineralization in both geological settings was encountered in the ACNC
drilling. One hole intersected 255 feet of 0.024 ounces per ton (opt) gold at
Antelope Basin and a hole drilled into a banded, siliceous iron formation,
intersected a 10 foot wide zone grading 0.32 opt in gold.

In 1992, Canyon Resources Inc. acquired the property and
conducted geological mapping and a limited surface, rock sampling program. In
1993, Canyon Resources Inc. entered into a joint venture agreement with Newmont
Mining Corporation. From 1993 to 1995 a comprehensive exploration program
carried out by Newmont Mining Corporation resulted in the drilling of 15 holes,
totalling 10,705 feet, in the North Stock area where significant gold
mineralization was encountered. In one hole, an intersection of 620 feet grading
0.037 opt in gold was encountered. Significant widths of higher grade gold
mineralization were contained within the larger intersection. In addition,
Newmont Mining Corporation identified a large gold geochemical

37

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anomaly associated with the South Stock intrusive on the
property and constructed a number of drill pads from which to test this anomaly,
but never carried out their proposed drill program. Also, there is no evidence
to suggest that Newmont Mining Corporation ever followed up the gold
mineralization discovered by ACNC in the Antelope Basin area. Newmont Mining
Corporation terminated the joint venture and returned the property to Canyon
Resources Inc. in 1995. Subsequently, Canyon Resources Inc. dropped the property
in 1997 during a period of depressed gold prices.

Rattlesnake Hills Property - Geology and Mineralization

The Rattlesnake Hills Property is underlain largely by a belt
of Archean metasedimentary and metavolcanic rocks that have been intruded by a
number of Tertiary alkalic plugs and dikes, principally trachyte and phonolite
in composition. The Archean rocks represent a fragment of a partially exposed
synformal Archean greenstone belt within the Wyoming Craton which has been
subjected to several phases of deformation. Two distinct episodes of gold
mineralization occur on the Rattlesnake Hills Property, namely: a syngenetic
stratabound exhalative mineralization (i.e.: banded, siliceous, iron formation)
and disseminated epithermal gold associated with the Tertiary dome-like
intrusives. Gold-bearing breccias are closely associated with and often marginal
to the Tertiary intrusives. The geologic setting described here for the
Rattlesnake Hills property and the presence of two gold-bearing geologic
environments (alkalic intrusive and banded iron formation) make the Rattlesnake
Hills property an exceptional exploration target and a justifiable
acquisition.

The initial exploration target of ACNC at Rattlesnake Hills was
the banded, iron formation and subsequently, the breccia zones associated with
the Tertiary alkalic intrusives; whereas, Newmont Mining Corporations principal
interest was only the structures associated with the Tertiary alkalic
intrusives.

Drilling by Newmont Mining Corporation in the vicinity of the
North Stock indicated a core of gold mineralization averaging 0.035 opt in a
structure that is 900 feet long, 70 to 250 feet wide and open to depth. This
core is surrounded by a halo of lower grade gold mineralization averaging 0.012
to 0.02 opt over an area that is 1,500 long, 280 to 350 feet wide and open at
depth. The higher grade mineralization is characterized by vuggy,
carbonate-pyrite veinlets with marginal densely disseminated pyrite. An increase
in grade with depth apparently occurs along the North Stock gold trend.
Relatively higher grade sulphide drill intercepts are common below lower grade
oxide trench exposures, suggesting that gold may be leached in the oxide zones.
The results of a geochemical survey carried out by Newmont Mining Corporation
suggest that strong potassium alteration is related to higher grade gold
mineralization and that gold appears to be depleted in the oxide zone. These
observations are significant in designing further exploration work at the
Rattlesnake Hills Property.

Rattlesnake Hills Property  Proposed Work Program and
Budget

An exploration budget to assess the significance of the results
obtained by ACNC and Newmont Mining Corporation and to further explore the
potential of the property has yet to be developed. However, an initial minimum
program involving an expenditure of $500,000 is envisaged. This amount would
provide for (a) an in-depth review and reassessment of the results from all the
previous exploration carried out on the property and (b) an initial diamond
drill program consisting of about 10,000 feet of drilling. The budget would
include all costs related to geological supervision, logging, assaying and
general administrative costs applicable to the Rattlesnake Hills Property.

38

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This work will be under the supervision of Art Ettlinger,
Ph.D., P. Geo., Chief Geologist of EMC.

Lewiston Property  Location and Access

The Lewiston Property is located in Fremont County
approximately 30 air miles south-southeast of the town of Lander, immediately
north of the Sweetwater River, in the southwest quadrant of the State of
Wyoming. Access to the property from Lander is south on Highway 28 for a
distance of 30 miles to the Atlantic City-South Pass cutoff, then an additional
3 miles along a well-maintained gravel road to the settlement of Atlantic City,
then a further 15 miles south-southeasterly from Atlantic City largely on an
unmaintained gravel road, which partly follows the valley of Strawberry Creek,
to the western edge of the Lewiston Property.

Lewiston Property - History

Early mining activities in the district were focused in the
Atlantic City, South Pass City and Miners Delight areas but activities were
limited in the Lewiston area because of its remoteness from established
communities at the time. The first recorded discovery of gold in the Lewiston
area dates back to 1875 when Martin Lewis located placer gold in the gravels of
Strawberry Creek. Subsequently, gold was found at Wilson Bar on the Sweetwater
River in 1878. Gold from this placer was traced up Burr Gulch and ultimately led
to the discovery of the Burr and Hidden Hand Mines, the first significant
deposits found in the Lewiston area around 1890. One zone in the Burr Mine was
reported to be 16 feet wide averaging about 0.50 opt in gold. Sporadic, rich
pockets of ore were mined that were reported to contain 25 to 250 opt in gold.
In the 1930s, mining on the Hidden Hand lode intersected a rich shoot that
produced several sacks of specimen-grade ore that has been reported to grade
from 75 to 1,650 ounces per ton in gold.

A number of other small mines in the area, ie: The Goodhope,
Mint, Gold Leaf, Wolf et al were all reported to have encountered zones of high
grade gold mineralization during their operating life. At the Wolf Mine, a 10
foot wide surface exposure of a shear zone containing abundant quartz stringers
and veinlets is reported to have assayed over 1.0 opt gold over the 10 feet.

Most of the mines operated around the turn of the century.
Despite the fact that gold-bearing shear zones were traced for considerable
distances, severe winters, primitive and inadequate equipment, limited capital
and the remoteness of the area deterred any attempt at serious mine development.
Most of the mine shafts and mine workings in the area are less than 100 feet
deep and the vertical extent of the gold mineralization is completely unknown at
this time.

There are no records or evidence of any significant drilling
having been carried out in the vicinity of existing shafts and old mine workings
in the Lewiston area.

Lewiston Property - Geology and Mineralization

The Property is underlain dominantly by an extensive area of
Precambrian metagreywackes of the Miners Delight Formation within the South Pass
greenstone belt. The structure, stratigraphy and mineralization of the Lewiston
area, is similar to Precambrian volcano-sedimentary terranes in Canada,
Australia and South Africa which collectively have produced more than one-half
of the worlds gold and give ample justification for the acquisition of this
property.

Shear zones in chloritized hematitic greywacke of the Miners
Delight Formation host essentially all of the historical, bedrock gold mines and
known gold occurrences at Lewiston. The gold

39

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bearing shear zones invariably parallel regional foliation in
the metagreywackes and were developed near the apex of a regional fold in the
metasediments and often, can be traced on surface for many hundreds of feet. The
gold frequently occurs as visible gold in fractures in quartz and in association
with pyrite, pyrrhotite and arsenopyrite which oxidize to hematite, limonite and
scorodite. Scheelite has also been identified in some of the gold-bearing shear
zones. Known trace elements or pathfinder elements associated with the gold
include tungsten, arsenic, antimony, bismuth, copper and a number of lesser
elements. A thin veneer of eluvial debris and silt covers large portions of the
known gold-bearing shears in the Lewiston area.

Although the gold-bearing shear zones have been traced along
strike for many hundreds of feet, the downdip dimensions have not been
determined. The depth of most of the mine shafts and old mine workings in the
Lewiston area is believed to be around 100 feet (30.5m) . The underground
workings and shafts in most of the mines in the district are currently
inaccessible due to a combination of caving and flooding.

Lewiston Property  Proposed Work Program and Budget

An exploration program to assess the significance of the known
gold-bearing shear zones on the property and to determine the potential to
discover others under the pervasive, thin veneer of eluvial debris, has yet to
be developed and budgeted; however, an initial minimum program involving an
expenditure of $250,000 is envisaged. This amount would provide for detailed,
ground geochemical and geophysical surveys (approximately $40,000), geological
mapping (approximately $10,000) and approximately 5,000 feet of core drilling
(approximately $200,000) which would include geological supervision, logging,
sampling, assaying and general program administrative costs. These costs would
be paid for out of the Companys working capital.

This work will eventually be under the supervision of Art
Ettlinger, Ph.D., P. Geo., Chief Geologist of EMC.

Silver Bow Property

Pursuant to the terms of a Mining Lease and Agreement made the
21st day of February, 2003 between ourselves and Donald K. Jennings
and Renegade Exploration (the Owners), we acquired the exclusive right to
explore and mine ores and minerals of any kind (except oil and gas) on 73
unpatented Federal lode mining claims, located on 1,460 acres, in Nye County,
Nevada known as the Silver Bow Property. Its location is shown on the following
map:

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The Silver Bow leased properties are described as follows:

|Name                                         | Date Recorded  | NMC
      Number | Expiry Date    
|-------------------------------------------- | -------------- | ---------------- | ---------------
|                                             |                |                  |                
|Bow 1-3, 14, 15, 32, 33, 18 - 23, &
      25 | March 1, 2002  | 828189  828202  | August 31, 2006
|                                             |                |                  |                
|Bow 4 - 13, 16, 17, 24, 26  73              | April 14, 2003 | 8464429- 846487  | August 31, 2006

On an annual basis, each of these claims requires a rental
payment of $125 to the Federal Government, payable by August 31. In the event
this payment is not made in any year, the Company may lose title to each claim
for which the rental is not paid.

The lease is subject to a 3% Net Smelter Return (NSR) royalty
in favor of the Owners. We have the right to purchase two thirds of the NSR for
$1,500,000 and the final third for an additional $2,000,000. The lease has a
term of 15 years, provided that the following advance royalty payments are made
to the Owners:

- $10,000 upon signing (paid);
- $15,000 on February 21st, 2004 (paid);
- $20,000 on February 21st, 2005 (paid);
- $30,000 on February 21st, 2006 (paid);
- $40,000 on February 21st, 2007;
- $50,000 on February 21st, 2008; and
- $50,000 on each February 21stthereafter.

While as at the date hereof we have sufficient funds to pay the
advance royalty payments due on February 21st, 2007, there is no
guarantee that we will have sufficient funds to make such payment when it is
due. In addition, we may not have the funds to make the advance royalty payments
due beginning February 21st, 2008. To have the funds available we
will either seek advances from our directors or officers, or engage in
additional offerings of our stock. At present, we have made no arrangements to
do any of these two methods of fund raising. In the event that we determine that
the Silver Bow Property does not merit further exploration, we will not make any
further advance royalty payments. If we fail to make the advance royalty
payments the Mining Lease and Agreement will terminate and we will lose our
interest in the Silver Bow Property.

Pursuant to the terms of the Mining Lease and Agreement we have
also agreed with the Owners that, in the event that we locate any additional
unpatented mining claims within an Area of Interest surrounding the Silver Bow
Property, such claims will be subject to the Mining Lease and Agreement and, as
a result, we will be obligated to pay a 3% NSR royalty referred to above to the
Owners in respect of such claims. In the event that any claims we locate are
inside the Area of Interest and are subject to a royalty payable to a third
party, the 3% NSR royalty payable to the Owners will be reduced on a dollar for
dollar basis. The Area of Interest is defined by specific boundaries and
encompasses 1,887 hectares located around the Silver Bow Property.

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The claims comprising the Silver Bow Property are numbered Bow
1-73 and are registered in the name of Donald K. Jennings. Maintenance fees on
these claims have been paid until September 1, 2006. As a result of the fact
that these claims are not registered in our name, other mining companies could
claim interests in the 73 unpatented mining claims or challenge our right to
conduct exploration activities on the Silver Bow Property.

Silver Bow Property  Location and Access

The Bow claims are located within the Silverbow Mining District
in Nye County, approximately 50 miles east-southeast of the town of Tonopah in
south-central Nevada. More precisely, the claims are situated in sections 26 and
32-36 inclusive, T1N, R49E in the central part of the Kawich Mountain Range. The
Nellis Air Force Bombing Range borders the area to the south. Access is by paved
road east of Tonopah on SR 6 and southeast on the access road to the Nevada Test
Site boundary and then approximately 20 miles of poorly maintained single track
gravel road.

Silver Bow Property - Climate, and Physiography

The Silver Bow Property lies at elevations ranging from 6,500
to 7,600 feet above mean sea level within a moderately rugged terrain. The
climate is classified as high arid desert. Temperatures vary from 110oF in the
summer to 0oF in the winter with an average precipitation of only 3.50 inches
per year.

Silver Bow Property - History

The Silver Bow property is located within the Silverbow Mining
District where the first discoveries of gold and silver were made in the fall of
1904. The first shipments of ore were made in 1906 and by the fall of the same
year, the area was abandoned. The area became active again in 1913 and 1920 when
small stamp mills were built.

Since the early 1960s there have been at least four programs
  of exploratory drilling carried out within and adjacent to our property. A total
  of 17 diamond core and rotary drill holes were completed by the Browne Group
  in the gulch west of the Silverbow town site in the 1960s. Amoco Minerals
  Co. completed 6 rotary drill holes north of the town site and near the Hillside
  Mine in 1983-1984. Later in the 1980s, several rotary holes were drilled
  by NERCO. In late 1993 and early 1994, the Phelps Dodge Mining Co. carried out
  a program of reverse circulation rotary drilling in the ridge west of the Silverbow
  town site. In 1997, Placer Dome Inc. finished the latest round of drilling and
  concluded that a target meeting their size requirements was unlikely and quitclaimed
  the property to NevSearch, L.L.C.

Silver Bow Property - Geology and Mineralization

The Bow claims are located within the Silverbow Mining District
in Nye County, NV. Altered volcanic and subvolcanic rocks that straddle the
southern margin of the Kawich Range Caldera underlie the claims. These rocks are
host to two, steeply dipping vein systems that contain banded quartz, are
locally brecciated and locally contain gold and/or silver mineralization. In
addition to quartz as the primary vein mineral, calcite and adularia are also
reported within the veins and wall rock alteration includes silicification,
illite-sericite, kaolinite and minor amounts of smectite. The main ore minerals
consist of stephanite, ruby silver, cerargyrite and electrum.

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Our justification for acquiring this property is based on its
location with a historic mining district in close proximity to a variety of
altered volcanic and subvolcanic rocks on the margin of a mineralized volcanic
caldera.

Silver Bow Property  Proposed Work Program and Budget

We have not conducted any significant exploration activities on
the Silver Bow Property. There are no known reserves on the Silver Bow Property
and any proposed program by us is exploratory in nature. There are no current
plans to conduct exploration on this property. Consequently an exploration
program and budget to assess the significance of the two quartz-adularia vein
systems has yet to be developed.

Lantern Property

On July 31, 2003, we entered into a Mining Lease with Newmont
Mining Corporation for patented fee land totalling 1,123 acres, and also
received a quit claim deed for 340 acres consisting of 17 unpatented Federal
mining claims. On August 10, 2005 we agreed with Newmont Mining Corporation to
amend the terms of the mining lease by postponing certain exploration
expenditure requirements to November 30, 2005. The property is known as the
Lantern Property. Platoro West Incorporated, a corporation controlled by William
Sheriff, one of our directors, is also a party to the Mining Lease. Specifically
excluded from the agreement are 22 unpatented mining claims under lease to
Romios Gold Resources, Inc. a Canadian corporation.

Platoro West Incorporated began negotiating with Newmont Mining
Corporation in 2002 to acquire the Lantern Property and made certain maintenance
fee payments in respect of the claims comprising the Lantern Property in
contemplation of a definitive agreement being reached with Newmont Mining
Corporation. In 2003, as part of these negotiations, Platoro West Incorporated
proposed to Newmont Mining Corporation that Platoro West Incorporated would
lease the Lantern Property from Newmont Mining Corporation and, in turn,
sublease the Lantern property to our company. Newmont Mining Corporation
requested instead that both Platoro West Incorporated and our company be party
to the mining lease agreement. We agreed with Platoro West Incorporated that we
would reimburse Platoro West Incorporated for all out-of-pocket costs incurred
by Platoro West Incorporated in respect of maintaining the Lantern Property
prior to the date of the Mining Lease and that, in the event that we do not
elect to conduct exploration work on the Lantern Property, we will transfer the
Lantern Property to Platoro West Incorporated, subject to the terms of the
Mining Lease. We are of the view that this arrangement was determined through
arms length negotiation and does not give rise to a conflict of interest with
William Sheriff (a current director of our company) or Platoro West
Incorporated.

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The 17 unpatented Federal mining claims deeded to us as part of
the Lantern Property are as follows:

|Name        | NMC
      Number | Expiry Date    
|----------- | ---------------- | ---------------
|Petal 1-8   | 772574-772581    | August 31, 2006
|Petal 29-36 | 772602-772609    | August 31, 2006
|Petal 38    | 772611           | August 31, 2006

On an annual basis, each of these claims requires a rental
payment of $135 to the Federal Government, payable by August 31. In the event
this payment is not made in any year, the Company may lose title to each claim
for which the rental is not paid.

The State leased portions of the Lantern Property are
29-OSP-0001(NLRC 182054) and 29-OSP-0006(182092).

Under the lease agreement (as amended), we are required to
spend the following amounts on exploration and assessment work:

- $62,500 during the period ended November 30, 2005 (which funds have been
  expended);
- $50,000 during the 12 month period ended July 31, 2007;
- $50,000 during the 12 month period ended July 31, 2008;
- $50,000 during the 12 month period ended July 31, 2009;
- $50,000 during the 12 month period ended July 31, 2010;
- $50,000 during the 12 month period ended July 31, 2011;
- $50,000 during the 12 month period ended July 31, 2012; and
- $100,000 during the 12 month period ended July 31, 2013 and each July 31
  thereafter as long as the agreement is in effect.

The lease is subject to a maximum 4% Net Smelter Return (NSR)
royalty in favor of Newmont Mining Corporation. Newmont Mining Corporation also
retained a preferential ore processing right. Prior to commencing production, we
are required to complete a feasibility study.

While as at the date hereof we have sufficient funds to pay the
initial exploration and assessment work due by July 31, 2007, there is no
guarantee that we will have sufficient funds to make such payment when due. In
the event that we do not have adequate funds available we will either seek
advances from our directors or officers, or engage in additional offerings of
our stock. At present, we have made no arrangements to do any of these two
methods of fund raising. In the event that we determine that the Lantern
Property does not merit further exploration, we will not make any further
exploration expenditures. If we fail to make the exploration expenditures the
mining lease will terminate and we will lose our interest in the Lantern
Property.

We are also responsible for all taxes and federal maintenance
fees for the property. Prior to completion of a feasibility study, and upon
payment to our company of 50% of the exploration expenditures made by us to that
date, Newmont Mining Corporation has the right to require our company to enter
into a joint venture agreement, with Newmont Mining Corporation having a 51%
interest and our company a 49% interest. Newmont Mining Corporation will also be
required to pay all expenditures by the joint venture up to an amount equal to
200% of the

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exploration expenditures made by our company to that date.
Newmont Mining Corporation may also require us to enter into the joint venture
agreement within 90 days of the delivery of the completion of a feasibility
study by paying to our company 100% of the exploration expenditures made by us
to that date, in which case Newmont Mining Corporation will also be required to
pay all expenditures by the joint venture up to an amount equal to 300% of the
exploration expenditures made by our company to that date. We can terminate the
Agreement at any time after spending $100,000 on exploration and assessment
work.

There are no known reserves on the Lantern Property and any
work programs by our company are exploratory in nature.

Acquisition of our interests in the Lantern Property was based
on the professional judgment and evaluation of two exploration geologists,
Thomas Skimming and William Utterback. Messrs. Skimming and Utterback was are
former members of our board of directors, with extensive exploration experience
in the State of Nevada. Messrs. Skimming and Utterback have no interest in the
Lantern Property.

Lantern Property  Location and Access

The Lantern Property is located in Pershing County, Nevada,
about 62 miles from Winnemucca, Nevada. Access to the property is from the town
of Lovelock located on Interstate Highway No. 80 over Nevada State Route 399 for
15 miles and then an additional 35 miles to the north over unimproved gravel
roads.

Lantern Property - Climate and Physiography

The Lantern Property is situated near the southwestern end of
the Antelope Range within a cluster of low hills ranging between 4,800 and 5,200
feet elevation. Vegetation consists essentially of sparse amounts of sage brush
and patches of native grasses.

The climate is high arid desert with light snow falls during
the winter months that usually melt before March and rarely accumulates to
depths that would inhibit travel. The area is dry throughout most of the
year.

Lantern Property - History

Since 1980, several companies, principally Santa Fe Pacific
Gold Corporation and Newmont Mining Corporation have conducted comprehensive
exploration programs within portions of the boundaries of the existing Lantern
Property. This work, consisting largely of geological mapping, soil and rock
geochemical surveys, various geophysical surveys and extensive drilling,
identified a low-grade resource. Higher grade intercepts of gold mineralization
were encountered in banded, epithermal quartz veins during the drilling but were
never evaluated with deeper, systematic drilling. The earlier exploration
programs focused on the potential for a low-grade, bulk tonnage-type of gold
deposit on the property but did not address the potential of a deeper,
high-grade, bonanza-type of gold mineralization.

Lantern Property  Geology and Mineralization

The Lantern Project is located approximately 10 miles south of
the formerly producing Hycroft gold mine and about 2 miles south of the closed
LAC Rosebud gold mine. The Hycroft mine produced approximately 1.1 million
ounces of gold while Rosebud produced approximately

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375,000 ounces of gold. The Hycroft and Rosebud mineralization
is controlled by northerly trending fault zones at contacts between Tertiary
volcanics and younger lake sediments, a setting very similar to the Lantern
property. This similar setting at Lantern gave us the justification needed to
acquire this property.

The property geology consists of Mesozoic phyllite in fault
contact with Tertiary lake sediments, with phyllite clasts, accumulated in a
fault bounded localized basin. Tertiary volcanics are common in the immediate
target areas. Alteration is abundant and includes sericitization, argillization,
and silicification and is primarily focused in zones of deep seated fault zones.
Several zones of highly anomalous gold have been identified and many have been
drill tested. The Lantern area was explored in the 1980's and early 1990's by
several mining and exploration companies including Homestake, Corona, and Santa
Fe. At least 90 drill holes have been completed and range from 60 to 600 feet
deep.

Lantern Property  Results of Exploration Activities

In October 2005, Zonge Geosciences Inc. of Reno, NV completed
gradient array and dipole-dipole IP/resistivity geophysical surveys at a cost of
$20,000. The target of the surveys was a generally flat, alluvium covered area
containing several large banded quartz vein boulders with gold mineralization,
which are characteristic of the upper levels of epithermal gold systems. The
gradient array survey identified a significant resistivity anomaly in the survey
area and subsequent dipole-dipole IP lines confirmed the resistivity feature. As
a result of this work, we commenced a reverse circulation drilling program, at a
cost of $65,000, to test the resistivity anomaly in the vicinity of the
mineralized boulders and a second area along the southern flanks of SP Ridge,
the focus of historic exploration on the property.

Highlights of this recent drill program are tabulated below.

Footage
    Interval,
    Silver, ppm
    Silver, oz/tonfeet(1)Hole L-4180-200
    20
    140
    4.09Including:180-185
    5
    254
    7.42185-190
    5
    101
    2.95190-195
    5
    35.1
    1.02195-200
    5
    170
    4.96Hole L-585-110
    25
    168
    4.91including:100-105
    5
    631
    18.43185-205
    20
    1289
    37.63including:185-190
    5
    229
    6.69190-195
    5
    47002
    137.24195-200
    5
    99
    2.89200-205
    5
    127
    3.71


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220-255
    35
    170
    4.96Including240-245
    5
    512
    14.95245-250
    5
    491
    14.34


1True thickness unknown
2determined by fire assay and gravimetric finish

Three samples yielding high silver assays were selected from
drill hole L-5 to be rerun for analysis by also screening the pulverized sample
for metallic silver. The results for the metallic screening indicate no
significant differences for those samples using metallic screening in
combination with sample pulverizing versus just sample pulverizing.

Three reverse circulation drill holes (L-1 through L-3)
totalling 1,190 feet (363 m) were completed to test the geophysical anomaly near
the gold boulders area; however only gravels and weakly oxidized, but otherwise
generally unaltered, lake sediments were intersected and due to budgetary
constraints, the drill was moved to the SP Ridge area.

SP Ridge

Drill holes L-4 through L-7 tested the mineralized Auld Lang
Syne (ALS) bedrock at the south end of SP Ridge near the vertical Santa Fe drill
hole DPL-18 (45 feet @ 0.017 oz/t Au) Holes L-4 (-50o), L-5
(-64o), and L-7 (-50o) were drilled at an azimuth of
270o along the same section as DPL-18 crossing the southern part of a
zone of sub parallel, epithermal veins and veinlets that crop out to the north
on the summit and east slope of SP Ridge. This zone strikes at approximately
345o, dips at a high angle, and remains open in all directions. Its
minimum dimensions, based on historic and recent drilling, is approximately 760
m along strike and 300 m perpendicular to strike. Holes L-4 and L-5 crossed the
zone and bottomed within it near the lower part of DPL-18.

L-4 intersected two significant zones of mineralization. The
first from approximately 180 to 200 feet and yielding 20 feet grading 140 gm/t
Ag (4.1 oz/t), and the second, from approximately 580 feet to the bottom of the
hole at 592 feet also assayed 140 gm/t Ag (4.1 oz/t) from 585-592 feet. The
upper zone intersected in L-4 was again intersected deeper in drill hole L-5
from approximately 475-510 feet and although silver values were generally low in
this interval, gold assayed 20 feet @ 1.29 gm/t (0.04 oz/t) from 490-510 feet.
Additional mineralization was intersected from 85-110 feet grading 168 gm/t Ag
(4.91 oz/t); 185-205 feet grading 1289 gm/t Ag (37.63 oz/t) including 5 feet @
4700 gm/t Ag (137.24 oz/t); and from 220-255 feet grading 170 gm/t Ag (4.96
oz/t).

In addition to the above, both holes L-4 and L-5 returned near
surface zones of anomalous gold mineralization.

L-7, drilled at -50o, crossed through DPL-18 within
50 feet of the surface, and then crossed the hanging wall of the mineralized
zone at approximately 460 feet depth. Trace amounts of epithermal veinlet
material were scattered throughout the drill hole however the maximum silver
value encountered assayed 48.1 gm/t (1.40 oz/t) while gold values were less than
0.52 gm/t (0.02 oz/t).

Individual mineralized structures in this zone range from a few
millimeters to 1.5 meters in thickness as seen in these drill holes and in
outcrop and the east slope of SP Ridge. Vein textures

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are strikingly similar to those of the Scossa veins 1 km to the
east. The SP Ridge and Scossa veins have NNW strikes and steep west dips.

L-6 was drilled at an azimuth of 285o and an
inclination of -50o to test an earlier idea that primary gold and
silver mineralization was hosted within an east-northeast fault zone. L-6
however intersected a post-mineralization rubble zone with only modestly
elevated gold (0.1 to 0.7 ppm) and silver values (10 to 40 ppm) in the upper
oxidized and lower bleached zones of the fault.

Quality Assurance/Quality Control

Rock chips for geochemical analysis were collected at the drill
site and shipped to the ALS Chemex laboratory facilities in Winnemucca, NV under
the direct supervision of the project geologist. Silver was analyzed by aqua
regia digestion and atomic absorption spectrometry (AAS) with a detection range
of 0.2 -1,500 ppm Ag. Samples containing more than 1,500 ppm Ag were reanalyzed
by fire assay with a gravimetric finish whereas samples with >10 ounces per
ton Ag were also screened for metallic silver. Gold was analyzed by fire assay
with an AAS finish having a detection limit of 0.005 -10 ppm. All samples
yielding >500 ppb Au or >100 ppm Ag were sent to American Assay
Laboratories of Reno, NV for check assaying. The results of the metallic
screening and check assays are considered to be acceptable.

Lantern Property  Proposed Work Program and Budget

We are currently evaluating the results of our recently
completed drilling program at Lantern. Upon completion of this review, we may
recommend further work for this property.

Quartz Mountain Property

Pursuant to the terms of an Option Agreement made as of October
15, 2003 with Seabridge Gold Corporation (a wholly-owned subsidiary of Seabridge
Gold Inc.), we acquired an exclusive option to earn a 50% interest in 67
unpatented mining claims located in Lake County, Oregon known as the Quartz
Mountain Property, subject to certain exclusions. Our rights pursuant to the
option agreement specifically exclude a reported 2.7 million ounce low-grade
gold resource, discussed below. Our exploration program is focused on other
reported grades of mineralization. Pursuant to the terms of the option
agreement, in order to maintain our option and earn the 50% interest we must:

- incur
cumulative exploration expenditures of $1,500,000 on or before October 15, 2008
as
follows:                    
by October 15, 2004, $100,000 (which exploration expenditures have been
incurred),               
    by October 15, 2005, $250,000 (which exploration expenditures
have been
incurred),               
     by October 15, 2006, $500,000 (which exploration
expenditures have been incurred),
and                    
by October 15, 2008, $1,500,000;

- issue
to Seabridge Gold Corporation 250,000 shares of our common stock as
follows:                    
50,000 shares on execution of the option agreement (which shares have been
issued),
and                    
200,000 shares with 30 days of satisfying the expenditure obligations described
above.

If those conditions are satisfied, we will be deemed to have
exercised the option and earned our 50% interest in the Quartz Mountain
Property, at which time we will be deemed to have entered into a Joint Venture
Agreement with Seabridge Gold Inc.

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We may also increase our interest in the Quartz Mountain
Property from 50% to 62.5% by (i) funding 100% of a feasibility study on the
Quartz Mountain Property within three years; and (ii) issuing 250,000 shares at
the completion of the feasibility study.

We are required to make the first $100,000 of expenditures
(which expenditures have been made) and to pay all fees required to keep the
Quartz Mountain Property in good standing. Once we have made the first $100,000
of expenditures we may terminate the option agreement on 60 days written notice
to Seabridge Gold Corporation.

We have also agreed with Seabridge Gold Inc. that, if the
parties to the option agreement acquire any additional mineral properties within
two miles of the outer boundaries of the Quartz Mountain Property, such
properties will immediately be subject to the option agreement. The option
agreement is subject to two Royalty Agreements, the first of which is between
Seabridge Gold Inc. and William M. Sheriff, one of our directors (the Sheriff
Royalty) pursuant to a Royalty Agreement dated December 18, 2001, and the second
of which is between Seabridge Gold Corporation and Quartz Mountain Resources
Ltd. (the QMR Royalty) pursuant to an Asset Purchase and Sale and Royalty
Agreement dated December 17, 2001. Pursuant to the Sheriff Royalty, Mr. Sheriff
is entitled to a 0.5% NSR royalty from all ore mined on the Quartz Mountain
Property, and pursuant to the QMR Royalty, Quartz Mountain Resources Ltd. is
entitled to a 1% NSR royalty from all ore mined on the Quartz Mountain Property.
We are of the view that the arrangement with Seabridge Gold Inc. was determined
through arms length negotiation.

The Federal claims are registered in the name of Seabridge Gold
Inc. and are described as follows:

|Name                                      | Date Recorded     | NMC
      Number                                                 | Expiry Date    
|----------------------------------------- | ----------------- | ---------------------------------------------------------------- | ---------------
|4 Squares 1-8, amended                    | March 29, 1962    | 22755-22762                                                      | August 31, 2006
|Angel 7-8                                 | October 5, 1956   | 22763-22764                                                      | August 31, 2006
|FH 5-12, 21, 23-27, 29-35, 64-65, amended | September 1, 1983 | 45146-45153, 45162,
      45164-45168, 45170-45176, 45205, 45206 | August 31, 2006
|FH 14, 22, 28, 36, 66, amended            | August 16, 1984   | 45155, 45163, 45169, 45177, 45207                                | August 31, 2006
|NQTZ 108, 110, 143-148                    | February 1, 1985  | 81602, 81603, 81627-81632                                        | August 31, 2006
|NQTZ 191, 193                             | February 3, 1985  | 81659, 81661                                                     | August 31, 2006
|QTZ 31, 32, 34, 41                        | June 18, 1983     | 63755, 63756, 63758, 63765                                       | August 31, 2006
|QTZ 43, 67-70, 77, 79                     | June 19, 1983     | 63767, 63791-63794, 63801, 63803                                 | August 31, 2006
|TRA 1-8                                   | September 1, 1983 | 66682-66689                                                      | August 31, 2006

On an annual basis, each of these claims requires a rental
payment of $125 to the Federal Government, payable by August 31. In the event
this payment is not made in any year, we may lose title to each claim for which
the rental is not paid.

The acquisition of the Quartz Mountain Property was based on a
review of the results of a number of exploration programs that were carried out
in the past and on the professional judgment and evaluation of two exploration
geologists, Thomas Skimming and George Cole. Messrs. Skimming and Cole are
former members of our board of directors with extensive exploration experience
in the State of Oregon. Messrs. Skimming and Cole have no interest in the Quartz
Mountain Property.

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There are no known reserves on the Quartz Mountain Property.
Our drilling program is exploratory in nature.

Quartz Mountain Property  Location and Access

The Quartz Mountain Property is located in the Fremont National
Forest in south-central Oregon approximately 30 miles west-northwest of the town
of Lakeview on Oregon State Highway 140. The Property consists of three distinct
mineralized areas, known as the Angel's Camp, Crone Hill and Quartz Butte.
Access to the Quartz Mountain Property from Highway 140 is via several secondary
paved and gravel service access roads to the Fremont National Forest that are
maintained by the United States Forest Service.

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Quartz Mountain  Climate and Physiography

The Quartz Mountain Property is situated at an elevation of
around 6,000 feet above mean sea level in the Basin and Range Province that
extends from Nevada into southern Oregon. The annual precipitation in this
region averages 20 inches, most of which falls as snow between the months of
October and April. Vegetation is characterized by an open, park-like, pine
forest with sparse underbrush that consists of low profile shrubs and patches of
native grasses.

Quartz Mountain  History

From 1982 to 1996, comprehensive exploration programs were carried
  out at different time periods by The Anaconda Company, Wavecrest Resources Ltd.,
  Galactic Resources Ltd., Pegasus Gold Corporation and Newmont Mining Corporation
  Exploration Ltd. within the boundaries of the existing Quartz Mountain Property.
  These programs, which consisted essentially of geological mapping, soil and
  rock geochemistry, various geophysical surveys and extensive reverse-circulation
  and core drilling identified a low-grade gold resource. Higher grade intercepts
  of gold mineralization were encountered in silica flooded sulphide breccias,
  multiple quartz veinlets and banded, epithermal quartz veins during the drilling
  but, excluding a small drill program that was carried out by Quartz Mountain
  Gold Corporation (a joint venture between Wavecrest Resources Ltd and Galactic
  Resources Ltd) during the fall of 1988, these high grade gold intercepts were
  never evaluated with deeper, systematic drilling. Earlier exploration programs
  focused on the potential for a low-grade, bulk tonnage-type of gold deposit.
  Little to no work has been performed on the Quartz Mountain Property from 1996
  to the commencement of our exploration program.

Quartz Mountain  Results of Exploration Activities to Date

We completed the first phase of an exploratory diamond drill
and sampling program on the Quartz Mountain Property in 2004. Previous
exploration work concentrated on low-grade gold mineralization amenable to open
pit mining with little or no attention given to the high-grade, feeder
structures commonly associated with large epithermal gold systems. These
high-grade, feeder structures at the Quartz Mountain Property were the principal
focus of our drill program. A total of 18 HQ diameter diamond drill holes with
an aggregate length of 14,069 feet were drilled. All drill holes were surveyed
by digital camera approximately every 100 feet of advance by Company staff.
Routinely, diamond drill core was photographed, logged, halved lengthwise with a
diamond saw and sampled. Samples were submitted to ALS Chemex Labs in Reno,
Nevada where they were analyzed for gold and silver using the Au -AA26 fire
assay and AAS method with 50 g nominal sample weight (assay range 0.010 -
100,000 ppm). Samples were also analyzed for trace elements using ME -ICP41, 34
element aqua regia acid digestion and ICP -AES. Sample preparation and gold
& silver analyses were carried out in the ALS Chemex Laboratory in Reno,
Nevada. All other analyses were performed by ALS Chemex 's Laboratory in
Vancouver, British Columbia.

Quartz Mountain Claim -Angel's Camp

A total of 9 holes totalling 5,903 feet in length were drilled
in the Angel's Camp area. In all, 171 samples were selected from the drill core
for analysis.

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Drill hole AC-1 intersected 105 feet of gold mineralization
(from the collar of the hole to 105.0 feet) within an iron-stained heterolithic
tuff which averaged 0.037 opt in gold. Within this section, two zones of higher
grade mineralization associated with an area of pervasive, banded epithermal
veins within the tuffs, assayed 0.123 opt over a 10.0 feet interval (from 40.0
to 50.0 feet) and 0.066 opt over a further 10 foot interval (from 60.0 to 70.0
feet) respectively. The latter zone contained an average of 0.65 opt in Ag over
the same interval.

Drill hole AC-2 was drilled to a depth of 570 feet through a
sequence of rhyolitic tuff and basalt with no evidence of any epithermal
activity. None of the core from this hole was assayed. Drill hole AC-3
intersected 100 feet of gold mineralization (from 190.0 to 290.0 feet) within
the same iron-stained tuff encountered in hole AC-1, and averaged 0.042 opt in
gold. Within this section, a zone of banded epithermal veins from 222.5 to 233.5
feet (11.0 feet) averaged 0.20 opt in Au and 0.39 opt in Ag.

Drill holes AC-4, AC-5, AC-7 and AC-9 encountered only low
levels of gold mineralization within a basaltic unit containing weak epithermal
vein and stockwork development. One narrow section from 383.2 to 386.8 feet (3.6
feet) in hole AC-4 assayed 0.114 opt Au.

Drill hole AC-10 intersected 60 feet of gold mineralization
(from 155.0 to 215.0 feet) within a rhyolitic lithic tuff which has a weighted
average grade of 0.179 opt in gold. The mineralized zone is associated with a
high incidence of banded epithermal veins and epithermal breccias within the
lithic tuff. Within the envelope of lower grade gold mineralization, a 5.5 foot
thick (from 191.5 to 197.0) sooty, clay-rich fault zone containing 50% fragments
of banded, epithermal vein material assayed 1.735 opt Au and > 100 ppm Ag
which disproportionately influenced the weighted average grade for the wider
intersection of gold mineralization in the hole.

Drill hole AC-11 intersected 90 feet of gold mineralization
(from 225.0 to 315.0) across a contact between a rhyolitic lithic tuff and a
vesicular basalt which averaged 0.073 opt in gold with subordinate amounts of
silver. Within this broader area, a 14.0 foot zone (from 255.0 to 269.0 feet) of
banded, epithermal veins associated with adularia, averaged 0.293 opt Au and
0.336 opt Ag over the entire 14.0 feet width.

Quartz Mountain Claim -Crone Hill

Three holes (QM-727, QM-731 and QM-733) totalling 2,377.5 feet
in length were drilled in the Crone Hill area. In all, 337 samples were selected
from the drill core for chemical analyses: 68 samples from hole QM-727; 173
samples from hole QM-731 and 96 samples from hole QM-733. Drill hole QM-727
intersected a continuous section of gold mineralization from 195.0 to 430.0 feet
(235.0 feet) in the hole within a heterolithic tuff and tuff breccia which
contained a weighted average of 0.028 opt Au. Within this section, from 362.2 to
370.0 (7.8 feet) at a contact between the tuffs and a vesicular basalt, a zone
of banded epithermal veins assayed 0.11 opt Au and 0.32 opt Ag. Also included in
the wider section from 395.0 to 410.0 (15.0 feet) a bleached, brecciated zone
averaged 0.10 opt Au with marginal values in Ag.

Drill hole QM-731 intersected several zones of gold
mineralization within a heterolithic tuff and a basalt which have been liberally
intruded by a network of narrow banded, epithermal veins, breccias and sulphide
veinlets. From 275.0 to 315.0 (40.0 feet) a mineralized zone averaged 0.022 opt
Au; from 363.5 to 410.0 (46.5 feet), a similar zone averaged 0.056 opt Au and
from 429.0 to 480.0 (51.0 feet) a section containing an average of 0.032 opt Au
was encountered. Within the section from 363.5 to 410.0, a higher grade zone
from 368.5 to 383.0 (14.5 feet) averaged 0.105 opt Au. Only low levels of Ag are
associated with these gold-bearing sections.

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Drill hole QM-733 encountered a wide zone of gold
mineralization from the collar of the hole to 220.0 feet (220.0 feet) within a
limonitic, heterolithic tuff and a basalt. This zone averaged 0.05 opt Au with
consistent low levels of Ag. Within this zone, a network of narrow, banded
epithermal veins from 88.5 to 104.4 (15.9 feet) assayed 0.10 opt in gold.

Also within the wider zone, a 5.5 feet section (119.0 to 124.5)
of epithermal veins at the tuff/basalt contact assayed 0.522 opt Au. An area of
pervasive banded, epithermal veins was intersected in hole QM-733 from 150.0 to
170.5 (20.5 feet) which averaged 0.16 opt Au.

Quartz Mountain Claim -Quartz Butte

Six holes (QM-725, QM-726, QM-728, QM-729, QM-730 and QM-732)
totalling 5,789 feet in length were drilled in the Quartz Butte area. In all,
157 samples were selected from the drill core for chemical analyses: 13 samples
from hole QM-725; 50 samples from hole QM-726; 38 samples from QM-728; 1 sample
from QM-729; 34 samples from QM-730 and 21 samples from hole QM-732. Drill Hole
QM-725 encountered 32 feet of 0.050 opt Au. Drill hole QM-728 encountered 10
feet of 0.050 opt Au and an additional 5 feet of 0.055 opt Au. Drill Hole QM-732
encountered 80 feet of 0.040 opt Au. Drill Holes QM-726, QM-729, QM-730
encountered very low gold values.

Quartz Mountain - Geology and Mineralization

The Quartz Mountain Property contains volcanic-hosted,
epithermal gold mineralization within the Basin and Range geologic province of
Nevada and Oregon. Gold mineralization occurs within Late Miocene, rhyolite
porphyry domes and within adjacent basaltic flows, tuffs and volcaniclastic
country rocks. Disseminated, micron-size, native gold mineralization at Quartz
Mountain accompanies pervasive silica flooding and quartz veining and is
associated with pyrite, marcasite, and stibnite or their oxidized equivalents.
The propertys location within the Basin and Range province, the presence of
rhyolite domes mineralized with gold and abundant silica flooding gave our
company the justification for acquiring this property.

Previous work concentrated on gold mineralization amenable to
open pit mining with little or no attention given to the high grade feeder
structures. Several known feeder veins exhibit quartz textures indicative of
high level, low temperature mineralization suggesting significant down-dip
potential for bonanza mineralization. These textures include angel wing quartz
after calcite, and massive porcelainous and banded chalcedony. These feeder
veins have been intersected in previous drilling with intercepts of more than
1.0 ounce per ton (opt) gold not uncommon. These high grade veins are known to
occur within and adjacent to the Crone Hill and Quartz Butte Resource areas as
well as in the little explored Angel Camp area.

Quartz Mountain  Proposed Work Program and Budget

To date we have expended approximately $975,000 on exploration
of the Quartz Mountain Property. Reclamation of all areas disturbed during our
2004 work program has been completed. As a result of this work we have satisfied
our work commitments through October 15, 2006. Consequently we do not plan any
exploration of the property during 2006. In the event that we determine the
Quartz Mountain Property does not merit further exploration, we will not make
any further exploration expenditures. If we fail to make the exploration
expenditures, the option agreement will terminate and we will lose our interest
in the Quartz Mountain Property.

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This review will be under the supervision of Art Ettlinger,
Ph.D., P. Geo., EMCs Chief Geologist.

Millers Property

In January 2004 we entered into a Mining Lease and Agreement
with Pacific Intermountain Gold Corporation pursuant to which we leased 21
unpatented Federal lode claims located in Esmeralda County, Nevada known as the
Millers Property. William Sheriff, one of our directors, holds a minority
(10%) interest in Pacific Intermountain Gold Corporation. Under the Mining Lease
and Agreement we paid an advance royalty of $5,000 and was required to complete
a $20,000 work commitment by January 23, 2005. In order to maintain the lease we
are required to make the following additional advance royalty payments and
exploration expenditures:

|Date                        | Advance Royalty Payment | Exploration Expenditure        
|--------------------------- | ----------------------- | -------------------------------
|January 23, 2004 (paid)     | $5,000                  | $Nil                           
|January 23, 2005 (paid)     | 7,500                   | $Nil                           
|January 23, 2006            | 10,000                  | $55,000                        
|January 23, 2007            | 15,000                  | $50,000                        
|January 23, 2008            | 30,000                  | $70,000                        
|January 23, 2009 and        | $50,000                 | $100,000, until commencement of
|every January 23 thereafter |                         | commercial production          

We have agreed with Pacific Intermountain Gold Corporation to
carry forward its advance royalty payments and work commitments.

Pursuant to the Mining Lease and Agreement the Millers Property
is subject to a sliding scale NSR royalty ranging from 2% for gold prices under
$300.00/oz to 5% for gold prices in excess of $500.00/oz. Advance royalty
payments are credited against the sliding scale NSR royalty. We are of the view
that the arrangement with Pacific Intermountain Gold Corporation was determined
through arms length negotiation.

While currently we have sufficient funds to make the advance
royalty payments and exploration expenditures due through January 23, 2007,
there is no guarantee that we will have sufficient funds to make future advance
royalty payments and exploration expenditures when due. In the event that we do
not have the funds available, we will either seek advances from our directors or
officers, or engage in additional offerings of our stock. At present, we have no
arrangements to do any of these two methods of fund raising. In the event that
we determine the Millers Property does not merit further exploration, we will
not make any further advance royalty payments or exploration expenditures. If we
fail to make the advance royalty payments or exploration expenditures, the
Mining Lease and Agreement will terminate and we will lose our interest in the
Millers Property.

The Federal claims comprised in the Millers Property are
registered in the name of Pacific Intermountain Gold Corporation and are
described as follows:

|Name         | Date Recorded     | BLM
      Serial Number | Expiry Date    
|------------ | ----------------- | ----------------------- | ---------------
|AS-1  AS-21 | December 30, 2002 | 839526-839546           | August 31, 2006

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On an annual basis, each of these claims requires a rental
payment of $125 to the Federal Government, payable by August 31. In the event
this payment is not made in any year, we may lose title to each claim for which
the rental is not paid.

Pursuant to the terms of the Mining Lease and Agreement we also
agreed with Pacific Intermountain Gold Corporation that, in the event that we
locate any additional unpatented mining claims within an Area of Interest
surrounding the Millers Property, such claims will be subject to the Mining
Lease and Agreement. The Area of Interest extends 5,280 feet from the exterior
perimeter of the Millers Property.

The acquisition of the Millers Property was based partly on a
review of the results of previous work carried out on the property, but mainly
on an on-site visit to the property by Thomas Skimming, William Utterback,
George Cole, Kathy Tureck, our former Exploration Manager and Dave Rowe, a
geological consultant of our company, all of whom, collectively, concluded that
the property was one that exhibited considerable exploration potential for
high-grade, bonanza-type gold mineralization at depth and as a result,
recommended to our management that an option to acquire the property be
negotiated with the property owners. All of the preceding persons are qualified
geologists with considerable exploration experience both in the state of Nevada
and worldwide.

Millers Property  Location and Access

The Millers Property is located in Esmeralda County in the
southwestern portion of the State of Nevada, approximately 13 miles in a
straight line, west of the town of Tonopah located at the intersection of U.S.
Routes 6 and 95.

Access to the property is from the town of Tonopah, west on U.S.
  Route 6 for a distance of 12 miles and then an additional 8.5 miles in a south-southwesterly
  direction over a dirt road, suitable only for a 4-wheel drive vehicle.



Millers Property - Climate, Local Resources and Physiography

The property is located on the eastern flank of Lone Mountain
in the Weepah Hills at an elevation of approximately 6,500 feet. Vegetation
consists of a variety of low profile shrubs including creosote, sage brush and a
sparse distribution of grasses. The climate is classified as high arid desert
which features light snow falls during the winter months that usually melt
before March and is characterized by hot, dry summers.

Millers Property  Geology and History

A number of small prospects dating back to the late 1800s are
  found throughout the area. Dickenson-Nevada held the property in the late 1980s
  and conducted extensive soil sampling that identified a rather large anomalous
  area in excess of one mile in length. Six holes totalling 2,470 feet (753 m)
  were drilled ranging from 355 feet (108 m) to 505 feet (154 m) in depth. This
  drilling targeted mineralization in the hanging wall of the veins and as a result,
  only two of the holes intersected vein material. Drill hole MS-1 intersected
  the quartz veining at about 115 feet with a high assay of 0.03 opt; whereas
  drill hole MS-2 hit a 40-foot thick zone of chalcedonic veining at 160-200 feet,
  which ran 0.01 opt.

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Our interest in the property centers on a large chalcedonic,
pyrite-bearing vein that has been traced along surface for more than a mile.
This vein ranges from 5 to more than 30 feet (9.1 m) in width and displays
classic high level, low temperature quartz textures. Calcite veining accompanies
the chalcedony locally and in select vein segments is dominant. The main vein is
the largest of at least 5 parallel to sub-parallel veins occurring in a broad
vein zone measuring up to 400 feet (122 m) in width. The veins cut a number of
rock types including a Jurassic granite and sediments and metasediments of
Cambrian age intruded by and partially covered by a variety of Tertiary
rhyolitic intrusives and volcanics.

In an October 2004 sampling program performed by our company,
of 56 grab samples collected to characterize the mineralization, the assays
ranged from <0.005 -4.65 ppm gold and averaged 0.30 ppm from quartz-carbonate
vein material exposed on the southern portion of the claims. Fluid inclusion
work commissioned by our company on three vein samples resulted in confirmation
of the boiling process at a maximum depth of 180 m below the paleo water table.
This compares favorably with field observations of vein texture and suggests a
boiling zone could be present at depths of from 300 (92 m) - 700 feet (213 m)
below the surface. The boiling zone would be the preferred target for bonanza
style mineralization.

This preliminary fieldwork by our personnel noted that contrary
to earlier descriptions of the Millers vein, the vast majority of strike
measurements varied considerably from N-S. Instead, a preliminary interpretation
is the presence of multiple high-level, en-echelon epithermal veins, which
individually strike from NNE-SSW to NE-SW but collectively trend along a single
structural corridor that strikes N-S. The existence of multiple veins, the
length of the vein zone being well in excess of 5000 feet along strike, the
evidence of multiple phase Tertiary igneous activity, the lack of sustained
modern exploration, along with the untested pediment potential are all positive
indicators suggesting the Millers property offers excellent potential for the
discovery of bonanza style epithermal gold mineralization at depth. The regional
setting of Millers with respect to the Walker Lane structure, the nearby
Castle-Black Rock deposit, and the Midway-Tonopah area further increase the
attractiveness of this project.

The presence and continuity of the chalcedonic vein, anomalous
gold assays encountered at the surface, and the applicability of a geologic
model calling for a Bonanza zone associated with boiling at depth were
sufficient justification for our company to acquire this property.

Millers Property  Proposed Work Program and Budget

An exploratory reverse circulation drilling program to assess
the significance of the gold-bearing, epithermal quartz vein system on the
property was initiated in late March 2006 and as of our yearend has not been
completed. The cost of this initial drill program is estimated to be $75,000 and
will be paid for out of our working capital. This amount will provide for
approximately 4,000 feet of reverse circulation drilling, assaying and project
management costs.

This work is under the supervision of Art Ettlinger, Ph.D., P.
Geo., EMCs Chief Geologist.

There are no known reserves on the Millers Property and any
proposed program by our company is exploratory in nature. We have not conducted
any exploration activities on the Millers Property prior to the ongoing drill
program. Subject to obtaining sufficient financing we plan to review these
mineral claims and, if warranted, undertake further exploration activities. We
are presently in the exploration stage and there is no assurance that a
commercially viable mineral deposit (a reserve), exists in the Millers Property
until further exploration is done and a comprehensive evaluation concludes
economic and legal feasibility.

59

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Seven Troughs Property

In September 2005 we terminated our lease on the Seven Troughs
Property with Newmont Capital Limited. We no longer have an interest in this
property.

AG Property

In March 2003, we staked 43 lode mining claims in Humboldt
County, Nevada known as the AG Property. The claims are registered in our
name.

The AG mining claims are described as follows:

|Name     | Date Recorded | NMC Number    | Expiry Date    
|-------- | ------------- | ------------- | ---------------
|AG 11-53 | March 3, 2003 | 844139-844181 | August 31, 2006

On an annual basis, each of these claims requires a rental
payment of $125 to the Federal Government, payable by August 31. In the event
this payment is not made in any year, we may lose title to each claim for which
the rental is not paid.

AG Property  Location and Access

The AG Property is located approximately 32 miles northwest of
the town of Orovada in Humboldt County, Nevada. The Property lies within the
Bilk Creek Mountains and encompasses a small hill.

Access to the Property is from the town of Winnemucca located
in northern Nevada on Interstate Route 80, north on U.S. Route 95, then
northwesterly on Nevada State Route 140 to the Fort McDermott Indian
Reservation, then along an unimproved dirt road running north through Sand
Canyon for approximately 22 miles to the Property.

The acquisition of the AG Property was based on the results of
an exploration program previously carried out by Noranda Exploration, Inc. in
1983 on ground presently encompassed by the AG Property. Thomas Skimming and
William Utterback, exploration geologists, also conducted a field examination.
They identified evidence of banded, epithermal, quartz-adularia veins on the
property which exhibited angel wing textures characteristic of many of the
epithermal quartz veins that have been developed as gold mines in the state of
Nevada. Messrs. Skimming and Utterback have no interest in the AG Property.

There are no known reserves on the AG Property and any proposed
  program by our company would be exploratory in nature. We have not conducted
  any exploration activities on the AG property. Subject to obtaining sufficient
  financing we plan to review these mineral claims and, if warranted, undertake
  further exploration activities. We are presently in the exploration stage and
  there is no assurance that a commercially viable mineral deposit, a reserve,
  exists in the AG Property until further exploration is done and a comprehensive
  evaluation concludes economic and legal feasibility. However, we do not plan
  to undertake any specific exploration activities on the AG Property in the immediate
  future.



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AG Property  Climate, Local Resources and Physiography

The AG Property lies at elevations ranging from 6,000 to 6,700
feet above mean sea level within a moderately rugged terrain. Agate Point, the
most prominent topographic feature on the Property, has an elevation of 6728
feet above mean sea level. The climate is classified as high arid to semi-arid
desert. Temperatures vary from 100 degrees Fahrenheit in the summer to 10
degrees Fahrenheit in the winter with an average precipitation of approximately
5 inches per year which is mainly in the form of snow during the winter months.

AG Property  History

During a routine field investigation in 1983 in Sand Canyon at
  the south end of the Bilk Creek Mountain Range, geologists of Noranda Exploration
  Inc. noticed a north trending structure extending to Agate Point which suggested
  an extensive area of silica alteration. Around 1990, Geomex Minerals Inc. acquired
  the AG Property and drilled two shallow holes approximately 2000 feet apart
  in the central area near Agate Point. One of these was collared near a granite
  contact. The results of their drilling are not available but it is known that
  they were looking for a bulk tonnage deposit.

AG Property  Geology and Mineralization

Preliminary sampling indicated anomalous gold, arsenic,
antimony and mercury in brecciated and stockwork veined volcanic rocks. During
the following year, geological mapping was carried out to identify the volcanic
stratigraphy, structure and the distribution and type of alteration exhibited in
the rocks. Geochemical sampling was done to identify areas with anomalous
concentrations of precious metals and pathfinder elements. This data was
examined and preliminary models were constructed. As a result of their findings,
Noranda concluded that the Agate Point area has low potential for a large
tonnage, economic precious metal deposit (open pit, heap leach-type of deposit)
but noted the potential for a structurally controlled, high grade-type deposit
in the area.

AG Property  Proposed Work Program and Budget

Although no specific work program is planned at present, it is
envisioned that an initial exploration program on the AG Property will cost
approximately $150,000. This amount provides for additional sampling of the vein
system in the central portion of the Property together with sample analyses
($15,000), geophysical surveys and the construction of a control grid ($35,000)
and approximately 5,000 feet of reverse-circulation drilling at an all inclusive
cost of $20 per foot, which would include geological supervision, logging,
sampling and assaying of drill samples ($100,000).

Atlas Database

On January 17, 2003 we acquired Atlas Database Corp., the owner
of a natural resource exploration database developed by Atlas Minerals Inc.
during the period 1982 through 1997. The majority of the information contained
in the database relates to research on bulk mineable precious mineralized
material in the western United States, particularly sediment hosted disseminated
gold deposits and volcanic hosted disseminated hot springs gold mineralized
material. Our management intends to utilize this database to further our stated
business objective of locating, acquiring and exploring mineral properties.

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Atlas Database Corp. was acquired pursuant to an Agreement and
Plan of Merger between our company, Atlas Database Acquisition Corp., our
wholly-owned subsidiary, Atlas Database Corp., Platoro West Incorporated and
William M. Sheriff, a member of our board of directors. Mr. Sheriff is the sole
Shareholder of Platoro West Incorporated which was, in turn, the sole
shareholder of Atlas Database Corp. Pursuant to the terms of the Agreement and
Plan of Merger, 6,000,000 shares of our common stock were issued to Platoro West
Incorporated in exchange for all of the issued and outstanding shares of Atlas
Database Corp., Atlas Database Acquisition Corp. merged with and into Atlas
Database Corp. and its separate existence ceased. As a result of the foregoing,
Atlas Database Corp. is now our wholly-owned subsidiary.

The purchase price for the Atlas Database of 6,000,000 shares
of our common stock was determined through arms length negotiations between
ourselves and Platoro West Incorporated. Atlas Database Corp. was formed in
January, 2003 and was assigned all of Platoro West Incorporateds right, title
and interest in and to the Atlas Database in exchange for $15,000 cash. Prior to
the Agreement and Plan of Merger, Platoro West Incorporated was the sole
shareholder of the Atlas Database and therefore its parent company.

Platoro West Incorporateds interest in the Atlas Database was
acquired pursuant to a Bill of Sale and Letter Agreement between Platoro West
Incorporated and Atlas Minerals Inc. dated June 10, 2000. The purchase price
paid by Platoro West Incorporated to Atlas Minerals Inc. was $15,000 cash. As
required by the Letter Agreement, we have agreed to comply with the terms
thereof. Accordingly, we are required to allow Atlas Minerals Inc. access to the
data contained in the Atlas Database for competitive purposes, provided that
Atlas Minerals Inc. provides reasonable notice. To date, Atlas Minerals Inc. has
not requested access to the data. The Letter Agreement does not provide for
sales of any of the data contained in the Atlas Database by Atlas Minerals Inc.
to third parties, it only requires that we grant access to the data for
competitive purposes. However, it does not specifically prohibit such sales nor
would we receive any portion of sales proceeds. We have not obtained a legal
opinion on whether or not Atlas Minerals Inc. has the right to sell any of the
data contained in the Atlas Database to third parties. However, we are of the
view that such sales would be a violation of the terms of the Letter Agreement
and would take steps to prevent such sales. We can give no assurance that we
would be successful in this regard. Pursuant to the terms of the Letter
Agreement, in the event that we sell any of the data to a third party we are
required to pay Atlas Minerals Inc. 25% of the proceeds of the sale. We do not
require Atlas Minerals Inc.s consent to sell any of the data in the Atlas
Database to any third party.

Pursuant to the terms of the Agreement and Plan of Merger we
granted Platoro West Incorporated the option to repurchase from us the Atlas
Database on an as is, where is basis, provided that (i) during the 365 day
period prior to the exercise of the option we have not made commercial use of
the Atlas Database and (ii) we have no commercially reasonable plans for use of
the Atlas Database. The exercise price of the option is payment by 6,000,000
shares of our common stock. Accordingly, the option exercise price is the same
as the purchase price. In the event that we sell the Atlas Database to an arms
length third party the option granted to Platoro West Incorporated will
terminate.

We are utilizing portions of the Atlas Database on an ongoing
basis in support of its gold exploration efforts in Nevada, however, no specific
budget is assigned to this database.

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Quality Assurance and Quality Control

We endeavor to acquire and report as accurate and precise
exploration results as practical on an ongoing basis. We recognize that the
accurate reporting of exploration data starts at the point of acquisition and
requires vigilance in oversight until reported in the public domain. In order to
accomplish this, we have implemented the following Quality Assurance/Quality
Control procedures for the collection of soil sediment and rock samples for
geochemical analyses:

At the Exploration Site

| | A. | The Project geologist is responsible for the integrity of
      all exploration samples.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | B. | Individual soil, sediment, rock chip, or drill chip
      samples are to be immediately placed, upon collection, into a new, clearly
      marked sample bag and secured from loss of material.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | A laboratory sample tag, identifying sample ID only,
      should be placed within the sample bag for secondary identification
      purposes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | C. | Drill core should be placed in a new core box that is
      clearly labelled with project name, drill hole number and drill footages.
      This drill core should be split in half at the drill site or core logging
      facility with one half of the core placed in a clearly labelled new sample
      bag along with a laboratory sample tag and placed in a secure location
      away from public access prior to shipping. Remaining drill core must be
      stored either at the drill site or core storage facility in such a way
      that the core box integrity is guarded from weathering and the core
      stacked to prevent tipping or spillage.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | D. | The samples, once labelled, are to be secured in a
      location away from public access to prevent tampering and/or loss of
      sample integrity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | E. | Blind duplicate samples, if required, should be bagged
      and labelled at the point of collection and placed with the general sample
      population for safe keeping.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | F. | Packing and transporting of exploration samples to the
      laboratory should be under direct supervision of the Project Geologist and
      whenever possible the Project Geologist or his delegate should accompany
      the samples while in transport to the laboratory.                                                                                                                                                                                                                                                                                                                                                                                        

At the Laboratory

| | A. | All exploration samples submitted for geochemical
      analyses should be submitted to an ISO accredited laboratory.                                                             
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                   
| | B. | The laboratory should have well-documented Quality
      Assurance/Quality Control procedures.                                                                                    
| |    |                                                                                                                                                                                   
| | C. | The laboratory should allow spot inspections of its
      facilities by our personnel.                                                                                            
| |    |                                                                                                                                                                                   
| | D. | The laboratory should routinely provide quality control
      data for reference materials and duplicate samples.                                                                 
| |    |                                                                                                                                                                                   
| | E. | Quality Assurance/Quality Control procedures are dynamic
      and ever evolving. The laboratory should be continually striving to
      improve and update these methods and show

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evidence of this through updates to
their posted procedures and level of ISO certification on a continuing basis.

Check Assaying

| | A. | We should design a check assaying procedure prior to
      initiation of any sampling program. Such programs may or may not be unique
      to each property and commodity.                                                                      
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                  
| | B. | For practical purposes, a primary laboratory should be
      designated that processes all exploration samples from a specific
      project.                                                                                                    
| |    |                                                                                                                                                                                                                                                  
| | C. | Whenever practical, blind duplicate samples should be
      collected at the sample site and submitted to the primary laboratory on a
      regular basis to be determined by the Qualified Person, as defined by NI
      43-101.               
| |    |                                                                                                                                                                                                                                                  
| | D. | Once geochemical analyses or assays are received, the
      Qualified Person and Project Geologist should select appropriate samples
      for check assaying at a secondary laboratory.                                                         
| |    |                                                                                                                                                                                                                                                  
| |    | The frequency of such sampling to be determined by the
      Qualified Person and Project Geologist. Our personnel should recover
      sample pulps from the primary lab and supervise their transfer to the
      secondary lab for processing.
| |    |                                                                                                                                                                                                                                                  
| | E. | In the case of high-grade precious metal assays received
      from the primary lab, the Project Geologist should direct the primary lab
      to perform metallic screen assays on coarse rejects from that
    sample.                         

National Instrument 43-101 Disclosure

All resource estimates contained herein, while considered to be
reliable and relevant, do not use categories as defined in NI 43101. All
resource estimates are based on prior data and reports obtained and prepared by
previous operators, and the reader is cautioned that none of the calculations
conform to NI 43-101 requirements for reporting reserves and resources. We have
not done the work necessary to verify the classification of the mineral resource
estimates. We are not treating the mineral resource estimates as a NI 43-101
defined resource verified by a qualified person. As such, the historical
estimates should not be relied upon. All of our properties will require
considerable further evaluation, which our management and consultants intend to
carry out in due course.

Exploration Facilities

We have no plans to construct a mill or smelter on any of our
mineral claims until an ore body of reasonable worth is found (which may be
never).

While in the exploration phase, our crews will be living in the
towns nearby our mineral properties to avoid building any permanent
facilities.

Other Material Mineral Properties

Other than the foregoing (and other than any additional mineral
  properties which we have acquired by staking but have not yet developed exploration
  plans for) we have not acquired any other significant mineral properties. We
  plan to continue to seek other significant mineral properties during the next
  year so as to diversify our holdings. Any mineral property acquisitions may
  involve the issuance of substantial blocks of our shares.

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Employees and Consultants

As at August 1, 2006, we did not have any employees either part
time or full time.

Paul Matysek, our sole officer, devotes substantially all of
his time to the operation of our business and that of our parent, Energy Metals
Corporation pursuant to a consulting arrangement with Energy Metals Corporation.
Our other directors serve on an as needed basis.

We are not party to any employment contracts or collective
bargaining agreements. Our management is of the view that the western United
States has a relatively large pool of people experienced in exploration of
mineral properties; being mainly geologists and mining consultants. In addition,
there is no lack of people who have experience in working on mineral properties
either as laborers or prospectors. As a result, we intend to use independent
workers and consultants on a part-time basis.

Competition

In the United States there are numerous mining and exploration
companies, both big and small. All of these mining companies are seeking
properties of merit and availability of funds. We will have to compete against
such companies to acquire the funds to develop our mineral claims. The
availability of funds for exploration is sometimes limited and we may find it
difficult to compete with larger and more well-known companies for capital. Even
though we have the right to the minerals on our claims there is no guarantee we
will be able to raise sufficient funds in the future to maintain our mineral
claims in good standing. Therefore, if we do not have sufficient funds for
exploration our claims might lapse and be staked by other mining interests. We
might be forced to seek a joint venture partner to assist in the exploration of
our mineral claims. In this case, there is the possibility that we might not be
able to pay our proportionate share of the exploration costs and might be
diluted to an insignificant carried interest.

Even when a commercial viable ore body is discovered, there is
no guarantee competition in refining the ore will not exist. Other companies may
have long term contracts with refining companies thereby inhibiting our ability
to process our ore and eventually market it. At this point in time we do not
have any contractual agreements to refine any potential ore we might discover on
our mineral claims.

The exploration business is highly competitive and highly
fragmented, dominated by both large and small mining companies. Success will
largely be dependent on our ability to attract talent from the mining field.
There is no assurance that our mineral expansion plans will be realized.

Government Regulation and Environmental Concerns

We are committed to complying and, to our knowledge, are in
compliance with all governmental and environmental regulations. Permits from a
variety of regulatory authorities are required for many aspects of mine
operation and reclamation. We cannot predict the extent to which future
legislation and regulation could cause additional expense, capital expenditures,
restrictions, and delays in the exploration of our properties.

Our activities are not only subject to extensive federal, state
and local regulations controlling the mining of and exploration for mineral
properties, but also the possible effects of such activities

65

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upon the environment. Future legislation and regulations could
cause additional expense, capital expenditures, restrictions and delays in the
exploration of our properties, the extent of which cannot be predicted. Permits
may also be required from a variety of regulatory authorities for many aspects
of mine operation and reclamation. In the context of environmental permitting,
including the approval of reclamation plans, we must comply with known
standards, existing laws and regulations that may entail greater or lesser costs
and delays depending on the nature of the activity to be permitted and how
stringently the regulations are implemented by the permitting authority. We are
not presently aware of any specific material environmental constraint affecting
our properties that would preclude the economic development or operation of any
specific property.

It is reasonable to expect that compliance with environmental
regulations will increase our costs. Such compliance may include feasibility
studies on the surface impact of our proposed exploration operations; costs
associated with minimizing surface impact; water treatment and protection;
reclamation activities, including rehabilitation of various sites; on-going
efforts at alleviating the mining impact on wildlife; and permits or bonds as
may be required to ensure our compliance with applicable regulations. It is
possible that the costs and delays associated with such compliance could become
so prohibitive that we may decide not to proceed with exploration on any of our
mineral properties.

We are prepared to engage professionals, if necessary, to
ensure regulatory compliance but in the near term expect our activities to
require minimal regulatory oversight. If we expand the scope of our activities
in the future it is reasonable to expect expenditures on compliance to rise.

Subsidiaries

We have one wholly-owned subsidiary, Atlas Database Corp., a
Delaware corporation through which we hold our interest in the Atlas Database.

Patents and Trademarks

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

Risks Related To Our Financial Condition And Business
Model

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

Our current operating funds will cover our current exploration
programs on our mineral properties. However, in order for us to perform any
further exploration or extensive testing we will need to obtain additional
financing. In addition, we may decide to reallocate our resources as between our
mineral properties or we may acquire additional properties which we consider to
have greater geological merit than our current properties and we may decide to
reallocate our resources to such properties. As of July 27, 2005, we had cash in
the amount of approximately $5.7 million. We currently do not have any income.
Our business plan calls for significant expenses in connection with the
exploration of our mineral claims. We will also require additional financing if
the costs of the exploration of our mineral claims are greater than anticipated.
We will require additional financing to sustain our business operations if we
are not successful in earning revenues once exploration is complete. If our
exploration programs are successful in discovering ore of commercial tonnage and
grade, we will require additional funds in order to place our mineral claims
into commercial production. We currently do not have any arrangements for
additional financing and we may not be able to obtain financing when required.
Obtaining

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additional financing would be subject to a number of factors,
including the market prices for minerals and the costs of exploring for or
mining these materials. These factors may make the timing, amount, terms or
conditions of additional financing unavailable to us.

Because we have not commenced business operations, we face a
high risk of business failure due to our inability to predict the success of our
business.

We have just begun the initial stages of exploration of our
mineral claims, and thus have no way to evaluate the likelihood that we will be
able to operate the business successfully. We were incorporated on May 5, 1999
and to date have been involved primarily in organizational activities and the
acquisition of our mineral claims. We have not earned any revenues as of the
date of this report.

Because of the unique difficulties and uncertainties inherent
in mineral exploration business, we face a high risk of business failure.

Potential investors should be aware of the difficulties
normally encountered by mineral exploration companies and the high rate of
failure of such enterprises. The likelihood of success must be considered in
light of the problems, expenses, difficulties, complications and delays
encountered in connection with the exploration of the mineral properties that we
plan to undertake. These potential problems include, but are not limited to,
unanticipated problems relating to exploration, and additional costs and
expenses that may exceed current estimates.

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

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

Because of the speculative nature of exploration of mineral
claims, there is substantial risk that no commercially exploitable minerals will
be found and this business will fail.

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

Because of the inherent dangers involved in mineral
exploration, there is a risk that we may incur liability or damages as we
conduct our business.

The search for valuable minerals involves numerous hazards. As
a result, we may become subject to liability for such hazards, including
pollution, cave-ins and other hazards against which we

67

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cannot insure or against which we may elect not to insure. The
payment of such liabilities may have a material adverse effect on our financial
position.

Risks Related To Legal Uncertainty

As we undertake exploration of our mineral claims, we will be
subject to compliance with government regulation that may increase the
anticipated cost of our exploration program. There are several governmental
regulations that materially restrict mineral exploration or exploitation. We
will be subject to local mining laws as we carry out our exploration program. We
may be required to obtain work permits, post bonds and perform remediation work
for any physical disturbance to the land in order to comply with these
regulations. While our planned exploration programs budget for regulatory
compliance, there is a risk that new regulations could increase our costs of
doing business and prevent us from carrying out our exploration program.

ITEM 2. DESCRIPTION OF PROPERTY

Our corporate offices are located at Suite 1238 -- 200
Granville Street, Vancouver British Columbia V6C 1S4. At the present time, these
offices are provided to us by our parent company, Energy Metals Corporation,
without charge. Other than the Atlas Database and the mineral properties
discussed under the heading Our Business we do not have any material assets
and, as such, we do not own any real or personal property.

ITEM 3. LEGAL PROCEEDINGS

We are not currently a party to any legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY
HOLDERS

On June 27, 2006 the Company held a Special Meeting of
Stockholders to approve the business combination with Energy Metals
Corporation.Information is incorporated by reference from the Companys
Schedule 14A Definitive Proxy Statement dated June 14, 2006. 26,429,343 votes
were cast at the Meeting, 26,418,043 votes for, 1,300 votes against and 10,000
votes abstaining. Accordingly, the resolutions approving the business
combination with Energy Metals Corporation were carried.

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PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

Market Information

On November 24, 2003 we were approved for listing on the
Over-the-Counter Bulletin Board under the symbol QCYR. On July 7, 2004 we
changed our name to Quincy Gold Corp and were issued a new symbol, QCYG. On
May 16, 2005 we changed our name to Quincy Energy Corp. and were issued a new
symbol, QCYE. On October 6, 2004 the shares of our common stock were approved
for listing on the TSX Venture Exchange under the symbol QGO, which was
changed to QUI in connection with our change of name on May 16, 2005. On July
11, 2006 our common stock was delisted from the TSX Venture Exchange and
quotation of our common stock on the Over-the-Counter Bulletin Board ceased.

As of August 1, 2006 we had 51,962,997 shares of our common
stock outstanding, which shares were held by one shareholder, Energy Metals
Corporation. On July 7, 2006, the last day on which our stock traded, our common
stock closed on the Over-the-Counter Bulletin Board at $1.011 per share.

The following table sets forth the range of high and low
closing bid quotations for our common stock since our common stock was listed on
the Over-the-Counter Bulletin Board. The quotations represent inter-dealer
prices without retail markup, markdown or commission, and may not necessarily
represent actual transactions.

|Three Month Period | High  | Low  
|------------------ | ----- | -----
|Ended              |       |      
|January 31, 2004   | $0.90 | $0.39
|April 30, 2004     | $0.86 | $0.53
|July 31, 2004      | $0.60 | $0.37
|October 31, 2004   | $0.57 | $0.33
|January 31, 2005   | $0.85 | $0.30
|April 30, 2005     | $0.78 | $0.39
|July 31, 2005      | $0.63 | $0.35
|October 31, 2005   | $0.75 | $0.45
|January 31, 2006   | $0.80 | $0.42
|April 30, 2006     | $1.48 | $0.61

The Securities Exchange Commission has adopted rules that
regulate broker-dealer practices in connection with transactions in penny
stocks. Penny stocks are generally equity securities with a price of less than
$5.00, other than securities registered on certain national securities exchanges
or quoted on the Nasdaq system, provided that current price and volume
information with respect to transactions in such securities is provided by the
exchange or system. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from those rules, deliver a
standardized risk disclosure document prepared by the Commission, which: (a)
contains a description of the nature and level of risk in the market for penny
stocks in both public offerings and secondary trading; (b) contains a
description of the broker's or dealer's duties to the

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customer and of the rights and remedies available to the customer
  with respect to a violation to such duties or other requirements of Securities'
  laws; (c) contains a brief, clear, narrative description of a dealer market,
  including bid and ask prices for penny stocks and significance of the spread
  between the bid and ask price; (d) contains a toll-free telephone number for
  inquiries on disciplinary actions; (e) defines significant terms in the disclosure
  document or in the conduct of trading in penny stocks; and (f) contains such
  other information and is in such form as the Commission shall require by rule
  or regulation. The broker-dealer also must provide, prior to effecting any transaction
  in a penny stock, the customer: (a) with bid and offer quotations for the penny
  stock; (b) the compensation of the broker-dealer and its salesperson in the
  transaction; (c) the number of shares to which such bid and ask prices apply,
  or other comparable information relating to the depth and liquidity of the market
  for such stock; and (d) monthly account statements showing the market value
  of each penny stock held in the customer's account. In addition, the penny stock
  rules require that prior to a transaction in a penny stock not otherwise exempt
  from those rules; the broker-dealer must make a special written determination
  that the penny stock is a suitable investment for the purchaser and receive
  the purchaser's written acknowledgment of the receipt of a risk disclosure statement,
  a written agreement to transactions involving penny stocks, and a signed and
  dated copy of a written suitably statement.

These disclosure requirements may have the effect of reducing
  the trading activity in the secondary market for our stock if it becomes subject
  to these penny stock rules. Therefore, if our common stock becomes subject to
  the penny stock rules, stockholders may have difficulty selling those securities.

**Recent Sales of Unregistered Securities**

In the past year the Registrant has sold the following securities
  which were not registered under the Securities Act, other than sales of securities
  previously reported on in Form 10-QSB or Form 8-K filings made by the Registrant.

| | • | On April 3, 2006 we issued 20,000 shares of our common
        stock on the exercise of previously issued share purchase warrants at
        a price of CDN $0.65 per share. These securities were issued in reliance
        upon the exemption from registration provided by Regulation S as the purchaser
        was not a U.S. Person as that term is defined in Regulation S.                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | • | On April 10, 2006 we issued 10,000 shares of our
        common stock on the exercise of previously issued share purchase warrants
        at a price of CDN $0.65 per share. These securities were issued in reliance
        upon the exemption from registration provided by Regulation S as the purchaser
        was not a U.S. Person as that term is defined in Regulation S.                                                                                                                                                    
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | • | On May 2, 2006 we issued 125,000 shares of our common
        stock on the exercise of previously issued share purchase warrants at
        a price of CDN $0.65 per share and 110,000 shares of our common stock
        on the exercise of previously issued share purchase warrants at a price
        of CDN $1.10 per share. These securities were issued in reliance upon
        the exemption from registration provided by Regulation S as the purchaser
        was not a U.S. Person as that term is defined in Regulation S.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | • | On May 8, 2006 we issued 550,000 shares of our common
        stock on the exercise of previously issued share purchase warrants at
        a price of CDN $0.65 per share. These                                                                                                                                                                                                                                                                                                                                                       

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| |   | securities were issued in reliance
        upon the exemption from registration provided by Regulation S as the purchaser
        was not a U.S. Person as that term is defined in Regulation S.                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | • | On May 17, 2006 we issued 10,000
        shares of our common stock on the exercise of previously issued share
        purchase warrants at a price of CDN $0.65 per share. These securities
        were issued in reliance upon the exemption from registration provided
        by Regulation S as the purchaser was not a U.S. Person as that term is
        defined in Regulation S.                                                                                                                                                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | • | On June 6, 2006 we issued 75,000
        shares of our common stock on the exercise of previously issued share
        purchase warrants at a price of CDN $0.65 per share. These securities
        were issued in reliance upon the exemption from registration provided
        by Regulation S as the purchaser was not a U.S. Person as that term is
        defined in Regulation S.                                                                                                                                                                                                            
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | • | On June 13, 2006 we issued 400,000
        shares of our common stock to NZ Uranium LLC pursuant to the terms of
        an option agreement dated May 12, 2005 between ourselves and NZ Uranium
        LLC as previously reporting by the Company in its Current Report on Form
        8-K dated May 16, 2005. These shares are being held in trust by NZ Uranium
        LLCs counsel pending resolution of certain outstanding title and
        other matters. These securities were issued in reliance upon the exemption
        from registration provided by s. 4(2) of the Securities Act.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | • | On June 19, 2006 we issued 275,000
        shares of our common stock on the exercise of previously issued share
        purchase warrants at a price of CDN $0.65 per share. These securities
        were issued in reliance upon the exemption from registration provided
        by s. 4(2) of the Securities Act.                                                                                                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | • | On June 21, 2006 we issued 666,667
        shares of our common stock on the exercise of previously issued share
        purchase warrants at a price of CDN $0.65 per share. These securities
        were issued in reliance upon the exemption from registration provided
        by Regulation S as the purchaser was not a U.S. Person as that term is
        defined in Regulation S.                                                                                                                                                                                                          
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | • | On June 26, 2006 we issued 12,500
        shares of our common stock on the exercise of previously issued share
        purchase warrants at a price of CDN $0.65 per share. These securities
        were issued in reliance upon the exemption from registration provided
        by Regulation S as the purchaser was not a U.S. Person as that term is
        defined in Regulation S.                                                                                                                                                                                                           

Dividends

There are no restrictions in our articles of incorporation or
  bylaws that prevent us from declaring dividends. The Nevada Revised Statutes,
  however, do prohibit us from declaring dividends where, after giving effect
  to the distribution of the dividend:

1. We would not be able to pay our debts as they become due in
  the usual course of business; or

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2. Our total assets would be less than the sum of our total liabilities
  plus the amount that would be needed to satisfy the rights of shareholders who
  have preferential rights superior to those receiving the distribution.

We have never declared or paid any cash dividends on our common
  stock. We currently intend to retain future earnings, if any, to finance the
  expansion of our business. As a result, we do not anticipate paying any cash
  dividends in the foreseeable future.

Equity Compensation Plan Information

The following table sets forth the information regarding our
  equity compensation plans as at the end of our most recently completed fiscal
  year:

|Plan category                | Number of securities to be issued | Weighted average exercise | Number of securities
|---------------------------- | --------------------------------- | ------------------------- | --------------------
|                             | upon exercise of outstanding      | price of                  | remaining available 
|                             | options, warrants and rights      | outstanding options,      | for future issuance 
|                             |                                   | warrants and rights       |                     
|                             |                                   |                           |                     
|                             | (a)                               | (b)                       | (c)                 
|Equity compensation plans    | 3,650,000                         | $0.45                     | 1,205,883           
|approved by security holders |                                   |                           |                     
|                             |                                   |                           |                     
|Equity compensation plans    | Nil                               | N/A                       | Nil                 
|not approved by              |                                   |                           |                     
|security holders             |                                   |                           |                     
|Total                        | 3,650,000                         |                           | 1,205,883           

See Employee Stock Incentive Plan above for a description
  of the material terms of our equity compensation plan.

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

The following discussion and analysis explains the major factors
  affecting our financial condition. The following discussion of our financial
  condition and plan of operation should be read along with the financial statements
  and notes to the financial statements included elsewhere in this annual report.

We are a start-up, exploration stage company and have not yet
  generated or realized any revenues from our business operations. We must raise
  cash in order to implement our plan and stay in business.

Our continued existence and plans for future growth depend on
  our ability to obtain the capital necessary to operate, through the generation
  of revenue and the issuance of additional debt or equity. While we believe that
  we have sufficient resources to continue in business until at least April 30,
  2007, we may not be able to continue in business beyond that date unless we
  obtain additional capital to pay our bills. Our management has not made a commitment
  of financial support to meet future obligations and we have not generated any
  revenues and no revenues are anticipated unless and until mineralized material
  is discovered on the properties that we have an interest in. Accordingly we
  must raise cash from other than the sale of mineralized materials. We will be
  conducting research in connection with the exploration of our properties. We
  are not planning to buy or sell any plant or significant equipment.

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Plan of Operation

Our business plan is to proceed with the exploration of our mineral
  properties to determine whether there are commercially exploitable reserves
  of uranium, gold, silver or other metals. We are planning to focus our efforts
  for the 2006-2007 fiscal year on our prospective uranium properties located
  in Oregon, New Mexico and Ontario, Canada.

The bulk of our uranium properties require compilation of historic
  data and recalculation of mineral resources to modern standards. Over the next
  twelve months we will be compiling the available data for each of our uranium
  properties. We are also currently completing a geological report and a new resource
  calculation for the Hosta Butte and Crownpoint properties.

We recently completed a drilling programs on our Arizona Strip
  Breccia Property located in Coconino County, Arizona and on our Lantern Property
  in Pershing County, Nevada.

We initiated a limited reverse circulation drilling program on
  our Miller Property in Nevada this spring. It is anticipated that approximately
  4,000 feet will be drilled along vein targets.

During the quarter we also completed a National Instrument 43-101
  compliant technical report on the Section 24 portion of our Crownpoint Property
  located in McKinley County, New Mexico.

As at the date of this annual report we have sufficient funds
  to complete the work outlined above. However, to further advance our uranium
  resources for categorization at lower levels of risk additional drilling will
  be needed on at least some of the properties. We will be in a position to perform
  this drilling, if needed, during the second half of 2006 at the earliest. It
  is likely we will require more financing for these additional work programs.
  We have made no arrangements for any such financing and there is no guarantee
  that such financing will be available.

There are no known commercially viable mineral deposits on any
  of our mineral properties and any proposed program by us is exploratory in nature.
  We have not conducted any advanced exploration activities on our mineral properties.
  We are presently in the exploration stage and there is no assurance that a commercially
  viable mineral deposit, a reserve, exists in any of our properties until further
  exploration is done and a comprehensive evaluation concludes economic and legal
  feasibility.

Results of Operations  Fiscal Year ended April 30, 2006

We did not earn any revenues during the fiscal year ended April
  30, 2006. We do not anticipate earning revenues until such time as we have entered
  into commercial production of our mineral properties. We are presently in the
  exploration stage of our business and we can provide no assurance that we will
  discover commercially exploitable levels of mineral resources on our properties,
  or if such resources are discovered, that we will enter into commercial production
  of our mineral properties.

We have incurred operating expenses in the amount of $12,247,410
  for the period from inception on May 5, 1999 to April 30, 2006. These operating
  expenses included: (a) exploration costs of $8,392,861; (b) consulting fees
  of $1,564,198; (c) professional fees of $624,228; (d) shareholder communication
  costs of $511,423; (e) administrative expenses of $988,111; (f) stock-based
  compensation expense of $568,700; (g) foreign exchange gain of $422,111, and
  (h) financing costs of $20,000.00

73

---

We incurred a loss in the amount of $12,107,060 for the period
  from inception on May 5, 1999 to April 30, 2006. For the fiscal year ended April
  30, 2006 only, we incurred a loss of $7,467,984. Our loss for this fiscal year
  was attributable to exploration costs ($6,298,056), consulting fees ($635,524),
  professional fees ($303,977), shareholder communication costs ($112,277), administrative
  expenses ($478,869), stock-based compensation expense ($355,675) and foreign
  exchange gain $600,938.

Liquidity and Capital Resources

There is limited historical financial information about our company
  upon which to base an evaluation of our performance. We are an exploration stage
  company and have not generated any revenues from operations.

Our continued existence and plans for future growth depend on
  our ability to obtain the capital necessary to operate, through the generation
  of revenue and the issuance of additional debt or equity. We will need to raise
  additional capital to fund normal operating costs and exploration efforts. If
  we are not able to generate sufficient revenues and cash flows or obtain additional
  or alternative funding, we will be unable to continue as a going concern.

At April 30, 2006 we had cash and cash equivalents of $4,605,922
  and working capital of $4,530,830. We believe that we currently have sufficient
  working capital to pay our administrative and general operating expenses through
  April 30, 2007 and to complete the exploration work programs outlined for the
  coming year exclusive of further reserve definition drilling.

We will need to obtain additional funds (presumably through equity
  offerings and/or debt borrowing) in order, if warranted, to fund our general
  and administrative expenses beyond April 2007, to make the future lease payments
  required on mineral properties and to conduct additional exploration programs
  thereon. Failure to obtain such additional financing will result in the loss
  by us of our interests in our mineral properties. Other than as stated above,
  we have no agreements or understandings with any person for additional financing.

None of our properties has commenced commercial production and
  we have no history of earnings or cash flow from our operations. While we may
  attempt to generate additional working capital through the operation, development,
  sale or possible joint venture development of our properties, there is no assurance
  that any such activity will generate funds that will be available for operations.

We have not declared or paid dividends on our shares since incorporation
  and do not anticipate doing so in the foreseeable future.

New Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 141 "Business Combinations"
  which supersedes APB Opinion No. 16 "Business Combinations" and FASB Statement
  No. 38 "Accounting for Preacquisition Contingencies of Purchased Enterprises."
  The provisions of this statement require that all business combinations be accounted
  for using "purchase accounting" and it disallows the use of "pooling of interests"
  as previously allowed under APB Opinion No. 16 and FASB Statement No. 38. This
  statement is effective for all business combinations subsequent to June 30,
  2001. The adoption of this statement did not have a material effect on our financial
  statements.

74

---

Also in June 2001, the FASB issued SFAS No. 142 "Goodwill and
  Other Intangible Assets," which supersedes APB Opinion No. 17 "Intangible Assets."
  The provisions of this statement changes the unit of account for goodwill and
  takes a very different approach to how goodwill and other intangible assets
  are accounted for subsequent to their initial recognition. Because goodwill
  and some intangible assets will no longer be amortized, the reported amounts
  of goodwill and intangible assets, as well as total assets, will not decrease
  at the same time and in the same manner as under previous standards. This statement
  is effective for all fiscal years beginning subsequent to December 15, 2001.
  The adoption of this statement did not have a material effect on our financial
  statements.

In August 2001, the FASB issued SFAS No. 143 "Accounting for
  Asset Retirement Obligations," which amends SFAS No. 19, and establishes a uniform
  methodology for accounting for estimated reclamation and abandonment costs.
  This statement requires that the fair value of a liability for an asset retirement
  obligation be recognized in the period in which it is incurred if a reasonable
  estimate of fair value can be made. The statement is required to be adopted
  by January 1, 2003, at which time we will record the estimated present value
  of reclamation liabilities and increase the carrying value of related assets.
  Subsequently, reclamation costs will be allocated to expense over the life of
  the related assets and will be adjusted for changes resulting from the passage
  of time and changes to either the timing or amount of the original present value
  estimate underlying the obligation. Currently we are in the process of quantifying
  the effect the adoption of this statement will have on our consolidated financial
  statements.

The FASB also issued SFAS No. 144 "Accounting for the Impairment
  or Disposal of Long-Lived Assets." This Statement addresses financial accounting
  and reporting for the impairment or disposal of long-lived assets. It supersedes
  SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
  Assets to Be Disposed Of," and the accounting and reporting provisions of APB
  Opinion No. 30, "Reporting the Results of Operations -- Reporting the Effects
  of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
  Occurring Events and Transactions," for the disposal of a segment of a business.
  It also amends APB No. 51, "Consolidated Financial Statements," to eliminate
  the exception to consolidation for a subsidiary for which control is likely
  to be temporary. The provisions of this Statement are effective for financial
  statements issued for fiscal years beginning after December 15, 2001, and interim
  periods within those fiscal years, with early application encouraged. The provisions
  of this Statement generally are to be applied prospectively. The adoption of
  this statement did not have a material effect on our financial statements.

In December, 2004, the FASB issued SFAS No. 123 (revised), Share-Based
  Payment, which supercedes APB No. 25, Accounting for Stock Issued to Employees,
  and its related implementation guidance. Under SFAS No. 123 (revised), all share-based
  payments would be treated as other forms of compensation by recognizing the
  costs, generally measured as the fair value at the date of grant, in the income
  statement. The Company adopted SFAS No. 123 (revised) for its fiscal year beginning
  May 1, 2004.

Forward Looking Statements

Many statements made in this report are forward-looking statements
  that are not based on historical facts. Because these forward-looking statements
  involve risks and uncertainties, there are a number of factors that could cause
  actual results to differ materially from those expressed or implied by these
  forward-looking statements. The forward-looking statements made in this report
  relate only to events as of the date on which the statements are made.

75

---

ITEM 7. FINANCIAL STATEMENTS

|Auditors' Report for the year ended April 30, 2006                                                                                                                   | F-2
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---
|                                                                                                                                                                     |    
|Consolidated Balance Sheet as at April 30, 2006                                                                                                                      | F-3
|                                                                                                                                                                     |    
|Consolidated Statements of Operations for the two years
      ended April 30, 2006 and 2005 and for the period from inception on May 5,
      1999 to April 30, 2006 | F-4
|                                                                                                                                                                     |    
|Consolidated Statements of Stockholders' Equity for the
      period from inception on May 5, 1999 to April 30, 2006                                                 | F-5
|                                                                                                                                                                     |    
|Consolidated Statements of Cash Flows for the two years
      ended April 30, 2006 and 2005 and for the period from inception on May 5,
      1999 to April 30, 2006 | F-6
|                                                                                                                                                                     |    
|Notes to Financial Statements                                                                                                                                        | F-8

76

---









Quincy Energy Corp. (formerly Quincy Resources Inc.)and Subsidiary(an Exploration Stage Company)

Consolidated 
  Financial Statements

Year Ended April 30, 2006









F-1

---

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of 
  Quincy Energy Corp. (formerly Quincy Resources Inc.)and Subsidiary 
  (an Exploration Stage Company)

We have audited the consolidated balance sheets of Quincy Energy
  Corp. (formerly Quincy Resources Inc.)and Subsidiary (an Exploration
  Stage Company)as at April 30, 2006 and 2005 and the related consolidated
  statements of operations, changes in stockholders equity, and cash flows
  for the years ended April 30, 2006 and 2005 and the cumulative amounts from
  inception on May 5, 1999 through April 30, 2006. These consolidated financial
  statements are the responsibility of the Companys management. Our responsibility
  is to express an opinion on these financial statements based on our audits.
  The related consolidated statements of operations, changes in stockholders
  equity, and cash flows from inception of the exploration stage on May 5, 1999
  through April 30, 2004 were audited by other auditors whose report dated August
  7, 2004 expressed an unqualified opinion. Our opinion on the statements of operations,
  changes in stockholders equity and cash flows from inception of the exploration
  stage through April 30, 2006, insofar as it relates to amounts for prior periods
  through April 30, 2004, is solely based on the reports of other auditors.

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

In our opinion, the consolidated financial statements referred
  to above present fairly, in all material respects, the financial position of
  Quincy Energy Corp. (formerly Quincy Resources Inc.)and Subsidiary (an
  Exploration Stage Company) as at April 30, 2006 and 2005 and the results of
  its operations and its cash flows for the periods indicated above in accordance
  with accounting principles generally accepted in the United States of America.

signed parker simone LLP

June 21, 2006

Mississauga, Ontario, Canada

F-2

---

Quincy Energy Corp. (formerly Quincy Resources Inc.)and Subsidiary (an Exploration Stage Company)

Audited Consolidated Balance Sheets

|As at April
      30,                                  | 2006              | 2005       
|------------------------------------------------------ | ----------------- | -----------
|                                                       |                   |            
|Assets                                                 |                   |            
|Current Assets                                         |                   |            
|Cash
      and cash equivalents                        | $ 4,605,992       | $ 6,644,026
|GST Recoverable                                        | 61,963            | -          
|Prepaid
      expense                                  | 8,535             | -          
|                                                       | 4,676,490         | 6,644,026  
|Other
      Assets                                     |                   |            
|Advance                                                | -                 | 100,000    
|Database,
      net of amortization (Note 2)           | 7,312             | 8,812      
|Reclamation bonds (Note 3)                             | 59,422            | 104,142    
|                                                       | 66,734            | 212,954    
|                                                       | $
      4,743,224 | $ 6,856,980
|Liabilities                                            |                   |            
|Current Liabilities                                    |                   |            
|Accounts
      payable and accrued liabilities         | $ 145,660         | $ 301,482  
|                                                       |                   |            
|Stockholders
      Equity                             |                   |            
|Common stock
      (Note 5)                            | 48,559            | 40,231     
|Capital
      in excess of par value                   | 13,596,873        | 8,087,318  
|Contributed
      surplus                              | 3,059,192         | 3,067,025  
|Deficit
      accumulated during the exploration stage | (12,107,060)      | (4,639,076)
|                                                       | 4,597,564         | 6,555,498  
|                                                       | $ 4,743,224       | $ 6,856,980

See accompanying notes to Consolidated Financial Statements

F-3

---

Quincy Energy Corp. (formerly Quincy Resources Inc.)and Subsidiary 
  (an Exploration Stage Company)

Audited Consolidated Statements of Operations

|Years Ended April 30,                  |   |            |   |   |            |  |   | Since inception   |  
|-------------------------------------- | - | ---------- | - | - | ---------- |  | - | ----------------- | -
|                                       |   |            |   |   |            |  |   | on May 5, 1999    |  
|                                       |   | 2006       |   |   | 2005       |  |   | to April 30, 2006 |  
|Operating Expenses                     |   |            |   |   |            |  |   |                   |  
|Exploration                            | $ | 6,298,056  |   | $ | 1,707,612  |  | $ | 8,392,861         |  
|Consulting                             |   | 635,524    |   |   | 580,449    |  |   | 1,564,198         |  
|Shareholder
      information          |   | 112,277    |   |   | 285,632    |  |   | 511,423           |  
|Administrative                         |   | 478,869    |   |   | 303,964    |  |   | 988,111           |  
|Stock-based
      compensation         |   | 355,675    |   |   | 213,025    |  |   | 568,700           |  
|Foreign exchange loss
      (gain)     |   | (600,938   | ) |   | 178,082    |  |   | (422,111          | )
|Professional
      fees                |   | 303,977    |   |   | 172,214    |  |   | 624,228           |  
|Financing costs                        |   | -          |   |   | -          |  |   | 20,000            |  
|Loss before other items                | $ | 7,583,440  |   | $ | 3,440,978  |  | $ | 12,247,410        |  
|Interest income                        |   | 115,456    |   |   | 24,894     |  |   | 140,350           |  
|Net loss                               | $ | 7,467,984  |   | $ | 3,416,084  |  | $ | 12,107,060        |  
|                                       |   |            |   |   |            |  |   |                   |  
|Loss Per Common Share- Basic           | $ | 0.17       |   | $ | 0.13       |  |   |                   |  
|and Diluted                            |   |            |   |   |            |  |   |                   |  
|                                       |   |            |   |   |            |  |   |                   |  
|                                       |   |            |   |   |            |  |   |                   |  
|Weighted Average Number of  **Shares** |   | 43,411,343 |   |   | 27,158,392 |  |   |                   |  

See accompanying notes to Consolidated Financial Statements

F-4

---

Quincy Energy Corp. (formerly Quincy Resources Inc.)and Subsidiary 
  (an Exploration Stage Company)

Consolidated Statement of Changes in Stockholders Equity

Common StockCapital in
      
      
      
      
      
      AccumulatedExcess
      
      
      Contributed
      
      
      Deficit During theShares
      
      
      Amount
      
      
      of
        Par Value
      
      
      Surplus
      
      
      Exploration StageBalance May 5, 1999 (date of inception)Issuance of common stock for cash at$0.001- June 17, 1999
      
      4,000,000
      
      $
      4,000
      
      $
      -
      
      $
      -
      
      $
      -Issuance of common stock for cashat $0.001 - July 26, 1999
      
      6,000,000
      
      
      6,000
      
      
      -
      
      
      -
      
      
      -Issuance of common stock for cashat $0.10 - August 15, 1999
      
      26,500
      
      
      27
      
      
      2,623
      
      
      -
      
      
      -Contributions to capital - expenses- relatedparties
      
      -
      
      
      -
      
      
      10,800
      
      
      -
      
      
      -Net operating loss for the periodMay 5, 1999 to April 30, 2000
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (24,058
      )Contributions to capital - expenses- related parties
      
      -
      
      
      -
      
      
      10,800
      
      
      -
      
      
      -Net operating loss for the yearended April 30, 2001
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (17,862
      )Contribution to capital - expenses - relatedparties
      
      -
      
      
      -
      
      
      10,800
      
      
      -
      
      
      -Net operating loss for the yearended April 30, 2002
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (22,906
      )Issuance of common stock for cash at $0.15 -November 2002 & January 2003
      
      533,333
      
      
      533
      
      
      79,468
      
      
      -
      
      
      -Issuance of common stock for purchase ofsubsidiary
      
      6,000,000
      
      
      6,000
      
      
      5,092
      
      
      -
      
      
      -Issuance of common stock for cashat $0.25 - April 2003
      
      195,250
      
      
      195
      
      
      48,618
      
      
      -
      
      
      -Issuance of common stock for paymentof debt - at $0.25 - April 10, 2003
      
      148,000
      
      
      148
      
      
      36,852
      
      
      -
      
      
      -Contribution to capital - expenses- related parties
      
      -
      
      
      -
      
      
      6,000
      
      
      -
      
      
      -Net operating loss for the yearended April 30, 2003
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (115,984
      )Issuance of common stock for cashat $0.25 - 2003/2004
      
      2,573,587
      
      
      2,574
      
      
      640,822
      
      
      -
      
      
      -Issuance of common stock for propertypayment at $0.25
      
      50,000
      
      
      50
      
      
      12,450
      
      
      -
      
      
      -Issuance of common stock for cash$0.70 - March 2004
      
      3,100,000
      
      
      3,100
      
      
      2,166,900
      
      
      -
      
      
      -Net operating loss for the yearended April 30,
        2004
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (1,042,182
      )Balance at April
        30, 2004
      
      22,626,670
      
      $
      22,627
      
      $
      3,031,225
      
      $
      -
      
      $
      (1,222,992
      )


See accompanying notes to Consolidated Financial Statements

F-5

---

Quincy Energy Corp. (formerly Quincy Resources Inc.)and Subsidiary 
  (an Exploration Stage Company)

Consolidated Statement of Changes in Stockholders Equity

AccumulatedCommon Stock
      
      
      
      
      
      
      
      
      DeficitCapital in
      
      
      
      
      
      During theShares
      
      
      Amount
      
      
      Excess
      
      
      Contributed
      
      
      Explorationof
        Par Value
      
      
      Surplus
      
      
      StageBalance at April 30, 2004
      
      22,626,670
      
      $
      22,627
      
      $
      3,031,225
      
      $
      -
      
      $
      (1,222,992
      )Issuance of common stockfor property payment at $0.40
      
      50,000
      
      
      50
      
      
      19,950
      
      
      -
      
      
      -Issuance of common stockfor cash at $0.37 - December 2004
      
      11,116,666
      
      
      11,116
      
      
      4,065,421
      
      
      -
      
      
      -Fair value assigned tounexercised warrants
      
      -
      
      
      -
      
      
      (2,701,000
      )
      
      2,701,000
      
      
      -Issuance of common stockfor property payment at $0.56, being themarket value at time of issue
      
      50,000
      
      
      50
      
      
      27,950
      
      
      -
      
      
      -Issuance of common stockfor property payment at $0.45, being themarket value at time of issue
      
      125,000
      
      
      125
      
      
      55,875
      
      
      -
      
      
      -Issuance of common stockfor property payment at $0.57, being themarket value at time of issue
      
      200,000
      
      
      200
      
      
      113,400
      
      
      -
      
      
      -Issuance of common stockon exercise of stock options at $0.25
      
      181,250
      
      
      181
      
      
      45,130
      
      
      -
      
      
      -Issuance of common stockfor cash at $0.69 - April, 2005
      
      5,881,411
      
      
      5,882
      
      
      4,076,464
      
      
      -
      
      
      -Cost of share issuanceson private placements
      
      -
      
      
      -
      
      
      (647,097
      )
      
      153,000
      
      
      -Fair value assigned to stockoptions granted
      
      -
      
      
      -
      
      
      -
      
      
      213,025
      
      
      -Net operating lossfor the year ended April 30, 2005
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (3,416,084
      )Balance at April
        30, 2005
      
      40,230,997
      
      $
      40,231
      
      $
      8,087,318
      
      $
      3,067,025
      
      $
      (4,639,076
      )Issuance of common stockfor property payment at $0.43, being themarket value at time of issue
      
      1,000,000
      
      
      1,000
      
      
      429,000
      
      
      -
      
      
      -Fair value assigned to stockoptions granted
      
      -
      
      
      -
      
      
      -
      
      
      355,673
      
      
      -Issuance of common stock for cash onexercise of stock option $0.30
      
      62,500
      
      
      62
      
      
      18,689
      
      
      -
      
      
      -Issuance of common stock for cash onexercise of warrants at $0.36
      
      387,833
      
      
      388
      
      
      149,140
      
      
      -
      
      
      -


See accompanying notes to Consolidated Financial Statements

F-6

---

Quincy Energy Corp. (formerly Quincy Resources Inc.)and Subsidiary 
  (an Exploration Stage Company)

Consolidated Statement of Changes in Stockholders Equity

Common Stock
      
      
      
      
      
      
      
      
      AccumulatedCapital in
      
      
      
      
      
      Deficit DuringShares
      
      
      Amount
      
      
      Excess
      
      
      Contributed
      
      
      the Explorationof Par Value
      
      
      Surplus
      
      
      StageIssuance of common stock for cash onexercise of non-plan stock option at $0.40
      
      375,000
      
      
      375
      
      
      149,625
      
      
      -
      
      
      -Issuance of common stock for propertypayment at $0.57, being the market value
        attime of issue
      
      40,000
      
      
      40
      
      
      22,603
      
      
      -
      
      
      -Issuance of common stockfor property payment at $0.70, being the
      
      
      
      
      
      
      
      
      
      
      -
      
      
      -market value at time of issue
      
      6,000,000
      
      
      6,000
      
      
      4,191,000Issuance of common stock
      
      
      
      
      
      
      
      
      
      
      
      
      
      -for property payment at $0.745, being the
      
      
      
      
      
      
      
      
      
      
      -market value at time of issue
      
      100,000
      
      
      100
      
      
      74,453Issuance of common stock for cash on
      
      
      
      
      
      
      
      
      
      
      -
      
      
      -exercise of stock option $0.25
      
      295,000
      
      
      295
      
      
      73,455Issuance of common stock for cash onexercise of warrants, Cdn $0.65
      
      67,500
      
      
      68
      
      
      38,084
      
      
      
      
      
      -Fair value assigned to warrants exercised
      
      -
      
      
      -
      
      
      175,756
      
      
      (175,756
      )
      
      -Fair value assigned to options exercised
      
      -
      
      
      -
      
      
      187,750
      
      
      (187,750
      )
      
      -Net operating lossfor the year ended
        April 30, 2006
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (7,467,984
      )Balance at April 30, 2006
      
      48,558,830
      
      $
      48,559
      
      $
      13,596,873
      
      $
      3,059,192
      
      $
      (12,107,060
      )


See accompanying notes to Consolidated Financial Statements

F-7

---

Quincy Energy Corp. (formerly Quincy Resources Inc.)and Subsidiary 
  (an Exploration Stage Company)

Consolidated Statements of Cash Flows

|Years Ended April 30,                                     |   |            |   |   |            |   |   |                               |  
|--------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ----------------------------- | -
|                                                          |   |            |   |   |            |   |   | Since inception               |  
|                                                          |   | 2006       |   |   | 2005       |   |   | May 5, 1999 to April 30, 2006 |  
|Operating Activities                                      |   |            |   |   |            |   |   |                               |  
|Net loss                                                  | $ | (7,467,984 | ) | $ | (3,416,084 | ) | $ | (12,107,060                   | )
|Adjustments to reconcile
      net loss to cash flow used |   |            |   |   |            |   |   |                               |  
|by
      operating activities:                            |   |            |   |   |            |   |   |                               |  
|Stock-based
      compensation                            |   | 355,675    |   |   | 213,025    |   |   | 568,700                       |  
|Issuance
      of Common Stock for                        |   |            |   |   |            |   |   |                               |  
|exploration expenses                                      |   | 4,724,196  |   |   | 217,600    |   |   | 4,954,296                     |  
|Amortization                                              |   | 1,500      |   |   | 1,500      |   |   | 4,994                         |  
|Net change in non-cash operating capital                  |   |            |   |   |            |   |   |                               |  
|working capital items:                                    |   |            |   |   |            |   |   |                               |  
|Accounts payable and accrued liabilities                  |   | (155,820   | ) |   | 155,610    |   |   | 182,682                       |  
|                                                          |   |            |   |   |            |   |   |                               |  
|GST Recoverable                                           |   | (61,963    | ) |   | -          |   |   | (61,963                       | )
|Prepaid expense                                           |   | (8,535     | ) |   | -          |   |   | (8,535                        | )
|Deposit                                                   |   | -          |   |   | 2,475      |   |   | -                             |  
|Capital contributions - related                           |   |            |   |   |            |   |   |                               |  
|party expenses                                            |   | -          |   |   | -          |   |   | 38,400                        |  
|Reclamation bonds                                         |   | 44,720     |   |   | (104,142   | ) |   | (59,422                       | )
|Cash flows used in
      operating activities             |   | (2,568,211 | ) |   | (2,930,016 | ) |   | (6,487,908                    | )
|Financing Activities                                      |   |            |   |   |            |   |   |                               |  
|Proceeds from issuance of
      common stock              |   | 430,177    |   |   | 8,204,194  |   |   | 11,589,231                    |  
|Cost of share issuances                                   |   | -          |   |   | (494,097   | ) |   | (494,097                      | )
|Cash flows provided
      by financing activities         |   | 430,177    |   |   | 7,710,097  |   |   | 11,095,134                    |  
|Investing Activities                                      |   |            |   |   |            |   |   |                               |  
|Additions to database                                     |   | -          |   |   | (1,214     | ) |   | (1,214                        | )
|Advance                                                   |   | 100,000    |   |   | (100,000   | ) |   | -                             |  
|Cash flows provided
      (used) in investing activities  |   | 100,000    |   |   | (101,214   | ) |   | (1,214                        | )
|Increase (decrease) in Cash and cash equivalents          |   | (2,038,034 | ) |   | 4,678,867  |   |   | 4,605,992                     |  
|Cash and cash equivalents                                 |   |            |   |   |            |   |   | -                             |  
|at beginning of period                                    |   | 6,644,026  |   |   | 1,965,159  |   |   |                               |  
|Cash and cash equivalents                                 |   |            |   |   |            |   |   |                               |  
|at End of Period                                          |   | 4,605,992  |   |   | 6,644,026  |   |   | 4,605,992                     |  

See accompanying notes to Consolidated Financial Statements

F-8

---

Quincy Energy Corp. (formerly Quincy Resources Inc.)and Subsidiary 
  (an Exploration Stage Company)

Notes to Consolidated Financial Statements 
  Year Ended April 30, 2006

General

Quincy Energy Corp. (Quincy or the Company) was incorporated
  under the laws of the State of Nevada on May 5, 1999 under the name Quincy
  Resources Inc. On July 7, 2004 the name was changed to Quincy Gold
  Corp. On May 16, 2005, the name was changed to Quincy Energy Corp. Its
  principal business activity is mineral exploration, operating primarily in the
  United States and Ontario, Canada.

The Company was organized for the purpose of acquiring and developing
  mineral properties. The Company has not established the existence of a commercially
  mineable ore deposit and therefore is considered to be in the exploration stage.

|1. | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Principles of Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | The consolidated financial statements include the accounts
        of the Company and its wholly-owned subsidiary Atlas Database Corp.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Foreign Exchange                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | The reporting and functional currency of the Company
        is the US dollar. Certain assets and liabilities are denominated in foreign
        currencies. Exchange gains and losses arising from the translation of
        these assets and liabilities are included in the Statement of Operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Loss Per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Basic loss per share is computed based on the weighted
        average number of shares outstanding. Diluted loss per share is computed
        using the weighted average number of common shares and common equivalent
        shares outstanding as if shares had been issued on the exercise of any
        common share rights. Diluted loss per share has not been presented as
        the factors referred to above are anti-dilutive.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Cash and cash equivalents consist of interest bearing
        deposits with maturities less than 90 days or with maturities over 90
        days, which are callable without penalty at Quincys option and are
        carried at the lower of cost or market value.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Company utilizes the liability method of accounting
        for income taxes. Under the liability method deferred tax assets and liabilities
        are determined based on the differences between financial reporting and
        the tax bases of the assets and liabilities and are measured using the
        enacted tax rates and laws that will be in effect, when the differences
        are expected to reverse. An allowance against deferred tax assets is recognized,
        when it is more likely than not, that such tax benefits will not be realized.
        On April 30, 2006, the Company has a net operating loss carry forward
        of $11,518,000. The tax benefit of approximately $3,916,000 from the loss
        carry forward has been fully offset by a valuation reserve because the
        use of the future tax benefit is doubtful since the Company has not been
        able to project an estimated future operating profit. The net operating
        loss expires starting 2015 through 2026.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Mineral Claim Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Cost of acquisition, exploration, carrying and retaining
        unproven mining leases are expensed as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

F-9

---

**Quincy Energy Corp.** (formerly Quincy Resources Inc.)**and Subsidiary 
  (an Exploration Stage Company)**

**Notes to Consolidated Financial Statements 
  Year Ended April 30, 2006**

|**1.** | Summary of Significant Accounting Policies(Continued)                                                                                                      
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                            
|       | Environmental Requirements                                                                                                                                 
|       | Environmental requirements related
        to the mineral leases acquired are unknown and therefore any estimate
        of any future cost cannot be made.

Asset Retirement ObligationsAs the Company currently has no projects under construction, there is
  no obligation requiring remediation.

However, as the development of any project
  commences, senior management will assess whether an asset retirement obligation
  (ARO) liability will arise. At the point where such liability arises,
  the financial statement adjustment required will be to increase the expenses
  related to the projects property and related ARO liability by the discounted
  value of the total liability. Thereafter, the Company will be required to record
  a charge to earnings each year to accrete the discounted ARO obligation to the
  final expected liability.

Concentration of Credit Risk
  
  There are no financial instruments that potentially subject the Company to significant
  concentration of credit risks except that the Company maintains cash in banks
  over the federally insured amounts of $100,000, but are otherwise in banks of
  high quality.

Financial Instruments 
  The carrying amounts of financial instruments, including cash and cash equivalents,
  GST recoverable and accounts payable and accruals are considered by management
  to be their estimated fair values due to their short term maturities.

Stock-Based Compensation Awards
  
  Beginning in fiscal 2005, the Company began expensing prospective grants of
  employee stock-based compensation awards in accordance with Statement of Financial
  Accounting Standards No. 123, Accounting for Stock-Based Compensation
  as amended by Statement of Financial Accounting Standards No. 148, Accounting
  for Stock-Based Compensation - Transition and Disclosure - an Amendment of SFAS
  No. 123". The fair value of awards granted in fiscal 2005 and subsequent years
  are expensed rateably over the vesting period. Prior to fiscal 2005, the Company
  accounted for stock options under APB 25, Accounting for Stock Issued
  to Employees and, as allowable, adopted only the disclosure provisions
  of SFAS No. 123.

Estimates and Assumptions
  
  Management uses estimates and assumptions in preparing financial statements
  in accordance with accounting principles generally accepted in United States
  of America. Those estimates and assumptions may affect the reported amounts
  of the assets and liabilities, the disclosure of contingent assets and liabilities,
  and the reported revenues and expenses. Actual results could vary from the estimates
  that were assumed in preparing these financial statements.

ReclassificationCertain of the prior year accounts have been reclassified in order to
  conform with the presentation adopted in the current year.

F-10

---

**Quincy Energy Corp.** (formerly Quincy Resources Inc.)**and Subsidiary 
  (an Exploration Stage Company)**

**Notes to Consolidated Financial Statements 
  Year Ended April 30, 2006**

|2. | Acquisition of a Database by Atlas Database Corp.
        (Subsidiary)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | On June 1, 2000, Atlas Database Corp. (Subsidiary) purchased
        a database for $15,000. The database contains information on the natural
        resources and exploration developed during the period 1982 through 1997.
        The majority of the information contained in the database relates to research
        on bulk mineable precious mineralized material in the Western United States,
        particularly sediment hosted disseminated gold mineralized material and
        volcanic hosted disseminated hot springs gold mineralized material from
        which the Company, and its subsidiary, is using for the Companys
        stated business objective of locating, acquiring, and exploring, mineral
        natural resource properties.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The database is being amortized to expense using the
        straight line method over 10 years starting on the date of purchase.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|3. | Reclamation Bonds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | Reclamation bonds consist of bonds and other cash payments
        made as security to cover the costs of reclamation of the related properties.
        Once the reclamation of the property is complete, the bond will be returned
        to the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|4. | Acquisition of Mineral Leases                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | The following acquired claims have not been proven to
        have commercially mineable ore reserves and therefore all costs of exploration
        and retaining the properties have been expensed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

Silver Bow Property 
  In February, 2003, the Company optioned 73 unpatented lode mining claims in
  Nye County, Nevada known as the Silver Bow Property. The terms of the option
  provide for advanced royalty payments totalling $165,000 by the fifth anniversary
  date as follows:

| | On or Before                                | Advanced Royalty Payment
| | ------------------------------------------- | ------------------------
| | February 21st, 2003                         | $ 10,000 (paid)         
| | February 21st, 2004                         | 15,000 (paid)           
| | February 21st, 2005                         | 20,000 (paid)           
| | February 21st, 2006                         | 30,000 (paid)           
| | February 21st, 2007                         | 40,000                  
| | February 21st, 2008 and annually thereafter | 50,000                  

The vendors maintain a 3 percent Smelter
  Return (NSR) royalty in the property. The Company has the right to purchase
  two thirds of the NSR for $1,500,000 and the final third for an additional $2,000,000.

F-11

---

**Quincy Energy Corp.** (formerly Quincy Resources Inc.)**and Subsidiary 
  (an Exploration Stage Company)**

**Notes to Consolidated Financial Statements 
  Year Ended April 30, 2006**

|4. | Acquisition of Mineral Leases(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Lantern Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | On July 31, 2003, the Company entered into a mining
        lease with Newmont Mining Corporation for patented fee land totalling
        1,123 acres, and also received a quit claim deed for 340 acres consisting
        of 17 unpatented mining claims. The property is known as the Lantern Property.
        Platoro West Incorporated, a corporation controlled by William Sheriff,
        one of the Companys directors and shareholders, is also a party
        to the Mining Lease.                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Under the lease agreement, the Company is required to
        spend $25,000 on exploration and assessment work during each of the years
        ended July 31, 2005 and 2006, $50,000 during each of the years ended July
        31, 2007 through 2012 and $100,000 each year after that. The lease is
        subject to a maximum 4 percent NSR.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | In December, 2005, the Company modified the terms of
        its Mining Lease and Sublease Agreement with                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Newmont Mining Corporation by deleting the requirement
        to spend $25,000 on exploration and assessment work during each of the
        years ended July 31, 2005 and 2006 and replacing it with a requirement
        to spend $62,500 on exploration and assessment work on or before December
        31, 2005. This date was further extended to April 30, 2006 and the required
        exploration work has subsequently been completed.                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Quartz Mountain Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | On October 15, 2003, the Company acquired an exclusive
        option from Seabridge Gold Corporation to earn a 50 percent interest in
        67 unpatented mining claims located in Lake County, Oregon known as the
        Quartz Mountain property.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | The terms of the agreement includes payments of cumulative
        exploration expenditures totalling $1,500,000 on or before October 15,
        2008 with the following minimum payments: $100,000 by October 15, 2004
        (incurred), an additional $150,000 by October 15, 2005 (incurred), an
        additional $250,000 (incurred) by October 15, 2006, and the balance of
        $1,000,000 by October 15, 2008, and the issuance of 50,000 shares of common
        capital stock (completed), and 200,000 shares within 30 days of satisfying
        the expenditures described above. The Company can increase its interest
        from 50 percent to 62.5 percent if it agrees to fund a feasibility study
        on the property within three years and issues 250,000 common shares upon
        completion of the feasibility study.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Millers Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | During January 2004, the Company entered into a Mining
        Lease and Agreement with Pacific Intermountain Gold Corporation in which
        the Company leased 21 unpatented lode claims located in Esmeralda County,
        Nevada known as the Millers Property. The terms of the agreement
        includes the following lease and minimum royalty and exploration payments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

F-12

---

**Quincy Energy Corp.** (formerly Quincy Resources Inc.)**and Subsidiary 
  (an Exploration Stage Company)**

**Notes to Consolidated Financial Statements 
  Year Ended April 30, 2006**

|4. | Acquisition of Mineral Leases(Continued)
|-- | ----------------------------------------
|   |                                         
|   | Millers Property(Continued)             

| | On or Before                                |   | Advance Royalty Payments |  |   | Exploration Expenditures | 
| | ------------------------------------------- | - | ------------------------ |  | - | ------------------------ | 
| | January 23, 2004                            | $ | 5,000 (paid)             |  | $ | -                        | 
| | January 23, 2005                            |   | 7,500 (paid)             |  |   | -                        | 
| | January 23, 2006                            |   | 10,000 (paid)            |  |   | 55,000 (incurred)        | 
| | January 23, 2007                            |   | 15,000                   |  |   | 50,000                   | 
| | January 23, 2008                            |   | 30,000                   |  |   | 70,000                   | 
| | January 23, 2009 and yearly thereafter      |   | 50,000                   |  |   | 100,000                  | 
| | until commencement of commercial production |   |                          |  |   |                          | 

The property is subject to a sliding
  scale net smelter returns royalty ranging from 2 percent for gold prices under
  $300/oz to 5 percent for gold prices in excess of $500/oz. Advance royalty payments
  are credited against the sliding scale net smelter returns royalty.

Seven Troughs Property
  
  During March 2004, the Company acquired a perpetual lease of mineral properties
  located in Pershing County, Nevada, known as the Seven Troughs Property from
  Newmont Capital Limited.

In June, 2005 the Company completed a
  7,700 foot (2,348 m) reverse circulation drilling program on the Seven Troughs
  Property. Following a review of the results of the drilling program, the Company
  determined to terminate the lease.

Rattlesnake Hills and Lewiston
  Properties 
  In October 2004, the Company acquired options to earn a 100 percent interest
  in two groups of mineral properties in Natrona and Fremont Counties, Wyoming
  from Bald Mountain Mining Co.

As consideration for the options, the
  Company has paid the sum of $50,000 and issued 100,000 shares.

In order to exercise the option on the
  first property, the Company must incur cumulative exploration expenditures of
  $5,000,000 as follows:

| | On or Before         | Cumulative Exploration Expenditures
| | -------------------- | -----------------------------------
| | October 14, 2005     | $ 150,000                          
| | October 14, 2006     | 500,000                            
| | October 14, 2007     | 1,000,000                          
| | October 14, 2008 and | 2,000,000                          
| | October 14, 2009     | 5,000,000                          

F-13

---

**Quincy Energy Corp.**(formerly Quincy Resources Inc.)**and Subsidiary 
  (an Exploration Stage Company)**

**Notes to Consolidated Financial Statements 
  Year Ended April 30, 2006**

|4. | Acquisition of Mineral Leases(Continued)                                                                                                                                                                                                                                                                                                                   
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                            
|   | Rattlesnake Hills and Lewiston Properties(Continued)                                                                                                                                                                                                                                                                                                       
|   | In the event that the Company incurs some, but not all,
        of the cumulative exploration expenditures on the first property the Company
        shall be deemed to have earned an undivided 10 percent interest for each
        $500,000 of cumulative exploration expenditures incurred and will enter
        into a Joint Venture on the property.
|   |                                                                                                                                                                                                                                                                                                                                                            
|   | In order to exercise the option on the second property,
        the Company must incur cumulative expenditures of $1,000,000 as follows:                                                                                                                                                                                                                   

| | On or Before         | Cumulative ExplorationExpenditures
| | -------------------- | ----------------------------------
| | October 14, 2005     | $ 100,000                         
| | October 14, 2006     | 250,000                           
| | October 14, 2007 and | 500,000                           
| | October 14, 2008     | 1,000,000                         

In the event that the Company incurs
  some, but not all, of the cumulative exploration expenditures on the second
  property the Company shall be deemed to have earned an undivided 10 percent
  interest for each $100,000 of the cumulative exploration expenditures incurred
  and will enter into a Joint Venture on the property.

For each $500,000 of exploration expenditures
  on both properties the Company is required to issue an additional 50,000 Shares,
  to a maximum 1,000,000 Shares.

Thirty of the unpatented mining claims
  comprised in the first property are subject to a 4 percent NSR and twenty-two
  of the unpatented mining claims comprised in the first property are subject
  to a 3 percent NSR. The second property is subject to a 3 percent NSR.

In December, 2005 the Company agreed
  to amend the terms of its agreement for the Rattlesnake Hills and Lewiston Properties
  by extending the deadlines for the required property expenditures to August
  14 of the following year from October 14 and paid the optionor $50,000 as consideration
  for the extension.

Arizona Strip Breccia Properties

The Company acquired an option to earn
  up to 50 percent interest in eight mineral properties with identified or indicated
  breccia pipes located in Coconino and Mohave Counties, Arizona.

As consideration for the options, the
  Company has paid cash payments in the amount of $10,000 and issued 125,000 shares.

In order to exercise the options in full,
  the Company is required to spend $1,500,000 on the exploration and development
  of the properties and issue an additional 525,000 shares as follows:

F-14

---

**Quincy Energy Corp.** (formerly Quincy Resources Inc.)**and Subsidiary 
  (an Exploration Stage Company)**

**Notes to Consolidated Financial Statements 
  Year Ended April 30, 2006**

|4. | Acquisition of Mineral Leases(Continued)   
|-- | -------------------------------------------
|   |                                            
|   | Arizona Strip Breccia Properties(Continued)

| | On or Before                            | Exploration Expenditures | Shares 
| | --------------------------------------- | ------------------------ | -------
| | December 31, 2005 (incurred and issued) | $ 150,000                | 40,000 
| | December 31, 2006                       | 150,000                  | 85,000 
| | December 31, 2007                       | 300,000                  | 100,000
| | December 31, 2008                       | 400,000                  | 125,000
| | December 31, 2009                       | 500,000                  | 175,000

The initial exploration and development
  expenditure and share commitment of $150,000 and 40,000 shares is a firm commitment.
  All other exploration expenditures and share commitments are optional.

The Company can earn an additional 20
  percent interest if it agrees to fund a bankable feasibility study on the Property.

The Companys largest shareholder
  is a significant shareholder and director of the optionor.

Elliott Lake Uranium Property
  
  The Company acquired an option to earn up to 75 percent interest in ten mineral
  claims with known uranium mineralization located in Buckles Township, Ontario.

As consideration for the option, the
  Company has paid CAD$50,000 and issued 200,000 shares. In order to earn a 50
  percent interest, the Company must incur exploration expenditures of CAD$850,000
  on the property by September 1, 2008, pay an additional CAD$150,000 and issue
  an additional 300,000 shares as follows:

On or Before
      Exploration Expenditures
      Cash Payments
      SharesFebruary 8, 2006 (paid)
      Nil
      CAD$50,000
      100,000September 1, 2006
      CAD$100,000
      Nil
      NoneFebruary 8, 2007
      Nil
      CAD$50,000
      100,000September 1, 2007
      CAD$250,000
      Nil
      NoneFebruary 8, 2008
      Nil
      CAD$50,000
      100,000September 1, 2008
      CAD$500,000
      Nil
      None


The Company will earn a 60 percent interest
  if it incurs aggregate exploration expenditures of CAD$1,850,000 by September
  1, 2009. The Company can earn an additional 15 percent interest if it agrees
  to fund a bankable feasibility study on the Property.

F-15

---

**Quincy Energy Corp.** (formerly Quincy Resources Inc.)**and Subsidiary 
  (an Exploration Stage Company)**

**Notes to Consolidated Financial Statements 
  Year Ended April 30, 2006**

|4. | Acquisition of Mineral Leases(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Hosta Butte, Hansen and McKinley Properties                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company acquired options to earn up to a 65 percent
        interest in three separate uranium properties located in New Mexico and
        Colorado.                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | As consideration for the options, the Company issued
        3,000,000 shares of common stock at $0.70 per share being the market value
        at time of issuance and, in order to exercise the options, the Company
        will be required to spend a total of $4,150,000 on exploration and development
        of the properties over a four-year period, of which $400,000 would be
        a firm commitment, and issue up to an additional 1,050,000 shares of common
        stock per property as follows:

| | On
      or Before | Exploration Expenditures | Shares (per Property)
| | ------------------ | ------------------------ | ---------------------
| | September 18, 2006 | $400,000                 | Nil                  
| | September 18, 2007 | $750,000                 | 350,000              
| | September 18, 2008 | $1,250,000               | 350,000              
| | September 18, 2009 | $1,750,000               | 350,000              

The Company has the right to increase
  its interest in any or all of the properties to 80 percent if it elects to fund
  one or more of the properties to a bankable feasibility study and obtain permits
  for the intended mining and processing operation. In which case, the Company
  would be required to issue an additional 250,000 shares of common stock per
  property. The Company also agreed to appoint the principal of the optionor to
  its board of directors and grant him options to acquire 100,000 shares of common
  stock at a price of CAD $0.72 per share pursuant to the Companys 2003
  Key Employee Stock Option Plan, vesting in four equal amounts every six months
  beginning September 18, 2005 and expiring March 18, 2010.

The agreement is subject to the finalization
  of a formal operating agreement to govern the relationship of the parties on
  exercise of the options.

The Hosta Butte and McKinley properties
  are located on lands which may be the subject to claims by the Navajo Indians.
  In April 2005 the Navajo Nation Council approved a bill which would prohibit
  uranium mining and processing on the Navajo reservation. The Company is currently
  assessing the impact of this development, in consultation with its legal counsel.

Subsequent to year-end, the Company has
  paid the optionor $125,000 for its agreement to extend the deadlines stated
  above for Exploration and Development Expenditures as follows:

| | On
      or Before | Exploration Expenditures | Shares (per Property)
| | ------------------ | ------------------------ | ---------------------
| | September 18, 2007 | $275,000                 | 350,000              
| | September 18, 2008 | $625,000                 | 350,000              
| | September 18, 2009 | $1,125,000               | 350,000              
| | September 18, 2010 | $1,625,000               | Nil                  
| | Total expenditures | $3,650,000               | 1,050,000            

The Company and the optionor are also
  in the process of documenting the proceeding, completing the form of operating
  agreement and addressing several other consequential amendments to the existing
  agreement, including an amendment which would allocate obligations and awards
  in the event that Quincy was unable to conduct exploration and development activities
  on the properties due to the Navajo moratorium and commences a takings case.

F-16

---

**Quincy Energy Corp.** (formerly Quincy Resources Inc.)**and Subsidiary 
  (an Exploration Stage Company)**

**Notes to Consolidated Financial Statements 
  Year Ended April 30, 2006**

|4. | Acquisition of Mineral Leases(Continued)
|-- | ----------------------------------------

Crownpoint PropertyThe Company has acquired an option to earn a 65 percent interest in
  the Crownpoint property located in McKinley County, New Mexico.

As consideration for the option, the
  Company has issued 3,000,000 shares of common stock in January 2006 at $0.70
  per share, being the market value at time of issuance and has paid $350,000.
  In order to exercise the option, the Company will be required to spend a total
  of $4,000,000 on exploration and development of the properties over a four year
  period, of which $500,000 is a firm commitment, and issue an additional 3,150,000
  shares of common stock, all as follows:

| | On or Before | Exploration Expenditures | Shares   
| | ------------ | ------------------------ | ---------
| | May 12, 2006 | $ 500,000                | 400,000  
| | May 12, 2007 | 750,000                  | 600,000  
| | May 12, 2008 | 1,250,000                | 1,000,000
| | May 12, 2009 | 1,500,000                | 1,150,000

The Company has the right to increase
  its interest in the property to 80 percent if it elects to fund the property
  to a bankable feasibility study for the intended mining and processing operation,
  in which case the Company would be required to issue an additional 750,000 shares
  of common stock.

The agreement is subject to the finalization
  of a formal operating agreement to govern the relationship of the parties on
  exercise of the options.

The property is located on lands which
  may be the subject to claims by the Navajo Indians. In April 2005 the Navajo
  Nation Council approved a bill which would prohibit uranium mining and processing
  on the Navajo reservation. The Company is currently assessing the impact of
  this development, in consultation with our legal counsel.

The agreement provides that, in the event
  that the Company was unable to conduct exploration and development activities
  on the property due to the Navajo moratorium, its obligations under the agreement
  will be suspended. In addition, the Company has the right (but not the obligation)
  to pursue a takings case, in which case the Company would bear all of the costs
  incurred in pursuing such a case and any award (net of costs) would be split
  between Quincy and the optionor 35/65.

Subsequent to year-end, the Company has
  paid the optionor $125,000 for its agreement to extend the deadlines stated
  above for Exploration and Development Expenditures as follows:

| | On
      or Before | Exploration Expenditures | Shares (per Property)
| | ------------------ | ------------------------ | ---------------------
| | May 12, 2006       | $ Nil                    | 400,000              
| | May 12, 2007       | 375,000                  | 600,000              
| | May 12, 2008       | 750,000                  | 1,000,000            
| | May 12, 2009       | 1,250,000                | 1,150,000            
| | May 12, 2010       | 1,500,000                | Nil                  
| | Total expenditures | $4,000,000               | 3,150,000            

F-17

---

**Quincy Energy Corp.** (formerly Quincy Resources Inc.)**and Subsidiary 
  (an Exploration Stage Company)**

**Notes to Consolidated Financial Statements 
  Year Ended April 30, 2006**

|4. | Acquisition of Mineral Leases(Continued)                                                                                                                                                                                                             
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                      
|   | The Company and the optionor are also in the process
        of documenting the proceeding, completing the form of operating agreement,
        and addressing several other consequential amendments to the existing
        agreement.             
|   |                                                                                                                                                                                                                                                      
|   | Aurora Property                                                                                                                                                                                                                                      
|   | The Company has acquired an option to earn up to a 51
        percent interest in 18 unpatented lode claims located in Oregon and known
        as the Aurora Property. The property is subject to a 1.5 percent Net Smelter
        Returns royalty.
|   |                                                                                                                                                                                                                                                      
|   | As consideration for the option, the Company has issued
        1,000,000 shares at $0.43 per share, being the market value at time of
        issue and paid $25,000.                                                                               
|   |                                                                                                                                                                                                                                                      
|   | In order to exercise the option, the Company must incur
        cumulative exploration expenditures of $2,000,000 on the property and
        issue 1,000,000 additional shares as follows:                                                          

| | On or Before | Exploration and Development Expenditures | Shares 
| | ------------ | ---------------------------------------- | -------
| | May 18, 2006 | $ 200,000                                | Nil    
| | May 18, 2007 | 400,000                                  | 333,333
| | May 18, 2008 | 600,000                                  | 333,333
| | May 18, 2009 | 800,000                                  | 333,334

|   | The initial exploration and development expenditure
        commitment of $200,000 is a firm commitment. All other exploration expenditures
        and share commitments are optional.                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                               
|   | Upon exercise of the option the Company will be deemed
        to have entered into a joint venture with the Company as operator. The
        Company has the right to earn an additional 24 percent interest in the
        property by funding a bankable feasibility study.
|   |                                                                                                                                                                                                                                                                               
|   | The Company subsequently acquired an additional 34 minerals
        claims through staking. These claims are adjacent to the existing 18 mineral
        claims which are the subject of the option.                                                                          
|   |                                                                                                                                                                                                                                                                               
|   | The Companys largest shareholder is a significant
        shareholder and director of the optionor.                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                               
|5. | Common Capital Stock and Warrants                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                               
|   | The Company is authorized to issue an aggregate of 200,000,000
        Common Shares at $0.001 par value of which 48,558,830 were outstanding
        as at April 30, 2006                                                                                                    

F-18

---

**Quincy Energy Corp.** (formerly Quincy Resources Inc.)**and Subsidiary 
  (an Exploration Stage Company)**

**Notes to Consolidated Financial Statements 
  Year Ended April 30, 2006**

|5. | Common Capital Stock and Warrants(Continued)                                              
|-- | ------------------------------------------------------------------------------------------
|   |                                                                                           
|   | Warrants                                                                                  
|   | The outstanding warrants at the year-end to purchase
        common shares are as follows:

| |                   |                | No. of Warrants
| | ----------------- | -------------- | ---------------
| |                   |                | April 30,      
| | Expiration Date   | Exercise price | 2006           
| | September 5, 2005 | $ 1.00         | -              
| | June 21, 2006     | 0.52           | 5,490,833      
| | June 21, 2006     | 0.36           | -              
| | April 1, 2007     | 0.88           | 2,452,941      
| | April 8,2007      | 0.88           | 487,765        
| |                   |                | 8,431,539      

During fiscal 2005, the Company has recorded
  the fair value of warrants issued using the Black-Scholes pricing model based
  on the following assumptions:

BrokerWarrants
      WarrantsGrant Date
      Dec 21/04
      April 1/05
      April 8/05
      Total
      Dec 21/04No. of warrants
      5,558,333
      2,452,941
      487,765
      
      387,833Exercise price
      $ 0.52
      $ 0.88
      $ 0.88
      
      $ 0.36Expected volatility
      102%
      96%
      96%
      
      102%Risk-free interest rate
      4%
      4%
      4%
      
      4%Expected life (years)
      1.5
      2
      2
      
      1.5Dividend yield
      -
      -
      -
      
      -Fair value of
        warrants
      $ 1,874,000
      $ 678,000
      $ 149,000
      $ 2,701,000
      $ 153,000


|   | Subsequent to April 30, 2006, 1,814,167 warrants were
        exercised for a total cash consideration of CAD$1,224,209.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|6. | Stock Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | 2003 Key Employee Stock Option Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In October 2003, the Company established a 2003 Key
        Employee Stock Option Plan to provide additional incentive to its directors,
        officers, employees and consultants in their efforts on behalf of the
        Company in the conduct of its affairs. During 2005, the Company amended
        the existing stock option plan such that the maximum number of shares
        of the Company which are available for issuance pursuant to options granted
        under the plan was changed from a fixed number being 1,900,000 to a rolling
        number being 10 percent of the aggregate number of Common Shares outstanding.
        Under the terms of the plan, all options vest as determined by the Board
        but not later than 5 years from the grant date and expire on the tenth
        anniversary from the date of issue, unless otherwise specified.

F-19

---

**Quincy Energy Corp.** (formerly Quincy Resources Inc.)**and Subsidiary 
  (an Exploration Stage Company)**

**Notes to Consolidated Financial Statements 
  Year Ended April 30, 2006**

|6. | Stock Options(Continued)
|-- | ------------------------

| |                                |   | 2006           |  |  | 2005      |  
| | ------------------------------ | - | -------------- |  |  | --------- | -
| |                                |   |                |  |  |           |  
| |                                |   | Weighted       |  |  |           |  
| |                                |   | Average        |  |  | No. of    |  
| |                                |   | Exercise Price |  |  | Options   |  
| |                                |   |                |  |  |           |  
| | Outstanding, beginning of year | $ | 0.32           |  |  | 2,670,000 |  
| | Transactions during the year   |   |                |  |  |           |  
| | Granted                        |   | 0.61           |  |  | 1,725,000 |  
| | Exercised                      |   | 0.26           |  |  | (357,500  | )
| | Cancelled                      |   | 0.47           |  |  | (387,500  | )
| | Outstanding, end of
      year | $ | 0.45           |  |  | 3,650,000 |  
| | Exercisable, end of year       | $ | 0.36           |  |  | 1,993,750 |  

The following table provides additional
  information about outstanding stock options at April 30, 2006:

WeightedWeighted
      
      
      
      
      
      No. of
      
      
      Average ExerciseNo. of
      
      
      Average
      
      
      Weighted
      
      
      Options
      
      
      Price-Options
      
      
      Remaining
      
      
      Average
      
      
      Currently
      
      
      ExercisableOutstanding
      
      
      Life (Years)
      
      
      Exercise Price
      
      
      Exercisable
      
      
      Options$0.25 - 0.30
      
      1,400,000
      
      
      2.8
      
      $
      0.26
      
      
      1,287,500
      
      $
      0.250.40 - 0.45
      
      725,000
      
      
      4.0
      
      
      0.44
      
      
      312,500
      
      
      0.440.50 - 0.60
      
      50,000
      
      
      3.8
      
      
      0.59
      
      
      25,000
      
      
      0.590.65 - 0.70
      
      1,475,000
      
      
      4.5
      
      
      0.64
      
      
      368,750
      
      
      0.643,650,000
      
      
      3.7
      
      $
      0.45
      
      
      1,993,750
      
      $
      0.36


The following table summarizes the assumptions
  used with the Black-Scholes valuation model for the determination of the stock-based
  compensation costs for the stock options granted during the year ended April
  30, 2006:

| | Grant Date               |   | May 12 |  |   | May 19 |  |   | Oct. 25 |  |   | Oct. 25   | 
| | ------------------------ | - | ------ |  | - | ------ |  | - | ------- |  | - | --------- | 
| | No. of options granted   |   | 25,000 |  |   | 25,000 |  |   | 200,000 |  |   | 1,475,000 | 
| | Exercise price           | $ | 0.43   |  | $ | 0.44   |  | $ | 0.42    |  | $ | 0.64      | 
| | Expected volatility      |   | 96%    |  |   | 95%    |  |   | 90%     |  |   | 90%       | 
| | Risk-free interest rate  |   | 4%     |  |   | 4%     |  |   | 4%      |  |   | 4%        | 
| | Expected life (years)    |   | 5      |  |   | 5      |  |   | 5       |  |   | 5         | 
| | Dividend yield           |   | -      |  |   | -      |  |   | -       |  |   | -         | 
| | Stock-based compensation | $ | 10,853 |  | $ | 11,000 |  | $ | 81,000  |  | $ | 550,000   | 

Stock-based compensation, which is expensed
  over the vesting period, was expensed in the amount of $355,675 (2005 
  $213,025).

F-20

---

**Quincy Energy Corp.** (formerly Quincy Resources Inc.)**and Subsidiary 
  (an Exploration Stage Company)**

**Notes to Consolidated Financial Statements 
  Year Ended April 30, 2006**

|6. | Stock Options(Continued)                                                                                                                                                                                                                          
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                   
|   | The following table summarizes the assumptions used
        with the Black-Scholes valuation model for the determination of the stock-based
        compensation costs for the stock options granted during the year ended
        April 30, 2005:

Grant Date
      
      Nov.
        1
      
      
      Feb.
        1
      
      
      Feb.
        28
      
      
      Apr.
        29
      
      
      TotalNo. of options granted
      
      250,000
      
      
      500,000
      
      
      75,000
      
      
      225,000
      
      
      1,050,000Exercise price
      $
      0.30
      
      $
      0.45
      
      $
      0.59
      
      $
      0.30Expected volatility
      
      97%
      
      
      101%
      
      
      99%
      
      
      96%Risk-free interest rate
      
      4%
      
      
      4%
      
      
      4%
      
      
      4%Expected life (years)
      
      5
      
      
      5
      
      
      5
      
      
      5Dividend yield
      
      -
      
      
      -
      
      
      -
      
      
      -Stock-based compensation
      $
      63,000
      
      $
      199,000
      
      $
      45,000
      
      $
      68,000
      
      $
      375,000Expensed during the year
      $
      13,230
      
      $
      15,920
      
      $
      1,875
      
      
      -
      
      $
      31,025


Subsequent to April 30, 2006, 390,000
  options were exercised for a total cash consideration of $97,500.

Non-Plan Options 
  The Company has outstanding non-plan stock options as at April 30, 2006 as follows:]

| |                                |   | 2006           |  |  | 2005     |  
| | ------------------------------ | - | -------------- |  |  | -------- | -
| |                                |   |                |  |  |          |  
| |                                |   | Weighted       |  |  |          |  
| |                                |   | Average        |  |  | No. of   |  
| |                                |   | Exercise Price |  |  | Options  |  
| | Outstanding, beginning of year | $ | 0.40           |  |  | 425,000  |  
| | Transactions during the year   |   |                |  |  |          |  
| | Granted                        |   | -              |  |  | -        |  
| | Exercised                      |   | 0.40           |  |  | (375,000 | )
| | Cancelled                      |   | 0.40           |  |  | (50,000  | )
| | Outstanding, end of year       | $ | -              |  |  | -        |  
| | Exercisable, end of year       | $ | -              |  |  | -        |  

The following table summarizes the assumptions
  used with the Black-Scholes valuation model for the determination of the stock-based
  compensation costs for the non-plan stock options granted during the year ended
  April 30, 2005:

F-21

---

**Quincy Energy Corp.** (formerly Quincy Resources Inc.)**and Subsidiary 
  (an Exploration Stage Company)**

**Notes to Consolidated Financial Statements 
  Year Ended April 30, 2006**

|6. | Stock Options(Continued)
|-- | ------------------------

| | Grant Date               |   | June 17, 2004 |  |   | July 29, 2004 |  |   | Total   | 
| | ------------------------ | - | ------------- |  | - | ------------- |  | - | ------- | 
| | No. of options granted   |   | 50,000        |  |   | 375,000       |  |   | 425,000 | 
| | Exercise price           | $ | 0.40          |  | $ | 0.40          |  |   |         | 
| | Expected volatility      |   | 104%          |  |   | 100%          |  |   |         | 
| | Risk-free interest rate  |   | 4%            |  |   | 4%            |  |   |         | 
| | Expected life (years)    |   | 1             |  |   | 5             |  |   |         | 
| | Dividend yield           |   | -             |  |   | -             |  |   |         | 
| | Stock-based compensation | $ | 10,000        |  | $ | 172,000       |  | $ | 182,000 | 
| | Expensed during the year | $ | 10,000        |  | $ | 172,000       |  | $ | 182,000 | 

|7. | Significant Transactions with Related Parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | During the year ended April 30, 2006, Kutu Energy Inc.
        (KEI) charged the company a total of $56,015 in respect of
        the services of James Fairbairn, Chief Financial Officer, of the Company.
        Mr. Fairbairn beneficially owns KEI. These charges also include accounting
        and administrative fees. Mr. Fairbairn is retained by the Company pursuant
        to a verbal consulting agreement on a month-to-month basis.                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Dan Farrell, Chairman and Chief Executive Officer and
        director, charged the Company $120,000 for the year ended April 30, 2006.
        Mr. Farrell is retained by the Company pursuant to a verbal consulting
        agreement on a month-to-month basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Art Ettlinger, an officer and a director, charged the
        Company $118,652 under the terms of an employment agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | The company issued 1,000,000 shares at $0.43 per share
        and 40,000 shares at $0.57 per share for property payments to Energy Metals
        Corporation. See note 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | All related party transactions are measured at their
        exchange amount, being the amount of consideration established and agreed
        to by the related parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|8. | Commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | On February 11, 2005, the Company entered into a six
        month management services agreement with its President and COO pursuant
        to which it has agreed to pay CAD$10,000 per month and granted options
        to acquire 500,000 shares of the Companys common stock at CAD $0.56
        per share pursuant to the Companys 2003 Key Employee Stock Options
        Plan, subject to vesting over the two years and expiring in 2010. The
        agreement was renewed for a subsequent six month period in August 2005.
        On September 28, 2005, the fee was changed to $13,000 per month and the
        term was extended to three years.                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | On November 13, 2005, the Company entered into a Letter
        of Intent with Energy Metals Corporation (EMC) pursuant to
        which the parties will work toward entering into a business combination
        where EMC will acquire all of the issued and outstanding securities of
        the Company. The ultimate structure of the transaction will be subject
        to review of applicable tax, accounting, corporate and securities law
        issues. Completion of the transaction is subject to a number of conditions,
        including, but not limited to, completion of due diligence, entering into
        of formal agreements, and receipt of all required regulatory and shareholder
        approvals. Pursuant to the terms of the Letter Agreement, Quincy shareholders
        will receive one common share of EMC for every five shares of Quincy.

F-22

---

**Quincy Energy Corp.** (formerly Quincy Resources Inc.)**and Subsidiary 
  (an Exploration Stage Company)**

**Notes to Consolidated Financial Statements 
  Year Ended April 30, 2006**

|6. | Commitments(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Energy Metals paid a $500,000 non-refundable deposit
        which will be forfeited if they do not proceed with the transaction. This
        deposit is not included in the accounts of the company.                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | On March 9, 2006 EMC and Quincy executed an Agreement
        and Plan of Merger whereby Quincy will become a wholly-owned subsidiary
        of Energy Metals, with shareholders of Quincy receiving 0.20 shares of
        Energy Metals for each Quincy share. In addition, Energy Metals will assume
        all of Quincys outstanding warrants and options, subject to appropriate
        adjustments to the number of shares issuable on exercise and the exercise
        price.

F-23

---

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

We have had no disagreements with our independent auditors on
  accounting or financial disclosures.

On May 13, 2005, we were notified by Madsen & Associates,
  CPAs Inc. that they would not be pursuing certification by the Canadian
  Public Accountability Board and for that reason were resigning as our independent
  public accountants. Madsen & Associates, CPAs Inc. report on the financial
  statements for the years ended April 30, 2004 and 2003 did not contain an adverse
  opinion or disclaimer of opinion, and was not modified as to uncertainty, audit
  scope, or accounting principles. In addition, there were no disagreements with
  Madsen & Associates, CPAs Inc. on any matter of accounting principles
  or practices, financial statement disclosure, or auditing scope or procedure,
  which would have caused Madsen & Associates, CPAs Inc. to make reference
  to the subject matter of the disagreement(s) in connection with their report
  on the financial statements for the years ended April 30, 2004 and 2003.

On May 13, 2005, we engaged parker simone, Chartered Accountants
  LLP of Mississauga, Ontario, Canada as our independent public accountants.

The decision to accept the resignation of Madsen & Associates,
  CPAs Inc. and appoint parker simone, Chartered Accountants LLP was approved
  by our board of directors.

ITEM 8A. CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management,
  including the Chief Executive Officer and Chief Financial Officer, we have evaluated
  the effectiveness of the design and operation of our disclosure controls and
  procedures pursuant to Exchange Act Rules 13a-14(c) and 15d-14(c) as of the
  end of the period covered by this report. Based on that evaluation, the Chief
  Executive Officer and Chief Financial Officer have concluded that these disclosure
  controls and procedures are effective. There were no changes in our internal
  control over financial reporting during the year ended April 30, 2006 that have
  materially affected, or are reasonably likely to materially affect, our internal
  controls over financial reporting.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
  PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

Each of our directors is elected by stockholders to a term of
  one year and serves until his or her successor is elected and qualified. Each
  of our officers is elected by the board of directors to a term of one year and
  serves until his or her successor is duly elected and qualified, or until he
  is removed from office. The board of directors has no nominating or compensation
  committees. Following the business combination with Energy Metals Corporation,
  the functions of the audit committee are performed by our full board of directors.

The names, addresses, ages and positions of our present officers
  and directors are set forth below:

63

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|Full Name and Address                   | Age | Positions                      | Date Appointed
|--------------------------------------- | --- | ------------------------------ | --------------
|                                        |     |                                | Director      
|Paul Matysek                            | 48  | Chief Executive Officer, Chief | July 10, 2006 
|c/o Suite 1238 -- 200 Granville Street, |     | Financial Officer, Secretary   |               
|Vancouver British Columbia V6C 1S4      |     | and Director                   |               
|George Lim                              | 49  | Chief Financial Officer        | July 10, 2006 
|c/o Suite 1238 -- 200 Granville Street, |     |                                |               
|Vancouver British Columbia V6C 1S4      |     |                                |               
|James G. Watt                           | 66  | Director                       | July 10, 2006 
|c/o Suite 1238 -- 200 Granville Street, |     |                                |               
|Vancouver British Columbia V6C 1S4      |     |                                |               
|William M. Sheriff                      | 46  | Director                       | April 6, 2005 
|7000 Eagle Circle                       |     |                                |               
|Wylie, TX 75098                         |     |                                |               

The persons named above have held their offices/positions since
  the date of appointment and are expected to hold their offices/positions until
  the next annual general meeting of our stockholders.

Background of Officers and Directors

Mr. Matysek is a professional geologist with over 25 years of
  international exploration and development experience. He has been in a senior
  management or director position with several natural resource exploration and
  development companies, notably First Majestic Resource Corp., First Quantum
  Minerals Ltd, Vannessa Ventures Ltd. and Odyssey Resources Ltd. Mr. Matysek
  has been instrumental in the acquisition and development of a number of significant
  precious metal and base-metal properties which include the 2.4 million ounce
  Crucitas Gold Project in Costa Rica and the Altintepe and Tavsan Gold projects
  in Turkey. Mr. Matysek holds a Bachelor of Science in Geology degree from the
  University of Toronto and a Masters of Science degree in Geology from the University
  of British Columbia.

Mr. Lim has been the Chief Financial Officer of our parent company,
  Energy Metals Corporation, since May of 2005. Prior to joining Energy Metals,
  Mr. Lim was the Chief Financial Officer of First Majestic Resource Corporation
  (CFO) from March 2005 to January 2006, and the Chief Financial Officer of Thiessen
  Equipment Ltd. from January 1999 to August 2004. He began his career at KPMG
  and holds designations as a Chartered Accountant and Certified General Accountant.

Mr. Watt has over 20 years' experience in banking and over 20
  years with junior natural resource companies. Currently he is a director and
  president of Tower Energy Ltd.; a current director and former president of Energy
  Metals Corp.; and a director of Doublestar Resources Ltd. Mr. Watt obtained
  status in 1975 as a Fellow of the Institute of Canadian Bankers as well as previously
  holding status as an Associate of the Institute of Bankers in Scotland since
  1962, both of which are presently inactive.

Mr. Sheriff currently serves as a director of our parent company,
  Energy Metals Corporation and Castleworth Ventures Inc and is the president
  of Energy Metals Corporation (U.S.), a subsidiary of Energy Metals Corporation.
  Mr. Sheriff began his career with Cyprus Minerals-AMOCO in 1980 working on molybdenum
  deposits in Montana. From 1981 to 1984 as Research Geologist for Amselco Exploration,
  Mr. Sheriff was responsible for prospect generation for the southwest USA. From
  1985 to present, Mr. Sheriff was President of Platoro West Incorporated, a minerals

64

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exploration firm specializing in project identification and acquisition
  throughout the western USA. From 2002 until present, Mr. Sheriff has served
  as the President of Pacific Intermountain Gold Corporation (PIGCO), a private
  corporation owned by Seabridge Gold Corporation. PIGCO holds over 30 advanced
  gold exploration projects throughout Nevada. Mr. Sheriff received his BSc in
  Geology from Fort Lewis College in Durango, Colorado and conducted graduate
  studies at the University of Texas-El Paso in Mining Geology and Mineral Economics.

Conflicts of Interest

We believe that all of our directors and officers may be subject
  to conflicts of interest. The conflicts of interest arise from their relationships
  in other mining companies and agreements with us.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company's executive
  officers and directors, and persons who beneficially own more than ten percent
  of the Company's equity securities, to file reports of ownership and changes
  in ownership with the Securities and Exchange Commission. Officers, directors
  and greater than ten percent shareholders are required by SEC regulation to
  furnish the Company with copies of all Section 16(a) forms they file. Based
  on its review of the copies of such forms received by it, the Company believes
  that during the fiscal year ended April 30, 2005 all such filing requirements
  applicable to its officers and directors were complied with.

ITEM 10. EXECUTIVE COMPENSATION

Compensation of Directors

Our directors have not been compensated for their services and
  there are no plans to compensate them in the near future until such time as
  we generate sufficient revenue to do so.

Executive Compensation - Summary Compensation Table

The following table sets forth information with respect to the
  total compensation paid or accrued by us for the three years ended April 30,
  2006 on behalf of each of our named executive officers and stock options to
  purchase common stock granted to our named executive officers during the fiscal
  year ended April 30, 2006.

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SUMMARY COMPENSATION TABLE

ANNUAL
      LONG TERM COMPENSATIONCOMPENSATIONAwards
      PayoutsAllName and Principal
      Year
      Salary
      Bonus
      Other
      Restricted
      Securities
      
      otherPosition
      
      
      
      annual
      stock
      underlying
      LTIP payouts
      compen -($)
      ($)
      compensation
      award(s)
      options/SARs
      ($)
      sation ($)($)
      ($)
      (#)Daniel T. Farrell (1)Chairman, Chief
      2006
      Nil
      Nil
      $120,000
      Nil
      500,000
      Nil
      NilExecutive Officer,
      2005
      Nil
      Nil
      $173,276
      Nil
      Nil
      Nil
      NilSecretary and director
      2004
      Nil
      Nil
      $42,500
      Nil
      220,000
      Nil
      NilArt Ettlinger (2)President, Chief
      2006
      Nil
      Nil
      $118,652
      Nil
      150,000
      Nil
      NilOperating Officer and
      
      
      
      
      
      
      
      Nildirector
      2005
      Nil
      Nil
      $25,893
      Nil
      500,000
      Nil
      Nil


(1)Appointed President and Secretary August 16, 2002
  and as director August 30, 2002. Appointed Chairman and Chief Executive Officer
  and resigned as President February 14, 2005. Resigned as officer and director
  July 10, 2006. (2) Resigned as officer and director July 10, 2006.

Employment Agreements with Executive Officers

There are no employment agreements with any officers or directors.
  We have entered into a consulting agreement with a company owned by Dr. Ettlinger
  pursuant to which we have agreed to pay the sum of CAD $13,000 per month and
  grant to Dr. Ettlinger an option to acquire 500,000 shares of our common stock
  at a price of CAD $0.56 per share, subject to vesting over two years and expiring
  in 2010.

Option Grants in Last Fiscal Year

Other than options granted to our directors, officers and consultants
  under our Amended 2003 Key Employee Stock Option Plan, we did
  not grant any options to purchase our common stock during the year ended April
  30, 2006.

Employee Stock Incentive Plan

On March 2, 2004, our shareholders adopted the2003 Key Employee
  Stock Option Plan.On April 1, 2005 our shareholders approved theAmended
  2003 Key Employee Stock Option Plan.

The aggregate number of shares of common stock that can be awarded
  under the plan is 10% of our issued and outstanding common stock, on a rolling
  basis. The plan permits the Board to grant qualified options with an exercise
  price of not less than the fair market value on the date of grant, and non-qualified
  options at an exercise price of not less than eighty-five percent (85%) of the
  fair market value of the underlying shares of common stock on the date of the
  grant. In addition, the exercise price of the option grants cannot be less than
  the discounted market price as defined by the policies of the TSX Venture Exchange,
  being:

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Closing Price
        (CAD)
      Maximum Price Discountup to $0.50
      25%$0.51 to $2.00
      20%Above $2.00
      15%


The plan permits the Board to grant options with a term of up
  to ten years for certain qualified options, and not more than five years for
  options granted to a granted to a person holding 10% or more of our stock. However,
  no options will be issued with a term longer than five years. Options will be
  used by us to attract and retain certain key individuals and to give such individuals
  a direct financial interest in our future success and profitability.

Option Grants to the Named Executive Officers and Directors from
  inception are as follows:

|Name of Beneficial
      Owner | Title                                                                          | Options   
|------------------------------ | ------------------------------------------------------------------------------ | ----------
|Daniel T. Farrell              | Former Chairman, Chief 
      Executive Officer, Secretary and 
      Director | 720,000(1)
|Art D. Ettlinger               | Former President, Chief Operating 
      Officer, Director                     | 650,000   
|William M. Sheriff             | Director                                                                       | 420,000   
|Thomas Skimming                | Former Director                                                                | 220,000   
|John Cullen                    | Former Director                                                                | 420,000   

(1) Of which 125,000 have been exercised.

Aggregated Option Exercises in Last Fiscal Year and Fiscal
  Year-end Option Values

During the year ended April 30, 2006, options to purchase 295,000
  shares of our common stock were exercised at a price of $0.25 per share for
  gross proceeds to us of $73,750 and options to purchase 62,500 shares of our
  common stock were exercised at a price of $0.30 per share for gross proceeds
  to us of $18,750.

Benefit Plans

We do not have a long-term incentive plan nor do we have a defined
  benefit, pension plan, profit sharing or other retirement plan.

Code of Ethics

We have adopted a Code of Ethics and Business Conduct for Officers,
  Directors and Employees, that applies to all of our officers, directors and
  employees. The Code of Ethics was filed as an exhibit to our Report on Form
  10-KSB for the year ended April 30, 2004.

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

The following table sets forth, as at August 1, 2006, the total
  number of shares owned beneficially by the present owners of 5% or more of our
  total outstanding shares. Unless

67

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otherwise stated, the stockholders listed below have direct ownership
  of their shares and possess sole voting and dispositive power with respect to
  their shares:

The persons named below may be deemed to be parents and promoters
  of our company within the meaning of such terms under the Securities Act, as
  amended, by virtue of his/its direct and indirect stock holdings.

|Title of Class | Name and Address of         | Amount and Nature of     | Percent of Class
|-------------- | --------------------------- | ------------------------ | ----------------
|               | Beneficial Owner            | Beneficial Ownership     |                 
|               |                             |                          |                 
|Common Stock   | Energy Metals Corporation   | 51,162,997 Common Shares | 100%            
|               | Suite 1238 -- 200 Granville | Direct                   |                 
|               | St. Vancouver BC V6C 1S4    |                          |                 

The following table sets forth, as at August 1, 2006, the total
  number of shares owned beneficially by each of our directors, officers and key
  employees, individually and as a group. Unless otherwise stated, the stockholders
  listed below have direct ownership of their shares and possess sole voting and
  dispositive power with respect to their shares:

|Title of Class | Name and Address of     | Amount and Nature of | Percent of Class
|-------------- | ----------------------- | -------------------- | ----------------
|               | Beneficial Owner        | Beneficial Ownership |                 
|               |                         |                      |                 
|Common Stock   | Paul Matysek            | 51,162,997 Common    | 100%            
|               | c/o Suite 1238 -- 200   | Shares               |                 
|               | Granville St. Vancouver | Indirect(1)          |                 
|               | BC V6C 1S4              |                      |                 
|               |                         |                      |                 
|Common Stock   | James G. Watt           | 51,162,997 Common    | 100%            
|               | c/o Suite 1238 -- 200   | Shares               |                 
|               | Granville St. Vancouver | Indirect(1)          |                 
|               | BC V6C 1S4              |                      |                 
|               |                         |                      |                 
|Common Stock   | William M. Sheriff      | 51,162,997 Common    | 100%            
|               | c/o Suite 1238 -- 200   | Shares               |                 
|               | Granville St. Vancouver | Indirect(1)          |                 
|               | BC V6C 1S4              |                      |                 
|               |                         |                      |                 
|Common Stock   | All Officers and        | 51,162,997 Common    | 100%            
|               | Directors, as a group   | Shares               |                 

(1) Messrs. Matysek, Watt and Sheriff are directors
  and officers of our parent, Energy Metals Corporation, and as such control these
  shares.

Except as otherwise noted, it is believed that all persons have
  full voting and investment power with respect to the shares indicated. Under
  the rules of the Securities and Exchange Commission, a person (or group of persons)
  is deemed to be a beneficial owner of a security if he or she, directly or indirectly,
  has or shares the power to vote or to direct the voting of such security, or
  the power to dispose of or to direct the disposition of such security. Accordingly,
  more than one person may be deemed to be a beneficial owner of the same security.
  A person is also deemed to be a beneficial owner of any security, which that
  person has the right to acquire within 60 days, such as options or warrants
  to purchase our Common Stock.

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ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Except as disclosed below, none of the following parties has
  in the last two fiscal years had any material interest, direct or indirect,
  in any transaction with us or in any presently proposed transaction that has
  or will materially affect us:

- Any of our directors or officers;
- Any person proposed as a nominee for election as a director;
- Any person who beneficially owns, directly or indirectly, shares carrying
    more than 10% of the voting rights attached to our outstanding shares of common
    stock;
- Any of our promoters; or
- Any relative or spouse of any of the foregoing persons who has the same
    house as such person.

On November 9, 2004 we agreed to acquire an option to earn up
  to a 50% interest in eight mineral properties known as the Arizona Strip Breccia
  Properties from Energy Metals Corporation (formerly Clan Resources Ltd.) (EMC).
  EMC in turn has agreed to acquire these Properties from William M. Sheriff,
  our largest shareholder and a member of our board of directors. The terms of
  the acquisition are described above under the heading Our Business.
  Mr., Sheriff is a significant shareholder of EMC and an officer of a subsidiary
  of EMC. EMC acquired certain of the claims comprised in the Arizona Strip Breccia
  Properties from Mr. Sheriff, as part of a larger group of claims, in exchange
  for an aggregate of 1,250,000 shares of EMC. Mr. Sheriff was not a member of
  our board of directors at the time this agreement was entered into.

On May 18, 2005 we agreed to acquire an option to earn up to
  a 75% interest in 18 unpatented lode claims covering an area of approximately
  146 hectares located in Malheur County, Oregon and known as the Aurora Property
  from Energy Metals Corporation (EMC). The terms of the acquisition
  are described above under the heading Our Business. EMC acquired
  the claims comprised in the Aurora Property from Mr. Sheriff, as part of a larger
  group of claims, in exchange for an aggregate of 1,000,000 shares of EMC. William
  M. Sheriff, a member of our board of directors and a significant shareholder
  of ours, is also a director and significant shareholder of EMC. Accordingly,
  the acquisition of the Aurora Property is not and arms length transaction.
  At the directors meeting at which the option agreement in respect of the Aurora
  Property was approved, Mr. Sheriff declared his interest in the transaction
  and abstained from voting thereon.

On March 9, 2006 we entered into an Agreement and Plan of Merger
  with Energy Metals Corporation and EMC Acquisition Corp., a wholly-owned subsidiary
  of Energy Metals, whereby, subject to the approval of the stockholders of our
  company and Energy Metals, and subject to regulatory approval, we would merge
  with and into EMC Acquisition Corp., with our company becoming a wholly owned
  subsidiary of Energy Metals. On July 10, 2006, the requisite shareholder and
  regulatory approvals having been obtained, we closed the business combination
  with Energy Metals Corporation pursuant to the Agreement and Plan of Merger
  and our company became a wholly-owned subsidiary of Energy Metals Corporation.
  William M. Sheriff, a member of our board of directors and a former significant
  shareholder of ours, is also a director and significant shareholder of EMC.

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ITEM 13. EXHIBITS

Exhibits

|Exhibit No. | Document Description                                                                                                                                                                                               
|----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|            |                                                                                                                                                                                                                    
|3.1(1)      | Articles of Incorporation                                                                                                                                                                                          
|            |                                                                                                                                                                                                                    
|3.1.1(10)   | Articles of Merger as filed May
      12, 2005                                                                                                                                                                     
|            |                                                                                                                                                                                                                    
|3.1.2       | Articles
      of Merger as filed July 10, 2006                                                                                                                                                                    
|            |                                                                                                                                                                                                                    
|3.2(1)      | Amended Bylaws
        dated August 31, 2005                                                                                                                                                                       
|            |                                                                                                                                                                                                                    
|4.1(1)      | Specimen Stock
        Certificate                                                                                                                                                                                 
|            |                                                                                                                                                                                                                    
|10.1(3)     | Agreement and
        Plan of Merger dated January 17, 2003 between Quincy Resources Inc., Atlas
        Database Acquisition Corp., Atlas Database Corp., Platoro West Incorporated
        and William M. Sheriff
|            |                                                                                                                                                                                                                    
|10.2(4)     | Bill of Sale
        and Letter Agreement between Platoro West Incorporated and Atlas Minerals,
        Inc. dated June 10, 2000.                                                                                  
|            |                                                                                                                                                                                                                    
|10.3(5)     | Mining Lease
        and Agreement made the 21stday of February, 2003 between Quincy
        Resources Inc., Donald K. Jennings and Renegade Exploration.                                                          
|            |                                                                                                                                                                                                                    
|10.4(4)     | Agreement between
        Newmont USA Limited, d/b/a Newmont Mining Corporation, Quincy Resources,
        Inc., and Platoro West Incorporated, dated July 31, 2003.                                               
|            |                                                                                                                                                                                                                    
|10.5(6)     | Option Agreement
        made as of October 15, 2003 between Quincy Resources Inc. and Seabridge
        Gold Corporation.                                                                                         
|            |                                                                                                                                                                                                                    
|10.6(7)     | Mining Lease
        and Agreement between Quincy Resources, Inc. and Nevada Contact Inc.,
        dated December 15, 2003.                                                                                        
|            |                                                                                                                                                                                                                    
|10.7(7)     | Mining Lease
        and Agreement between Quincy Resources, Inc. and Pacific Intermountain
        Gold Corporation dated January 23, 2004.                                                                       
|            |                                                                                                                                                                                                                    
|10.8(8)     | Minerals Lease,
        Sublease and Agreement between Quincy Resources, Inc. and Newmont Capital
        Limited dated March 1, 2004.                                                                             
|            |                                                                                                                                                                                                                    
|10.9(2)     | Option Agreement
        dated October 14, 2004 between Quincy Gold Corp. and Bald Mountain Mining
        Co.                                                                                                     
|            |                                                                                                                                                                                                                    
|10.10(2)    | Letter Agreement
        effective November 9, 2004 between Quincy Gold Corp. and Energy Metals
        Corporation (formerly Clan Resources Ltd.).                                                                
|            |                                                                                                                                                                                                                    
|10.11(2)    | Agency Agreement
        between Quincy Gold Corp., Kingsdale Capital Partners Inc. and Kingsdale
        Capital Markets Inc. dated December 21, 2004                                                             
|            |                                                                                                                                                                                                                    
|10.12(9)    | Letter Agreement
        dated February 10, 2005 between Quincy Gold Corp. and Canada Enerco Corp.                                                                                                                 
|            |                                                                                                                                                                                                                    
|10.13(9)    | Option Agreement
        between Quincy Gold Corp. and NZ Uranium LLC dated March 18, 2005.                                                                                                                        
|            |                                                                                                                                                                                                                    
|10.14(11)   | Option Agreement
        between Quincy Gold Corp. and NZ Uranium LLC dated May 12, 2005.                                                                                                                          
|            |                                                                                                                                                                                                                    
|10.15(11)   | Option Agreement
        between Quincy Gold Corp., Energy Metals Corporation and Energy Metals
        Corporation (US) dated May 12, 2005.                                                                       
|            |                                                                                                                                                                                                                    
|10.16(14)   | Agreement and
        Plan of Merger dated March 9, 2006 between Quincy Energy Corp., Energy
        Metals Corporation and EMC Acquisition Corp.                                                                  
|            |                                                                                                                                                                                                                    
|21.1(5)     | Subsidiary of
        Quincy Resources Inc.                                                                                                                                                                        
|            |                                                                                                                                                                                                                    
|31.1        | Certification
        of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002.                                                                                            
|            |                                                                                                                                                                                                                    
|31.2        | Certification
        of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
        Act of 2002.                                                                                            

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|32.1     | Certification
        of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as
        Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|-------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |                                                                                                                                                                       
|32.2     | Certification
        of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as
        Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|         |                                                                                                                                                                       
|99.1(13) | Code of Ethics
        and Business Conduct of Officers, Directors and Employees.                                                                                     

|(1)  | Incorporated by reference to same exhibit filed with
        the Companys Form 10SB Registration Statement filed September 11,
        2000, SEC file no. 000-31501.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2)  | Previously filed as an exhibit to our Form SB-2 filed
        on January 26, 2005, SEC file no. 333- 122301.                                                         
|(3)  | Incorporated by reference to same exhibit filed with
        the Companys Form 8-K Current Report dated January 17, 2003, SEC
        file no. 000-31501.           
|(4)  | Previously filed as an exhibit to our Form SB-2/A-1
        filed on August 19, 2003, SEC file no. 333- 105616.                                                      
|(5)  | Previously filed as an exhibit to our Form SB-2 filed
        on May 28, 2003, SEC file no. 333-105616.                                                              
|(6)  | Previously filed as an exhibit to our Post Effective
        Amendment No. 1 on Form SB-2 filed on December 23, 2003, SEC file no.
        333-105616.               
|(7)  | Incorporated by reference to our Post Effective Amendment
        No. 2 on Form SB-2 filed on March 26, 2003, SEC file no. 333-105616.                               
|(8)  | Incorporated by reference to same exhibit filed with
        the Companys Form 8-K Current Report dated March 15, 2004, SEC file
        no. 000-31501.             
|(9)  | Incorporated by reference to same exhibit filed with
        the Companys Form SB-2/A dated April 27, 2005, SEC file no. 333-122301.                                
|(10) | Incorporated by reference to same exhibit filed with
        the Companys Form 8-K Current Report dated May 16, 2005, SEC file
        no. 000-31501.               
|(11) | Incorporated by reference to same exhibit filed with
        the Companys Form SB-2/A-2 dated June 2, 2005, SEC file no. 333-122301.                                
|(12) | Incorporated by reference to same exhibit filed with
        the Companys Form 14A Filed March 7, 2005, SEC file no. 000-31501.                                     
|(13) | Incorporated by reference to same exhibit filed with
        the Companys Annual Report on Form 10- KSB dated August 10, 2004,
        SEC file no. 000-31501.      
|(14) | Incorporated by reference to same exhibit filed with
        the Companys Quarterly Report on Form 10- QSB dated March 22, 2006,
        SEC file no. 000-31501.    

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Company's board of directors reviews and approves audit and
  permissible non-audit services performed by parker simone LLP (PS),
  as well as the fees charged by PS for such services. In its review of non-audit
  service fees and its appointment of PS as the Company's independent accountants,
  the board of directors considered whether the provision of such services is
  compatible with maintaining PS's independence. All of the services provided
  and fees charged by PS in 2006 were pre-approved by the board of directors.

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Audit Fees

$26,200 was billed for professional services rendered by PS in
  connection with our annual financial statements and the reviews of the financial
  statements included in our quarterly reports for periods ending prior to April
  30, 2006.

Audit-Related Fees

$35,375 was billed by PS during fiscal 2006 for assurance and
  related services that were reasonably related to the performance of the audit
  or review of the Company's financial statements and not reported under "Audit
  Fees" above. There were no other fees billed by PS prior to fiscal 2006.

Tax Fees

$1,650 was billed by PS for tax compliance services in fiscal
  2006.

All Other Fees

There were no other fees billed by PS during the last two fiscal
  years for products and services provided by PS.

72

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SIGNATURES

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

QUINCY ENERGY CORP.

By: /s/ Paul Matysek
         Paul Matysek,
         Chairman and Chief Executive Officer
  (Principal Executive Officer) and Secretary 
  Date: August 25, 2006

By: /a/ George Lim 
         George Lim,
         Chief Financial Officer (Principal Financial
  Officer) 
  Date: August 25, 2006

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

By  /s/ Paul Matysek
  Paul Matysek 
  Director 
  Date: August 25, 2006

By /s/ James G. Watt
  James G. Watt 
  Director 
  Date: August 25, 2006

By /s/ William M. Sheriff
  William M. Sheriff 
  Director 
  Date: August 25, 2006

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