---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 20-F/A(AMENDMENT NO. 1)

[   ] REGISTRATION STATEMENT PURSUANT TO SECTION 12(b)
OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

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

For the fiscal year ended **April 30, 2007**

OR

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

For the transition period from ____________ to __________

OR

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

Date of event requiring this shell company
report____________

Commission file number: 001-33439

CROSSHAIR EXPLORATION & MINING CORP.(Exact name of Registrant as specified in its charter)

British Columbia, Canada(Jurisdiction
of incorporation or organization)

Suite 1240, 1140 West Pender Street, Vancouver, B.C.
Canada V6E 4G1(Address of principal executive offices)

Mark J. Morabito, President and Chief Executive OfficerTelephone Number: (604) 681-8030E-Mail:
mark@crosshairexploration.comFacsimile Number: (604) 681-8039(Name, Telephone, E-Mail and/or Facsimile number and Address of
Company Contact Person)

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

|Title of each class              | Name of Exchange on which registered
|-------------------------------- | ------------------------------------
|Common Shares, without par value | American Stock Exchange             

Securities registered pursuant to Section 12(g) of the Act:
None

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

Indicate the number of outstanding shares of each of the
issuer's classes of capital or common stockas of the close of the period
covered by the annual report: **70,912,072**

---

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
[   ]   No [X]

If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934.Yes [  
]   No [X]

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes
[X]   No [   ]

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

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

Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing:

|U.S. GAAP [   ] | International Financial Reporting Standards
      as issued | Other [X]
|--------------- | ----------------------------------------------------------- | ---------
|                | By the International Accounting Standards
      Board [   ] |          

If Other has been checked in response to the previous
question, indicate by check mark which financial statement item the
registrant has elected to follow: Item 17 [X]  Item 18
[   ]

If this is an annual report, indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).Yes [   ]    No [X]

Index to Exhibits on Page 45

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EXPLANATORY NOTE

Crosshair Exploration & Mining Corp. (Crosshair
  or the Company) is a Canadian issuer eligible to file its
  annual report pursuant to Section 13 of the Securities Exchange Act of 1934,
  as amended (the Exchange Act), on Form 20-F. This Amendment
  No. 1 on Form 20-F (the Amendment) hereby amends Crosshairs
  Form 20-F for the fiscal year ended April 30, 2007, as originally filed with
  the Securities and Exchange Commission (the SEC) on October
  31, 2007 (the Original Filing). The Amendment is being filed
  solely to address those comments raised by the SEC in its comment letters to
  the Company dated January 30, 2008 and March 20, 2008, and to incorporate relevant
  portions of the disclosure contained in the Companys amended and restated
  managements discussion and analysis originally filed by the Company with
  the SEC as Exhibit 99.2 to Form 6-K on April 11, 2008. This Amendment does not
  reflect events occurring after the filing of the Original Filing and should
  not be viewed as updating any information contained therein. Except as described
  above, no other changes have been made to the Original Filing.

PART I


ITEM 4. INFORMATION ON THE COMPANY

4.A.       History and
Development of the Company

Introduction

Crosshair Exploration & Mining Corp. was incorporated as a
specially limited company pursuant to the Company Act (British Columbia)
on September 2, 1966 under the name Shasta Mines & Oil Ltd.
(Non-Personal Liability). On March 5, 1986 we converted from a specially limited
company into a limited company under the name of International Shasta
Resources Ltd.On March 1, 2004 we changed our name to Crosshair
Exploration & Mining Corp.

Our executive office is located at:

Suite 1240 - 1140 West Pender Street Vancouver, British
Columbia, Canada V6E 4G1 Telephone: (604) 681-8030 Facsimile: (604)
681-8039 Website: www.crosshairexploration.com
Email: mark@crosshairexploration.com

The contact person is: Mr. Mark J. Morabito, President.

Our fiscal year ends April 30th.

Our common shares first began trading on the Vancouver Stock
Exchange under the name Shasta Mines & Oil Ltd. on March 14, 1969. Our
common shares have been trading on the TSX Venture Exchange with the trading
symbol CXX since March 1, 2004. On February 10, 2006, the Company graduated to
Tier 1 on the TSX Venture Exchange. On May 7, 2007, our Common Shares began
trading on the American Stock Exchange with the trading symbol CXZ.

On March 29, 2004, the Company Act(British Columbia)
(the Company Act) was replaced by the Business Corporations Act(British Columbia) (the BCBCA). Accordingly, we are now subject to
the BCBCA and are no longer governed by the Company Act. There are a number of
differences under the BCBCA, which differences are designed to provide greater
flexibility and efficiency for British Columbia companies.

1

---

Under the BCBCA, every company incorporated under the Company
Act must complete a mandatory transition rollover under the BCBCA to substitute
a Notice of Articles for its Memorandum within two years of March 29, 2004. On
June 1, 2004 we replaced our Memorandum with a Notice of Articles as is required
by the Business Corporations Act(British Columbia). The only information
contained in the Notice of Articles is the authorized share structure of the
company, the name of the company, the address of the registered and records
office of the company, and the names and addresses of the directors of the
company. On March 11, 2005, we changed our authorized capital to an unlimited
number of common shares.

Property Acquisitions

Since the beginning of fiscal 2007, we have acquired the
following properties :

Newfoundland

On May 1, 2006, we entered into an option agreement with
Rubicon Minerals Corporation (Rubicon Minerals) to earn a 60% interest
in the Golden Promise project. On December 8, 2006, Rubicon Minerals spun-off
its Newfoundland mineral properties under a plan of arrangement to Paragon
Minerals Corporation (Paragon Minerals). All references to Paragon
Minerals in this report also include its predecessor, Rubicon Minerals, where
the context requires. The Golden Promise claims are contiguous with those of our
South Golden Promise Property. In order to earn our interest, we must spend $4.0
million over four years (including $750,000 in the first year), issue shares
totaling 80,000 (including 20,000 shares in the first year) and make underlying
property payments. The budget for the first year after vesting will be capped at
$3.0 million unless increased by mutual consent.

On June 7, 2006, we acquired 90 additional claims from Paragon
Minerals (originally optioned by Paragon Minerals from local private interests)
contiguous with the southwestern portion of the South Golden Promise property in
the Victoria Lake region. This is an addendum to the original Victoria Lake
Property agreement signed with Paragon Minerals in February, 2003. We can earn a
60% interest in the additional 90 claims by maintaining the claims in good
standing and making cash payments totaling $95,000 to the property vendors. The
property vendors also maintain a 2.5% Net Smelter Return Royalty (NSR) on the
property.

In July 2007, we staked an additional 34 claims contiguous with
the South Golden Promise property boundary, which are subject to the terms and
conditions of the option agreement signed with Paragon Minerals.

Labrador

In May 2007, we entered into an agreement with Belmont
Resources Inc. and International Montoro Resources Inc. whereby we acquired the
option to earn a 75% interest in 139 additional claims comprising four different
mineral licences in the Central Mineral Belt of Labrador totaling 34.75 km.
Three of the licences, referred to as the Stormy Lake block, are contiguous with
the southern boundary of the Central Mineral Belt Project, while the other
licence, referred to as the Partridge River block, is situated approximately 95
km west of the property. Under the terms of the agreement, we may earn a 75%
interest in the claims by carrying out $800,000 in exploration expenditures and
issuing 175,000 common shares to the vendors over a three year period.

Between April and July 2007, we staked an additional 120 claims
  contiguous with the Central Mineral Belt project boundaries, bringing the total
  number of claims to 2,999 covering 74,975 hectares. A total of $24,000 in eligible
  exploration expenditures must be spent on these claims before July 2008.

Property Terminations

We have not terminated our options in any of our properties
since the beginning of fiscal 2007.

Capital Expenditures

Our capital expenditures, excluding property, plant and
equipment, for the last three fiscal years were as follows:

2

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Fiscal Year
    ExpendituresFiscal 2005
    $1,566,346(1)Fiscal 2006
    $1,435,954(2)Fiscal 2007
    $10,631,531(3)


|(1) | These funds were spent as outlined below (Note - The
      total amount includes acquisition costs of $245,000, which were paid in
      common shares and not cash.):
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                              |   | Glenwood |  |   | Wings Point- |  |   | South   |  |   | North Pauls |   |   | Beigou   |  |   | Central      |  |   |          |  
|----------------------------- | - | -------- |  | - | ------------ |  | - | ------- |  | - | ------------ | - | - | -------- |  | - | ------------ |  | - | -------- | -
|                              |   | Break    |  |   | Titan        |  |   | Golden  |  |   | Pond Gold    |   |   | Gold     |  |   | Mineral Belt |  |   | DJ Gold  |  
|Expense ($)                   |   | Property |  |   | Property     |  |   | Promise |  |   | Property     |   |   | Property |  |   | Project      |  |   | Property |  
|Drilling and Trenching        | $ | 51,712   |  | $ | 126,550      |  | $ | 13,076  |  | $ | 2,008        |   |   | --       |  |   | --           |  |   | --       |  
|Geology                       |   | 171,706  |  |   | 7,270        |  |   | 143,655 |  |   | 30,756       |   | $ | 64,473   |  | $ | 193,243      |  | $ | 6,349    |  
|Geophysics                    |   | 44       |  |   | 2,346        |  |   | 23,500  |  |   | 11,154       |   |   | --       |  |   | 83,137       |  |   | --       |  
|Admin.                        |   | 19,671   |  |   | 20,111       |  |   | 19,025  |  |   | 2,917        |   |   | 23,305   |  |   | 20,201       |  |   | 720      |  
|Technical analysis            |   | 80,219   |  |   | 31,232       |  |   | 71,449  |  |   | 16,043       |   |   | 304      |  |   | 41,919       |  |   | 937      |  
|Acquisition costs             |   | 25,000   |  |   | 34,360       |  |   | 25,000  |  |   | 20,000       |   |   | 83,362   |  |   | 260,000      |  |   | 28,580   |  
|Write off of mineral property |   | --       |  |   | --           |  |   | --      |  |   | (109,878     | ) |   | --       |  |   | --           |  |   | (79,110  | )

|(2) | These funds were spent as outlined
  below:
|--- | -------------------------------------------

|                       |   |          |   |   |             |   |   |         |   |   |          |   |   | Central   |   |   |               |  |   |        | 
|---------------------- | - | -------- | - | - | ----------- | - | - | ------- | - | - | -------- | - | - | --------- | - | - | ------------- |  | - | ------ | 
|                       |   | Glenwood |   |   | Wings       |   |   | South   |   |   | Beigou   |   |   | Mineral   |   |   | Otter/Portage |  |   |        | 
|                       |   | Break    |   |   | Point-Titan |   |   | Golden  |   |   | Gold     |   |   | Belt      |   |   | Lake          |  |   | Sinbad | 
|Expense ($)            |   | Property |   |   | Property    |   |   | Promise |   |   | Property |   |   | Project   |   |   | Properties    |  |   | Claims | 
|Drilling and trenching | $ | 32,349   |   |   | --          |   | $ | 37,929  |   |   | --       |   | $ | 323,008   |   |   | --            |  |   | --     | 
|Geology                |   | 73,089   |   | $ | 10,872      |   |   | 145,301 |   | $ | 41,410   |   |   | 541,753   |   | $ | 400           |  | $ | 8,597  | 
|Geophysics             |   | 3,562    |   |   | --          |   |   | 98,112  |   |   | --       |   |   | 1,085,376 |   |   | --            |  |   | --     | 
|Administration         |   | 4,188    |   |   | 2,463       |   |   | 36,148  |   |   | 17,081   |   |   | 152,555   |   |   | --            |  |   | --     | 
|Technical analysis     |   | 22,438   |   |   | 104         |   |   | 110,393 |   |   | --       |   |   | 87,725    |   |   | --            |  |   | --     | 
|Acquisition costs      |   | --       |   |   | --          |   |   | 82,000  |   |   | --       |   |   | 290,000   |   |   | 70,000        |  |   | 4,125  | 
|Credits received       |   | (36,693  | ) |   | (31,326     | ) |   | (22,150 | ) |   | --       |   |   | (266,300  | ) |   | --            |  |   | --     | 
|Write-off of mineral   |   |          |   |   |             |   |   |         |   |   |          |   |   |           |   |   |               |  |   |        | 
|properties             |   | (884,096 | ) |   | (374,522    | ) |   | --      |   |   | (229,935 | ) |   | --        |   |   | --            |  |   | --     | 

|(3) | These funds were spent as outlined
  below:
|--- | -------------------------------------------

CentralSouth
    
    
    Golden
    
    
    Mineral
    
    
    Otter/PortageGolden
    
    
    Promise
    
    
    Belt
    
    
    Lake
    
    
    SinbadExpense ($)
    
    Promise
    
    
    Property
    
    
    Project
    
    
    Properties
    
    
    ClaimsDrilling and trenching
    $
    514,059
    
    
    640,629
    
    $
    2,474,435
    
    
    94,698
    
    
    --Geology
    
    78,338
    
    
    32,738
    
    
    2,070,123
    
    
    34,741
    
    
    3,127Geophysics
    
    79,961
    
    
    --
    
    
    2,278,608
    
    
    62,900
    
    
    --Administration
    
    42,743
    
    
    54,301
    
    
    343,171
    
    
    7,765
    
    
    --Technical analysis
    
    40,189
    
    
    17,336
    
    
    432,758
    
    
    8,261
    
    
    --Acquisition costs
    
    223,500
    
    
    110,400
    
    
    710,000
    
    
    276,750
    
    
    --Credits received
    
    --
    
    
    --
    
    
    --
    
    
    --
    
    
    --


3

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We expect to incur capital expenditures of approximately
$12,000,000 for fiscal year 2008. Our capital expenditures have been financed
through sales of our Common Shares.

4.B.       Business
Overview

Historical Corporate Development

We are a mineral exploration company engaged in the acquisition
and exploration of mineral properties (primarily uranium, base and precious
metals). We do not have any producing mineral properties at this time. Our
business is presently focused on the exploration and evaluation of various
mineral deposits in North America.

We are currently focusing our exploration activities on the
following properties:

- South Golden Promise, Victoria Lake and Golden Promise properties located
  in Newfoundland, Canada, acquired through option agreements with Paragon
  Minerals in February 2003 and May 2006.
- Central Mineral Belt properties located in Labrador, Canada, acquired
  through separate option agreements in November 2004 (amended March 2005),
  December 2005 and May 2007, as well as through claim staking.

We are currently considering a strategy of combining the Golden
Promise project, the South Golden Promise project and our Victoria Lake project
into a new company, which could be spun out to our shareholders. Such a strategy
would allow us to focus exclusively on our Central Mineral Belt Labrador uranium
projects. Our implementation of such a strategy will depend on our exploration
results and prevailing market conditions. However, we may also decide to not
implement this strategy.

During fiscal 2006, we decided not to pursue exploration on
certain properties. In this regard, the option-JV agreements with Paragon
Minerals for the Glenwood Break and Wings Point-Titan properties were terminated
and related property costs were written off. During fiscal 2005, we announced
that we had completed a formal joint venture with the Liaoning Non-ferrous
Geological Bureau in China for the Beigou Gold Project. However, during the
third quarter of 2006, we decided to shift our main focus to our Newfoundland
and Labrador properties and as a result decided not to continue with the Beijou
Gold Property in China.

During fiscal 2004, we entered into agreements to acquire a
100% interest in the North Pauls Pond Gold Property in Newfoundland and the DJ
Gold Property in Shaanxi, China, which were subsequently terminated in fiscal
2006 and fiscal 2005, respectively. Related property costs were written off.

The Companys objective is to work aggressively on the
exploration and development of its mineral properties in the Province of
Newfoundland and Labrador, Canada and to aggressively seek other
opportunities.

4

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Material Effects of Government Regulations

Our current and anticipated future operations, including
further exploration activities, require permits from various Canadian Federal
and Provincial governmental authorities. Such operations are subject to various
laws governing land use, the protection of the environment, production, exports,
taxes, labor standards, occupational health, waste disposal, toxic substances,
well safety and other matters. Unfavorable amendments to current laws,
regulations and permits governing operations and activities of resource
exploration companies, or more stringent implementation thereof, could have a
materially adverse impact on us and cause increases in capital expenditures
which could result in our ceasing operations. We have had no material costs
related to compliance and/or permits in recent years, and anticipate no material
costs in the next year.

Seasonality

We can only carry out exploration when weather is favourable.
Typically, we cannot carry out any work during the months of November and
December for winter freeze-up and March and April for spring break-up on our
Canadian properties.

Dependency upon Patents/Licenses/Contracts/Processes

Not applicable

5

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Sources/Availability of Raw Materials

Not applicable

4.C.       Organization
Structure

We have no subsidiaries.

4.D.       Property, Plants
and Equipment

Cautionary Note to U.S. Investors concerning estimates
  of Inferred Resources

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

Our properties are in the exploration stage and a substantial
amount of capital will have to be spent on each property before we will know if
they contain commercially viable mineral deposits. Our material properties are
located in the Province of Newfoundland and Labrador, Canada. Our properties are
without known reserves and the work being done by us is exploratory in nature.

Our executive offices are located in rented premises of
approximately 2,858 square feet at Suite 1240, 1140 West Pender Street,
Vancouver, British Columbia Canada. We have occupied these facilities since 2006
and our current monthly rent is approximately $7,575. We also have a field
office at 39 Sagona Avenue, Mount Pearl, Newfoundland, Canada where our current
monthly rent is approximately $3,574.

Newfoundland

Golden Promise Property and Agreements

Paragon Minerals acquired an option to earn a 100% interest in
the Golden Promise property subject to an underlying option agreement with
William Mercer and Stephen Courtney (the Vendors). A total of 192
claims (4,800 hectares) comprise the option arrangement with William Mercer with
payments totaling $230,000 ($155,000 paid) and 100,000 Paragon Minerals common
shares, all of which have been issued. The option arrangement with Mr. Courtney
involves 6 claims (150 hectares) with payments totaling $35,000. Both vendors
are entitled to a 2% NSR subject to a $1 million buyback of 50% of the NSR at
anytime. Paragon Minerals also staked claims in the immediate vicinity of the
vendors claims to now hold a total of 1,033 claims as outlined in the Summary of
Licences Under Option below.

On May 2, 2006, the Company entered into an option agreement
with Paragon Minerals to earn a 60% interest in the Golden Promise Project.

6

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The option agreement calls for:

| | i) | Issuing common shares:
| | -- | ----------------------

| |                                            |  | Number of |  |  |                             | 
| | ------------------------------------------ |  | --------- |  |  | --------------------------- | 
| |                                            |  | shares    |  |  |                             | 
| | Within 5 days of the execution date of the |  |           |  |  |                             | 
| | agreement                                  |  | 20,000    |  |  | Issued by the Company       | 
| | On or before May 1, 2007                   |  | 20,000    |  |  | Issued by the
      Company | 
| | On or before May 1, 2008                   |  | 20,000    |  |  |                             | 
| | On
      or before May 1, 2009             |  | 20,000    |  |  |                             | 
| |                                            |  | 80,000    |  |  |                             | 

| | ii) | Incurring a total of $4,000,000 in exploration
      expenditures:
| | --- | ------------------------------------------------------------------

| |                                         |   | Amount    |     |  |  | 
| | --------------------------------------- | - | --------- | --- |  |  | 
| | On or before May 1, 2007 (as a firm and | $ | 750,000   | (1) |  |  | 
| | binding commitment)                     |   |           |     |  |  | 
| | On or before May 1, 2008                |   | 900,000   |     |  |  | 
| | On or before May 1, 2009                |   | 1,100,000 |     |  |  | 
| | On
      or before May 1, 2010          |   | 1,250,000 |     |  |  | 
| |                                         | $ | 4,000,000 |     |  |  | 

|(1) | As at April 30, 2007, the Company incurred $745,004 in
      exploration expenditures, paid $85,000 in cash, and issued 20,000 common
      shares at a value of $25,400 for acquisition
costs.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | iii) | Make cash payments on behalf of Paragon Minerals for
      Paragon Minerals obligations with respect to the Golden Promise Project
      and other claims as follows:
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                  |   | Amount  |  |  |                                | 
| | -------------------------------- | - | ------- |  |  | ------------------------------ | 
| | On or before June 1, 2006        | $ | 75,000  |  |  | Paid by Paragon
      Minerals | 
| | On or before June 14, 2006       |   | 10,000  |  |  | Paid by the Company            | 
| | On
      or before June 14, 2007 |   | 15,000  |  |  |                                | 
| |                                  | $ | 100,000 |  |  |                                | 

During the year ended April 30, 2007, the Company advanced
$587,000 to Paragon Minerals for Golden Promise exploration costs and at April
30, 2007, Paragon Minerals had spent $742,803. As a result the Company owes
Paragon Minerals $155,803.

A 14 hole, 3,073 meter program was completed in the 2006/2007
winter exploration program. This drilling was successful in extending the main
Jaclyn vein system by more than 50% to a current defined strike length of 750
metres and to a depth of 225 metres, and the zone remains open. Visible gold was
noted in 10 of the 14 holes completed in this phase of drilling, which included
some of the highest grades reported to date.

The work completed to date has unveiled a significant gold
bearing system at the main Jaclyn Zone. At Jaclyn North, which also remains open
in all directions, 4 of 6 holes completed to date intersected visible gold
bearing quartz veins. Given its potentially high grade nature and its close
proximity to the main Jaclyn Zone, the Jaclyn North system could prove to be an
extremely important component of the Golden Promise project and will be
addressed with additional drilling in the future.

7

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In advance of the planned spin out of its Newfoundland gold and
base metal assets, the Company plans to commission a NI 43-101 report covering
the Golden Promise (gold) and Victoria Lake (zinc/copper/silver/gold) projects.

Expenditure Schedule

|Year                            | Work Expenditures | Shares Issued to Rubicon Minerals
|------------------------------- | ----------------- | ---------------------------------
|                                |                   |                                  
|Within 5 days of execution Date | --                | 20,000                           
|                                |                   |                                  
|on or before 1st anniversary    | $ 750,000         | 20,000                           
|                                |                   |                                  
|on or before 2nd anniversary    | $ 900,000         | 20,000                           
|                                |                   |                                  
|on or before 3rd anniversary    | $ 1,100,000       | 20,000                           
|                                |                   |                                  
|on or before 4th anniversary    | $ 1,250,000       | Nil                              

In lieu of making any or all share payments as outlined above,
Crosshair may elect to make cash payments of $30,000 (on the basis of $1.50 cash
in lieu of each share). As of April 30, 2007, we incurred $745,004 in
exploration expenditures, paid $85,000 in cash and issued 20,000 Common Shares
at a value of $25,400 for acquisition costs.

The six blocks of licenses cover 25,825 hectares in 1,033
map-staked claims. Each claim is 500 by 500 metres, which is bounded by one
corner of the UTM grid square and is one quarter of the square. The claims are
grouped into licenses, which are the units of ownership and assessment work
requirements. The details of the licenses covered by the option agreement are
described as follows:

Summary of Licenses under Option

|        |        |               | Sec.    |                  |                   |                         
|------- | ------ | ------------- | ------- | ---------------- | ----------------- | ------------------------
|Licence | Claims | NTS AREA      | Deposit | Renewal Date     | Report Due        | Expenditures Required   
|8904M   | 6      | 12A/16        | $0.00   | July 9, 2007     | September 7, 2006 | $600.93 by 2006/07/09   
|11028M  | 256    | 12A/16        | $0.00   | June 21, 2007    | August 20, 2007   | $85,929.15 by 2008/06/21
|11029M  | 256    | 12A/16        | $0.00   | June 21, 2007    | August 20, 2007   | $80,698.88 by 2008/06/21
|11033M  | 256    | 2D/13, 12A/16 | $0.00   | June 21, 2007    | August 20, 2007   | $99,928.62 by 2008/06/21
|11034M  | 217    | 12A/16        | $0.00   | June 21, 2007    | August 20, 2007   | $94,636.18 by 2009/06/21
|11057M  | 42     | 12A/16        | $0.00   | October 28, 2009 | December 27, 2006 | $5,398.54 by 2006/10/28 
|Total:  | 1,033  |               |         |                  |                   |                         

Paragon Minerals will be the operator (manager) overseeing the
execution of the exploration programs in the first and second years for cost
plus 8% fee. Subsequent to the second year, we will consider renewing Paragon
Minerals as operator or elect to carry out the exploration programs on Golden
Promise using in-house personnel.

Property Location

The Golden Promise Property consists of six blocks of licenses
located east, and northeast of Red Indian Lake in west central Newfoundland
specifically within National Topographic Series (NTS) Map Sheets 12A/16 and
2D/13, part of the Grand Falls  Buchans Electoral District. The claims are
crosscut by an all season Highway (Route 370) connecting the towns of Buchans in
the southwest to Badger at the Trans Canada Highway in the northeast end of the
property.

8

---

Accessibility

The properties are accessible from Badger on the Trans Canada
Highway via Route 370 to Buchans Junction about 43 km to the southwest. The
Buchans Highway (Route 370) is the principal access road to the various blocks
in the west and southwest portions of the property where most of the exploration
activity has been focused. Access to the eastern and southern portions of the
property is gained via logging roads trending south and west of the town of
Grand Falls-Windsor, a major industrial hub for central Newfoundland. The
Exploits River, the largest river system on the Island of Newfoundland, crosses
the north-western part of the property. Secondary access to most of the property
is provided by logging roads and snowmobile and ATV trails leading from Route
370 as well as the logging roads south and southwest of Grand Falls-Windsor.

History and Previous Work

The exploration history of the vast majority of the property
dates back only as far as 2002, when a prospector working in an area burned by a
major forest fire in 1999 located gold-bearing quartz boulders immediately north
of Route 370 approximately 10 kilometers southwest of the town of Badger.
Exploration in the region prior to 2002 traditionally focused on the massive
sulphide districts located south and west of the current property boundaries.
The mining town of Buchans, located about 30 kilometers west - southwest of the
property, produced ores carrying extremely rich grades of zinc (14.5%), copper
(1.4%), lead (7.6%), gold (1.3 grams per tonne) and silver (126 grams per tonne)
for 56 years prior to closing in 1984. The massive sulphide districts of
Newfoundland are renowned for their high grade and polymetallic nature.

The property was mapped by both the Provincial and Federal
Geological Surveys whose efforts included regional scale geological surveys and
geochemical surveys including glacial till and lake sediment sampling.

In the spring of 2002, a local prospector, William Mercer,
discovered several large boulders of gold bearing float of which a composite
sample from 10 boulders returned 30 grams per tonne gold. The property was
subsequently optioned by Mr. Mercer to Paragon Minerals in July of 2002.

Geological Setting

The property lies within the Dunnage Zone, a major tectonic and
stratigraphic succession of Cambrian to Ordovician aged volcanic and sedimentary
rocks occupying much of central Newfoundland. The Dunnage Zone rocks record the
opening and closing of a proto-Atlantic Ocean known as Iapetus. The Dunnage Zone
can be subdivided into two subzones, the Notre Dame and the Exploits, which are
separated by a major fault system known as the Red Indian Line. The bulk of the
Golden Promise property is inferred to be underlain by rocks of the Exploits
Subzone, which includes the Badger and Victoria Lake Groups.

Regional Geology and Mineralization

The property is largely underlain by sedimentary rocks of the
Badger Group, which conformably overlie Caradocian black shale, which in turn
overlie Ordovician volcanic and sedimentary rocks of the Victoria Lake
Supergroup. The volcanic sequences of the Victoria Lake Supergroup are among the
most prolific hosts to massive sulphide copper/lead/zinc deposits in
Canada.

Property Geology and Mineralization

The property is largely underlain by sedimentary rocks of the
Badger Group, consisting mainly of arkose, greywacke and shale. The Badger Group
rocks sit on top of the Victoria Lake sequences of volcaniclastic and fine
grained sedimentary rocks. A unit of black shale of Caradocian age separates the
Badger Group from the Victoria Lake Group and is a regional stratigraphic
marker. All rock units have been folded into a series of tight, isoclinal,
upright, northeast plunging folds. The dominant structural trend is
northeasterly as demonstrated by northeasterly faults and mafic dykes, which
occupy the faults at several locations.

9

---

The mineralization at Golden Promise consists of a series of
sub-parallel gold-bearing quartz veins ranging up to 4 meters in true thickness.
The veins are milky white, inclusion rich and locally bladed. Gold is hosted by
the veins typically occurring within narrow intervals (20-30 cms) close to vein
margins. Fine grained arsenopyrite is the most common accessory mineral with
lesser amounts of pyrite, galena, spahalerite and chalcopyrite (< 1%).

At least 5 known zones of gold mineralization are known to
occur at Golden Promise and include the Jaclyn, Jaclyn South, Jaclyn North,
Christopher and Shawns Shot occurrences, of which the most important are the
Jaclyn, Jaclyn South and Jaclyn North Zones. The most significant mineralization
occurs at the Jaclyn Zone, which has been defined by diamond drilling over a
strike length of 750 meters and to a vertical depth of 270 meters. A total of 63
holes have been drilled in to the Jaclyn Zone (9,000 meters) including 11 as
part of the ongoing Phase 3 program which began at the end of June 2007.
Significant intersections include GP02-01 which returned 16.57 grams per tonne
gold over 1.64 meters, GP02-05 which returned 11.41 grams per tonne gold over
1.80 meters, GP02-09 which returned 7.05 grams per tonne gold over 2.22 meters,
GP07-83 which returned 6.51 grams per tonne gold over 1.40 meters, and GP07-90
which returned 10-14 grams per tonne gold over 1.40 meters. Drilling completed
in August of 2006 intersected a new hangingwall zone of mineralization which
returned 93.71 grams per tonne gold over 1.40 meters.

The Jaclyn North occurrence, located 250 meters north of the
Jaclyn Zone, has been tested by 10 drill holes and has been defined over a 250
meter strike length. The occurrence has returned values up to 5.24 grams per
tonne gold over 1.70 meters.

The Jaclyn South occurrence, located 300 meters southeast of
the Jaclyn Zone, consists of at least 3 vein zones up to 3.4 meters thick and
has been tested by four drill holes. The best result to date is 0.30 meters
grading 44.6 grams per tonne gold.

Exploration and Development

In July of 2002, the property was optioned by local prospectors
to Paragon Minerals who completed a Phase 1 drilling program to follow up on the
discovery of high grade gold-bearing float. The 21 hole program (1,045 meters)
tested the Jaclyn Zone along a 225 meter strike length and to a vertical depth
of 50 meters. Subsequent drilling in late 2003 extended the Jaclyn Zone along
strike and to depth, and also tested the newly discovered Jaclyn North and
Jaclyn South Zones.

We optioned the Golden Promise property from Paragon Minerals
on May 1, 2006 and embarked on a Phase 2 drilling program in June. The Phase 2
program, completed in February 2007, included 5,488 meters of drilling in 29
holes on the Jaclyn, Jaclyn North and Jaclyn South Zones. In late June 2007, a
3,750 meter Phase 3 drilling program was initiated on the property, of which
2,614 meters have been completed in 15 holes. The remaining eight planned drill
holes of the Phase 3 program are to be completed before the end of 2007.

The first year of the agreement between Crosshair and Paragon
Minerals will see Paragon Minerals manage the program and collect an 8%
management fee. Paragon Minerals has carried all exploration programs since 2002
and is the best candidate for managing the program. Successive drilling programs
to date have been successful in extending the known limits of the Jaclyn Zone to
750 meters along strike and to vertical depths of 270 meters.

To date over $2.5 million in exploration work has been carried
out on the property since 2002. The work includes more than 80 drill holes of
which 63 have been drilled on the Jaclyn Zone, 4 holes at Jaclyn South and, 10
holes at Jaclyn North, 2 holes at the Christopher Zone and 2 holes at the
Shawns Shot occurrence. The remaining drill holes tested various geochemical
and geophysical targets over the remainder of the property. The drilling
followed extensive soil sampling, prospecting and trenching, which included
21surface trenches, 5,624 soil samples and 2,334 rock samples as well as
geological and structural mapping surveys. An 8,250 kilometer high resolution
airborne magnetic and electromagnetic survey was flown in late 2003 to assist in
the geological mapping and structural interpretation of the property. The
airborne survey was extremely successful in outlining the trace of the
Caradocian shale, a key marker unit closely associated with the mineralization
at the Jaclyn Zone in particular.

10

---

South Golden Promise Property

Paragon Minerals acquired an option to earn a 100% interest in
the South Golden Promise Property pursuant to an underlying option agreement,
dated January 8, 2003, with Al Keats, Calvin Keats and Kevin Keats (the
"Vendors"). The Vendors are entitled to a 2.5% Net Smelter Return.
Paragon Minerals can repurchase a 1.5% Net Smelter Return for $1,500,000 and has
a right of first refusal with respect to the remaining 1.0% . As of September
2005, Paragon Minerals completed its obligations under its option agreement with
the Vendors and now holds a 100% interest in the South Golden Promise Property
subject to the 2.5% Net Smelter Return.

On February 14, 2003, we entered into an option agreement with
Paragon Minerals whereby we acquired an option to purchase and earn a 60%
interest in the South Golden Promise Property. In order to earn the 60%
interest, we agreed to pay $1,750,000 in exploration expenditures on the
property and issue 400,000 common shares to Paragon Minerals, over a four year
period. The schedule of work and share issuance is as follows:

Expenditure Schedule

|Year                        | Work Expenditures | Shares Issued to Rubicon
      Minerals
|--------------------------- | ----------------- | ---------------------------------------
|on Approval Date            | --                | 100,000                                
|on or before 1stanniversary | $ 250,000         | 100,000                                
|on or before 2ndanniversary | $ 300,000         | 100,000                                
|on or before 3rdanniversary | $ 500,000         | 100,000                                
|on or before 4thanniversary | $ 700,000         | --                                     

As of April 30, 2007, we incurred $1,647,312 in exploration expenditures,
  issued 400,000 Common Shares at a value of $328,000 and paid cash of $27,500
  on this property.

The two blocks of licenses cover 17,800 hectares in 712
map-staked claims. Each claim is 500 by 500 metres, which is bounded by one
corner of the UTM grid square and is one quarter of the square. The claims are
grouped into licenses, which are the units of ownership and assessment work
requirements. The details of the licenses covered by the option agreement are
described as follows:

11

---

Summary of Licenses under Option

|         |        |            | Sec.      |                   |                   |                               
|-------- | ------ | ---------- | --------- | ----------------- | ----------------- | ------------------------------
|Licence  | Claims | NTS AREA   | Deposit   | Renewal Date      | Report Due        | Expenditures
      Required   
|SGP      |        |            |           |                   |                   |                               
|         |        | 12A/09,10, |           |                   |                   |                               
|12460M   | 70     | 15,16      | $0.00     | November 22, 2009 | January 21, 2008  | $11,224.08 by
      2007/11/22
|12462M   | 256    | 12A/16     | $0.00     | August 19, 2012   | October 18, 2008  | $4,605.26 by 2009/08/19       
|13591M   | 23     | 12A/16     | $0.00     | November 22, 2009 | January 21, 2008  | $6,538.63 by
      2007/11/22 
|13766M   | 34     | 12A/15, 16 | $1,700.00 | August 16, 2012   | October 15, 2008  | $6,800.00 by 2008/08/16       
|11058M   | 20     | 12A/16     | $0.00     | October 28, 2009  | December 27, 2007 | $6,921.20 by
      2008/10/28 
|11059M   | 4      | 12A/16     | $0.00     | October 28, 2009  | December 27, 2007 | $568.64 by 2010/10/28         
|Victoria |        |            |           |                   |                   |                               
|08883M   | 166    | 12A/06     | $0.00     | July 2, 2012      | September 1, 2008 | $83,525.58 by
      2009/07/02
|12380M   | 139    | 12A/06     | $0.00     | July 5, 2009      | September 3, 2008 | $77,701.49 by
      2013/07/05
|Total:   | 712    |            |           |                   |                   |                               

Paragon Minerals was the contractor for the execution of the
exploration programs in the first year for cost plus 8% fee. Subsequent to the
first year, we have operated and carry out the exploration programs on the South
Golden Promise property using in-house personnel.

We are responsible for paying for and renewing these licenses.
The fee for license renewals is $25 per claim every five years and failure to
pay the fee will result in the loss of the claims.

Property Location

The South Golden Promise Property consists of two blocks of
Licences located east and southwest of Red Indian Lake in west central
Newfoundland, in the Grand Falls  Buchans Electoral District. The property is
named for the extension of similar geology of the Golden Promise property which
is contiguous and immediately northeast of the South Golden Promise claims. The
South Golden Promise Property also includes the Victoria Lake claims which are
targeting massive sulphide deposits as opposed to the gold targets of Golden
Promise and South Golden Promise

Accessibility

The properties are accessible from Badger on the Trans Canada
Highway via Route 370 to Buchans Junction about 43 kilometers to the southwest
of Badger, and from Grand Falls-Windsor, immediately east of the property. The
Millertown  Lake Ambrose logging haulage road west southwest of Buchans
Junction is the principal access road to the various claim blocks to the south
and southwest. The Exploits River, the provinces largest river system, crosses
the northern portion of the property. The Victoria Lake claim group, the
southwestern most claims, are best accessed by the main logging road leading
west from the Exploits Dam along the south shore of Red Indian Lake. Numerous
older logging roads, generally in poor shape, crosscut the property and afford
locally limited access.

History

The northeastern portion of the property has received the least
amount of previous exploration. In fact, prior to the discovery of gold-bearing
boulders at Golden Promise in 2002, most of the northern half of the property
had received no previous exploration.

The bulk of exploration activity in the region focused on the
highly prospective volcanic rocks to the southwest which are known to host
numerous copper and zinc prospects in the region. The sedimentary sequences that
host the Jaclyn gold mineralization were completely ignored by previous
explorers. The volcanic sequences, most common on the south side of the Exploits
River and occurring in the south central portion of the South Golden Promise
property, received moderate amounts of exploration in the search for base metals
(copper, lead and zinc). Noranda was most active and carried out ground surveys
including, line cutting, geological mapping, soil sampling and geophysics.

12

---

Several widely spaced drill holes did not intersect any
mineralization. Immediately east of the property Aur Resources (subsequently
taken over by Teck/Cominco) commenced commercial production in January 2007 at
the Duck Pond deposit and will produce concentrate containing copper, zinc,
lead, gold and silver over the projected 10 year life of the mine.

The Victoria Lake claims have received the most intensive
exploration of all of the South Golden Promise property. The claims are
considered highly prospective to host significant quantities of massive
sulphides rich in copper, lead, zinc, gold and silver. Noranda carried out
numerous exploration programs over the past 25 years including diamond drilling.
Favourably altered volcanic rocks were encountered in several localities and
suggest that massive sulphide bodies could exist on the claims. Work by Paragon
Minerals in 2002 located potentially significant gold mineralization in the
extreme southwestern portion of the claim group. Results include
sulphide-bearing quartz veins that have returned assays of 2.5 and 3.6 grams per
tonne gold.

Property Geology

The South Golden Promise property, in particular the northern
and central portions, is underlain mainly by sedimentary and volcanic rocks of
the Ordovician Victoria Lake Group which are in turn overlain by the Badger
Group sedimentary rocks. The Badger Group rocks only occur in the northern
portion of the property with the vast majority of the property area underlain by
rocks of the Victoria Lake Group. The Victoria Lake Group is dominated in the
upper sections by fine grained sedimentary sequences, while the lower portions
of the Group are dominated by mafic and felsic volcanic rocks with minor
interbedded sedimentary rocks. The Victoria Lake Group and Badger Group rocks
are separated by a regionally important marker horizon of Caradocian shale.

The prominent structures on the property are a major syncline -
anticline pair traced by folds in the Cardocian shale. The folds are tight and
upright with a gentle plunge to the northeast. Penetrative foliation is common
and sub parallel to bedding. Glacial striae showing ice movement to the
northeast and south-southeast are observed locally.

The Victoria Lake claims are underlain mainly by volcanic and
sedimentary rocks of the Victoria Lake Group. The felsic volcanic rocks in this
area are considered highly prospective for hosting significant massive sulphide
deposits and several areas of favourably altered and locally mineralized
volcanic rocks are known to occur. These areas will be the primary target of
exploration efforts on that portion of the property.

Exploration and Development

Since acquiring the properties, we have completed several
phases of exploration including prospecting, mapping, till and rock sampling as
well as excavator trenching on targets defined by the other works. The Victoria
Lake claims also had ground gravity surveying completed to help identify
potential massive sulphide targets. Diamond drilling has been carried out on the
gold targets at South Golden Promise and the massive sulphide targets at
Victoria Lake.

At South Golden Promise, the work to date has outlined a
significant gold-bearing quartz vein system that has been exposed on surface for
170 meters and tested to about 50 meters in diamond drilling. A total of 16
holes were completed at South Golden Promise with two holes returning visible
gold bearing quartz veining returning a high of 19.5 grams per tonne gold over
1.15 meters. Further work including diamond drilling and trenching of soil
geochemical anomalies is proposed for the South Golden Promise gold target.

At Victoria Lake, an 11 hole (2,197 meters) diamond drilling
program was completed in 2006. The program tested several coincidental
geological, rock and soil geochemical anomalies as well as geophysical (gravity)
anomalies identified by Crosshair. Favorably altered, sulphide-bearing felsic
volcanic units were encountered in several of the holes. The drilling program
was managed by Paragon Minerals personnel who have extensive experience in the
region and who received 8% of the program costs as a management fee. Further
work including diamond drilling has been recommended.

13

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LabradorCentral Mineral Belt

The Moran Lake Property

On October 14, 2004, the Company entered into an agreement with
a private individual for an option to acquire a 90% interest (subject to a 2%
NSR and a 10% carried interest to the vendor) in the Moran Lake Property in
Central Labrador. On March 1, 2005 the Company acquired another 381 claims north
of the Moran Lake Property, known as Moran Heights.

We subsequently carried out a detailed digital compilation of
all the historic work that has been carried out on the property. The TSX Venture
Exchange approved this transaction on November 10, 2004.

The amended and restated agreement
calls for:

| | i) | Making cash payments:
| | -- | ---------------------

| |                                                                        |   | Amount  |  |  |                            | 
| | ---------------------------------------------------------------------- | - | ------- |  |  | -------------------------- | 
| | Upon execution of the agreement (original)                             | $ | 25,000  |  |  | (Paid October
      2004)  | 
| | Within 5 business days of the approval date (original
      agreement) |   | 50,000  |  |  | (Paid November 2004)       | 
| | Upon signing of the amended and restated
      agreement               |   | 25,000  |  |  | (Paid March
    2005)      | 
| | On or before November 10, 2005                                         |   | 100,000 |  |  | (Paid November 2005)       | 
| | On or before November 10, 2006                                         |   | 100,000 |  |  | (Paid November
      2006) | 
| | On or before November 10, 2007                                         |   | 125,000 |  |  |                            | 
| | On
      or before November 10, 2008                                   |   | 150,000 |  |  |                            | 
| |                                                                        | $ | 575,000 |  |  |                            | 

| | ii) | Issuing common shares:
| | --- | ----------------------

| |                                                                       |  | Number of shares |  |  |                              | 
| | --------------------------------------------------------------------- |  | ---------------- |  |  | ---------------------------- | 
| | Upon execution of the agreement (original)                            |  | 250,000          |  |  | (Issued October
      2004)  | 
| | Upon acceptance by the TSX Venture Exchange (amended
      agreement) |  | 100,000          |  |  | (Issued March 2005)          | 
| | Upon the approval date of the original
      agreement                |  | 250,000          |  |  | (Issued December
      2004) | 
| | Second year share payment                                             |  | 250,000          |  |  | (Issued October 2005)        | 
| | Third year share payment                                              |  | 250,000          |  |  | (Issued November
      2006) | 
| | Fourth year share payment                                             |  | 250,000          |  |  |                              | 
| | Fifth year share payment                                              |  | 250,000          |  |  |                              | 
| |                                                                       |  | 1,600,000        |  |  |                              | 

| | iii) | Incurring a total of $3,000,000 in exploration
      expenditures:
| | ---- | ------------------------------------------------------------------

| |                                      |   | Amount    |  |  |                   | 
| | ------------------------------------ | - | --------- |  |  | ----------------- | 
| | On or before November 10, 2005       | $ | 100,000   |  |  | (Requirement met) | 
| | On or before November 10, 2006       |   | 300,000   |  |  | (Requirement met) | 
| | On or before November 10, 2007       |   | 500,000   |  |  | (Requirement met) | 
| | On or before November 10, 2008       |   | 800,000   |  |  | (Requirement met) | 
| | On
      or before November 10, 2009 |   | 1,300,000 |  |  | (Requirement met) | 
| |                                      | $ | 3,000,000 |  |  |                   | 

The agreement requires completion of a bankable feasibility
study for the commencement of commercial production on the property within 24
months of completion of all aforementioned obligations.

14

---

We can earn a 90% interest in the Moran Lake Property by
completing the following obligations:

Expenditures
    Shares Issued to Lewis Murphy
    Cash Payments to Lewis Murphy$100,000 by November 10, 2005
    250,000 released from trust to Lewis Murphy on
      November 10, 2004
    $25,000 on signing of the original Moran Lake
      agreement$200,000 by November 10, 2006
    250,000 shares issued to Lewis Murphy on
      November 10, 2004
    $50,000 within 5 days of November 10, 2004, the
      approval date of the original Moran Lake agreement$500,000 by November 10, 2007
    100,000 shares on the approval dated of the
      amended and restated Moran Lake agreement dated March 1, 2005
    $25,000 upon the signing of the amended and
      restated Moran Lake agreement dated March 1, 2005$800,000 by November 10, 2008
    250,000 shares; second year share payment on or
      before November 10, 2005
    $100,000 on or before November 10, 2005$1,300,000 by November 10, 2009
    250,000 shares; third year share payment on or
      before November 10, 2006
    $100,000 on or before November 10, 2006250,000 shares; fourth year share payment on or
      before November 10, 2007
    $125,000 on or before November 10, 2007250,000 shares; fifth year share payment on or
      before November 10, 2008
    $150,000 on or before November 10, 2008$200,000 per year on or before November 10 of
      every subsequent year until the Moran Lake Property is put into commercial
      production


As at April 30, 2007, the Company incurred $9,861,712 (net of
$266,300 credits received) in exploration expenditures, paid $300,000 in cash,
and issued 1,100,000 common shares at a value of $960,000 for acquisition costs.

The Company completed over 9,400 metres of drilling in the 2007
winter exploration program on the Central Mineral Belt project. The drilling
focused on the Upper and Lower C Zones and targets along strike, and the results
continue to substantiate the potential for a large uranium deposit(s) within a
4.5 kilometer-long trend. This drilling, together with over 20,000 metres of
drilling in 2006, will be used to greatly expand the existing NI 43-101 resource
outlined by Shell Canada drilling in the late 1970s. This updated resource
estimate will be completed in July 2007.

A 40,000 meter drill program utilizing three drill rigs is
planned for the remainder of the year on the entire Central Mineral Belt
Project. The program is designed to increase the uranium resource contained in
the Upper C Zone, delineate a uranium resource at the Lower C and B Zones,
continue defining known uranium zones at Area 1, Moran Heights and Croteau Lake,
and test new Blue Sky uranium targets. Concurrently, an extensive mapping,
rock sampling, geochemical and geophysical program will be carried out on the
under-explored southern region of the 750 square kilometer project.

On December 2, 2005, we entered into an agreement to acquire
  56 claims from Triassic Properties Limited, a private St. Johns, Newfoundland
  based company. The claims cover historic uranium occurrences and are strategically
  located within the Moran Lake property holdings. In order for us to earn a 100%
  interest in the Otter and Portage Lake claims, subject to a 1.5% NSR to the
  vendor, we must, over the 3 year term, carry out $600,000 in eligible exploration
  expenses, issue 225,000 common shares and pay an aggregate of $140,000. Through
  April 30, 2007, we have spent $208,765 in exploration costs, issued 125,000
  Common Shares and made cash payments of $55,000

15

---

In May 2007, we entered into an agreement with Belmont
Resources Inc. and International Montoro Resources Inc. whereby we acquired the
option to earn a 75% interest in 139 additional claims comprising four different
mineral licences in the Central Mineral Belt of Labrador totaling 34.75 km.
Three of the licences, referred to as the Stormy Lake block, are contiguous with
the southern boundary of the Central Mineral Belt Project, while the other
licence, referred to as the Partridge River block, is situated approximately 95
km west of the property. Under the terms of the agreement, we may earn a 75%
interest in the claims by carrying out $800,000 in exploration expenditures and
issuing 175,000 common shares to the vendors over a three year period.

Property Description and Location

The Moran Lake Property is located in the Central Mineral Belt
of Labrador, about 140 km north of the town of Happy Valley-Goose Bay and 85 km
southwest of the coastal community of Postville on Kaipokok Bay. In a direct
line to the northeast, the property is about 75 km from tidewater. The
undeveloped Michelin uranium deposit is 60 km east-northeast of the Moran Lake
Property. The property area is within the Naskaupi Electoral District of
Labrador.

Summary of Licences under Option

|        |        |                  | Sec.      |                   |                    |                               
|------- | ------ | ---------------- | --------- | ----------------- | ------------------ | ------------------------------
|Licence | Claims | NTS AREA         | Deposit   | Renewal Date      | Report Due         | Expenditures
      Required   
|9781M   | 28     | 13K/10           | $0.00     | December 1, 2008  | January 30, 2008   | $25,200.00 by
      2016/12/01
|9783M   | 3      | 13K/06           | $0.00     | December 1, 2008  | January 30, 2008   | $1,759.28 by 2015/12/01       
|10367M  | 8      | 13K/03           | $0.00     | November 15, 2009 | January 15, 2008   | $1,220.96 by
      2012/11/15 
|10368M  | 48     | 13K/06           | $0.00     | November 15, 2009 | January 15, 2008   | $43,200.00 by 2016/11/15      
|10715M  | 256    | 13K/06, 07       | $0.00     | April 1, 2010     | May 31, 2008       | $91,696.10 by
      2010/04/01
|10716M  | 256    | 13K/06           | $0.00     | April 1, 2010     | May 31, 2008       | $73,303.49 by 2010/04/01      
|10717M  | 256    | 13K/06           | $0.00     | April 1, 2010     | May 31, 2008       | $70,765.01 by
      2010/04/01
|10718M  | 256    | 13K/06           | $0.00     | April 1, 2010     | May 31, 2008       | $95,002.35 by 2010/04/01      
|10719M  | 256    | 13K/06, 07       | $0.00     | April 1, 2010     | May 31, 2008       | $93,087.60 by
      2010/04/01
|10720M  | 256    | 13K/07           | $0.00     | April 1, 2010     | May 31, 2008       | $94,249.10 by 2010/04/01      
|10722M  | 201    | 13K/02, 03, 06   | $0.00     | April 1, 2010     | May 31, 2008       | $70,230.06 by
      2010/04/01
|10723M  | 229    | 13K/07           | $0.00     | April 1, 2010     | May 31, 2008       | $79,185.50 by 2010/04/01      
|11395M  | 36     | 13K/06           | $1,800.00 | November 16, 2010 | January 15, 2008   | $17,129.24 by
      2011/11/16
|11770M  | 140    | 13K/06           | $7,000.00 | February 28, 2011 | April 30, 2008     | $48,685.74 by 2011/02/28      
|11833M  | 16     | 13K/07           | $0.00     | July 22, 2012     | September 20, 2008 | $14,400.00 by
      2017/07/22
|11834M  | 48     | 13K/06, 07       | $0.00     | July 22, 2012     | September 20, 2008 | $43,200.00 by 2017/07/22      
|11835M  | 27     | 13K/06, 07       | $0.00     | July 22, 2012     | September 20, 2008 | $24,300.00 by
      2017/07/22
|12616M  | 79     | 13K/06,07, 10,11 | $0.00     | April 1, 2010     | May 31, 2008       | $13,444.14 by 2011/04/01      
|12617M  | 89     | 13K/10           | $0.00     | February 21, 2010 | April 23, 2008     | $18,907.05 by
      2010/02/21
|12618M  | 252    | 13K/07, 10       | $0.00     | January 31, 2010  | April 2, 2008      | $10,780.33 by 2012/01/31      
|13427M  | 105    | 13K/03           | $5,250.00 | May 3, 2012       | July 2, 2008       | $21,000.00 by
      2008/05/03
|13634M  | 5      | 13K/03           | $250.00   | July 5, 2012      | September 3, 2008  | $1,000.00 by 2008/05/07       
|13635M  | 10     | 13K/06           | $500.00   | July 5, 2012      | September 3, 2008  | $2,000.00 by
      2008/05/07 
|12353M  | 66     | 13K/03           | $3,300.00 | July 24, 2011     | September 22, 2008 | $19,380.14 by 2011/07/24      
|12376M  | 39     | 13K/02, 03       | $1,950.00 | July 31, 2011     | September 29, 2008 | $12,565.46 by
      2011/07/31
|13332M  | 11     | 13K/03           | $550.00   | April 12, 2012    | June 11, 2008      | $2,200.00 by 2008/04/12       
|12352M  | 23     | 13L/02           | $1,150.00 | July 24, 2011     | September 22, 2008 | $6,939.29 by
      2011/07/24 
|        |        |                  |           |                   |                    |                               
|Total:  | 2,999  |                  |           |                   |                    |                               

16

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17

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Accessibility

Helicopter, and to a lesser degree float plane service out of
Goose Bay, is the most efficient means of access to the property. Local
infrastructure is confined to the limited facilities of the community of
Postville, which does enjoy commercial airline service from Goose Bay and
commercial ferry service from St Johns, Newfoundland. Coastal boats are
available to convey goods and passengers from Happy Valley to Postville. Most
necessary goods and services, including charter aircraft, can be obtained in
Goose Bay, which has excellent commercial airline connections to St Johns,
Halifax and Montreal.

This part of Labrador has a sub-Arctic climate with short, cool
summers and long, cold winters. Snow cover lasts for six to eight months.
Freeze-up begins in late-October and the lakes become ice free in mid-June.
Temperature ranges can be extreme from -30°C in winter to in excess of 28°C in
the summer. Lengthy periods of fog and/or rain can be experienced during the
summer exploration season.

The topography of the Moran Lake area consists of rolling
highlands with maximum relief approaching 300m. The hilltops can be partly
barren while the slopes and valleys are covered in vegetation, mostly scrubby
black spruce and some deciduous trees with thick intervening growth of alders.
Almost everywhere there is a thick ground cover of moss. The valleys are steep
sided at many locations and are often host to boggy ground with small ponds or
lakes. Moran Lake, one of the largest lakes on the property, occupies a
prominent valley which trends east-northeast.

History

Uranium was first discovered near Moran Lake by British
Newfoundland Exploration Limited, which conducted prospecting, geological
mapping and radiometric surveying in the area from 1956 to 1958. In 1964, Mokta
Co. Ltd. (Mokta) acquired a development license for the Moran Lake area and
subsequently discovered uranium mineralization at Lady Lake, the site of the
present C zone. In following years, Mokta completed a considerable amount of
prospecting, trenching and packsack drilling in the Moran Lake A, B and C zones.
In 1969 however, Mokta allowed the development license to expire at which time
the license was granted to Brinex, which did no further work on the property.

In 1976, the license was granted to Commodore Mining Company
Limited (Commodore) which in turn optioned the property to Shell Canada
Resources Limited (Shell). During September of 1976, Shell performed geological,
magnetometer and Track Etch surveys over the B zone near Henry Lake and did
preliminary geological mapping on the C zone. This led to a 15 hole, 864 m drill
program to test the B zone uranium mineralization during the winter of 1977.

In the summer of 1977, a full exploration program was carried
out on the C zone including detailed geological mapping, systematic trench
sampling, a scintillometer survey and a small drill program totalling eight
holes and 497 metres. Uranium mineralization was discovered in a fault zone over
which VLF-EM, magnetometer and Track Etch surveys were performed during
September. In the winter of 1978, Shell completed a 17 hole, 1,542 m drill
program to test the uraniferous fault zone and subsequently found high grade
uranium mineralization. The following summers exploration program consisted of
VLF- EM, magnetometer and altimeter surveys over the entire C zone, with a 15
hole, 1,581 m drill program to test the uraniferous zones. Low grade uranium
mineralization was located in altered sandstones above the Aphebian-Helikian
unconformity near Lady Lake. This led to a 1979 winter dril1 program of 17 drill
holes totalling 1,193 m to explore the unconformity and the later named Lower C
zone.

In the summer of 1979, Shell undertook a review of its Moran
Lake project. Drill core from the Upper C zone (C-1 to C-35) was re-logged by
one person and multiple samples were taken for thin section study and 30 element
spectrographic analysis. This work led to the appreciation that the rocks were
extensively altered, that the identification of primary lithologies was in many
cases dubious, that the uranium mineralization was associated with alteration
and that there was a definable geometry to the alteration package. The property
was

18

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considered to have good uranium potential and an 8 hole, 1,400
m drill program was proposed but never carried out as Shell abandoned its
interest in the area.

Lewis Murphy acquired the Moran Lake claims in 2003 and
optioned the ground to Crosshair in October of 2004. In 2003, an airborne
gravity survey of the area located an interpreted 4 milligal to 8 milligal
gravity anomaly, elliptical in shape, about 4 km long and centered between the
Moran B and C zones. Considering the spatial association of uranium with
brecciated, highly silicified, carbonatized and hematized rocks, plus locally
significant concentrations of copper, silver and gold mineralization, Crosshair
invoked the analogy with Iron Oxide Copper Gold (IOCG) deposit types, as at
Olympic Dam in Australia.

Since acquiring the Moran Lake property in October, 2004, we
have embarked on an aggressive program including airborne radiometric and
magnetic surveys, compilation of previous work including sampling archived drill
core from the 1970s Shell Canada Resources drilling, and commencement of
diamond drilling in January of 2006. A more detailed description of the
exploration program is included below under Exploration.

Property Geology

The Moran Lake Property was staked in a configuration to cover
as much mineralized Paleoproterozoic stratigraphy as was available. This
encompasses mostly rocks of the Moran Lake Group and the overlying Heggart Lake,
Brown Lake and Sylvia Lake Formations of the Bruce River Group, both groups
containing known occurrences of uranium, Cu, Pb, Zn, Ag, Fl and iron (as pyrite
and hematite).

The Moran Lake Group (MLG) unconformably overlies Archean
gneisses and granites of the Nain Province. The basal unit, the Warren creek
Formation was deposited in a low energy, shallow shoreline or shelf environment
and consists mainly of black graphitic, grey and green shale and siltstone
containing local interbeds of dolostone, chert and black conglomerate with
siltstone and shale clasts. The Warren Creek Formation ranges from perhaps
1,200m up to 3,000m in thickness and is overlain conformably by 100m to 300m
thickness of the Joe Pond Formation, a sequence of light- to dark-green, fine
grained, massive and pillowed basalt and mafic tuff with occasional interbeds of
variably colored chert or grey dolostone. Rocks of the Moran Lake Group occupy a
northeasterly trending belt which underlies the northern projection of the Moran
Lake Property.

The Bruce River Group consists of a basal, polymictic
conglomerate and sandstone of the Heggart Lake Formation overlain by polymictic
conglomerate and tuffaceous sandstone of the Brown Lake Formation. The uppermost
and thickest unit of the Group is the Sylvia Lake Formation, a bimodal, potassic
calc-alkaline assemblage of predominantly subaerial volcanic rocks which are
coeval with the plutons of the Trans Labrador Batholith. Northerly directed
compression during the Grenville orogenic event folded the Bruce River Group
into a northeast-trending, open, upright syncline.

Exploration

We acquired the property in October of 2004 and immediately launched
  a comprehensive review and compilation of all previous exploration carried out
  on the property. The results of the review confirmed that the property had considerable
  potential to host multiple uranium and uranium rich iron oxide copper gold deposits
  (IOCG).

Exploration work on the property by Crosshair has included line
cutting, ground geophysical surveys, lake sediment sampling and till geochemical
surveys, prospecting, limited hand trenching and geological mapping. The ground
geophysical surveys include gravity, induced potential (IP), and horizontal loop
EM (Max-Min) surveys. An airborne radiometric and magnetic survey totaling 7,312
line kilometers covering the entire property was carried out by Fugro Airborne
Surveys in 2005. A supplemental airborne survey totaling 675 kilometers covering
several claims acquired subsequent to the 2005 survey was carried out by Fugro
in 2006. In 2007, a helicopter supported electromagnetic and magnetic
(HeliGEOTEM) survey totaling approximately 4,500 line kilometers was carried out
over 2 different blocks on the property. Follow-up of targets identified from
interpretation of the various data has resulted in the discovery of several new
showings and target areas, some of which have been drill tested as well as
others that are being advanced to the drill ready stage.

19

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A NI43-101 report was commissioned in 2007 and included a
revised resource estimate for the Upper and Lower C-Zones based on our drilling
to date as well as previous drilling carried out by Shell Canada Resources
Limited. The estimate included an indicated resource in the Upper C-Zone of 3.19
million pounds U3O8(3.75 million tonnes at 0.04%), as
well as inferred resources of 4.59 million pounds U3O8(6.32 million tonnes at 0.03%) in the Upper and Lower C-Zones.

Drilling

We launched our first drill program in February 2006,
completing approximately 2,900 meters of drilling in 19 holes at the C-Zone.
Further drilling using two drill rigs and totaling over 18,600 meters was
carried out during the summer of 2006, followed by an additional 9,400 meters of
drilling during the winter of 2007. The drilling programs focused on defining
uranium mineralization at the C-Zone, which represents the most advanced uranium
target on the property, but also tested targets at the B-Zone, Area 51, Moran
Heights, Madsen Lake, and Area 1.

Our 2006 drill program totaled 21,486 meters and consisted of
137 holes, of which 58 tested the Upper C Zone and 10 tested the Lower C zone.
The remainder of the holes tested seven other anomalies or showings on the
property. From late January 2007 to late April of 2007, we carried out further
drilling at the C Zone as well as limited drilling at the Armstrong and Dominion
showings and Area 1. Total drilling in the winter 2007 amounted to 9,410 meters
in 34 holes. At the C Zone, our 2007 winter drill program consisted of 8,211
meters in 26 holes. Fifteen of the holes tested both the Upper and Lower C Zone,
6 holes (1,042 meters) tested the Upper C Zone only, and 5 holes (1,166 meters)
tested the Lower C Zone. The program expanded the C Zone mineralization along
strike and to depth. The program also included the intersection of the thickest
and highest grades of uranium reported from the Lower C Zone.

Significant results from the Phase 1 and 2 programs at the
C-Zone include 6.03 meters grading 0.11% U3O8in hole
ML-09, 30.30 meters grading 0.13% U3O8in hole ML-20, and
28.90 meters grading 0.14% U3O8in hole ML-32. At the
B-Zone, hole ML-BZ-01 returned 0.27% U3O8over 7.56
meters, including 0.96% U3O8over 1.26 meters. At Area 1,
hole ML-A1-16 intersected 11.50 meters grading 0.11% U3O8.
All zones of mineralization reported to date are open for extension.

A third drill rig was mobilized to the property during the summer
  of 2007 for the Phase 3 diamond drilling program. To date over 11,000 meters
  have been drilled as part of the Phase 3 program at the C-Zone, Area 1, and
  Croteau Lake. Preliminary assay results from the Phase 3 program have returned
  some of the best intercepts to date from the C-Zone, including hole ML-87 which
  graded 0.10% U3O8over 45.7meters, and hole ML-90 which
  graded 0.10% U3O8 over 36.7 meters. We plan to continue
  drilling in 2007 with a focus on the Upper C Zone and a property wide total
  of 30,000 meters of drilling in all areas tested.

To date on the Moran Lake property, we have completed 136 drill
holes at the C-Zone, 45 drill holes at Area 1, 12 drill holes at the B Zone, 2
holes at the Armstrong Showing, 4 holes at the Dominion Showing, 3 holes at Area
3 and 2 holes at Area 2 all located in the central portion of the Moran Lake
property. Several other areas have also been drill tested, including Moran
Heights (25 holes), Area 51 (13 holes), Croteau Lake (6 holes), and Madsen Lake
(9 holes). All programs have been helicopter supported producing BTW size drill
core.

Otter and Portage Lake Properties

On December 2, 2005, we entered into an agreement with a private
  company for an option to acquire a 100% interest (subject to a 1.5% NSR) in
  the Otter and Portage Lake properties totaling 56 claims. The new claims are
  located in the southern portion of the property, considered by our geological
  team as being highly prospective for Michelin or shear zone type
  uranium deposits. (Michelin is an advanced uranium project located 60 kilometers
  east-northeast of the Moran Lake property with inferred reserves of 32 million
  pounds of U3O8.) The Otter andPortage Lake properties
  host previously known uranium occurrences discovered in the 1950s, but
  which have not been thoroughly explored. Surface sampling has returned up to
  2% U3O8from grab sampling along a four kilometer strike
  length of anomalous radioactivity. Geological mapping, rock sampling, as well
  as Alpha Track, till sampling and lake sediment surveys are being carried out
  in order to prioritize targets for diamond drilling in 2008. The option agreement
  calls for:

20

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|i) | Making cash payments:
|-- | ---------------------

| |                                     |   | Amount  |  |  |                               | 
| | ----------------------------------- | - | ------- |  |  | ----------------------------- | 
| | Upon execution of the agreement     | $ | 25,000  |  |  | (Paid in December
      2005) | 
| | On or before December 2, 2006       |   | 30,000  |  |  | (Paid in December 2006)       | 
| | On or before December 2, 2007       |   | 35,000  |  |  |                               | 
| | On or before
      December 2, 2008 |   | 50,000  |  |  |                               | 
| |                                     | $ | 140,000 |  |  |                               | 

|ii) | Issuing common shares:
|--- | ----------------------

| |                                     |  | Number of shares |  |  |                                 | 
| | ----------------------------------- |  | ---------------- |  |  | ------------------------------- | 
| | Upon acceptance by the TSX          |  | Venture          |  |  |                                 | 
| | Exchange                            |  | 50,000           |  |  | (Issued in January 2006)        | 
| | On or before December 2, 2006       |  | 75,000           |  |  | (Issued in
      December 2006) | 
| | On or before
      December 2, 2007 |  | 100,000          |  |  |                                 | 
| |                                     |  | 225,000          |  |  |                                 | 

|iii) | Incurring a total of $600,000 in exploration
      expenditures:
|---- | ----------------------------------------------------------------

| |                                                   |   | Amount  |  |  |                   | 
| | ------------------------------------------------- | - | ------- |  |  | ----------------- | 
| | On or before December 2, 2006                     | $ | 100,000 |  |  | (Requirement met) | 
| | On or before December 2, 2007 an additional       |   | 200,000 |  |  |                   | 
| | On
      or before December 2, 2008 an additional |   | 300,000 |  |  |                   | 
| |                                                   | $ | 600,000 |  |  |                   | 

As at April 30, 2007, the Company incurred $208,765 in
exploration expenditures, paid $55,000 in cash, and issued 125,000 common shares
at a value of $291,750 for acquisition costs.

South Golden Promise (& Victoria
  Lake), Wings Point-Titan, Glenwood Break Properties

In February 2003, the Company entered into three option-JV
agreements with Paragon Minerals (formerly Rubicon Minerals) to acquire three
separate interests in up to 2,515 mineral claims in the Botwood Basin area of
Central Newfoundland. The agreements cover three separate land packages known as
South Golden Promise, Wings Point-Titan and Glenwood Break. The Company
had the right to acquire a 60% interest in the properties by issuing up to
1,200,000 shares (400,000 for each property) and by incurring aggregate
exploration expenditures of $5,250,000 (Glenwood Break - $2,000,000; Wings Point
- $1,500,000; South Golden Promise - $1,750,000) within four years of September
2003.

Wings Point-Titan

The assay results received for Phase 2 program completed in
spring 2005 were not significant enough to warrant further exploration on the
property. At this time the Company has no further obligations in respect to this
property and has accordingly written off a total of $374,522.

Glenwood Break Property

The Company elected to terminate the Glenwood Break option in
  the second quarter of 2006. At this time the Company has no further obligations
  in respect to this property and has accordingly written off a total of $884,096.

21

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South Golden Promise (& Victoria
  Lake)

At April 30, 2007, the Company incurred $1,647,312 (net of
$22,150 credits received) in exploration expenditures, issued 400,000 common
shares at a value of $328,000 and paid cash to the vendor of $27,500, in
relation to the South Golden Promise Project.

During the year ended April 30, 2007, the company advanced $370,000
  to Paragon Minerals for Southern Golden Promise exploration costs and at April
  30, 2007, Paragon Minerals had spent $562,482 on behalf of the Company. As a
  result the Company owes Paragon Minerals $192,482.

The first phase of reconnaissance drilling at Victoria Lake was
very successful in outlining multiple horizons of strongly altered,
sulphide-bearing felsic volcanic rocks that could host a significant
precious-metal rich massive sulphide deposit. The encouraging results received
from the widely spaced drilling are strongly suggestive of a proximal VHMS
environment.

The 11 hole, 2198 meter program tested several precious
metal-rich massive sulphide targets on four widely spaced grids underlain by
highly prospective volcanic rocks similar to those hosting the nearby high grade
Boomerang Cu-Pb-Zn massive sulphide deposit being explored by Messina
Minerals.

North Pauls Pond Gold Property

The assay results received for the diamond-drilling program completed
  in spring 2005, although locally anomalous, were not significant enough to warrant
  further exploration on the property. As a result the Company terminated its
  option on the North Pauls Pond Gold property on June 22, 2005. At this
  time the Company has no further obligations in respect to this property and
  has accordingly written off a total of $139,754.

Utah

Sinbad claims

The Sinbad claims, located in Emery County, Utah, were
transferred to the Company on January 17, 2006 for $4,125 and $11,724 was
incurred in relation to geological work. The Company has recently entered into
an agreement with Target Exploration & Mining Corp. (a related party by way
of common directors with the Company) for the sale of the Sinbad claims for a
cash payment in the amount of $31,698. The Company will retain a 2% net smelter
royalty. Subsequently, this agreement was approved by the TSX Venture Exchange.

Liaoning Province, Northeast China

Beigou Gold Property

On September 16, 2004 the Company entered into a letter of
intent with the Liaoning Non-ferrous Geological Bureau (the Bureau) in China
for a formal joint venture of the Beigou Gold Project. On December 2, 2004, the
Company announced the completion of a formal joint venture agreement with the
Bureau following completion of a NI 43-101 report on the Beigou Gold project.
The original agreement was amended and restated on April 18, 2005. The Company
could earn an 80% interest in the Property by making exploration expenditures in
the aggregate amount of US$3,500,000 and making cash payments to the Bureau in
the amount of US$500,000, all over a five year period. A finder's fee of
US$100,000, 1,000,000 common shares, and a 1% NSR, was to be paid to a third
party over a five year period.

Based on the decision to concentrate its efforts in North
America, on December 20, 2005 the Company decided not to continue with the
Beijou Gold Property in China. At this time the Company has no further
obligations in respect to this property and has accordingly written off a total
of $229,935.

22

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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion for fiscal years 2007, 2006 and 2005
should be read in conjunction with our audited financial statements for the
referenced periods and the notes thereto, and in particular Note 13 related to
Differences Between Canadian and United States Generally Accepted Accounting
Principles,included in this Annual Report. Our financial statements have
been prepared in accordance with Canadian GAAP and reconciled to US GAAP. We are
a Canadian company and therefore our financial statements have been prepared in
Canadian dollars.

Overview

The Company is a mineral exploration company engaged in
acquiring, exploring and developing mineral properties (primarily uranium, base
and precious metals). The Company does not have any producing mineral properties
at this time. The Companys business is presently focused on the exploration and
evaluation of various mineral deposits in North America. On February 10, 2006
the Company graduated to Tier 1 on the TSX Venture Exchange and as of May 2,
2007, the Company received approval to list its shares on the American Stock
Exchange.

The Company is currently focusing its exploration activities on
the following projects:

- South Golden Promise (including South Golden Promise and Victoria Lake
  projects) and Golden Promise projects located in the Province of Newfoundland
  and Labrador, Canada, acquired through option agreements with Paragon Minerals
  in February 2003 and May 2006.
- Central Mineral Belt Project (including Moran Lake) located in Labrador,
  Newfoundland and Labrador, Canada acquired through 2 separate option
  agreements in November 2004 and May 2007.

Critical Accounting Policies

Our accounting policies are described in Note 2 of the
financial statements for the year ended April 30, 2007. We consider the
following policies to be most critical in understanding our financial results:

Use of Estimates

Our management is required to make judgments, estimates and
assumptions that affect our reported amounts of assets and liabilities at the
date of our financial statements and the reported amounts of revenues and
expenses during the reporting period. On a regular basis, we evaluate our
estimates and assumptions. We base our estimates on historical experience and on
various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions.

Mineral Properties

Costs related to the acquisition, exploration and development
of mineral properties are capitalized by property until the commencement of
commercial production. If commercially profitable ore reserves are developed,
capitalized costs of the related property are reclassified as mining assets and
amortized using the unit of production method. If, after management review, it
is determined that capitalized acquisition, exploration and development costs
are not recoverable over the estimated economic life of the property, or the
property is abandoned, or management deems there to be an impairment in value,
the property is written down to its net realizable value.

Stock-Based Compensation

We have an employee stock option plan. We recognize an expense
arising from stock options granted to both employees and non-employees using the
fair value method. The fair value of option grants is generally established

23

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at the date of grant using the Black Scholes option pricing
model and the compensation amount, equal to the options fair value, is then
recognized over the options vesting periods.

Recent Accounting Pronouncements

Costs associated with exit or disposal
  activities

In July 2002, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 146 Accounting for
Costs Associated with Exit or Disposal Activities (FAS 146). FAS
146 addresses financial accounting and reporting for costs associated with exit
or disposal activities, and is effective for exit or disposal activities
initiated after December 31, 2002. FAS 146 nullifies Emerging Issues Task Force
Issue No. 94-3 (EITF 94-3) Liability Recognition for Certain Employee
Termination Benefits and Other Costs to Exit an Activity (including Certain
costs Incurred in Restructuring). The principal difference between FAS 146 and
EITF 94-3 relates to the recognition of a liability for a cost associated with
an exit or disposal activity. FAS 146 requires that the cost associated with an
exit or disposal activity be recognized when the liability is incurred, whereas
under EITF 94-3 the liability is recognized at the date of an entitys
commitment to an exit plan. This is substantially consistent with the CICA EIC
Abstract 135, Accounting for Costs Associated with Exit and Disposal
Activities (including Costs Incurred in a Restructuring). We are currently
assessing the impact of FAS 146 and EIC Abstract 135 on our financial position
and results of operations.

Guarantees

In November 2002, the FASB issued Interpretation No. 45,
Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others, which requires certain
disclosures to be made by a guarantor in its interim and annual financial
statements for periods ending after December 15, 2002 about its obligations
under guarantees. FIN 45 also requires the recognition of a liability by a
guarantor at the inception of certain guarantees entered into or modified after
December 31, 2003. FIN 45 requires the guarantor to recognize a liability for a
non-contingent component of certain guarantees; that is, it requires the
recognition of a liability for the obligation to stand ready to perform in the
event that specified triggering events or conditions occur. The initial
measurement of this liability is the fair value of a guarantee at inception.
This is substantially consistent with the CICA Accounting Guideline AcG-14,
Disclosure of Guarantees. We do not have any guarantees under these
standards.

Variable interest entities

The FASB has published a revision to Interpretation 46 to
clarify some of the provisions of FASB Interpretation No. 46, Consolidation
of Variable Interest Entities, and to exempt certain entities from its
requirements. The additional guidance is being issued in response to input
received from constituents regarding certain issues arising in implementing
Interpretation 46.

Under the new guidance, special effective date provisions apply
to enterprises that have fully or partially applied Interpretation 46 prior to
issuance of this revised Interpretation. Otherwise application of Interpretation
46R (or Interpretation 46) is required in financial statements of public
entities that have interests in securities that are commonly referred to as
special-purpose entities for periods ending after December 15, 2003. Application
by public entities, other than small business issuers, for all other types of
variable interest entities is required in financial statements for periods
ending after March 15, 2004. Application by small business issuers to variable
interest entities other than special-purpose entities and by nonpublic entities
to all types of variable interest entities is required at various dates in 2004
and 2005. In some instances enterprises have the option of applying or
continuing to apply Interpretation 46 for a short period of time before applying
this revised Interpretation. We do not have any interests in variable interest
entities, under this standard.

Effective May 1, 2006, the beginning of the Companys 2007
fiscal year, the Company decided to early adopt the following new accounting
standards issued by the Canadian Institute of Chartered Accountants (CICA)
relating to

24

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financial instruments. These new standards have been adopted on
a prospective basis with no restatement to prior period financial statements.
The following summarizes the new accounting standards:

Financial Instruments and Comprehensive
  Income

These new recommendations of the CICA are for the accounting
for comprehensive income (CICA Handbook Section 1530), and for the
classification, recognition and measurement of financial instruments (CICA
Handbook Section 3855) that apply to the Company  see note 2 to the audited
financial statements of the Company for the year ended April 30, 2007. The
concept of comprehensive income is to include unrealized changes in the value of
financial instruments in shareholders equity under the heading Accumulated
other comprehensive income. The policys most significant impact on the Company
is with respect to the treatment of the Companys marketable securities, which
are now accounted for at fair value with gains and losses reported in the
statement of operations. There were no other significant impacts on the
Companys financial statements as a result of these new recommendations.

Hedging (CICA Handbook Section 3865).This new standard
specifies the circumstances under which hedge accounting is permissible and how
hedge accounting may be performed. The Company currently does not have any
hedges.

Accounting changes (CICA Handbook Section 1506).This
standard allows for voluntary changes in accounting policy only when such
changes enhance the relevance and reliability of the financial statements and
the comparability of those financial statements over time and with the financial
statements of other entities. The standard requires changes in accounting policy
to be applied retrospectively unless doing so is impracticable, requires prior
period errors to be corrected retrospectively and calls for enhanced disclosures
about the effects of changes in accounting policies, estimates and errors on the
financial statements.

Any impact that the adoption of Section 1506 will have on our
results of operations and financial condition will depend on the nature of
future accounting changes. Its adoption has had no impact on these financial
statements. There was no effect on opening equity as of May 1, 2006 as a result
of applying these new standards.

Effective for fiscal periods commencing January 1, 2008, the
Company will adopt new CICA standards relating to capital disclosures and
financial instruments disclosure and presentation, and, effective January 1,
2009, a standard relating to goodwill and intangible assets. The Company is
currently assessing the impact of these new accounting standards on its
financial statements.

Capital Disclosures (Section 1535).This standard
establishes standards for the disclosure of (i) an entitys objectives, policies
and processes for managing capital; (ii) quantitative data about what the entity
regards as capital; (iii) whether the entity has complied with any capital
requirements and (iv) if it has not complied, the consequences of such
non-compliance.

Financial Instruments Disclosures (Section 3862) and
Financial Instruments  Presentation (Section 3863). These two standards
replace the current standard Financial Instruments  Disclosure and
Presentation (Section 3861), revising and enhancing its disclosure
requirements, and carrying forward unchanged its presentation requirements.
These new Sections place increased emphasis on disclosures about the nature and
extent of risks arising from financial instruments and how the entity manages
those risks.

Goodwill and Intangible Assets (Section 3064).This new
standard replaces the current standard for goodwill and intangible assets,
Section 3062, and establishes revised standards for the recognition,
measurement, presentation and disclosure of goodwill and intangible assets. The
new standard also provides guidance for the treatment of preproduction and
start-up costs and requires that these costs be expensed as incurred.

25

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US GAAP Reconciliation

Under Canadian GAAP, it is acceptable to defer mineral property
acquisition and exploration costs until a decision to abandon the property is
made, it is determined that the property does not have economically recoverable
reserves or that a company is unlikely to pursue exploration activities on the
property. Under U.S. GAAP, mineral exploration costs are expensed until it can
be proven that economically viable reserves are present on the property and a
company has the ability and intention to pursue exploitation of these reserves.

Under Canadian GAAP, cash flows relating to mineral property
exploration costs are reported as investing activities. For U.S. GAAP, these
costs would be characterized as operating activities.

Under Canadian GAAP, future income taxes are calculated based
on enacted or substantially enacted tax rates applicable to future years. Under
U.S. GAAP, only enacted rates are used in the calculation of future income
taxes. This GAAP difference did not result in a difference in our financial
position, results of operations or cash flows for the years ended April 30,
2007, 2006 and 2005.

We have adopted the fair value based approach to Stock Based
Compensation under the provisions of CICA 3870 and SFAS No. 148. The method of
adoption applied by us is permissible under both Canadian and US standards.

5.A.       Operating
Results

Results of Operations for the year ended April 30, 2007
compared to the year ended April 30, 2006

For the year ended April 30, 2007, we incurred a net loss of
$5,533,011 ($0.09 per share) compared to a net loss of $2,175,473 ($0.05 per
share) for the prior year. We had no operating revenue in either period. The
loss is comprised of the general and administrative expenses of $6,584,203, of
which $3,696,601 was for stock-based compensation (2006  $2,410,229, of which
$682,213 was for stock-based compensation) and property write-offs of $Nil (2006
- $1,518,429). Management fees and interest income of $385,287 (2006 - $245,065)
and realized/unrealized gains on marketable securities of $665,905 (2006 - $Nil)
offsets the operating loss.

In the year ended April 30, 2007 compared to the same period in
the prior year, we increased our exploration, corporate and financing
activities. For example there was an increase in exploration activities on the
Moran Lake Property and Golden Promise Property and we hired and appointed new
employees, officers, directors and contractors. The additional administration,
accounting and management time was required as we increased our business
activities. As a result, our operating expenses increased by $4,173,974 in the
year ended April 30, 2007 compared to the same period of 2006. The major expense
categories were conferences and exhibitions $99,448 (2006 - $Nil); insurance
$35,897 (2006 - $Nil); investor relations expense $143,773 (2006 - $130,364);
legal fees $212,486 (2006 - $100,700); office and administration $562,642 (2006
- $339,703); stock-based compensation $3,696,601 (2006 - $682,213); travel
$306,978 (2006 - $165,538); and wages and salaries expense $923,743 (2006 -
$41,441). 72% of this the increase in operating expenses is related to
stock-based compensation expense.

Results of Operations for the year ended April 30, 2006
compared to the year ended April 30, 2005

For fiscal 2006, we incurred a net loss of $2,175,473 (loss per
share - $0.05) compared to a net loss of $645,386 (loss per share - $0.03) for
fiscal 2005. The loss is comprised of general and administrative expenses of
$2,410,229 in fiscal 2006 compared to $1,243,921 in fiscal 2005, and property
write-offs of $1,518,429 in fiscal 2006 compared to $188,988 in fiscal 2005. The
net loss was offset by management and interest income of $245,065 in fiscal 2006
compared to $32,803 in fiscal 2005 and future income tax recoveries of
$1,508,120 in fiscal 2006 compared to $754,720 in fiscal 2005.

In fiscal 2006 compared to fiscal 2005, we increased our
exploration, corporate and financing activities such as exploring new properties
such as the Moran Lake Property, hiring and appointing new officers, directors
and contractors. The additional administration, accounting and management time
was required as we became more active. As a result, our operating expenses
increased by $1,166,308 in fiscal 2006 compared to fiscal 2005. The

26

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major expense categories were stock-based compensation of
$682,213 in fiscal 2006 compared to $316,521 in fiscal 2005; consulting fees of
$244,534 in fiscal 2006 compared to $182,227 in fiscal 2005; directors fees of
$63,000 in fiscal 2006 compared to $5,000 in fiscal 2005; management fees of
$225,000 in fiscal 2006 compared to $158,931 in fiscal 2005; legal fees of
$100,700 in fiscal 2006 compared to $79,300 in fiscal 2005; property
investigations of $93,467 in fiscal 2006 compared to $28,776 in fiscal 2005;
travel expenses of $165,538 in fiscal 2006 compared to $60,623 in fiscal 2005;
and office and miscellaneous expenses of $339,703 in fiscal 2006 compared to
$120,993 in fiscal 2005.

Exploration Expenditures

During fiscal 2007 and fiscal 2006, we incurred the following
expenditures on exploration of properties as follows:

Apr. 07 Quarter
    Jan. 07 Quarter
    Oct. 06 Quarter
    July 06 Quarter
    April 06 Quarter
    Jan. 06 Quarter
    Oct. 05 Quarter
    July 05 QuarterCurrent PropertiesGolden Promise
    167,450
    229,409
    205,548
    252,997
    Nil
    Nil
    Nil
    NilMoran Lake Property (Central Mineral Belt
      Project)
    2,557,718
    1,505,655
    2,888,512
    1,357,210
    781,868
    701,278
    680,903
    50,066Otter / Portage Lake (Central Mineral
      Belt Project)
    Nil
    276,750
    149,918
    58,447
    (2,400)
    72,800
    Nil
    NilSinbad Claims
    Nil
    Nil
    2,351
    776
    8,597
    4,125
    Nil
    NilSouth Golden Promise (Victoria Lake)
    7,119
    297,887
    473,612
    200,172
    62,427
    89,472
    190,921
    144,912Properties written-offGlenwood Break
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    (892,998)
    107,836Wings Point-Titan
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    (408,234)
    15,825Beigou Gold Property
    Nil
    Nil
    Nil
    Nil
    Nil
    (229,935)
    21,562
    24,544Other Properties
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil
    NilTotal
    2,732,287
    2,309,701
    3,719,941
    1,869,602
    850,492
    637,740
    (407,846)
    343,183


During the year ended April 30, 2007, we spent a total of
$10,631,531 on our properties (including $242,500 paid in cash and $1,078,150
from the issuance of 445,000 common shares related to acquisition costs)
compared to 2,954,385 incurred during the year ended April 30, 2006. During the
year ended April 30, 2007, we had property write-offs totaling $Nil compared to
$1,518,429 during the year ended April 30, 2006.

During fiscal 2006, we spent a total of $2,954,385 on our
properties (including $317,000 acquisition costs paid by the issuance of 400,000
common shares and $390,368 in grant assistance received) compared to $1,755,334
(including 940,000 common shares at a value of $245,000 for property
acquisition) incurred during fiscal 2005. During fiscal 2006, we had property
write-offs totaling $1,518,429 compared to $188,988 during fiscal 2005.

During the second quarter of 2006, we elected to terminate our
options in the Glenwood Break property and the Wings Point-Titan property and
consequently mineral property costs of $884,096 and $374,522 were written off.
In addition, during the second quarter of 2006, we received a total $68,019 of
exploration grant assistance from the government for the Glenwood Break property
and the Wings Point-Titan property. As a result of these two factors, the
Glenwood Break property and the Wings Point-Titan property resulted in a
negative $892,998 and $408,234 in exploration expenditures for fiscal 2006 shown
in the table above.

27

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Based on the decision to concentrate its efforts in North
America, on December 20, 2005 the Company decided not to continue with the
Beijou Gold Property in China. As a result $229,935 was written off in the third
quarter of fiscal 2006.

5.B.       Liquidity and
Capital Resources

Liquidity  April 30, 2007, April 30, 2006 and April 30,
2005

We had cash on hand of $14,311,417, $13,947,976 and $4,746,707
as of April 30, 2007, 2006 and 2005, respectively. Our working capital was
$15,390,704, $14,093,821 and $4,512,628 as of April 30, 2007, 2006 and 2005,
respectively. We currently have sufficient cash resources to meet our ongoing
obligations as they become due.

Our major source of financing is from the sale of Common
Shares, the exercise of stock options and warrants, if any. We have sufficient
funds to meet our working capital requirements and property maintenance costs
and to carry out some exploration of our mineral properties for the next 12
months. During that period the amount of funds available for exploration of our
mineral properties and acquisition of additional mineral properties are
dependent on whether and how much we can raise in additional equity financing.

Financings  Fiscal 2007

During February and March 2007, we raised approximately $7.9
million through the exercise of warrants and issuance of additional Common
Shares. Warrants to purchase 5,028,750 Common Shares were exercised, raising
approximately $7.2 million, and a total of 490,375 additional Common Shares were
issued, raising approximately $700,000.

Financings  Fiscal 2006

On November 3, 2005, we closed a brokered private placement
with Pacific International Securities (the Agent), which consists of
4,000,000 flow-through units (the FT Units) at a price of $1.00 per FT
Unit for aggregate proceeds of $4,000,000 and 8,977,500 non-flow-through units
(the Common Share Units) at a price of $0.80 per Common Share Unit for
aggregate proceeds of $7,182,000. Each FT Unit is comprised of one flow-through
common share and one-half of one transferable non-flow through share purchase
warrant. Each whole warrant entitles the holder to purchase one common share of
the Company at a price of $1.75 per share until November 3, 2007. Each Common
Share Unit is composed of one non-flow-through common share and one half of one
transferable non-flow through share purchase warrant. Each whole warrant
entitles the holder to purchase one common share of the Company at a price of
$1.25 per share until November 3, 2007.

The Agent was entitled to a commission of 7% of the gross
proceeds of the placement, $460,547 of which was taken in cash and $322,193 in
402,741 Common Share Units. The Agent was also issued 1,297,750 compensation
options equal to 10% of the number of units sold. Each compensation option
entitles the Agent to acquire one Common Share Unit of the Company at an
exercise price of $0.85 for a period of two years. All securities issued
pursuant to this offering are subject to a four-month hold period commencing
November 3, 2005.

Financings  Fiscal 2005

During the year ended April 30, 2005, we completed five
financings:

On May 31, 2004, we completed a private placement of 4,080,000
flow-through shares at a price of $0.25 per share for gross proceeds of
$1,020,000. The agent received an 8% commission of the gross proceeds and
326,400 brokers warrants exercisable into common shares at $0.25 per share for
a period of 12 months. The brokers warrants were all exercised during the year
ended April 30, 2005 and provided us with another $81,600. Share issue costs of
$138,896 were incurred in relation to this private placement.

28

---

On November 26, 2004, we completed a non-brokered private
placement of 1,525,000 units at a price of $0.25 per unit for gross proceeds of
$381,250. Each unit is comprised of one common share and one non-transferable
share purchase warrant. Each warrant entitles the holder to purchase one common
share at a price of $0.30 per share until November 27, 2005. The warrants
contain a forced exercise provision. As of April 30, 2005, 20,000 warrants
associated with this private placement were exercised. Share issue costs of
$1,410 were incurred in relation to this private placement.

On December 14, 2004, we completed a non-brokered private
placement of 2,750,000 units at a price of $0.40 per unit, for gross proceeds of
$1,100,000. Each unit is comprised of one flow-through common share and one half
of one non-transferable share purchase warrant. Each whole warrant is
exercisable until December 14, 2005, and entitles the holder to purchase one
common share at a price of $0.50 per share. We paid a finders fee equal to 7%
of the aggregate gross proceeds raised from the private placement totaling
192,500 units. Each finders fee unit includes one common share and one share
purchase warrant with the same terms. Share issue costs of $81,385 were incurred
in relation to this private placement.

On January 11, 2005, we completed a private placement of
1,000,000 units at a price of $0.30 per unit for aggregate gross proceeds of
$300,000. Each unit is comprised of one common share and one non-transferable
share purchase warrant. The warrant entitles the holder to acquire one common
share at a price of $0.40 per share until January 11, 2006. The warrants contain
a forced exercise provision. In the event that the closing price our shares
exceeds $0.60 per common share for 10 consecutive trading days after the four
month hold period, the exercise period of the warrants will be shortened to a
period of 30 days from the date that we provide written notice to the holders of
the warrants of such an early expiry. Share issue costs of $2,240 were incurred
in relation to this private placement.

On March 15, 2005, we completed a private placement of
5,622,220 units at a price of $0.45 per unit for aggregate gross proceed of
$2,529,999. Each unit is comprised of one common share and one half of one
transferable share purchase warrant. Each whole warrant entitles the holder to
acquire one common share at a price of $0.75 per share until March 15, 2007. We
paid a commission equal to 7% of the aggregate gross proceeds raised from the
private placement totalling $177,100, of which $91,210 was taken in cash and the
remainder of $85,890 in 190,867 units with the same terms. Share issue costs of
$273,561 were incurred in relation to this private placement. In addition,
562,222 compensation options were issued to the broker in connection with this
private placement. Each compensation option is exercisable into a unit at a
price of $0.50 per unit for a period of two years. Each unit consists of one
common share and one half of one transferable share purchase warrant with the
same terms.

Capital Resources

Our authorized capital consists of unlimited number of common
shares without par value. At April 30, 2007, we had 70,912,072 issued and
outstanding common shares compared to 58,356,045 at April 30, 2006, and at
September 30, 2007, we had 71,740,789 issued and outstanding common shares.

We adopted a formal written stock option plan on July 26, 2004.
Under this plan, we may grant options for up to 2,752,240 common shares to
directors, employees, consultants and certain other service providers at
exercise price to be determined by the Board by not less than closing market
price on the date preceding the grant less 25% discount. Option shares are
subject to the minimum vesting requirement, with 25% of the total number of the
options granted to be released every 6 months from the date of grant. The
options can be granted for a maximum term of 5 years. The Stock Option Plan was
approved by the TSX Venture Exchange on September 21, 2004. On February 10, 2006
we amended the Stock Option Plan to grant options for up to 11,308,528 common
shares in order to reflect our increased issued and outstanding capital. On July
9, 2007 we further amended the terms of the Stock Option Plan to allow for the
extension of options by up to ten business days in the event that an option
expires during a time when the Companys directors, employees and consultants
are subject to a Company imposed black out period.

During the year ended April 30, 2007, 2,672,764 stock options
were exercised, 700,000 stock options were cancelled or expired and 5,990,000
stock options were granted. As at April 30, 2007 the Company had 8,981,984 (of
which 2,753,484 were exercisable) options outstanding at exercise prices ranging
from $0.25 per share to $3.10

29

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per share with expiry dates ranging from November 2, 2007 to
April 23, 2012. Subsequent to April 30, 2007, 80,000 stock options were
cancelled, 118,250 stock options and 21,500 agents options were exercised for
total proceeds of $76,775. If exercised, the remaining 8,762,234 stock options
would increase the Companys available cash by $14,013,731.

As at April 30, 2007, we had 380,244 warrants outstanding at an
exercise price of $1.25 per share with an expiry date of November 3, 2007. If
exercised, these remaining warrants would increase our available cash by
$475,305.

Contributed surplus was $3,888,533 as at April 30, 2007 (April
30, 2006 - $1,188,003). The increase of $2,700,530 represents $3,696,601 of the
fair value of the options released in the year ended April 30, 2007 less
$996,071 of the fair value of stock options and warrants exercised. The fair
value of the outstanding options and compensation options was calculated using
the Black-Scholes method of valuation.

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

We are a mineral exploration company and do not engage in conventional
  research and development. We have not incurred research and development expenses
  or adopted research on development policies within the last three fiscal years.

5.D.       Trend Information

We are a mineral exploration company. Consequently, there is no
production, sales, or inventory in the conventional sense. Our financial success
will be dependent upon the extent to which we can discover mineralization and
the economic viability of developing such properties. Such development, if
initiated, may take years to complete and the amount of resulting income, if
any, is difficult to determine with any certainty. We have no mineral reserves
and to date have not produced any revenues. The sales value of any
mineralization discovered by us is largely dependent upon factors beyond our
control such as the market value of the metals produced.

Other than as disclosed herein, we are not aware of any trends,
uncertainties, demands, commitments or events which are reasonably likely to
have a material effect upon our net sales or revenues, income from continuing
operations, profitability, liquidity or capital resources, or that would cause
reported financial information not necessarily to be indicative of future
operating results or financial condition.

The major factors that caused significant variations in net
loss were the recording of stock based compensation when stock options were
granted and the write-down of properties based on a periodic review of such
properties, both of which have no identifiable trend.

5.E.       Off-Balance Sheet
Arrangements

Not applicable

5.F.       Tabular Disclosure
of Contractual Obligations

As at April 30, 2007, we had the following contractual
obligations:

|                                    |   | Payments
      due by period | 
|----------------------------------- | - | ---------------------------- | 
|                                    |   |                              | 
|Contractual Obligations             |   | Total                        | 
|Capital (Finance) Lease Obligations | $ | --                           | 
|Operating Lease Obligations         |   | 208,835                      | 
|Total                               | $ | 208,835                      | 

30

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ITEM 6. DIRECTORS, SENIOR MANAGEMENT, AND EMPLOYEES

6.A.       Directors and
Senior Management

|Name                      | Age | Position                                          
|------------------------- | --- | --------------------------------------------------
|                          |     |                                                   
|Mark J. Morabito          | 41  | President, CEO and Director                       
|                          |     |                                                   
|C. Stewart Wallis (2)     | 63  | Director                                          
|                          |     |                                                   
|Jay Sujir (2)             | 49  | Director                                          
|                          |     |                                                   
|David Ying Tat Lee (1)(2) | 59  | Director                                          
|                          |     |                                                   
|Geir L. Liland            | 58  | Director                                          
|                          |     |                                                   
|Ian B. Smith (1)          | 62  | Director                                          
|                          |     |                                                   
|Leo Power (1)             | 45  | Director                                          
|                          |     |                                                   
|Christopher Collingwood   | 60  | Director                                          
|                          |     |                                                   
|J. Wayne Pickett          | 53  | Vice President,
      Exploration                 
|                          |     |                                                   
|Julie L. Bolden           | 43  | VP Corporate
      Affairs and Corporate Secretary
|                          |     |                                                   
|Douglas R. Brett          | 54  | Chief Financial
      Officer                     
|                          |     |                                                   
|Daniel McIntyre           | 38  | VP Investor
      Relations                       

|(1) | Member of Audit Committee       
|--- | --------------------------------
|(2) | Member of Compensation Committee

We are an exploration stage junior exploration company. As
such, we have historically operated without full-time employees and our
corporate functions were primarily administered through private consulting
companies owned by our current senior management. Our needs will be dependent
upon our level of exploration programs and financial condition. In 2006, we
began entering into employment agreements with our senior officers and currently
have employment agreements with Messrs. Morabito, Pickett and McIntyre and Ms.
Bolden. In addition, we entered into a consulting agreement with Douglas Brett
and his affiliate for Mr. Brett to act as our Chief Financial Officer. See Item
6.B. Compensation  Employment and Consulting Agreements.

Set forth below are brief descriptions of recent employment and
business experience of our directors and senior management.

Mark J. Morabitohas been our President and CEO since
February of 2003 and a Director since November of 1998. Mr. Morabito devotes 70%
of his time during a typical work week to our business. He is also currently the
CEO and a Director of Target. Target currently trades on the TSX Venture
Exchange under the symbol TEM.

Target is not engaged, and does not plan to be engaged, in
mining exploration in the same geographical areas as us, nor do we plan to
pursue mining and exploration opportunities in areas in which Target operates.
Mr. Morabito owns 4.48% of the issued and outstanding shares of Target. We have
no formal measures in place to prevent a conflict of interest and independent
directors are required to approve any transactions we complete with Target. All
transactions with Target are disclosed as related party transactions and
reviewed. We believe the transactions we have completed with Target have been
fair to us and to our disinterested shareholders. Effective September 1, 2007,
we entered into a cost sharing arrangement with Target whereby Target reimburses
us for 30% of common operating expenditures including rent and salaries of
certain employees who divide their time between Target and us.

31

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Mr. Morabito also serves on the board of directors of Tequila
Minerals Corp. and Silver Quest Resources Ltd. From 2000 to 2003 he was the
General Counsel and Vice President of Corporate Affairs for Leisure Canada Inc.
From 1995 to 2000 he was an Associate Lawyer for Owen Bird, Barristers and
Solicitors in Vancouver, British Columbia and for Anfield Sujir Kennedy &
Durno, Barristers and Solicitors also located in Vancouver, British Columbia. He
received his Bachelor of Law degree from the University of Western Ontario
located in London, Ontario in 1993 and his Bachelor of Arts Degree from Simon
Fraser University in Vancouver, British Columbia in 1990.

Mr. Morabito was a director of Lima Gold Corporation (a prior
name of the Company), which on February 10, 1999 was the subject of a Section
164 Cease Trade Order for failure to file financial statements. The Cease Trade
Order was rescinded on April 14, 1999. At the time the Company did not have an
active business and was undergoing extensive reorganization.

C. Stewart Wallishas been a member of our Board of
Directors since June 2003 and is also a director of Target and Patrician
Diamonds Inc. He was the Managing Director of Sundance Ventures, a private
entity owned and controlled by him, from 1994 until 2000, at which time he
joined Pincock, Allen & Holt Ltd. He was Principal Geologist in Vancouver
with that company until he rejoined Sundance Ventures in 2002. Sundance Ventures
provides geological services, including evaluations and prefeasibility studies,
for individuals and mining companies based throughout the world. Mr. Wallis was
the General Manager, Vancouver office, for Roscoe Postle Associates Inc. from
2003 to October 2006. He is currently consulting for a number of clients in the
mining industry through Sundance Geological Ltd. a private entity owned and
controlled by him. He received his Bachelor of Science Degree in Geology from
McMaster University, located in Hamilton, Canada. His professional affiliations
include: Association of Professional Engineers and Geoscientists of
Saskatchewan, the Association of Professional Engineers and Geoscientists of
British Columbia, Wyoming Professional Geologist, Certified Professional
Geologist, Fellow, Society of Economic Geologists and a Member of the Society of
Mining Engineers.

Jay Sujirhas been a member of our Board of Directors
since February 2003 and is a current director of AMI Resources Inc., Escape
Group Inc., Midasco Capital Corp., Target, Tequila Minerals Corp., Uracan
Resources Ltd. and Yamiri Energy and Gold Inc. Mr. Sujir is also the Chairman of
bcMetals Corp. He is a securities and natural resource lawyer who has experience
with advising and assisting public companies. He obtained his B.A. from the
University of Victoria in 1981 and obtained his LL.B. from the University of
Victoria in 1985. He has been a lawyer in the law firm of Anfield Sujir Kennedy
& Durno and its predecessor firm since August 1986 and has been a partner of
that firm since 1991.

David Ying Tat Lee has been a member of our Board of
Directors since February 2004 and is a Director of DMR Financial Corporation,
which is a private company. He received his Bachelor of Arts Degree from
Occidental College in Los Angeles and his Master of Arts Degree from California
State University. He has operated his own consulting firm since 1999. His
services include sourcing manufacturing facilities and merchandise from China,
training for Chinese banks, general financial consulting for companies operating
in Canada and China, real estate acquisition and donations to charitable
organizations.

Geir L. Liland joined our Board of Directors in June
2005 and served as our Chief Financial Officer from May 2, 2006 to July 31,
2007. He is currently a Director of Uranium North Resources Corp., Target,
Pacific Imperial Mines Inc., Holcot Capital Corp., egX Group, Inc., Prescient
NeuroPharma Inc., Tapango Resources Ltd. and HSF Capital Corporation. He was the
Vice President, Corporate Finance for the TSX Venture Exchange from 1999 until
2002 and since that time he has been a consultant to companies listed on
Canadian stock exchanges. He received his Bachelor of Arts (Economics and
Commerce) from Simon Fraser University in Burnaby, British Columbia. From 1978
until 1982 he studied accounting, auditing and taxation at the Chartered
Accountants Institute of British Columbia.

Leo Power has been a member of our Board of Directors
since November 2006. Mr. Power received his MBA from the Joint Kellogg-Schulich
Executive MBA Program at York University. Mr. Power has a combined 5 years
experience in direct employment with the Government of Canada and the Government
of Newfoundland and Labrador, and another 15 years as an independent
Newfoundland and Labrador based business and government

32

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relations consultant. Mr. Power served as Senior Assistant to
the Honourable John C. Crosbie (1984-1989) during Mr. Crosbies tenure in the
federal portfolios of Justice Minister and Attorney General of Canada, Minister
of Transport and Minister of International Trade. He also acted as Principal
Secretary to the former Premier of Newfoundland, the Honourable Tom Rideout,
during his term of office in 1989, with wide ranging responsibilities including:
coordination of federal-provincial activities, responsibility for political
staff in both the Premiers office and Ministers offices, and acting as senior
contact person for provincial cabinet, bureaucracy, business community and
interest groups. Mr. Power also serves on the board of directors of New Island
Resources Inc. and Newfoundland Goldbar Resources Inc.

Ian B. Smith joined our Board of Directors in September
2006. Mr. Smith has over 40 years experience in corporate, operations, and
project management and consulting within the international base, precious metals
and coal industries. He has worked around the world including Africa, China,
southeast Asia and extensively in the Americas. Mr. Smith was President and
Founding Partner of MRDI which became one of the largest and most successful
mining consultancies in North America. Mr. Smith is CEO and a director of
Tequila Minerals Corp. and is a director of Minco plc.

Christopher Collingwood has been a member of our Board
of Directors since October 2007. Mr. Collingwood is the Chairman and CEO of
Baine Johnston Corp. (Baine Johnston), a privately held Newfoundland firm and
has been actively involved with Baine Johnston since 1967. Baine Johnston is
active in commercial and industrial real estate, commercial insurance, Leon's
Furniture Ltd. Franchised Operations for Newfoundland and has investments in a
number of other Newfoundland companies. Mr. Collingwood is a board member of a
number of Newfoundland and Labrador companies including Consilient Technologies
Ltd. and Pan Maritime Energy Services Inc. He is also a past public director of
the Investment Dealers Association of Canada. Mr. Collingwood earned a B.Comm
from Memorial University in 1970.

Douglas R. Brett has been our Chief Financial Officer
since August 1, 2007. Mr. Brett has more than 20 years experience in public
practice accounting. He was the Chief Financial Officer of bcMetals Corporation
from August 2003 to February 2007 and has served as an officer and director of
other public companies. Mr. Brett is a Chartered Accountant and has been a
member of the Institute of Chartered Accountants of British Columbia since
December 1982. He obtained his B.Sc. in computer science and mathematics from
the University of British Columbia.

J. Wayne Picketthas been our Vice President Exploration
  since August 14, 2007. Mr. Pickett received his Master of Science, Earth Science
  (Geology) from Memorial University, Newfoundland in 1989. He is a Registered
  Professional Geoscientist and a member of the Association of Professional Engineers
  and Geoscientists of Newfoundland and the Association of Professional Engineers
  and Geoscientists of British Columbia. He has over 25 years experience in mineral
  exploration in various parts of Canada, Mexico, Peru, Colombia and Ghana. He
  was part of the geology team that discovered the Collins Bay B Uranium
  deposit in northern Saskatchewan for Gulf Minerals and Bobbys pond VMS
  deposit for Inco in Newfoundland.

Julie L. Bolden has been our Vice President Corporate
Affairs and Corporate Secretary since August 28, 2006. Ms. Bolden also serves as
the vice president corporate affairs and corporate secretary of Target. She
devotes 95% of her time during a typical work week to our business. She received
a Legal Assistant Certificate from Capilano College in May 1997. During the
period from May 1987 until July 2006, Ms. Bolden worked as a paralegal at a
number of Vancouver law firms and at a group of public companies.

Daniel McIntyre has been our Vice President Investor
Relations since December 4, 2006. Prior to joining us, Mr. McIntyre spent two
and a half years working at Fronteer Development Group and Aurora Energy
Resources Inc. as manager of investor relations and corporate communications.
Mr. McIntyre spent the years before joining Fronteer and Aurora working at HSBC
Bank Canada focussing on Retail Banking, Information Technology and Risk
Management. Mr. McIntyre received a BA (Honours) from the University of Western
Ontario in 1991.

No Director and/or senior management had been the subject of
any order, judgment, or decree of any governmental agency or administrator or of
any court or competent jurisdiction, revoking or suspending for cause any
license, permit or other authority of such person or of any corporation of which
he is a Director and/or senior management,

33

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to engage in the securities business or in the sale of a
particular security or temporarily or permanently restraining or enjoining any
such person or any corporation of which he is an officer or director from
engaging in or continuing any conduct/practice/employment in connection with the
purchase or sale of securities, or convicting such person of any felony or
misdemeanor involving a security or any aspect of the securities business or of
theft or of any felony.

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

6.B.     
 Compensation

Because Mr. Collingwood was not appointed to the Board of
Directors until October 25, 2007, there is no compensation disclosure related to
Mr. Collingwood in this section.

Compensation of Executive Officers and Directors

The following table sets out the compensation information for
the fiscal year ended April 30, 2007, for our directors and executive officers.

|                                                          | Annual
      Compensation |          | Long
      Term Compensation
|--------------------------------------------------------- | ------------------------- | -------- | ----------------------------
|                                                          |                           |          |                             
|Name and                                                  | Year                      | Salary   | Bonus                       
|Principal Position                                        |                           | (CDN$)   | (CDN$)                      
|                                                          |                           |          |                             
|                                                          |                           |          |                             
|                                                          |                           |          |                             
|                                                          |                           |          |                             
|Mark J. Morabito President, CEO
      and Director        | 2007                      | $200,000 | $200,000                    
|                                                          |                           |          |                             
|Gier Liland (1)Chief Financial
      Officer and Director | 2007                      | --       | --                          
|                                                          |                           |          |                             
|Timothy D.L. Froude (2)Senior
      VP, Exploration       | 2007                      | 100,000  | 25,000                      
|                                                          |                           |          |                             
|Stewart Wallis, Director                                  | 2007                      | --       | --                          
|                                                          |                           |          |                             
|Jay Sujir Director                                        | 2007                      | --       | --                          
|                                                          |                           |          |                             
|David Y.T. Lee Director                                   | 2007                      | --       | --                          
|                                                          |                           |          |                             
|Leo Power Director                                        | 2007                      | --       | --                          
|                                                          |                           |          |                             
|Ian Smith Director                                        | 2007                      | --       | --                          

| | (1) | Mr. Liland ceased serving as our Chief Financial Officer
      as of July 31, 2007.                                                                                                                                                             
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Mr. Froudes employment with the Company ceased on August
      13, 2007.                                                                                                                                                                       
| | (3) | Directors fees paid to non-executive
directors.                                                                                                                                                                                                
| | (4) | Includes directors fees in the amount of $13,500 and
      geological consulting fees in the amount of $40,890 paid to Sundance
      Geological Ltd. a private entity owned and controlled by Mr. Wallis.
      Excludes $33,075 of geological

34

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| |     | consulting fees to Roscoe Postle Associates Inc., a
      company for which Stewart Wallis was an employee until Oct 2006.                                                
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (5) | Excludes $25,882 of legal fees paid to Anfield Sujir
      Kennedy & Durno Barristers & Solicitors, a limited liability
      partnership of which Jay Sujir is a partner.

During the fiscal year ended April 30, 2007, a total of
2,900,000 stock options were granted to our directors and executive officers as
follows:

|                    |  |                  |  |                 |  |               |  |                |  |                 |  | Mkt. Value of     
|------------------- |  | ---------------- |  | --------------- |  | ------------- |  | -------------- |  | --------------- |  | ------------------
|                    |  | % of Total       |  |                 |  |               |  |                |  |                 |  | Securities        
|                    |  | Options Granted  |  |                 |  |               |  |                |  |                 |  | Underlying        
|Name of Director or |  | as of year ended |  | Number Of       |  |               |  | Exercise Price |  |                 |  | Options on Date of
|Executive Officer   |  | Apr 30, 2007     |  | Options Granted |  | Date of Grant |  | per Share ($)  |  | Expiration Date |  | Grant ($)         
|                    |  |                  |  |                 |  |               |  |                |  |                 |  |                   
|Mark J. Morabito    |  | 16.69            |  | 1,000,000       |  | 5/1/06        |  | 1.32           |  | 5/1/11          |  | 1.27              
|                    |  | 8.35             |  | 500,000         |  | 3/6/07        |  | 2.50           |  | 3/6/12          |  | 3.04              
|Tim Froude          |  | 1.67             |  | 100,000         |  | 5/24/06       |  | 1.32           |  | 5/24/12         |  | 1.35              
|                    |  | 1.67             |  | 100,000         |  | 3/23/07       |  | 3.00           |  | 3/23/12         |  | 3.23              
|Geir Liland         |  | 2.50             |  | 150,000         |  | 5/24/06       |  | 1.32           |  | 5/24/12         |  | 1.35              
|                    |  | 2.50             |  | 150,000         |  | 3/6/07        |  | 2.50           |  | 3/6/12          |  | 3.04              
|Leo Power           |  | 1.67             |  | 100,000         |  | 5/24/06       |  | 1.32           |  | 5/24/11         |  | 1.35              
|                    |  | 1.67             |  | 100,000         |  | 11/17/06      |  | 2.26           |  | 11/17/11        |  | 2.65              
|                    |  | 1.67             |  | 100,000         |  | 3/6/07        |  | 2.50           |  | 3/6/12          |  | 3.04              
|Ian Smith           |  | 2.50             |  | 150,000         |  | 8/ 21/06      |  | 1.43           |  | 8/21/11         |  | 1.76              
|                    |  | 0.83             |  | 50,000          |  | 12/11/06      |  | 3.10           |  | 12/11/11        |  | 3.85              
|                    |  | 1.67             |  | 100,000         |  | 3/ 6/07       |  | 2.50           |  | 3/6/12          |  | 3.04              
|Jay Sujir           |  | 1.67             |  | 100,000         |  | 3/6/07        |  | 2.50           |  | 3/6/12          |  | 3.04              
|David Lee           |  | 1.67             |  | 100,000         |  | 3/6/07        |  | 2.50           |  | 3/6/12          |  | 3.04              
|Stewart Wallis      |  | 1.67             |  | 100,000         |  | 3/6/07        |  | 2.50           |  | 3/6/12          |  | 3.04              

The above listed options vest over a period of two years such
that 25% become available for exercise every six months.

The following table gives certain information concerning stock
option exercises during the year ended April 30, 2007 by our executive officers
and directors. It also gives information concerning stock option values.

Aggregated Stock Options Exercises in Fiscal 2007
Fiscal Yearend Unexercised Stock Options Fiscal
Yearend Stock Option Values Executive
Officers/Directors

Value of Unexercised In-Number of
    
    
    
    
    
    the-Money Options atShares
    
    
    
    Number of Unexercised
    
    Fiscal Year-End (1)Acquired on
    
    Aggregate Value
    
    Options at Fiscal Year-End
    
    Exercisable/Name
    
    Exercise
    
    Realized
    
    Exercisable/Unexercisable
    
    UnexercisableMark Morabito
    
    300,000
    
    $861,000
    
    750,000/1,450,000
    
    $1,315,000/1,388,000Stewart Wallis
    
    70,000
    
    115,900
    
    230,000/150,000
    
    $      
      492,200/96,000Jay Sujir
    
    100,000
    
    289,000
    
    100,000/150,000
    
    $       191,500/96,000David Ying Tat Lee
    
    20,000
    
    68,000
    
    180,000/150,000
    
    $     
       372,700/96,000


35

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Value of Unexercised In-Number of
    
    
    
    
    
    the-Money Options atShares
    
    
    
    Number of Unexercised
    
    Fiscal Year-End (1)Acquired on
    
    Aggregate Value
    
    Options at Fiscal Year-End
    
    Exercisable/Name
    
    Exercise
    
    Realized
    
    Exercisable/Unexercisable
    
    UnexercisableGeir Liland
    
    --
    
    --
    
    162,500/337,500
    
    $   
       295,750/306,250Timothy Froude
    
    97,500
    
    235,575
    
    215,000/225,000
    
    $    
      421,600/181,000Ian Smith
    
    --
    
    --
    
    37,500/262,500
    
    $       45,375/150,125Leo Power
    
    --
    
    --
    
    75,000/325,000
    
    $    
      120,000/238,000


(1) Based on the closing price of the Common Shares on the TSX
Venture Exchange on April 30, 2007 of $2.64 per Common Share.

Director Compensation

Directors are entitled to reimbursement for reasonable travel
and other out-of-pocket expenses incurred in connection with attendance at
meetings of the Board of Directors. The Board of Directors may award special
remuneration to any director undertaking any special services on our behalf
other than services ordinarily required of a director. Due to the onerous amount
of work associated with currently applicable securities legislation and ongoing
compliance requirements, we have instituted a modest compensation plan for the
non-management members of the Board of Directors, which commenced May 1, 2005.
Under the compensation plan every director receives a monthly fee of $1,000 and
an additional monthly fee of $500 in the event that the director serves on a
committee. Directors fees may be deferred as appropriate based on our financial
condition. We do not propose to pay or distribute any non-cash compensation
during the current financial year, other than the possible grant of incentive
stock options.

Stock Option Plan

We may grant stock options to directors, senior management and
employees pursuant to our Amended Stock Option Plan dated July 9, 2007. Under
the Amended Stock Option Plan, we may grant stock options to purchase up to a
maximum of 11,308,528 Common Shares. During the fiscal year ended April 30,
2007, we granted stock options to purchase an aggregate of 5,990,000 Common
Shares. During the year, stock options to purchase an aggregate of 2,672,764
Common Shares were exercised and stock options to purchase an aggregate of
700,000 Common Shares were cancelled.

Employment and Consulting Agreements

We have entered into employment agreements with Messrs.
Morabito, Pickett and McIntyre and Ms. Bolden. Pursuant to the Agreements, the
Company has agreed to pay a salary of $200,000 to Mr. Morabito, $100,000 to Mr.
Pickett, $100,000 to Mr. McIntyre and $85,000 to Ms. Bolden. In addition,
Messrs. Morabito and Pickett are eligible for bonuses in amounts not to exceed
$200,000 and $50,000, respectively. The bonuses are to be paid in cash quarterly
and the amounts will be determined in the discretion of the Companys
compensation committee. Ms. Bolden is also eligible for bonuses in an amount not
to exceed $25,000 and Mr. McIntyre is eligible for bonuses in an amount up to
25% of his base salary. These bonuses will be paid in cash annually and the
amounts will be determined in the Companys discretion.

The agreements with Messrs. Morabito and Pickett and Ms. Bolden
provide that they shall be provided with employee benefits comparable to those
provided by the Company from time to time to other senior executives of the
Company generally. The agreements with Messrs. Morabito, Pickett and McIntyre
and Ms. Bolden provide for a grant of options to purchase 1,000,000, 50,000,
200,000 and 200,000 Common Shares, respectively, upon execution of the agreement
and options to purchase 500,000, 100,000, 100,000 and 100,000Common Shares,
respectively, on the first anniversary of the date of the initial grant and each
anniversary thereafter. The initial options have an exercise price of $1.32,
$1.56, $2.07 and $1.32 per Common Share, respectively, and the annual

36

---

options shall have an exercise price at the market price on the
date they are granted. Mr. Morabitos right to receive annual option grants is
subject to the requirement that the aggregate number of incentive stock options
held by Mr. Morabito at any given time not exceed 5% of the number of issued and
outstanding Common Shares of the Company at such time. Mr. Pickett was also
awarded a cash bonus of $20,000 and options to purchase 100,000 Common Shares
upon his promotion to Vice President, Exploration, on August 14, 2007. Mr.
Picketts options have an exercise price of $1.54 per Common Share and are
subject to vesting over a two year period and will expire on August 14, 2012.

The employment agreements require the Company to pay severance
to Messrs. Morabito and Froude and Ms. Bolden if it terminates their respective
employment other than for just cause (as defined in the agreements) or if the
respective employee resigns for good reason (as defined in the agreements).
The severance payments will consist of either 24 months notice of termination or
a lump sum payment equal to two times the employees annual salary, at the
employees option, and continued participation in the annual option grants and
benefit plans until the earliest of the expiration of the 24 month notice period
and the death of the employee. Mr. McIntyre, upon termination without cause,
would be entitled to six months notice or pay in lieu of notice equal to six
months of base salary, or any combination thereof.

On August 1, 2007, we entered into an independent consulting
services agreement (the Consulting Agreement) with Douglas R. Brett,
Inc. (the Contractor) and Douglas R. Brett. Pursuant to the Consulting
Agreement, we engaged the Contractor to provide financial services and appointed
Mr. Brett as our Chief Financial Officer. Mr. Brett will personally provide to
the Company such advisory and consulting services on behalf of the Contractor as
the Company may request from time to time. According to the Consulting
Agreement, Mr. Bretts Services will require an average of between 40 and 60
hours of his time per month. In exchange for Mr. Bretts services, the Company
will pay to the Contractor $6,250 per month plus goods and services taxes. In
addition, the Company agreed to grant to the Consultant options to acquire up to
200,000 Common Shares at a price per share equal to the prevailing fair market
value, such options subject to the terms of the Companys Stock Option Plan. The
term of the Consulting Agreement shall automatically cease at 11:59 p.m.
(Vancouver time) on August 1, 2008 (the Term), unless earlier
terminated as hereinafter provided or unless the parties have agreed in writing
to renew the Consulting Agreement. The Contractor and the Company each have the
right to terminate the Consulting Agreement at any time by giving to the other
party at least 30 days prior written notice of the effective date of such
termination (the Termination Date). On the Termination Date, the
Consultant will resign as Chief Financial Officer unless other arrangements are
made.

Mr. Brett agreed to indemnify and save harmless the Company for
any demonstrated losses, damages, costs or other amounts, including without
limitation reasonable legal fees, suffered or incurred by the Company arising
out of third party claims relating to his presence or activities or his
representatives in performing the services to the extent that such losses,
damages, costs or other amounts are caused by: any breach of Mr. Bretts
obligation to perform his services in full compliance with all applicable laws
and consistent with a high degree of business ethics; and any negligence, wilful
misconduct or fraud on the part of Mr. Brett in performing the services. Subject
to Mr. Bretts obligation to indemnify the Company as described above, and
provided that Mr. Brett has not breached his obligation to perform his services
in full compliance with all applicable laws and consistent with a high degree of
business ethics, the Company agreed to indemnify and save harmless Mr. Brett for
any demonstrated losses, damages, costs or other amounts, including without
limitation reasonable legal fees, suffered or incurred by Mr. Brett arising out
of third party claims relating to his presence or activities and/or his
representatives in performing the services as would reasonably be the case for
all directors and officers of the Company. In addition, the Company agreed that
any directors and officers liability insurance coverage currently in place or
obtained in the future by the Company will also be extended to Mr. Brett without
charge to either Mr. Brett or the Contractor.

Post Employment Compensation

No funds were set aside or accrued by us during Fiscal 2007 to
provide pension, retirement or similar benefits for directors or senior
management.

37

---

Other than as described above, we do not have any plans or
arrangements in respect of remuneration received or that may be received by our
executive officers to compensate such officers in the event of termination of
employment (as a result of resignation, retirement, change of control) or a
change of responsibilities following a change of control, where the value of
such compensation would exceed US$60,000 per person.

6.C.       Board Practices

The Board of Directors presently consists of eight directors,
all of whom were elected at the annual general meeting of the shareholders of
the Company, held on September 10, 2007, except for Mr. Collingwood, who was
appointed to the Board of Directors on October 25, 2007. The directors have
served in their respective capacities since their election and/or appointment
and will serve until the next annual general meeting or until a successor is
duly elected, unless the office is vacated in accordance with our Articles. The
Board of Directors appoints senior management who serve at the discretion of the
Board of Directors. Mr. Morabito has served as a director of the Company since
November 1998; Mr. Wallis has served as a director of the Company since June
2003; Mr. Sujir has served as a director of the Company since February 2003; Mr.
Lee has served as a director of the Company since February 2004; Mr. Liland has
served as a director of the Company since June 2005; Mr. Smith has served as a
director of the Company since September 2006; and Mr. Power has served as a
director of the Company since November 2006.

Board of Director Committees

We have an Audit Committee, which recommends to the Board of
Directors the engagement of our independent auditors and reviews with the
independent auditors the scope and results of our audits, our internal
accounting controls, and the professional services furnished to us by our
independent auditors. The current members of our Audit Committee are: Ian Smith,
David Lee and Leo Power.

We have established a Compensation Committee, which currently
consists of Stewart Wallis, Jay Sujir and David Lee. The mandate established for
the Compensation Committee is for the purposes of:

|1. | considering appropriate levels of compensation for the
      directors and officers and making recommendations to the Board as to the
      remuneration and other compensation to be provided to the directors, the
      president and the other officers of the Company;
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                            
|2. | reviewing personnel policies and benefit plans available
      to employees and making recommendations to the Board of Directors;
    and                                                                                                                                  
|   |                                                                                                                                                                                                                                                                            
|3. | carrying out periodic performance assessments of the
      President.                                                                                                                                                                                                      

6.D.       Employees

As of October 31, 2007, we had 20 full-time employees.

6.E.       Share Ownership

The following table presents the beneficial ownership of the
directors and those persons named in Item 6.B Compensation above as of October
31, 2007. As of October 31, 2007, we had 72,390,789 common shares issued and
outstanding. The number of common shares beneficially owned by the persons
listed below includes those securities exercisable into common shares within 60
days of October 31, 2007.

38

---

Number of
    Percent of OutstandingName
    Common Shares
    Common SharesMark J. Morabito
    2,469,769 (1)
    3.97%C. Stewart Wallis
    275,400 (2)
    *Jay Sujir
    175,000 (3)
    *David Y.T. Lee
    250,000 (4)
    *Geir Liland
    325,000 (5)
    *Leo Power
    232,700 (6)
    *Ian Smith
    145,000 (7)
    *Christopher Collingwood
    350,300 (8)
    *


| | *   | Indicates less than one percent                         
| | --- | --------------------------------------------------------
| | (1) | Includes options to purchase 1,475,000 common
    shares
| | (2) | Includes options to purchase 230,000 common
  shares    
| | (3) | Includes options to purchase 150,000 common
  shares    
| | (4) | Includes options to purchase 230,000 common
  shares    
| | (5) | Includes options to purchase 325,000 common
  shares    
| | (6) | Includes options to purchase 225,000 common
  shares    
| | (7) | Includes options to purchase 125,000 common
  shares    
| | (8) | Includes options to purchase 100,000 common
  shares    

The following table presents the stock options granted to the
aforementioned persons and unexercised as of October 31, 2007. The stock options
are for Common Shares.

Number ofUnderlyingDate of
    Common
    
    Exercise
    ExpirationName
    Grant
    Shares
    Vested *
    Price
    DateMark J. Morabito
    Mar. 6, 2007
    500,000
    125,000
    $2.50
    Mar. 6, 2012May 1, 2006
    1,000,000
    750,000
    1.32
    May 1, 2011Jan. 18, 2006
    400,000
    300,000
    1.00
    Jan. 18, 2011Feb. 4, 2005
    300,000
    300,000
    0.45
    Feb. 4, 2010C. Stewart Wallis
    Mar. 6, 2007
    100,000
    25,000
    $2.50
    Mar. 6, 2012Jan. 18, 2006
    100,000
    75,000
    1.00
    Jan. 18, 2011Feb. 4, 2005
    100,000
    100,000
    0.45
    Feb. 4, 2010Jan. 21, 2004
    25,000
    25,000
    0.25
    Jan. 21, 2009Jun. 19, 2003
    5,000
    5,000
    0.25
    Jun. 19, 2008Jay Sujir
    Mar. 6, 2007
    100,000
    25,000
    $2.50
    Mar. 6, 2012Jan. 18, 2006
    100,000
    75,000
    1.00
    Jan. 18, 2011Feb. 4, 2005
    50,000
    50,000
    0.45
    Feb. 4, 2010David Y.T. Lee
    Mar. 6, 2007
    100,000
    25,000
    $2.50
    Mar. 6, 2012Jan. 18, 2006
    100,000
    75,000
    1.00
    Jan. 18, 2011Feb. 4, 2005
    100,000
    100,000
    0.45
    Feb. 4, 2010Feb. 17, 2004
    30,000
    30,000
    0.25
    Feb. 17, 2009Geir Liland
    Mar. 6, 2007
    150,000
    37,500
    $2.50
    Mar. 6, 2012May 24, 2006
    150,000
    112,500
    1.32
    May 24, 2011Jan. 18, 2006
    100,000
    75,000
    1.00
    Jan. 18, 2011Jun. 14, 2005
    100,000
    100,000
    0.45
    Jun. 14, 2010


39

---

Number ofUnderlyingDate of
    Common
    
    Exercise
    ExpirationName
    Grant
    Shares
    Vested *
    Price
    DateLeo Power
    Mar. 6, 2007
    100,000
    25,000
    $2.50
    Mar. 6, 2012Nov. 17, 2006
    100,000
    50,000
    2.26
    Nov. 17, 2011May 24, 2006
    100,000
    75,000
    1.32
    May 24, 2011Jan. 5, 2006
    100,000
    75,000
    0.90
    Jan. 5, 2011Ian Smith
    Mar. 6, 2007
    100,000
    25,000
    $2.50
    Mar. 6, 2012Dec. 11, 2006
    50,000
    25,000
    3.10
    Dec. 11, 2011Aug. 21, 2006
    150,000
    75,000
    1.43
    Aug. 21, 2011Christopher Collingwood
    Oct. 24, 2007
    150,000
    Nil
    $1.95
    Oct. 24, 2012Dec. 11, 2006
    50,000
    25,000
    3.10
    Dec. 11, 2011May 1, 2006
    50,000
    37,500
    1.32
    May 1, 2011Jan. 18, 2006
    50,000
    37,500
    1.00
    Jan. 18, 2011


*             
Includes those options that are exercisable within 60 days of October 31, 2007.

We do not have any arrangements for involving the employees in
the capital of the Company. We do not have a share purchase plan, dividend
reinvestment plan for our directors, officers and employees. However, we will,
from time to time, grant individual stock options to our directors, officers or
employees as an incentive pursuant to our amended stock option plan.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY
TRANSACTIONS

7.A.       Major Shareholders

To the knowledge of management, other than the entities listed
below, no person beneficially owns 5% or more of our issued and outstanding
Common Shares:

|                                      |  | Number of     |  |              
|------------------------------------- |  | ------------- |  | -------------
|Name                                  |  | Common Shares |  | Percentage(1)
|                                      |  |               |  |              
|David W. Tice &
      Associates, LLC |  | 4,216,200 (2) |  | 5.9%         
|John Burbank                          |  | 3,320,233 (3) |  | 4.6          

|(1) | Based on 71,740,789 Common Shares outstanding as of
      September 30, 2007.                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                               
|(2) | This information is based on an amendment to Schedule 13G
      filed with the Securities and Exchange Commission on February 6, 2007, by
      David W. Tice & Associates, LLC and Prudent Bear Funds, Inc.                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                               
|(3) | This information is based on an amendment to Schedule 13G
      filed with the Securities and Exchange Commission on February 15, 2007 by
      Passport Global Master Fund SPC, Ltd,. Partners Group Alternative
      Strategies PCC Limited Gold Iota Cell, Passport Holdings, LLC, Passport
      Management, LLC, Passport Capital, LLC and John
Burbank.

Based on a Schedule 13G filed with the Securities and Exchange
Commission on March 10, 2006, Goodman & Company as investment counsel and
portfolio manager to various mutual funds and other clients, reported that it
beneficially owned 6,607,400 Common Shares, including 1,087,500 common shares
underlying warrants. An amendment to that Schedule 13G filed by Goodman &
Company on September 11, 2006 reported that it had sold 3,955,000 Common Shares.

40

---

All of our shares, both issued and unissued, are common shares
of the same class and rank equally as to dividends, voting powers and
participation of powers. Accordingly, there are no special voting powers held by
our major shareholders.

On September 30, 2007, we had 71,740,789 common shares issued
and outstanding to approximately 101 shareholders of record. We believe that the
number of beneficial owners is substantially greater than the number of record
holders because a portion of its outstanding common stock is held in broker
street names for the benefit of individual investors or other nominees.
Management believes that there are 23 stockholders of record that are U.S.
persons, who own an aggregate of approximately 5.2% of our outstanding Common
Shares. In addition to these record holders there may be more U.S. persons
holding our Common Shares in street name.

We are a publicly owned Canadian corporation, with shareholders
in Canada, the United States and other foreign jurisdictions. We are not
controlled by any foreign government or other person. There are no arrangements
that would result in a change of control of the Company.

7.B.       Related Party
Transactions

Other than as disclosed below, for the year ended April 30,
2007 and the period from May 1, 2007 to the date of this annual report, we have
not entered into any transactions or loans between us and any: (a) enterprises
that directly or indirectly through one or more intermediaries, control or are
controlled by, or are under common control with, us; (b) associates; (c)
individuals owning, directly or indirectly, an interest in the voting power of
us that gives them significant influence over us, and close members of any such
individuals' family; (d) key management personnel and close members of such
individuals' families; or (e) enterprises in which a substantial interest in the
voting power is owned, directly or indirectly, by any person described in (c) or
(d) or over which such a person is able to exercise significant influence.

The Company entered into transactions with related parties as
follows:

| | 1. | We engaged the services of Anfield Sujir Kennedy &
      Durno Barristers & Solicitors for legal services relating to
      securities matters. One of our directors, Jay Sujir, is a partner of
      Anfield Sujir Kennedy & Durno. We paid fees directly to Anfield Sujir
      Kennedy & Durno in the amount of $25,882 for Fiscal 2007. Fees of
      $20,393 have been paid to Anfield Sujir Kennedy & Durno since April
      30, 2007 through October 31, 2007. We currently expect to continue to
      utilize the legal services of Anfield Sujir Kennedy & Durno.                                                                                        
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 2. | We engaged the services of Sundance Geological Ltd.
      (Sundance) for geological services. One of our directors, Stewart
      Wallis, is the principal of Sundance. We paid fees directly to Sundance in
      the amount of $27,245 during Fiscal 2007 and at April 30, 2007 $5,830 was
      owed to Sundance. Fees of $13,050 were paid to Sundance from April 30,
      2007 through October 31, 2007. We currently expect to continue to utilize
      the services of Sundance.                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 3. | On May 2, 2006, we engaged the services of Geir Liland to
      provide services ordinarily provided by a chief financial officer. We paid
      fees of $50,000 to Mr. Liland during the fiscal year ended April 30, 2007.
      Mr. Liland ceased serving as our Chief Financial Officer as of July 31,
      2007.                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 4. | Until May 1, 2006, we paid Yvonne Coles private
      consulting company management fees of $4,583 per month. As of May 1, 2006,
      we hired Ms. Cole as our Corporate Secretary. Ms. Coles employment with
      the Company terminated on August 24, 2006, and she was paid a severance
      payment of $4,583.                                                                                                                                                                                                                                                                                                                                              
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | 5. | During the fiscal year ended April 30, 2007, we charged
      management fees of $40,000 to Target, a company of which several of our
      directors and officers serve as officers and directors. From May 1, 2007
      to August 31, 2007, we received $20,000 in management fees from Target.
      Effective September 1, 2007, in lieu of management fees, we entered into a
      cost sharing arrangement with Target whereby we are reimbursed for an
      agreed percentage, currently 30%, of shared expenses such as rent, office
      and salaries of certain personnel. As of October 31, 2007, $38,089 was
      owed to us under this arrangement.

41

---

| | 6. | On August 1, 2007, we entered into the Consulting
      Agreement with Mr. Brett and his private consulting company, and agreed to
      pay $6,250 per month.                                                                                                                                    
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                   
| | 7. | On February 12, 2007, we entered into an agreement with
      Target for the sale of our Sinbad claims for a cash payment in the amount
      of $31,698. We retained a 2% net smelter royalty.                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                   
| | 8. | Our directors and officers regularly incur expenses on
      our behalf for which they are reimbursed. As at April 30, 2007, we had
      outstanding expense reports from Gregory Davis as to $2,305.27, from J.
      Wayne Pickett as to $35.73 and from Mark J. Morabito as to
    $11,070.48.
| |    |                                                                                                                                                                                                                                                                                                   
| | 9. | During Fiscal 2006, we made an overpayment of management
      fees to Mark J. Morabito in the amount of $4,167. Mr. Morabito repaid this
      amount during Fiscal 2007.                                                                                                                        

Amounts payable to related parties have no specific terms of
repayment, are unsecured, and have no interest rate.

The amounts charged to the Company for the services provided
have been determined by negotiation among the parties and are covered by signed
agreements.

These transactions were incurred in the normal course of
operations and, in managements opinion, were undertaken with the same terms and
conditions as transactions with unrelated parties.

7.C.       Interests of
Experts and Counsel

Not applicable

ITEM 8. FINANCIAL INFORMATION

8.A.      Consolidated Statements
and Other Financial Information

*Financial Statements*

Our financial statements are stated in Canadian Dollars (CDN$)
and are prepared in accordance with Canadian Generally Accepted Accounting
Principles (GAAP), the application of which conforms in all material respects
for the periods presented with United States GAAP, except as discussed in
footnotes to the financial statements.

See our audited financial statements for the fiscal years ended
April 30, 2007, April 30, 2006 and April 30, 2005 included under Item 17 of this
annual report.

Dividend Policy

We have not declared or paid any cash dividends on our capital
stock. We do not currently expect to pay cash dividends in the foreseeable
future as we anticipate that all available funds will be invested to finance the
growth of our business. The Board of Directors will determine if and when
dividends should be declared and paid in the future based upon the Companys
financial position at the relevant time.

Legal/Arbitration Proceedings

There are no material, active or pending, legal or arbitration
proceedings, including those relating to bankruptcy, receivership or similar
proceedings and those involving any third party, which may have, or have had in
the recent past, significant effects on our financial position or profitability.
There are no legal proceedings to which the Company is a party, nor to the best
of the knowledge of the Companys management are any legal proceedings
contemplated.

42

---

8.B.     Significant Changes

Since April 30, 2007, the date of our most recent financial
statements, the following significant changes have occurred:

Subsequent to April 30, 2007, we entered into an option agreement with Belmont
Resources Inc. and International Montoro Resources Inc. to acquire a 75%
interest in four mineral licenses totaling 139 claims located in the central
mineral belt of Labrador, by carrying out $800,000 in exploration expenditures
and issuing 175,000 common shares in the capital of the Company over a three
year period. The agreement was approved by the TSX Venture Exchange on May 28,
2007.

43

---

PART II


ITEM 15. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, we carried
out an evaluation, under the supervision of our Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures pursuant to Exchange Act Rule
13a-15. Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures are
effective to ensure that information required to be disclosed in the reports
that we file or submit under the Exchange Act are recorded, processed,
summarized and reported within the time periods specified in the U.S. Securities
Exchange Commission rules and forms. In addition, our Chief Executive Officer
and Chief Financial Officer concluded that our disclosure controls and
procedures are effective to ensure that information required to be disclosed in
the reports that we file or submit under the Exchange Act is accumulated and
communicated to our management, including our Chief Executive Officer and Chief
Financial Officer, so as to allow timely decisions regarding required
disclosure.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial
reporting that occurred during our most recently completed fiscal year ended
April 30, 2007 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting. Nor were there
any significant deficiencies or material weaknesses in our internal controls
requiring corrective actions.

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

The Board of Directors of the Company has determined that Ian
Smith, a member of its audit committee, qualifies as an audit committee
financial expert as defined in Item 16.A. of Form 20-F.

The Board of Directors of the Company has determined that Mr.
Smith is an independent director in accordance with the definition set
forth in Section 121 of the American Stock Exchange Company Guide.

44

---

PART III


ITEM 17. FINANCIAL STATEMENTS

Our financial statements are stated in Canadian Dollars and are
prepared in accordance with Canadian Generally Accepted Accounting Principles
(GAAP), the application of which, in our case, conforms in all material respects
for the periods presented with United States GAAP, except as discussed in
footnotes to the financial statements.

Auditors
      Report dated June 1, 2007Balance
      Sheet at April 30, 2007, 2006 and 2005Statement
      of Operations and Deficit for the years ended April 30, 2007, 2006 and
      2005Statement
      of Cash Flows for the years ended April 30, 2007, 2006 and 2005Notes
      to the Financial Statements for the years ended April 30, 2007, 2006 and
      2005


45

---







CROSSHAIR EXPLORATION & MINING CORP.



FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

APRIL 30, 2007

---

|DAVIDSON&COMPANYLLP |                       |  | A Partnership of Incorporated Professionals
|------------------- | --------------------- |  | -------------------------------------------
|                    | Chartered Accountants | 

INDEPENDENT AUDITORS REPORT

To the Shareholders of 
  Crosshair Exploration & Mining
  Corp.

We have audited the balance sheets of Crosshair Exploration
  & Mining Corp. as at April 30, 2007 and 2006 and the statements of
  operations, shareholders' equity and cash flows for the years ended April 30,
  2007, 2006 and 2005. These financial statements are the responsibility of the
  Company's management. Our responsibility is to express an opinion on these
  financial statements based on our audits.

We conducted our audits in accordance with Canadian generally
  accepted auditing standards and 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 whether the financial
  statements are free of material misstatement. An audit includes examining, on a
  test basis, evidence supporting the amounts and disclosures in the financial
  statements. An audit also includes assessing the accounting principles used and
  significant estimates made by management, as well as evaluating the overall
  financial statement presentation.

In our opinion, these financial statements present fairly, in
  all material respects, the financial position of the Company as at April 30,
  2007 and 2006 and the results of its operations and cash flows for the years
  ended April 30, 2007, 2006 and 2005 in accordance with Canadian generally
  accepted accounting principles.

|                  | **"DAVIDSON** **&
      COMPANY LLP"**
|----------------- | --------------------------------------
|                  |                                       
|Vancouver, Canada | Chartered Accountants                 
|                  |                                       
|June 1, 2007      |                                       

A
          Member of SCINTERNATIONAL1200 - 609 Granville Street, P.O. Box 10372,
          Pacific Centre, Vancouver, BC, Canada, V7Y 1G6Telephone (604) 687-0947 Fax (604) 687-6172


F-2

---

CROSSHAIR EXPLORATION & MINING CORP. 
  BALANCE
  SHEETS 
  AS AT APRIL 30 
  (Expressed in Canadian dollars)

|                                                             |   | 2007        |   |   | 2006        |  
|------------------------------------------------------------ | - | ----------- | - | - | ----------- | -
|                                                             |   |             |   |   |             |  
|ASSETS                                                       |   |             |   |   |             |  
|                                                             |   |             |   |   |             |  
|Current                                                      |   |             |   |   |             |  
|Cash and cash equivalents                                    | $ | 14,311,417  |   | $ | 13,947,976  |  
|Marketable securities (Note 3)                               |   | 1,787,387   |   |   | -           |  
|Receivables                                                  |   | 444,929     |   |   | 229,327     |  
|Due from
      related parties (Note 8)                      |   | -           |   |   | 4,167       |  
|Prepaid expenses                                             |   | 203,438     |   |   | 138,792     |  
|                                                             |   |             |   |   |             |  
|                                                             |   | 16,747,171  |   |   | 14,320,262  |  
|                                                             |   |             |   |   |             |  
|Equipment(Note 4)                                            |   | 366,080     |   |   | 126,369     |  
|Mineral properties(Note 5)                                   |   | 14,551,292  |   |   | 3,919,761   |  
|                                                             |   |             |   |   |             |  
|                                                             | $ | 31,664,543  |   | $ | 18,366,392  |  
|                                                             |   |             |   |   |             |  
|LIABILITIES AND SHAREHOLDERS'
      EQUITY                   |   |             |   |   |             |  
|                                                             |   |             |   |   |             |  
|Current                                                      |   |             |   |   |             |  
|Accounts payable and
      accrued liabilities               | $ | 988,941     |   | $ | 212,220     |  
|Due to
      related parties (Note 8)                        |   | 19,241      |   |   | 14,221      |  
|Due to Paragon (formerly
      Rubicon) (Note 5a & e)        |   | 348,285     |   |   | -           |  
|                                                             |   |             |   |   |             |  
|                                                             |   | 1,356,467   |   |   | 226,441     |  
|Shareholders' equity                                         |   |             |   |   |             |  
|Capital stock (Note 6)                                       |   |             |   |   |             |  
|Authorized                                                   |   |             |   |   |             |  
|Unlimited number of common shares without par
      value    |   |             |   |   |             |  
|Issued                                                       |   |             |   |   |             |  
|70,912,072 (April 30, 2006  58,356,045) common
      shares |   | 44,135,660  |   |   | 29,135,054  |  
|Contributed surplus (Note 6)                                 |   | 3,888,533   |   |   | 1,188,003   |  
|Deficit                                                      |   | (17,716,117 | ) |   | (12,183,106 | )
|                                                             |   |             |   |   |             |  
|                                                             |   | 30,308,076  |   |   | 18,139,951  |  
|                                                             |   |             |   |   |             |  
|                                                             | $ | 31,664,543  |   | $ | 18,366,392  |  
|Nature and continuance of operations
      (Note 1)          |   |             |   |   |             |  
|Subsequent events (Note 13)                                  |   |             |   |   |             |  
|Commitments and contingencies (Note
      12)                |   |             |   |   |             |  

On behalf of the Board:

|Mark
      Morabito | Director | Geir Liland | Director
|--------------------- | -------- | ------------- | --------

The accompanying notes are an integral part of these financial
  statements

F-3

---

CROSSHAIR EXPLORATION & MINING CORP. 
  STATEMENTS
  OF OPERATIONS 
  YEARS ENDED APRIL 30 
  (Expressed in Canadian dollars)

|                                                           |   | 2007       |   |   | 2006       |   |   | 2005       |  
|---------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
|                                                           |   |            |   |   |            |   |   |            |  
|                                                           |   |            |   |   |            |   |   |            |  
|EXPENSES                                                   |   |            |   |   |            |   |   |            |  
|Advertising                                                | $ | 65,327     |   | $ | -          |   | $ | -          |  
|Amortization                                               |   | 43,882     |   |   | 7,477      |   |   | 745        |  
|Audit and accounting (Note 8)                              |   | 38,604     |   |   | 143,212    |   |   | 83,536     |  
|Conference and
      exhibitions                           |   | 99,448     |   |   | -          |   |   | -          |  
|Consulting                                                 |   | 171,724    |   |   | 244,534    |   |   | 182,227    |  
|Directors fees (Note 8)                                    |   | 60,500     |   |   | 63,000     |   |   | 5,000      |  
|Insurance                                                  |   | 35,897     |   |   | -          |   |   | -          |  
|Investor relations                                         |   | 143,773    |   |   | 130,364    |   |   | 120,880    |  
|Legal (Note 8)                                             |   | 212,486    |   |   | 100,700    |   |   | 79,300     |  
|Management fees (Note
      8)                             |   | 50,000     |   |   | 225,000    |   |   | 158,931    |  
|Office and administration                                  |   | 562,642    |   |   | 339,703    |   |   | 122,603    |  
|Property investigations                                    |   | 1,602      |   |   | 93,467     |   |   | 28,776     |  
|Rent                                                       |   | 83,979     |   |   | 67,132     |   |   | 26,487     |  
|Stock-based
      compensation (Note 6)                    |   | 3,696,601  |   |   | 682,213    |   |   | 316,521    |  
|Transfer agent and filing fees                             |   | 87,017     |   |   | 106,448    |   |   | 58,292     |  
|Travel                                                     |   | 306,978    |   |   | 165,538    |   |   | 60,623     |  
|Wages and salaries                                         |   | 923,743    |   |   | 41,441     |   |   | -          |  
|                                                           |   | (6,584,203 | ) |   | (2,410,229 | ) |   | (1,243,921 | )
|                                                           |   |            |   |   |            |   |   |            |  
|OTHER ITEMS                                                |   |            |   |   |            |   |   |            |  
|Interest income                                            |   | 345,287    |   |   | 233,065    |   |   | 20,803     |  
|Management income (Note
      8)                           |   | 40,000     |   |   | 12,000     |   |   | 12,000     |  
|Realized gain - marketable securities                      |   | 701,494    |   |   | -          |   |   | -          |  
|Unrealized loss 
      marketable securities              |   | (35,589    | ) |   | -          |   |   | -          |  
|Write-off of mineral properties (Note
      5)             |   | -          |   |   | (1,518,429 | ) |   | (188,988   | )
|                                                           |   | 1,051,192  |   |   | (1,273,364 | ) |   | (156,185   | )
|                                                           |   |            |   |   |            |   |   |            |  
|Loss before income tax                                     |   | (5,533,011 | ) |   | (3,683,593 | ) |   | (1,400,106 | )
|                                                           |   |            |   |   |            |   |   |            |  
|Future income tax recovery (Note 9)                        |   | -          |   |   | 1,508,120  |   |   | 754,720    |  
|                                                           |   |            |   |   |            |   |   |            |  
|Loss and comprehensive loss for the year                   |   | (5,533,011 | ) |   | (2,175,473 | ) |   | (645,386   | )
|                                                           |   |            |   |   |            |   |   |            |  
|                                                           |   |            |   |   |            |   |   |            |  
|Basic and
      diluted loss per common share              | $ | (0.09      | ) | $ | (0.05      | ) | $ | (0.03      | )
|                                                           |   |            |   |   |            |   |   |            |  
|                                                           |   |            |   |   |            |   |   |            |  
|Weighted average number of common shares
      outstanding |   | 62,434,069 |   |   | 47,264,482 |   |   | 24,677,131 |  

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

F-4

---

CROSSHAIR EXPLORATION & MINING CORP. 
  STATEMENTS
  OF CASH FLOWS 
  YEARS ENDED APRIL 30 
  (Expressed in Canadian dollars)

|                                                            |   | 2007       |   |   | 2006       |   |   | 2005       |  
|----------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
|                                                            |   |            |   |   |            |   |   |            |  
|CASH FLOWS FROM OPERATING ACTIVITIES                        |   |            |   |   |            |   |   |            |  
|Loss for the year                                           | $ | (5,533,011 | ) | $ | (2,175,473 | ) | $ | (645,386   | )
|Items not affecting
      cash:                             |   |            |   |   |            |   |   |            |  
|Amortization                                                |   | 43,882     |   |   | 7,477      |   |   | 745        |  
|Stock-based compensation                                    |   | 3,696,601  |   |   | 682,213    |   |   | 316,521    |  
|Write-off
      of mineral properties                       |   | -          |   |   | 1,518,429  |   |   | 188,988    |  
|Future income taxes                                         |   | -          |   |   | (1,508,120 | ) |   | (754,720   | )
|Unrealized
      loss  marketable securities               |   | 35,589     |   |   | -          |   |   | -          |  
|Realized gain  marketable securities                       |   | (701,494   | ) |   |            |   |   |            |  
|                                                            |   |            |   |   |            |   |   |            |  
|Purchase of marketable
      securities                     |   | (3,026,015 | ) |   | -          |   |   | -          |  
|Proceeds from sales of marketable securities                |   | 1,904,533  |   |   | -          |   |   | -          |  
|                                                            |   |            |   |   |            |   |   |            |  
|Changes in non-cash working capital
      items:            |   |            |   |   |            |   |   |            |  
|Receivables                                                 |   | (215,602   | ) |   | (167,761   | ) |   | (41,086    | )
|Prepaid
      expenses                                      |   | (64,646    | ) |   | (137,592   | ) |   | 10,500     |  
|Accounts payable and accrued liabilities                    |   | 52,531     |   |   | (163,312   | ) |   | 160,002    |  
|Due from
      related parties                              |   | 4,167      |   |   | 3,210      |   |   | (210       | )
|Due to related parties                                      |   | 5,020      |   |   | (9,334     | ) |   | 7,986      |  
|                                                            |   |            |   |   |            |   |   |            |  
|Net cash used in
      operating activities                 |   | (3,798,445 | ) |   | (1,950,263 | ) |   | (756,660   | )
|                                                            |   |            |   |   |            |   |   |            |  
|CASH FLOWS FROM INVESTING ACTIVITIES                        |   |            |   |   |            |   |   |            |  
|Mineral properties                                          |   | (8,480,906 | ) |   | (2,551,070 | ) |   | (1,510,334 | )
|Acquisition of
      equipment                              |   | (283,593   | ) |   | (132,108   | ) |   | -          |  
|                                                            |   |            |   |   |            |   |   |            |  
|Net cash used in
      investing activities                 |   | (8,764,499 | ) |   | (2,683,178 | ) |   | (1,510,334 | )
|                                                            |   |            |   |   |            |   |   |            |  
|CASH FLOWS FROM FINANCING ACTIVITIES                        |   |            |   |   |            |   |   |            |  
|Issuance of shares for cash                                 |   | 12,926,385 |   |   | 14,395,916 |   |   | 6,818,624  |  
|Share issue costs                                           |   | -          |   |   | (561,206   | ) |   | (318,939   | )
|                                                            |   |            |   |   |            |   |   |            |  
|Net cash provided by
      financing activities             |   | 12,926,385 |   |   | 13,834,710 |   |   | 6,499,685  |  
|                                                            |   |            |   |   |            |   |   |            |  
|Net change in cash during the year                          |   | 363,441    |   |   | 9,201,269  |   |   | 4,232,691  |  
|                                                            |   |            |   |   |            |   |   |            |  
|Cash and cash equivalents, beginning of
      year          |   | 13,947,976 |   |   | 4,746,707  |   |   | 514,016    |  
|                                                            |   |            |   |   |            |   |   |            |  
|Cash and cash equivalents, end of year                      | $ | 14,311,417 |   | $ | 13,947,976 |   | $ | 4,746,707  |  
|                                                            |   |            |   |   |            |   |   |            |  
|Cash and cash equivalents                                   |   |            |   |   |            |   |   |            |  
|                                                            |   |            |   |   |            |   |   |            |  
|Cash                                                        | $ | 28,402     |   | $ | 3,947,976  |   | $ | 615,707    |  
|                                                            |   |            |   |   |            |   |   |            |  
|Liquid short term investments                               |   | 14,283,015 |   |   | 10,000,000 |   |   | 4,131,000  |  
|                                                            |   |            |   |   |            |   |   |            |  
|                                                            | $ | 14,311,417 |   | $ | 13,947,976 |   | $ | 4,746,707  |  
|                                                            |   |            |   |   |            |   |   |            |  
|Supplemental disclosures with respect to cash flows(Note 7) |   |            |   |   |            |   |  

The accompanying notes are an integral part of these financial
  statements

F-5

---

CROSSHAIR EXPLORATION & MINING CORP.STATEMENT
  OF SHAREHOLDERS EQUITY 
  (Expressed in Canadian dollars)

|                                                |  |            |   |   |           |  |   |            |   |   |             |   |  |             |   |  |            |  
|----------------------------------------------- |  | ---------- | - | - | --------- |  | - | ---------- | - | - | ----------- | - |  | ----------- | - |  | ---------- | -
|                                                |  | Number of  |   |   |           |  |   |            |   |   | Contributed |   |  |             |   |  |            |  
|                                                |  | Shares     |   |   | Price     |  |   | Amount     |   |   | Surplus     |   |  | Deficit     |   |  | Total      |  
|                                                |  |            |   |   |           |  |   |            |   |   |             |   |  |             |   |  |            |  
|Balance at April 30, 2004                       |  | 16,899,203 |   |   |           |  | $ | 10,318,467 |   | $ | 400,600     |   |  | (9,362,247  | ) |  | 1,356,820  |  
|                                                |  |            |   |   |           |  |   |            |   |   |             |   |  |             |   |  |            |  
|Issued for:                                     |  |            |   |   |           |  |   |            |   |   |             |   |  |             |   |  |            |  
|Private placement (Note 6 (a))                  |  | 4,080,000  |   | $ | 0.25      |  |   | 1,020,000  |   |   | -           |   |  | -           |   |  | 1,020,000  |  
|Private placement (Note 6 (b))                  |  | 1,525,000  |   |   | 0.25      |  |   | 381,250    |   |   | -           |   |  | -           |   |  | 381,250    |  
|Private placement (Note 6 (c))                  |  | 2,750,000  |   |   | 0.40      |  |   | 1,100,000  |   |   | -           |   |  | -           |   |  | 1,100,000  |  
|Private placement (Note 6 (d))                  |  | 1,000,000  |   |   | 0.30      |  |   | 300,000    |   |   | -           |   |  | -           |   |  | 300,000    |  
|Private placement (Note 6 (e))                  |  | 5,622,220  |   |   | 0.45      |  |   | 2,529,999  |   |   | -           |   |  | -           |   |  | 2,529,999  |  
|Property acquisition (Note 6
      (g))         |  | 940,000    |   |   | 0.20-0.60 |  |   | 245,000    |   |   | -           |   |  | -           |   |  | 245,000    |  
|Finders fee (Notes 6 (c & e))                  |  | 383,367    |   |   | 0.40-0.45 |  |   | 162,890    |   |   | -           |   |  | -           |   |  | 162,890    |  
|Exercise of agents options
      and stock     |  | 397,600    |   |   | 0.15-0.25 |  |   | 174,035    |   |   | -           |   |  | -           |   |  | 174,035    |  
|options (Note 6 (h))                            |  |            |   |   |           |  |   |            |   |   |             |   |  |             |   |  |            |  
|Exercise of brokers warrants                   |  | 1,133,150  |   |   | 0.25-0.35 |  |   | 415,730    |   |   | -           |   |  | -           |   |  | 415,730    |  
|(Note 6 (i))                                    |  |            |   |   |           |  |   |            |   |   |             |   |  |             |   |  |            |  
|Exercise of warrants (Note 6
      (k))         |  | 2,974,000  |   |   | 0.30-0.35 |  |   | 1,039,900  |   |   | -           |   |  | -           |   |  | 1,039,900  |  
|Debt settlement (Note 6 (l))                    |  | 60,000     |   |   | 0.17      |  |   | 10,200     |   |   | -           |   |  | -           |   |  | 10,200     |  
|Shares returned to treasury
      (Note 6 (j))  |  | (154,000   | ) |   | 0.25      |  |   | (38,500    | ) |   | -           |   |  | -           |   |  | (38,500    | )
|Less: share issue costs                         |  | -          |   |   | -         |  |   | (504,942   | ) |   | -           |   |  | -           |   |  | (504,942   | )
|                                                |  |            |   |   |           |  |   |            |   |   |             |   |  |             |   |  |            |  
|Fair value of warrants issued as finders       |  | -          |   |   | -         |  |   | -          |   |   | 23,113      |   |  | -           |   |  | 23,113     |  
|fee (Note 6 (a))                                |  |            |   |   |           |  |   |            |   |   |             |   |  |             |   |  |            |  
|Stock-based compensation for the year           |  | -          |   |   | -         |  |   | -          |   |   | 316,521     |   |  | -           |   |  | 316,521    |  
|Less: fair market value of stock options,       |  |            |   |   |           |  |   |            |   |   |             |   |  |             |   |  |            |  
|agents options and brokers warrants           |  |            |   |   |           |  |   |            |   |   |             |   |  |             |   |  |            |  
|exercised (Notes 6 (h &
      i))               |  | -          |   |   | -         |  |   | -          |   |   | (133,739    | ) |  | -           |   |  | (133,739   | )
|Tax benefit renounced to flow-though            |  |            |   |   |           |  |   |            |   |   |             |   |  |             |   |  |            |  
|share subscribers                               |  | -          |   |   | -         |  |   | (754,720   | ) |   | -           |   |  | -           |   |  | (754,720   | )
|Loss for the year                               |  | -          |   |   | -         |  |   | -          |   |   | -           |   |  | (645,386    | ) |  | (645,386   | )
|                                                |  |            |   |   |           |  |   |            |   |   |             |   |  |             |   |  |            |  
|Balance at April 30, 2005                       |  | 37,610,540 |   |   |           |  |   | 16,399,309 |   |   | 606,495     |   |  | (10,007,633 | ) |  | 6,998,171  |  
|                                                |  |            |   |   |           |  |   |            |   |   |             |   |  |             |   |  |            |  
|Issued for:                                     |  |            |   |   |           |  |   |            |   |   |             |   |  |             |   |  |            |  
|Private placement (Note 6 (f))                  |  | 12,977,500 |   |   | 0.80-1.00 |  |   | 11,182,000 |   |   | -           |   |  | -           |   |  | 11,182,000 |  
|Finders fee (Note 6 (f))                       |  | 402,741    |   |   | 0.80      |  |   | 322,193    |   |   | -           |   |  | -           |   |  | 322,193    |  
|Less: Share issue costs (Note
      6 (f))      |  | -          |   |   | -         |  |   | (1,536,806 | ) |   | -           |   |  | -           |   |  | (1,536,806 | )
|Property acquisition (Note 6 (p))               |  | 400,000    |   |   | 0.76-0.90 |  |   | 317,000    |   |   | -           |   |  | -           |   |  | 317,000    |  
|Exercise of agents options
      and stock     |  | 2,363,874  |   |   | 0.25-0.85 |  |   | 1,886,491  |   |   | -           |   |  | -           |   |  | 1,886,491  |  
|options (Note 6 (m))                            |  |            |   |   |           |  |   |            |   |   |             |   |  |             |   |  |            |  
|Exercise of agents warrants
      (Note 6 (n)) |  | 438,418    |   |   | 0.50-0.75 |  |   | 280,688    |   |   | -           |   |  | -           |   |  | 280,688    |  
|Exercise of warrants (Note 6 (o))               |  | 4,162,972  |   |   | 0.30-1.25 |  |   | 1,792,299  |   |   | -           |   |  | -           |   |  | 1,792,299  |  
|Stock-based compensation for the year           |  | -          |   |   | -         |  |   | -          |   |   | 1,335,620   |   |  | -           |   |  | 1,335,620  |  
|Less: fair market value of stock options        |  | -          |   |   | -         |  |   | -          |   |   | (754,112    | ) |  | -           |   |  | (754,112   | )
|exercised (Note 6 (m))                          |  |            |   |   |           |  |   |            |   |   |             |   |  |             |   |  |            |  
|Tax benefit renounced to flow-through share     |  | -          |   |   | -         |  |   | (1,508,120 | ) |   | -           |   |  | -           |   |  | (1,508,120 | )
|subscribers                                     |  |            |   |   |           |  |   |            |   |   |             |   |  |             |   |  |            |  
|Loss for the year                               |  | -          |   |   | -         |  |   | -          |   |   | -           |   |  | (2,175,473  | ) |  | (2,175,473 | )

F-6

---

CROSSHAIR EXPLORATION & MINING CORP.STATEMENT OF SHAREHOLDERS EQUITY 
  (Expressed in Canadian dollars)

|                                                    |  |            |  |  |           |  |   |            |  |   |             |   |   |             |   |   |            |  
|--------------------------------------------------- |  | ---------- |  |  | --------- |  | - | ---------- |  | - | ----------- | - | - | ----------- | - | - | ---------- | -
|                                                    |  | Number of  |  |  |           |  |   |            |  |   | Contributed |   |   |             |   |   |            |  
|                                                    |  | Shares     |  |  | Price     |  |   | Amount     |  |   | Surplus     |   |   | Deficit     |   |   | Total      |  
|                                                    |  |            |  |  |           |  |   |            |  |   |             |   |   |             |   |   |            |  
|Continued                                           |  |            |  |  |           |  |   |            |  |   |             |   |   |             |   |   |            |  
|                                                    |  |            |  |  |           |  |   |            |  |   |             |   |   |             |   |   |            |  
|Balance at April 30, 2006                           |  | 58,356,045 |  |  | -         |  | $ | 29,135,054 |  | $ | 1,188,003   |   | $ | (12,183,106 | ) | $ | 18,139,951 |  
|                                                    |  |            |  |  |           |  |   |            |  |   |             |   |   |             |   |   |            |  
|Issued for:                                         |  |            |  |  |           |  |   |            |  |   |             |   |   |             |   |   |            |  
|Property acquisition (Note 6 (t))                   |  | 445,000    |  |  | 1.27-3.29 |  |   | 1,078,150  |  |   | -           |   |   | -           |   |   | 1,078,150  |  
|Exercise of agents options
      and stock options |  | 2,672,764  |  |  | 0.23-1.32 |  |   | 2,400,146  |  |   | -           |   |   | -           |   |   | 2,400,146  |  
|(Note 6 (r))                                        |  |            |  |  |           |  |   |            |  |   |             |   |   |             |   |   |            |  
|Exercise of agents warrants
      (Note 6 (r))     |  | 273,863    |  |  | 0.75-1.25 |  |   | 277,571    |  |   | -           |   |   | -           |   |   | 277,571    |  
|Exercise of warrants (Note 6 (r))                   |  | 8,674,025  |  |  | 0.75-1.75 |  |   | 10,537,395 |  |   | -           |   |   | -           |   |   | 10,537,395 |  
|Shares issued under incentive
      program (Note   |  | 490,375    |  |  | 1.25-1.75 |  |   | 707,343    |  |   |             |   |   |             |   |   | 707,343    |  
|6 s)                                                |  |            |  |  |           |  |   |            |  |   |             |   |   |             |   |   |            |  
|Stock-based compensation for the year               |  | -          |  |  | -         |  |   | -          |  |   | 3,696,601   |   |   | -           |   |   | 3,696,601  |  
|Less: value of stock options exercised (Note 6 (q)) |  | -          |  |  | -         |  |   | -          |  |   | (996,071    | ) |   | -           |   |   | (996,071   | )
|                                                    |  |            |  |  |           |  |   |            |  |   |             |   |   |             |   |   |            |  
|Loss for the year                                   |  | -          |  |  | -         |  |   | -          |  |   | -           |   |   | (5,533,011  | ) |   | (5,533,011 | )
|                                                    |  |            |  |  |           |  |   |            |  |   |             |   |   |             |   |   |            |  
|Balance at
      April 30, 2007                     |  | 70,912,072 |  |  | -         |  | $ | 44,135,660 |  | $ | 3,888,533   |   | $ | (17,716,117 | ) | $ | 30,308,076 |  

F-7

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|1. | NATURE AND CONTINUANCE OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Crosshair Exploration & Mining Corp. (the "Company")
      was incorporated under the laws of British Columbia on September 2, 1966.
      Its principal business activities are the exploration and development of
      resource properties. All of the Companys resource properties are located
      in North America.                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company is in the process of acquiring, exploring and
      developing its resource properties and has not yet determined whether the
      properties contain ore reserves that are economically recoverable. The
      recoverability of the amounts shown for resource properties and related
      deferred exploration costs are dependent upon the existence of
      economically recoverable reserves, the ability of the Company to obtain
      necessary financing to complete the development of those reserves and upon
      future profitable production.                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | These financial statements have been prepared on a going
      concern basis, which contemplates the realization of assets and
      liquidation of liabilities during the normal course of business as they
      come due.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | At April 30, 2007, the company has working capital of
      $15,390,704 and has remaining commitments to spend approximately
      $1,036,000 on its mineral properties before April 30, 2008. The funds
      required to continue operations and exploration activities during this
      period have been financed primarily from the issue of equity. Management
      believes that the successful financings over the last three years have
      mitigated the adverse conditions which raised substantial doubt on the
      Company's going concern.                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Management estimates that these funds will be sufficient
      to meet the company's obligations and capital expenditure plans for the
      coming year. The company's ability to continue as a going concern, and the
      recoverability of its mineral properties and equipment, is dependent on
      its ability to fund its exploration programs and reach profitable
      operations. These financial statements do not reflect the adjustments to
      carrying values of assets and liabilities and the reported expenses and
      balance sheet classifications that would be necessary should the going
      concern assumption be inappropriate, and these adjustments could be
      material.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | All amounts are in Canadian dollars unless otherwise
      stated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|2. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Financial Instruments - Changes in Accounting
      Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Effective May 1, 2006, the Company decided to early adopt
      the following new accounting standards issued by the Canadian Institute of
      Chartered Accountants (CICA) relating to financial instruments. These new
      standards have been adopted on a prospective basis with no restatement to
      prior period financial statements.                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Financial Instruments-Recognition and Measurement
      (Section 3855)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | These standards set out criteria for the recognition and
      measurement of financial instruments for fiscal years beginning on or
      after October 1, 2006. This standard requires all financial instruments
      within its scope, including derivatives, to be included on a Companys
      balance sheet and measured either at fair value or, in certain
      circumstances when fair value may not be considered most relevant, at cost
      or amortized cost. Changes in fair value are to be recognized in the
      statements of operations and comprehensive income.                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | All financial assets and liabilities are recognized when
      the entity becomes a party to the contract creating the item. As such, any
      of the Companys outstanding financial assets and liabilities at the
      effective date of adoption are recognized and measured in accordance with
      the new requirements as if these requirements had always been in effect.
      Any changes to the fair values of assets and liabilities prior to February
      1, 2007, are recognized by adjusting opening deficit or opening
      accumulated other comprehensive income.                                                                                                                         

F-8

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|2. | SIGNIFICANT ACCOUNTING POLICIES(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | All financial instruments are classified into one of the
      following five categories: held for trading, held-to-maturity, loans and
      receivables, available-for-sale financial assets, or other financial
      liabilities. Initial and subsequent measurement and recognition of changes
      in the value of financial instruments depend on their initial
      classification:                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | •    Held for trading
      financial instruments are measured at fair value. All gains and losses
      are included in net earnings in the period in which they arise.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | •    Held-to-maturity
      investments, loans and receivables, and other financial liabilities are
      initially measured at fair value and subsequently measured at amortized
      cost. Amortization of premiums or discounts and losses due to impairment
      are included in current period net earnings.                                                                                                                                                                                                                                                                                                                                   
|   | •    Available-for-sale
      financial assets are measured at fair value. Revaluation gains and losses
      are included in other comprehensive income until the asset is removed
      from the balance sheet.                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | •    All derivative
      financial instruments are classified as held for trading financial instruments
      and are measured at fair value, even when they are part of a hedging relationship.
      All gains and losses are included in net earnings in the period in which
      they arise.                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In accordance with this new standard, the Company has
      classified its financial instruments as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Cash and cash equivalents, and marketable securities are
      classified as held-for-trading; receivables are classified as loans and
      accounts payable are classified as other financial liabilities. All are
      measured at fair value and gains and losses are included in net earnings
      in the period in which they arise. Cash and cash equivalents are exposed
      to credit risk and these amounts are placed with major Canadian banks. The
      Company is not exposed to interest rate risk due to the short term
      maturity of the financial instruments.                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Hedging (Section 3865)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | This new standard specifies the circumstances under which
      hedge accounting is permissible and how hedge accounting may be performed.
      The Company currently does not have any hedges.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Comprehensive Income (Section 1530)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Comprehensive income is the change in shareholders
      equity during a period from transactions and other events from non-owner
      sources. This standard requires certain gains and losses that would
      otherwise be recorded as part of net earnings to be presented in other
      comprehensive income until it is considered appropriate to recognize
      into net earnings. This standard requires the presentation of
      comprehensive income, and its components in a separate financial statement
      that is displayed with the same prominence as the other financial
      statements.                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | There was no effect on opening equity as of May 1, 2006,
      as a result of applying these new standards.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Accounting Changes (Section 1506)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | This standard allows for voluntary changes in accounting
      policy only when such changes enhance the relevance and reliability of the
      financial statements, and the comparability of those financial statements
      over time and with the financial statements of other entities. The
      standard requires changes in accounting policy to be applied
      retrospectively unless doing so is impracticable, requires prior period
      errors to be corrected retrospectively and calls for enhanced disclosures
      about the effects of changes in accounting policies, estimates and errors
      on the financial statements.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Any impact that the adoption of Section 1506 will have on
      the Companys results of operations and financial condition will depend on
      the nature of future accounting changes. Its adoption has had no impact on
      these financial statements.                                                                                                                                                                                                                                                                                                                                                                                         

F-9

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|2. | SIGNIFICANT ACCOUNTING POLICIES(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Use of estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The preparation of financial statements in conformity
      with Canadian generally accepted accounting principles requires management
      to make estimates and assumptions that affect the reported amount of
      assets and liabilities and the disclosure of contingent assets and
      liabilities at the date of the financial statements and the reported
      amount of revenues and expenses during the period. Actual results could
      differ from these estimates.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company considers cash and cash equivalents to
      include cash on deposit and highly liquid short-term interest bearing
      variable rate investments. Interest earned is recognized immediately in
      operations.                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Marketable securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | The Company accounts for its marketable securities at
      fair market value with gains and losses included in the statement of
      operations.                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Receivables                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Receivables are reported at face value less any
      provisions for uncollectible accounts considered necessary.                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Equipment is recorded at cost. The equipment noted below
      is amortized over its useful lives using the following annual rates and
      methods:                                                                                                                                                                                                                                                                                                                                 

Computer hardware
      30%
      Declining balanceComputer software
      45%
      Declining balanceExploration equipment
      20%
      Declining balanceFurniture and fixtures
      20%
      Declining balanceOffice equipment
      30%
      Declining balance


Mineral properties

Costs related to the acquisition,
  exploration and development of mineral properties are capitalized by property
  until the commencement of commercial production. If commercially profitable ore
  reserves are developed, capitalized costs of the related property are
  reclassified as mining assets and amortized using the unit of production method.
  If, after management review, it is determined that capitalized acquisition,
  exploration and development costs are not recoverable over the estimated
  economic life of the property, or the property is abandoned, or management deems
  there to be an impairment in value, the property is written down to its net
  realizable value.

Any option payments received by the
  Company from third parties or tax credits refundable by the Government of
  Newfoundland are credited to the capitalized cost of the mineral property. If
  payments received exceed the capitalized cost of the mineral property, the
  excess is recognized as income in the year received.

The amounts shown for mineral
  properties do not necessarily represent present or future values. Their
  recoverability is dependent upon the discovery of economically recoverable
  reserves, the ability of the Company to obtain the necessary financing to
  complete the development, and future profitable production or proceeds from the
  disposition thereof.

F-10

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|2. | SIGNIFICANT ACCOUNTING POLICIES(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Asset retirement obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company recognizes the fair value of a liability for an asset retirement obligation in the year in which it is incurred when a reasonable estimate of fair value can be made. The carrying amount of the related long-lived asset
      is increased by the same amount as the liability. The Company does not have any significant asset retirement obligations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Flow-through shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Canadian tax legislation permits a company to issue flow-through shares whereby the deduction for tax purposes relating to qualified resource expenditures is claimed by the investors rather than the Company. Recording these
      expenditures for accounting purposes gives rise to taxable temporary differences.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Effective March 19, 2004, the Emerging Issues Committee of the Canadian Institute of Chartered Accountants requires, where it is more likely than not, that when flow-through expenditures are renounced, a portion of the future
      income tax assets that were not recognized in previous years, due to the recording of a valuation allowance, be recognized as recovery of income taxes in the statement of operations.                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Loss per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Basic loss per share is computed by dividing the loss for the period by the weighted average number of common shares outstanding during the period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | For diluted per share computations, assumptions are made regarding potential common shares outstanding during the period. The weighted average number of common shares is increased to include the number of additional common shares
      that would be outstanding if, at the beginning of the period, or at time of issuance, if later, all options and warrants are exercised. Proceeds from exercise are used to purchase the Companys common shares at their average market price during
      the period, thereby reducing the weighted average number of common shares outstanding. If these computations prove to be anti-dilutive, diluted loss per share is the same as basic loss per share.                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company has an employee stock option plan. The Company recognizes an expense arising from stock options granted to both employees and non-employees using the fair value method. The fair value of option grants is generally
      established at the date of grant using the Black Scholes option pricing model and the compensation amount, equal to the options fair value, is then recognized over the options vesting periods.                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Income taxes are accounted for using the asset and liability method. Under this method of tax allocation, future tax assets and liabilities are determined based on differences between the financial statement carrying amounts of
      existing assets and liabilities and their respective tax bases (temporary differences) and losses carried forward. Future income tax assets and liabilities are measured using the enacted tax rates expected to be in effect when the
      temporary differences are likely to reverse. The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment. The amount of future income tax
      assets recognized is limited to the amount that is more likely than not to be realized.

F-11

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|3. | MARKETABLE SECURITIES
|-- | ---------------------

| |  |   |                         |  |   |                      |  |   |                         |  |   |      | 
| |  | - | ----------------------- |  | - | -------------------- |  | - | ----------------------- |  | - | ---- | 
| |  |   | April
      30, 2007    |  |   | April
      30, 2006 | 
| |  |   |                         |  |   |                      |  |   |                         |  |   |      | 
| |  |   | Fair
      Market Value |  |   | Cost                 |  |   | Fair
      Market Value |  |   | Cost | 
| |  |   |                         |  |   |                      |  |   |                         |  |   |      | 
| |  | $ | 1,787,387               |  | $ | 1,822,976            |  | $ | -                       |  | $ | -    | 

|4. | PROPERTY, PLANT AND
      EQUIPMENT
|-- | -----------------------------------

| |                                      |   | April 30, 2007 |  |   | April 30, 2006 | 
| | ------------------------------------ | - | -------------- |  | - | -------------- | 
| |                                      |   |                |  |   |                | 
| |                                      |   |                |  |   | Accumulated    | 
| |                                      |   | Cost           |  |   | Amortization   | 
| |                                      |   |                |  |   |                | 
| | Furniture and fixtures               | $ | 75,112         |  | $ | 14,625         | 
| | Computer hardware / office equipment |   | 67,014         |  |   | 13,843         | 
| | Computer software                    |   | 32,936         |  |   | 5,581          | 
| | Exploration equipment                |   | 247,162        |  |   | 22,095         | 
| |                                      |   |                |  |   |                | 
| |                                      | $ | 422,224        |  | $ | 56,144         | 

F-12

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|5. | MINERAL PROPERTIES
|-- | ------------------

Central
        Mineral Belt ProjectSouthernGolden
      
      
      
      
      
      Otter / Portage
      
      
      
      
      
      Golden
      
      
      Glenwood
      
      
      Wings
      
      
      BeigouPromise
      
      
      Moran Lake
      
      
      Lake
      
      
      Sinbad
      
      
      Promise
      
      
      Break
      
      
      Point -Titan
      
      
      Gold
      
      
      OtherProperty
      
      
      Property
      
      
      Properties
      
      
      claims
      
      
      (Victoria Lake)
      
      
      Property
      
      
      Property
      
      
      Property
      
      
      Properties
      
      
      TotalBalance at April 30, 2005$
      -
      
      $
      598,500
      
      $
      -
      
      $
      -
      
      $
      536,289
      
      $
      785,163
      
      $
      392,409
      
      $
      171,444
      
      $
      -
      
      $
      2,483,805-Drilling and trenching
      
      -
      
      
      323,008
      
      
      -
      
      
      -
      
      
      37,929
      
      
      32,349
      
      
      -
      
      
      -
      
      
      55,046
      
      
      448,332Geology
      
      -
      
      
      541,753
      
      
      400
      
      
      8,597
      
      
      145,301
      
      
      73,089
      
      
      10,872
      
      
      41,410
      
      
      7,504
      
      
      828,926Geophysics
      
      -
      
      
      1,085,376
      
      
      -
      
      
      -
      
      
      98,112
      
      
      3,562
      
      
      -
      
      
      -
      
      
      -
      
      
      1,187,050Administration
      
      -
      
      
      152,555
      
      
      -
      
      
      -
      
      
      36,148
      
      
      4,188
      
      
      2,463
      
      
      17,081
      
      
      561
      
      
      212,996Technical analysis
      
      -
      
      
      87,725
      
      
      -
      
      
      -
      
      
      110,393
      
      
      22,438
      
      
      104
      
      
      -
      
      
      664
      
      
      221,324Acquisition costs
      
      -
      
      
      290,000
      
      
      70,000
      
      
      4,125
      
      
      82,000
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      446,125Credits received
      
      -
      
      
      (266,300
      )
      
      -
      
      
      -
      
      
      (22,150
      )
      
      (36,693
      )
      
      (31,326
      )
      
      -
      
      
      (33,899
      )
      
      (390,368
      )Total expenditures for the year
      
      -
      
      
      2,214,117
      
      
      70,400
      
      
      12,722
      
      
      487,733
      
      
      98,933
      
      
      (17,887
      )
      
      58,491
      
      
      29,876
      
      
      2,954,385Write-off of mineral
        properties
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (884,096
      )
      
      (374,522
      )
      
      (229,935
      )
      
      (29,876
      )
      
      (1,518,429
      )Balance at April 30, 2006
      $
      -
      
      $
      2,812,617
      
      $
      70,400
      
      $
      12,722
      
      $
      1,024,022
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      3,919,761Drilling and trenching
      
      640,629
      
      
      2,474,435
      
      
      94,698
      
      
      -
      
      
      514,059
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      3,723,821Geology
      
      32,738
      
      
      2,070,123
      
      
      34,741
      
      
      3,127
      
      
      78,338
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      2,219,067Geophysics
      
      -
      
      
      2,278,608
      
      
      62,900
      
      
      -
      
      
      79,961
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      2,421,469Administration
      
      54,301
      
      
      343,171
      
      
      7,765
      
      
      -
      
      
      42,743
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      447,980Technical analysis
      
      17,336
      
      
      432,758
      
      
      8,261
      
      
      -
      
      
      40,189
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      498,544Acquisition costs
      
      110,400
      
      
      710,000
      
      
      276,750
      
      
      -
      
      
      223,500
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      1,320,650Credits received
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -Total expenditures for the year
      
      855,404
      
      
      8,309,095
      
      
      485,115
      
      
      3,127
      
      
      978,790
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      10,631,531Balance at April 30, 2007
      $
      855,404
      
      $
      11,121,712
      
      $
      555,515
      
      $
      15,849
      
      $
      2,002,812
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      14,551,292


F-13

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|5. | MINERAL PROPERTIES(contd)
|-- | ---------------------------

Cumulative totals as at April 30, 2007:

Central Mineral Belt ProjectSouthernGolden
      
      
      
      
      
      Otter / Portage
      
      
      
      
      
      Golden
      
      
      Glenwood
      
      
      Wings
      
      
      BeigouPromise
      
      
      Moran Lake
      
      
      Lake
      
      
      Sinbad
      
      
      Promise
      
      
      Break
      
      
      Point -Titan
      
      
      Gold
      
      
      OtherProperty
      
      
      Property
      
      
      Property
      
      
      claims
      
      
      (Victoria Lake)
      
      
      Property
      
      
      Property
      
      
      Property
      
      
      Properties
      
      
      TotalDrilling and trenching
      $
      640,629
      
      $
      2,797,441
      
      $
      94,698
      
      $
      -
      
      $
      565,064
      
      $
      84,061
      
      $
      126,550
      
      $
      -
      
      $
      57,054
      
      $
      4,365,497Geology
      
      32,738
      
      
      2,805,121
      
      
      35,141
      
      
      11,724
      
      
      448,585
      
      
      350,739
      
      
      144,147
      
      
      105,883
      
      
      49,833
      
      
      3,983,911Geophysics
      
      -
      
      
      3,447,121
      
      
      62,900
      
      
      -
      
      
      325,368
      
      
      272,920
      
      
      5,118
      
      
      -
      
      
      11,154
      
      
      4,124,581Administration
      
      54,301
      
      
      515,927
      
      
      7,765
      
      
      -
      
      
      104,400
      
      
      54,694
      
      
      35,842
      
      
      40,386
      
      
      5,224
      
      
      818,539Technical analysis
      
      17,336
      
      
      562,402
      
      
      8,261
      
      
      -
      
      
      226,045
      
      
      108,375
      
      
      34,831
      
      
      304
      
      
      22,396
      
      
      979,950Acquisition costs
      
      110,400
      
      
      1,260,000
      
      
      346,750
      
      
      4,125
      
      
      355,500
      
      
      50,000
      
      
      59,360
      
      
      83,362
      
      
      107,102
      
      
      2,376,599Credits received
      
      -
      
      
      (266,300
      )
      
      -
      
      
      -
      
      
      (22,150
      )
      
      (36,693
      )
      
      (31,326
      )
      
      -
      
      
      (33,899
      )
      
      (390,368
      )Write-off of mineral properties
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      (884,096
      )
      
      (374,522
      )
      
      (229,935
      )
      
      (218,864
      )
      
      (1,707,417
      )Balance at April 30, 2007
      $
      855,404
      
      $
      11,121,712
      
      $
      555,515
      
      $
      15,849
      
      $
      2,002,812
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      -
      
      $
      14,551,292


F-14

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|5. | MINERAL PROPERTIES(contd)
|-- | ---------------------------

a)GOLDEN PROMISE PROJECT

On May 2, 2006, the Company entered
  into an option agreement with Paragon Minerals Corporation (Paragon) (formerly
  Rubicon Minerals Corporation) to earn a 60% interest in the Golden Promise
  Property. The option agreement calls for:

| | i) | Issuing common shares:
| | -- | ----------------------

| |                                                            |  | Number of shares |  |  |                             | 
| | ---------------------------------------------------------- |  | ---------------- |  |  | --------------------------- | 
| | Within 5 days of the execution date of the
      agreement |  | 20,000           |  |  | Issued by the
      Company | 
| | On or before May 1, 2007                                   |  | 20,000           |  |  | Issued by the Company       | 
| | On or before May 1, 2008                                   |  | 20,000           |  |  |                             | 
| | On or before May
      1, 2009                             |  | 20,000           |  |  |                             | 
| |                                                            |  | 80,000           |  |  |                             | 

| | ii) | Incurring a total of $4,000,000 in exploration
      expenditures:
| | --- | ------------------------------------------------------------------

| |                                                                   |   | Amount    |  |  |  | 
| | ----------------------------------------------------------------- | - | --------- |  |  |  | 
| | On or before May 1, 2007 (as a firm and
      binding commitment) | $ | 750,0001  |  |  |  | 
| | On or before May 1, 2008                                          |   | 900,000   |  |  |  | 
| | On or before May 1, 2009                                          |   | 1,100,000 |  |  |  | 
| | On or before May
      1, 2010                                    |   | 1,250,000 |  |  |  | 
| |                                                                   | $ | 4,000,000 |  |  |  | 

1As at April 30, 2007, the
  Company incurred $745,004 in exploration expenditures, paid $85,000 in cash, and
  issued 20,000 common shares at a value of $25,400 for acquisition costs.

| | iii) | Make cash payments on behalf of Paragon for Paragons
      obligations with respect to the Golden Promise Property and other claims
      as follows:
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                  |   | Amount  |  |  |                     | 
| | -------------------------------- | - | ------- |  |  | ------------------- | 
| | On or before June 1, 2006        | $ | 75,000  |  |  | Paid by Paragon     | 
| | On or before June 14, 2006       |   | 10,000  |  |  | Paid by the Company | 
| | On
      or before June 14, 2007 |   | 15,000  |  |  |                     | 
| |                                  | $ | 100,000 |  |  |                     | 

During the year ended April 30, 2007,
  the Company advanced $587,000 to Paragon for Golden Promise exploration costs
  and at April 30, 2007, Paragon had spent $742,803. As a result the Company owes
  Paragon $155,803.

b)MORAN LAKE PROPERTY (PART OF CENTRAL MINERAL BELT PROJECT)

On October 14, 2004, the Company
  entered into an agreement with a private individual for an option to acquire a
  90% interest (subject to a 2% NSR and a 10% carried interest to the vendor) in
  the Moran Lake Property in Central Labrador. On March 1, 2005, the Company
  acquired another 381 claims north of the Moran Lake Property, known as Moran
  Heights.

F-15

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|5. | MINERAL PROPERTIES(contd)
        The amended and restated agreement calls
          for:
|-- | -------------------------------------------------------------------------------------------

| | i) | Making cash payments:
| | -- | ---------------------

| |                                                                        |   | Amount  |  |  |                      | 
| | ---------------------------------------------------------------------- | - | ------- |  |  | -------------------- | 
| | Upon execution of the agreement (original)                             | $ | 25,000  |  |  | (Paid October 2004)  | 
| | Within 5 business days of the approval date (original
      agreement) |   | 50,000  |  |  | (Paid November 2004) | 
| | Upon signing of the amended and restated
      agreement               |   | 25,000  |  |  | (Paid March 2005)    | 
| | On or before November 10, 2005                                         |   | 100,000 |  |  | (Paid November 2005) | 
| | On or before November 10, 2006                                         |   | 100,000 |  |  | (Paid November 2006) | 
| | On or before November 10, 2007                                         |   | 125,000 |  |  |                      | 
| | On
      or before November 10, 2008                                   |   | 150,000 |  |  |                      | 
| |                                                                        | $ | 575,000 |  |  |                      | 

| | ii) | Issuing common shares:
| | --- | ----------------------

| |                                                                       |  | Number of shares |  |  |                        | 
| | --------------------------------------------------------------------- |  | ---------------- |  |  | ---------------------- | 
| | Upon execution of the agreement (original)                            |  | 250,000          |  |  | (Issued October 2004)  | 
| | Upon acceptance by the TSX Venture Exchange
      (amended agreement) |  | 100,000          |  |  | (Issued March 2005)    | 
|
| | Upon the approval date of the original agreement                      |  | 250,000          |  |  | (Issued December 2004) | 
| | Second year share payment                                             |  | 250,000          |  |  | (Issued October 2005)  | 
| | Third year share payment                                              |  | 250,000          |  |  | (Issued November 2006) | 
| | Fourth year share payment                                             |  | 250,000          |  |  |                        | 
| | Fifth year share
      payment                                        |  | 250,000          |  |  |                        | 
| |                                                                       |  | 1,600,000        |  |  |                        | 

| | iii) | Incurring a total of $3,000,000 in exploration
      expenditures:
| | ---- | ------------------------------------------------------------------

| |                                      |   | Amount    |  |  |                   | 
| | ------------------------------------ | - | --------- |  |  | ----------------- | 
| | On or before November 10, 2005       | $ | 100,000   |  |  | (Requirement met) | 
| | On or before November 10, 2006       |   | 300,000   |  |  | (Requirement met) | 
| | On or before November 10, 2007       |   | 500,000   |  |  | (Requirement met) | 
| | On or before November 10, 2008       |   | 800,000   |  |  | (Requirement met) | 
| | On
      or before November 10, 2009 |   | 1,300,000 |  |  | (Requirement met) | 
| |                                      | $ | 3,000,000 |  |  |                   | 

The agreement requires completion of a
  bankable feasibility study for the commencement of commercial production on the
  property within 24 months of completion of all aforementioned obligations.

As at April 30, 2007, the Company
  incurred $9,861,712 (net of $266,300 credits received) in exploration
  expenditures, paid $300,000 in cash, and issued 1,100,000 common shares at a
  value of $960,000 for acquisition costs.

F-16

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|5. | MINERAL PROPERTIES(contd)
|-- | ---------------------------

c)OTTER / PORTAGE LAKE PROPERTY (PART OF CENTRAL MINERAL BELT
  PROJECT)

On December 2, 2005 the Company entered
  into an agreement with a private company for an option to acquire a 100%
  interest (subject to a 1.5% NSR) in the Otter and Portage Lake Properties. The
  option agreement calls for:

| | i) | Making cash payments:
| | -- | ---------------------

| |                                     |   | Amount  |  |  |                               | 
| | ----------------------------------- | - | ------- |  |  | ----------------------------- | 
| | Upon execution of the agreement     | $ | 25,000  |  |  | (Paid in December
      2005) | 
| | On or before December 2, 2006       |   | 30,000  |  |  | (Paid in December 2006)       | 
| | On or before December 2, 2007       |   | 35,000  |  |  |                               | 
| | On or before
      December 2, 2008 |   | 50,000  |  |  |                               | 
| |                                     | $ | 140,000 |  |  |                               | 

| | ii) | Issuing common shares:
| | --- | ----------------------

| |                                             |  | Number of shares |  |  |                                | 
| | ------------------------------------------- |  | ---------------- |  |  | ------------------------------ | 
| | Upon acceptance by the TSX Venture Exchange |  | 50,000           |  |  | (Issued in
      January 2006) | 
| | On or before December 2, 2006               |  | 75,000           |  |  | (Issued in December 2006)      | 
| | On
      or before December 2, 2007         |  | 100,000          |  |  |                                | 
| |                                             |  | 225,000          |  |  |                                | 

| | iii) | Incurring a total of $600,000 in exploration
      expenditures:
| | ---- | ----------------------------------------------------------------

| |                                                   |   | Amount  |  |  |                   | 
| | ------------------------------------------------- | - | ------- |  |  | ----------------- | 
| | On or before December 2, 2006                     | $ | 100,000 |  |  | (Requirement met) | 
| | On or before December 2, 2007 an additional       |   | 200,000 |  |  |                   | 
| | On
      or before December 2, 2008 an additional |   | 300,000 |  |  |                   | 
| |                                                   | $ | 600,000 |  |  |                   | 

As at April 30, 2007, the Company
  incurred $208,765 in exploration expenditures, paid $55,000 in cash, and issued
  125,000 common shares at a value of $291,750 for acquisition costs.

d)SINBAD CLAIMS

The Sinbad claims, located in Emery
  County, Utah, were transferred to the Company on January 17, 2006 for $4,125 and
  $11,724 was incurred in relation to geological work. The Company has recently
  entered into an agreement with Target Exploration & Mining Corp. (a related
  party by way of common directors with the Company) for the sale of the Sinbad
  claims for a cash payment in the amount of $31,698. The Company will retain a 2%
  net smelter royalty. Subsequent to April 30, 2007, this agreement was approved
  by the TSX Venture Exchange.

F-17

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|5. | MINERAL PROPERTIES(contd)
|-- | ---------------------------

e)SOUTHERN
  GOLDEN PROMISE (VICTORIA LAKE), WINGS POINT  TITAN, GLENWOODBREAK PROPERTIES

During February 2003, the Company
  entered into three separate option-JV agreements with Paragon Minerals
  Corporation (Paragon) (formerly Rubicon Minerals Corporation) to acquire a 60%
  interest in mineral claims located in the Botwood Basin area of Central
  Newfoundland covering three separate land packages known as Southern Golden
  Promise, Wings Point  Titan, and Glenwood Break. The Company was able to earn
  its 60% interest in the properties by issuing up to 400,000 shares for each
  property and incurring $5,250,000 in exploration, both spread over a four year
  period with each period ending September 30, with a minimum $750,000 during the
  first year, $1,200,000 during the second year, and the remainder over the third
  and fourth years; with 60% of the expenditures to target on diamond
  drilling.

On September 7 and September 22, 2005,
  the Company elected to terminate its options on the Wings Point-Titan property
  and the Glenwood Break property, respectively, and returned the properties to
  Paragon Minerals Corporation. As a result, the Company has no further
  obligations and the related mineral properties costs of $1,258,618 were
  written-off in the second quarter of 2006.

At April 30, 2007, the Company incurred
  $1,647,312 (net of $22,150 credits received) in exploration expenditures, issued
  400,000 common shares at a value of $328,000 and paid cash to the vendor of
  $27,500, in relation to the Southern Golden Promise Property.

During the year ended April 30, 2007,
  the company advanced $370,000 to Paragon for Southern Golden Promise exploration
  costs and at April 30, 2007, Rubicon had spent $562,482 on behalf of the
  Company. As a result the Company owes Paragon $192,482.

f)BEIGOU GOLD PROPERTY

On September 16, 2004 the Company
  announced that it had entered into a letter of intent with the Liaoning
  Non-ferrous Geological Bureau (the Bureau) in China for a formal joint venture
  of the Beigou Gold Project. On December 2, 2004, the Company announced the
  completion of a formal joint venture agreement with the Bureau following
  completion of a NI 43-101 report on the Beigou Gold project. The original
  agreement was amended and restated on April 18, 2005. The Company can earn up to
  a 80% interest in the Property by making exploration expenditures in the
  aggregate amount of US$3,500,000 and making cash payments to the Bureau in the
  amount of US$500,000, all over a five year period. A finder's fee of US$100,000,
  1,000,000 common shares, and a 1% NSR, was to be paid to a third party over the
  five year period as the Company makes the exploration expenditures in the joint
  venture agreement. As at January 31, 2006, the Company incurred $146,573 in
  exploration expenditures and paid $18,758 of finders fees and $64,604 of legal
  fees related to the acquisition of the Beigou Gold Project.

Based on the decision to concentrate
  its efforts in North America, on December 20, 2005 the Company decided not to
  continue with the Beijou Gold Property in China. As a result $229,935 was
  written-off in the third quarter of 2006 and the Company has no further
  obligations in respect to this property.

g)OTHER PROPERTIES WRITTEN-OFF

NORTH PAULS POND GOLD PROPERTY

During June 2003, the Company entered
  into an agreement with a private individual for an option to acquire a 100%
  interest in the North Pauls Pond Gold Property in North-Central Newfoundland.
  On June 22, 2005, the Company terminated its option on the North Pauls Pond
  Gold property and as a result has no further obligations. The related costs of
  $109,878 were written-off in the year ended April 30, 2005 and an additional
  $63,775 was written-off in the first quarter of 2006.

F-18

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|**5.** | MINERAL PROPERTIES(contd)                                                                                                                                                                                                                                                                                                                                                                    
|------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |                                                                                                                                                                                                                                                                                                                                                                                                
|       | NORTH PAULS POND GOLD PROPERTY(contd.)                                                                                                                                                                                                                                                                                                                                                      
|       |                                                                                                                                                                                                                                                                                                                                                                                                
|       | $33,899 was received for the North Pauls Pond property
      in the third quarter of 2006. This was from the Newfoundland Government in
      regards to the mineral incentive program. As a result the amount of
      $173,653 originally written off was decreased to $139,754.                                                                                                            
|       |                                                                                                                                                                                                                                                                                                                                                                                                
|       | DJ Gold Property                                                                                                                                                                                                                                                                                                                                                                               
|       |                                                                                                                                                                                                                                                                                                                                                                                                
|       | During January 2004, the Company entered into an
      agreement to acquire up to 100% of the DJ Gold Property in the Shaanxi
      Province of China from Dinjialing Gold Corporation Limited. During the
      year ended April 30, 2005, the Company elected to terminate this option
      along with its obligations and related mineral property costs of $79,110
      were written-off.
|       |                                                                                                                                                                                                                                                                                                                                                                                                
|6.     | CAPITAL STOCK AND CONTRIBUTED SURPLUS                                                                                                                                                                                                                                                                                                                                                          
|       |                                                                                                                                                                                                                                                                                                                                                                                                
|       | Share issuances                                                                                                                                                                                                                                                                                                                                                                                
|       |                                                                                                                                                                                                                                                                                                                                                                                                
|       | The authorized share capital of the Company is an
      unlimited number of common shares without par
      value.                                                                                                                                                                                                                                                                             

| | (a) | On May 31, 2004, the Company completed a private
      placement of 4,080,000 flow-through shares at a price of $0.25 per share
      for proceeds of $1,020,000. The agent received an 8% commission of the
      gross proceeds along with 326,400 brokers warrants exercisable into
      common shares of the Company at $0.25 per share for a period of 12 months
      ($23,113 representing the fair value of these warrants was added to
      contributed surplus). The agents warrants were fully exercised during the
      year ended April 30, 2005. Share issue costs of $138,896 were incurred in
      relation to this private placement.                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (b) | On November 27, 2004, the Company completed a private
      placement of 1,525,000 units at a price of $0.25 per unit for aggregate
      gross proceeds of $381,250. Each unit is comprised of one common share and
      one non- transferable share purchase warrant. The warrant entitles the
      holder to acquire one common share of the Company at a price of $0.30 per
      share until November 27, 2005. The warrants contain a forced exercise
      provision. In the event that the closing price of the Companys listed
      shares exceeds $0.60 per common share for 10 consecutive trading days
      after the four month hold period, the exercise period of the warrants
      could be shortened to a period of 30 days from the date that the Company
      provides written notice to the holders of the warrants of such an early
      expiry. During the year ended April 30, 2006, all the warrants associated
      with this private placement were exercised (Notes 5 (k & o)). Share
      issue costs of $1,410 were incurred in relation to this private
      placement.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | (c) | On December 14, 2004, the Company completed a
      non-brokered private placement of 2,750,000 units at a price of $0.40 per
      unit for aggregate gross proceed of $1,100,000. Each unit is comprised of
      one flow-through common share of the Company and one half of one
      non-transferable share purchase warrant. Each whole warrant entitles the
      holder to purchase one common share of the Company at a price of $0.50 per
      share until December 14, 2005. The Company paid a finders fee equal to 7%
      of the aggregate gross proceeds raised from the private placement totaling
      192,500 units. Each finders fee unit includes one common share and one
      share purchase warrant. Share issue costs of $81,385 were incurred in
      relation to this private placement. During the year ended April 30, 2006,
      all the warrants associated with this private placement were exercised
      (Notes 6 (n & o)).                                                                                                                                          

F-19

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|6. | CAPITAL STOCK AND CONTRIBUTED SURPLUS
|-- | -------------------------------------
|   |                                      
|   | Share issuances(contd)             
|   |                                      
|   | (d)                                  
|   |                                      
|   | (e)                                  
|   |                                      
|   | (f)                                  
|   |                                      
|   | (g)                                  
|   |                                      
|   | (h)                                  

F-20

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|6. | CAPITAL STOCK AND CONTRIBUTED SURPLUS
        Share issuances(contd)
|-- | ----------------------------------------------------------------------
|   |                                                                       
|   | (i)                                                                   
|   |                                                                       
|   | (j)                                                                   
|   |                                                                       
|   | (k)                                                                   
|   |                                                                       
|   | (l)                                                                   
|   |                                                                       
|   | (m)                                                                   
|   |                                                                       
|   | (n)                                                                   
|   |                                                                       
|   | (o)                                                                   
|   |                                                                       
|   | (p)                                                                   
|   |                                                                       
|   | (q)                                                                   

Stock Options
      
      Agents Options200,000
      $ 0.23
      215,866
      $ 0.50780,000
      $ 0.25
      366,898
      $ 0.85175,000
      $ 0.28410,000
      $ 0.45
      582,76475,000
      $ 0.5884,000
      $ 0.6435,000
      $ 0.6575,000
      $ 0.9050,000
      $ 1.00206,000
      $ 1.322,090,000


F-21

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|6. | CAPITAL STOCK AND CONTRIBUTED SURPLUS
|-- | -------------------------------------
|   |                                      
|   | Share issuances(contd)             
|   |                                      
|   | (r)                                  
|   |                                      
|   | (s)                                  
|   |                                      
|   | (t)                                  

Share purchase warrants

At April 30, 2007, the following
  warrants were outstanding:

| |  | Number            | Exercise |                    
| |  | ----------------- | -------- | -------------------
| |  | of
      Warrants | Price    | Expiry
      Date  
| |  |                   |          |                    
| |  | 362,500           | $1.25    | November 3, 2007(1)
| |  | 37,383            | $1.25    | November 3, 2007(2)
| |  | 399,883           |          |                    

| | (1) | These warrants were granted in connection with the
      private placement on November 3, 2005 (Note 6(f)).                                                
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | These warrants were granted with the compensation shares
      to the broker on completion of the private placement on November 3, 2005
      (Note 6 (f)).

Stock options

The Company adopted a formal written
  stock option plan on July 26, 2004. Under this plan, the Company may grant
  options to directors, employees, consultants and certain other service
  providers. Option shares are subject to the minimum vesting requirement, with
  25% of the total number of the options granted to be released every 6 months
  from the date of grant. The options can be granted for a maximum term of 5
  years.

F-22

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|6. | CAPITAL STOCK AND CONTRIBUTED SURPLUS(contd)                                                                                                                   
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                  
|   | Stock options(contd)                                                                                                                                           
|   |                                                                                                                                                                  
|   | The following is a summary of stock options outstanding
      at April 30, 2007, April 30, 2006 and April 30, 2005 and changes during
      the years then ended.

April
        30, 2007
      
      
      April
        30, 2006
      
      
      April 30, 2005Weighted
      
      
      
      
      
      Weighted
      
      
      
      
      
      WeightedNumber
      
      
      Average
      
      
      Number
      
      
      Average
      
      
      Number
      
      
      Averageof options
      
      
      Exercise Price
      
      
      of options
      
      
      Exercise Price
      
      
      of options
      
      
      Exercise PriceOutstanding, beginning of year
      
      6,364,748
      
      $
      0.68
      
      
      4,774,622
      
      $
      0.34
      
      
      2,361,434
      
      $
      0.24Exercised
      
      (2,672,764
      )
      
      0.53
      
      
      (2,363,874
      )
      
      0.48
      
      
      (397,600
      )
      
      0.24Cancelled or expired
      
      (700,000
      )
      
      0.84
      
      
      (393,750
      )
      
      0.33
      
      
      (316,434
      )
      
      0.20Granted
      
      5,990,000
      
      
      2.04
      
      
      4,347,750
      
      
      0.91
      
      
      3,127,222
      
      
      0.39Outstanding, end
        of year
      
      8,981,984
      
      $
      1.62
      
      
      6,364,748
      
      $
      0.68
      
      
      4,774,622
      
      $
      0.34Currently exercisable
      
      2,753,484
      
      $
      0.83


F-23

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|6. | CAPITAL STOCK AND CONTRIBUTED SURPLUS(contd)
        Stock options(contd)                                    
|-- | -----------------------------------------------------------------------------------------------------------------
|   |                                                                                                                  
|   | At April 30, 2007, the following stock options were
      outstanding to directors, officers and
      employees:

Number
      Exercise Price ($)
      Expiry Date191,984
      0.85
      November 2, 2007*5,000
      0.25
      June 19, 200875,000
      0.25
      January 21, 200930,000
      0.25
      February 17, 200950,000
      0.25
      June 17, 200925,000
      0.28
      January 1, 2010715,000
      0.45
      February 4, 2010100,000
      0.45
      June 14, 2010100,000
      0.45
      September 14, 2010115,000
      0.68
      September 26, 2010116,000
      0.64
      November 14, 2010150,000
      0.90
      January 5, 20111,100,000
      1.00
      January 18, 201175,000
      1.32
      April 18, 2011389,000
      1.32
      April 24, 20111,325,000
      1.32
      May 1, 2011450,000
      1.32
      May 24, 2011180,000
      1.32
      July 1, 2011300,000
      1.43
      August 21, 2011100,000
      1.43
      September 21, 201150,000
      1.56
      October 1, 2011275,000
      2.07
      November 4, 2011100,000
      2.26
      November 17, 2011150,000
      3.10
      December 11, 2011100,000
      2.66
      January 12, 2012350,000
      2.50
      February 1, 20121,600,000
      2.50
      March 6, 201240,000
      2.58
      March 13, 2012475,000
      3.00
      March 23, 2012100,000
      3.00
      April 15, 2012150,000
      3.00
      April 23, 20128,981,984


* 1,297,750 compensation options were
  issued to the broker in connection with the completion of the private placement
  on November 3, 2005 of which 738,868 were exercised during the year ended April
  30, 2006. Each compensation option is exercisable into a unit of the Company at
  a price of $0.85 per unit for a period of two years. Each unit consists of one
  common share and one half of one transferable share purchase warrant (Note
  6(f)).

F-24

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|6. | CAPITAL STOCK AND CONTRIBUTED SURPLUS(contd)                                                                                                                                                                                                                                                                                                                         
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                        
|   | Stock-based compensation                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                        
|   | The Company recognizes compensation expense for all stock
      options granted using the fair value based method of accounting. The fair
      value of the options vested in the year ended April 30, 2007 totaled
      $3,696,601. The weighted average fair value of options granted in the year
      was $2.16 (April 30, 2006 - $0.91, April 30, 2005 - $0.39).
|   |                                                                                                                                                                                                                                                                                                                                                                        
|   | The following weighted average assumptions were used for
      the Black-Scholes method of valuation of stock options granted during the
      years:                                                                                                                                                                                                                  

| |                          | April
      30, | April
      30, | April
      30,
| | ------------------------ | --------------- | --------------- | ---------------
| |                          | 2007            | 2006            | 2005           
| |                          |                 |                 |                
| | Risk-free interest rate  | 3.79%           | 3.70%           | 2.85%          
| | Expected life of options | 5 years         | 5 years         | 5 years        
| | Annualized volatility    | 239%            | 140%            | 130%           
| | Dividend rate            | 0%              | 0%              | 0%             
| |                          |                 |                 |                

|   | Escrow shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | At April 30, 2007, a total of 140,625 (April 30, 2006 
      281,250; April 30, 2005  562,500) shares were held in escrow. No expense
      was recognized for the release of these shares as the release is not
      considered compensatory.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | These shares were originally placed in escrow as an
      incentive for management to reorganize the Company. The release of these
      shares from escrow is subject to certain performance conditions and to the
      direction and determination of the TSX Venture Exchange. The performance
      conditions state that the shares may be released from escrow on the basis
      of 15% of the original number for every $100,000 expended on exploration
      and development of a resource property calculated proportionately after
      the first $100,000 expenditure. If the performance conditions are not met
      by February 14, 2010, the shares will be returned and cancelled.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|7. | SUPPLEMENTAL DISCLOSURES WITH RESPECT TO CASH
      FLOWS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

| |                                            |   |      |  |   |      |  |   |       | 
| | ------------------------------------------ | - | ---- |  | - | ---- |  | - | ----- | 
| | For the years
      ended April 30,        |   | 2007 |  |   | 2006 |  |   | 2005  | 
| |                                            |   |      |  |   |      |  |   |       | 
| | Cash paid during the year for income taxes | $ | -    |  | $ | -    |  | $ | -     | 
| |                                            |   |      |  |   |      |  |   |       | 
| | Cash paid during the year for interest     | $ | -    |  | $ | -    |  | $ | 1,610 | 

The following were significant non-cash
  investing and financing transactions during the year ended April 30, 2007:

| | (a) | The Company recognized fair market value of $996,071 in
      respect of stock options and agents options exercised (Note
      6(q)).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                        
| | (b) | The Company issued a total of 445,000 common shares at a
      value of $1,078,150 for property acquisitions (Note 6(t)).              
| |     |                                                                                                                                        
| | (c) | Included in accounts payable was $810,505 related to
      mineral property costs.                                                     
| |     |                                                                                                                                        
| | (d) | All amounts owed to Paragon are for mineral property
      costs.                                                                      

F-25

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|7. | SUPPLEMENTAL DISCLOSURES WITH RESPECT TO CASH FLOWS(contd)                                                      
|-- | ------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                   
|   | The following were significant non-cash investing and financing transactions during the year ended April 30, 2006:
|   |                                                                                                                   
|   | (a)                                                                                                               
|   |                                                                                                                   
|   | (b)                                                                                                               
|   |                                                                                                                   
|   | (c)                                                                                                               
|   |                                                                                                                   
|   | (d)                                                                                                               
|   |                                                                                                                   
|   | (e)                                                                                                               
|   |                                                                                                                   
|   | (f)                                                                                                               
|   |                                                                                                                   
|   | The following were significant non-cash investing and financing transactions during the year ended April 30, 2005:
|   |                                                                                                                   
|   | (a)                                                                                                               
|   |                                                                                                                   
|   | (b)                                                                                                               
|   |                                                                                                                   
|   | (c)                                                                                                               
|   |                                                                                                                   
|   | (d)                                                                                                               
|   |                                                                                                                   
|   | (e)                                                                                                               
|   |                                                                                                                   
|   | (f)                                                                                                               

F-26

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|8. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                             
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                        
|   | The Company entered into transactions with related
      parties as follows:                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                        
|   | During the year ended April 30, 2007, the Company
      recorded management fees of $40,000 (2006 - $12,000, 2005 - $12,000) from
      a public Company with directors in common. At April 30, 2007, $Nil (April
      30, 2006 - $Nil) was owed from this party.     
|   |                                                                                                                                                                                                                                                                        
|   | During the year ended April 30, 2007, the Company
      incurred management fees of $50,000 (2006  $225,000, 2005 - $150,000) to
      a director. At April 30, 2007, $Nil (April 30, 2006 - $Nil) was
      owed.                                                    
|   |                                                                                                                                                                                                                                                                        
|   | During the year ended April 30, 2007, the Company
      incurred directors fees of $60,500 (2006 - $63,000, 2005 - $5,000), to
      non-executive directors. At April 30, 2007, $Nil (April 30, 2006 - $Nil)
      was owed to these directors.                      
|   |                                                                                                                                                                                                                                                                        
|   | During the year ended April 30, 2007, the Company
      incurred accounting fees of $Nil (2006 - $58,529, 2005 - $58,414) to a
      private company controlled by a former director. At April 30, 2007, $Nil
      (April 30, 2006 - $2,536) was owed.                
|   |                                                                                                                                                                                                                                                                        
|   | During the year ended April 30, 2007, the Company
      incurred legal fees of $25,882 (2006  $70,907, 2005 - $91,322) to a
      company that a director is a partner of. At April 30, 2007, $Nil (April
      30, 2006 - $Nil) was owed to this party.              
|   |                                                                                                                                                                                                                                                                        
|   | During the year ended April 30, 2007, the Company
      incurred geological consulting fees of $33,075 (2006 - $40,701, 2005 -
      $10,000) to a private company owned by a director. At April 30, 2007,
      $5,830 (April 30, 2006 - $Nil) was owed to this party.
|   |                                                                                                                                                                                                                                                                        
|   | At April 30, 2007, $13,411 (April 30, 2006 - $11,685,
      April 30, 2005 - $6,435) was owed to directors and/or officers for
      expenses paid on behalf of the Company.                                                                                           
|   |                                                                                                                                                                                                                                                                        
|   | As at April 30, 2007, $Nil (April 30, 2006 - $4,167) was
      owed from a director for overpayment of management fees.                                                                                                                                                
|   |                                                                                                                                                                                                                                                                        
|   | These transactions were incurred in the normal course of
      operations and, in managements opinion, were undertaken with the same
      terms and conditions as transactions with unrelated parties.                                                               
|   |                                                                                                                                                                                                                                                                        
|9. | INCOME TAXES                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                        
|   | A reconciliation of income taxes at statutory rates with
      the reported taxes is as follows:                                                                                                                                                                       

| |                                                                                         |   |            |   |   |            |   |   |            |  
| | --------------------------------------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
| |                                                                                         |   | 2007       |   |   | 2006       |   |   | 2005       |  
| |                                                                                         |   |            |   |   |            |   |   |            |  
| | Loss before income tax recovery                                                         | $ | (5,533,011 | ) | $ | (3,683,593 | ) | $ | (1,400,106 | )
| |                                                                                         |   |            |   |   |            |   |   |            |  
| | Expected income tax recovery at statutory
      rates                                   | $ | (1,961,735 | ) | $ | (1,388,715 | ) | $ | (498,438   | )
| | Non-taxable items                                                                       |   | 1,965,026  |   |   | 1,095,317  |   |   | 129,033    |  
| | Unrecognized (recognized) benefit of
      non-capital losses and resource expenditures |   | (3,291     | ) |   | (1,214,722 | ) |   | (385,315   | )
| |                                                                                         |   |            |   |   |            |   |   |            |  
| | Total income taxes (recovery)                                                           | $ | -          |   | $ | (1,508,120 | ) | $ | (754,720   | )

F-27

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|9. | INCOME TAXES(contd)                                                              
|-- | -----------------------------------------------------------------------------------
|   |                                                                                    
|   | The significant components of the Company's future tax
      assets are as follows:

| |                                                             |   | 2007       |   |   | 2006       |  
| | ----------------------------------------------------------- | - | ---------- | - | - | ---------- | -
| |                                                             |   |            |   |   |            |  
| | Future tax assets and (liabilities):                        |   |            |   |   |            |  
| | Loss carry forwards                                         | $ | 606,851    |   | $ | 1,049,668  |  
| | Marketable Securities                                       |   | 11,033     |   |   | -          |  
| | Equipment                                                   |   | 17,405     |   |   | 4,622      |  
| | Share Issuance Costs                                        |   | 243,054    |   |   | 419,880    |  
| | Mineral property and
      related exploration expenditures |   | 917,927    |   |   | (197,576   | )
| |                                                             |   |            |   |   |            |  
| |                                                             |   | 1,796,270  |   |   | 1,276,594  |  
| |                                                             |   |            |   |   |            |  
| | Less: valuation allowances                                  |   | (1,796,270 | ) |   | (1,276,594 | )
| |                                                             |   |            |   |   |            |  
| | Net future tax assets ( liabilities)                        | $ | -          |   | $ | -          |  

|    | During the year ended April 30, 2006, the Company issued
      4,000,000 common shares on a flow-through basis for gross proceeds of
      $4,000,000. The flow-through agreement requires the Company to renounce
      certain deductions for Canadian exploration expenditures incurred on the
      Companys resource properties. Future income taxes of $1,508,120 on the
      exploration expenditures to be renounced to shareholders were applied
      against capital stock.                                                                                
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company has available for deduction against future
      taxable income non-capital losses of approximately $2,784,000. These
      losses, if not utilized, will expire commencing in 2016. Subject to
      certain restrictions, the Company also has resource expenditures available
      to reduce taxable income in future years. Future tax benefits which may
      arise as a result of these non-capital losses and resource deductions have
      not been recognized in these financial statements and have been offset by
      a valuation allowance.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10. | SEGMENTED INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company operates in one reportable operating segment,
      being the exploration and development of mineral properties. Geographical
      information is as follows:                                                                                                                                                                                                                                                                                                                                                                                              

| |                    |   | April 30,  |  |   | April 30, | 
| | ------------------ | - | ---------- |  | - | --------- | 
| |                    |   | 2007       |  |   | 2006      | 
| | Equipment          |   |            |  |   |           | 
| | Canada             | $ | 366,080    |  | $ | 126,369   | 
| | USA                |   | -          |  |   | -         | 
| |                    |   |            |  |   |           | 
| |                    | $ | 366,080    |  | $ | 126,369   | 
| |                    |   |            |  |   |           | 
| | Mineral properties |   |            |  |   |           | 
| | Canada             | $ | 14,535,443 |  | $ | 3,907,039 | 
| | USA                |   | 15,849     |  |   | 12,722    | 
| |                    |   |            |  |   |           | 
| |                    |   |            |  |   |           | 
| |                    | $ | 14,551,292 |  | $ | 3,919,761 | 

F-28

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|11. | FINANCIAL INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | The Company's financial instruments consist of cash and
      cash equivalents, marketable securities, receivables, accounts payable and
      accrued liabilities, due to Paragon and due from/to related parties.
      Unless otherwise noted, it is management's opinion that the Company is not
      exposed to significant interest, currency or credit risks arising from
      these financial instruments. The fair values of these financial
      instruments approximate their carrying values, unless otherwise
      noted.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|12. | COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

2008
      
      $ 76,8042009
      
      48,5862010
      
      47,9542011
      
      35,491


|13. | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Subsequent to April 30, 2007, the Company entered into an
      option agreement with Belmont Resources Inc. and International Montoro
      Resources Inc. to acquire a 75% interest in four mineral licenses
      totalling 139 claims located in the central mineral belt of Labrador, by
      carrying out $800,000 in exploration expenditures and issuing 175,000
      common shares in the capital of the Company over a three year period. The
      agreement was approved by the TSX Venture Exchange on May 28,
      2007.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|14. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES
      GENERALLY ACCEPTED ACCOUNTING PRINCIPLES                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | These financial statements have been prepared in
      accordance with Canadian GAAP. Material variations in the accounting
      principles, practices and methods used in preparing these financial
      statements from principles, practices and methods accepted in the United
      States ("United States GAAP") are described and quantified
      below.                                                                                                                                                                       

F-29

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|14. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES
      GENERALLY ACCEPTED ACCOUNTING PRINCIPLES(contd.)                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                  
|    | Balance sheets                                                                                                                   
|    |                                                                                                                                  
|    | The impact of the differences between Canadian GAAP and
      United States GAAP on the balance sheets would be as
      follows:

2007
      
      
      
      
      
      
      
      
      2006Balance,
      
      
      Adjustments
      
      
      Balance,
      
      
      Balance,
      
      
      Adjustments
      
      
      Balance,Canadian
      
      
      
      
      
      US
      
      
      Canadian
      
      
      
      
      
      USGAAP
      
      
      
      
      
      GAAP
      
      
      GAAP
      
      
      
      
      
      GAAPAssets:Current assets
      $
      16,747,171
      
      $
      -
      
      $
      16,747,171
      
      $
      14,320,262
      
      $
      -
      
      $
      14,320,262Equipment
      
      366,080
      
      
      -
      
      
      366,080
      
      
      126,369
      
      
      -
      
      
      126,369Mineral properties
      
      14,551,292
      
      
      (12,474,517
      )
      
      2,076,775
      
      
      3,919,761
      
      
      (3,163,636
      )
      
      756,125Total assets
      $
      31,664,543
      
      $
      (12,474,517
      )
      $
      19,190,026
      
      $
      18,366,392
      
      $
      (3,163,636
      )
      $
      15,202,756LiabilitiesCurrent liabilities
      $
      1,356,467
      
      $
      -
      
      $
      1,356,467
      
      $
      226,441
      
      $
      -
      
      $
      226,441Flow-through shareliability
      
      -
      
      
      -
      
      
      -
      
      
      -
      
      
      401,546
      
      
      401,546Shareholders equityCapital stock
      
      44,135,660
      
      
      -
      
      
      44,135,660
      
      
      29,135,054
      
      
      1,444,640
      
      
      30,579,694Contributed surplus
      
      3,888,533
      
      
      -
      
      
      3,888,533
      
      
      1,188,003
      
      
      -
      
      
      1,188,003Deficit
      
      (17,716,117
      )
      
      (12,474,517
      )
      
      (30,190,634
      )
      
      (12,183,106
      )
      
      (5,009,822
      )
      
      (17,192,928
      )Total liabilities andshareholders equity
      $
      31,664,543
      
      $
      (12,474,517
      )
      $
      19,190,026
      
      $
      18,366,392
      
      $
      (3,163,636
      )
      $
      15,202,756


Statements of operations

The impact of the differences between
  Canadian GAAP and United States GAAP on the statements of operations would be as
  follows:

| |                                                               |   | 2007        |   |   | 2006       |   |   | 2005       |  
| | ------------------------------------------------------------- | - | ----------- | - | - | ---------- | - | - | ---------- | -
| |                                                               |   |             |   |   |            |   |   |            |  
| |                                                               |   |             |   | $ |            |   |   |            |  
| | Loss for the year under Canadian GAAP                         | $ | (5,533,011  | ) |   | (2,175,473 | ) | $ | (645,386   | )
| | Adjustments:                                                  |   |             |   |   |            |   |   |            |  
| | Mineral property
      expenditures incurred during the year  |   | (9,310,881  | ) |   | (2,508,260 | ) |   | (1,279,032 | )
| | Mineral properties written off
      during the year          |   | -           |   |   | 1,325,707  |   |   | 81,886     |  
| | Flow-through
      share premium (discount) paid in excess of |   |             |   |   |            |   |   |            |  
| | (below) market value                                          |   | -           |   |   | 491,714    |   |   | 124,940    |  
| | Future income
      tax recovery                              |   | -           |   |   | (1,508,120 | ) |   | (754,720   | )
| | Loss under US
      GAAP                                      | $ | (14,843,892 | ) | $ | (4,374,432 | ) | $ | (2,472,312 | )
| |                                                               |   |             |   |   |            |   |   |            |  
| | Weighted average number of common shares outstanding          |   |             |   |   |            |   |   |            |  
| | under US GAAP                                                 |   | 62,293,444  |   |   | 46,983,232 |   |   | 24,114,631 |  
| |                                                               |   |             |   |   |            |   |   |            |  
| | Loss per share under US GAAP                                  | $ | (0.24       | ) | $ | (0.09      | ) | $ | (0.10      | )

F-30

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|14. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES
      GENERALLY ACCEPTED ACCOUNTING PRINCIPLES(contd.)                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                            
|    | Statements of cash flows                                                                                                                   
|    |                                                                                                                                            
|    | The impact of the differences between Canadian GAAP and
      United States GAAP on the statements of cash flows would be as
      follows:

| |                                                                 |   | 2007        |   |   | 2006       |   |   | 2005       |  
| | --------------------------------------------------------------- | - | ----------- | - | - | ---------- | - | - | ---------- | -
| | Net cash flows from operating activities                        |   |             |   |   |            |   |   |            |  
| | Under Canadian GAAP                                             | $ | (3,798,445  | ) | $ | (1,950,263 | ) | $ | (756,660   | )
| | Mineral
      properties                                        |   | (8,238,406  | ) |   | (2,421,945 | ) |   | (1,279,032 | )
| | Net cash used in
      operating activities under US GAAP       |   | (12,036,851 | ) |   | (4,372,208 | ) |   | (2,035,692 | )
| |                                                                 |   |             |   |   |            |   |   |            |  
| | Net cash flows from financing activities                        |   |             |   |   |            |   |   |            |  
| | Under
      Canadian GAAP and US GAAP                           |   | 12,926,385  |   |   | 13,834,710 |   |   | 6,499,685  |  
| |                                                                 |   |             |   |   |            |   |   |            |  
| | Net cash flows used in investing activities                     |   |             |   |   |            |   |   |            |  
| | Under
      Canadian GAAP                                       |   | (8,764,499  | ) |   | (2,683,178 | ) |   | (1,510,334 | )
| | Mineral properties                                              |   | 8,238,406   |   |   | 2,421,945  |   |   | 1,279,032  |  
| | Net cash
      provided by (used in) investing activities under |   | (526,093    | ) |   | (261,233   | ) |   | (231,302   | )
| | US GAAP                                                         |   |             |   |   |            |   |   |            |  
| | Net increase in cash and cash equivalents
      during the year |   | 363,441     |   |   | 9,201,269  |   |   | 4,232,691  |  
| | Cash and cash equivalents, beginning the year                   |   | 13,947,976  |   |   | 4,746,707  |   |   | 514,016    |  
| | Cash and cash equivalents, end of year                          | $ | 14,311,417  |   | $ | 13,947,976 |   | $ | 4,746,707  |  
| |                                                                 |   |             |   |   |            |   |   |            |  

Mineral property interests and
  deferred exploration costs

In accordance with EITF 04-02, the
  Company classifies the costs of acquiring its mineral interests as tangible
  assets resulting in no difference between Canadian and U.S GAAP. Under U.S. GAAP
  exploration costs on mineral properties, other than acquisition costs, prior to
  the establishment of proven or probable reserves are expensed as incurred. Under
  Canadian GAAP these costs may be deferred.

Under US GAAP, the Company performs
  evaluations of its investment in mineral properties to assess the recoverability
  and the residual value of its investments in these assets. All mineral
  properties are reviewed for impairment whenever events or circumstances change
  which indicates the carrying amount of an asset may not be recoverable,
  utilizing established guidelines based on undiscounted future net cash flows
  from the asset or upon the determination that certain exploration properties do
  not have sufficient potential for economic mineralization.

F-31

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|14. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES(contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Flow-through shares                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Under Canadian income tax legislation, the Company is permitted to issue shares whereby the Company agrees to incur qualifying expenditures (as defined under the Income Tax Act of Canada) and renounce the related income tax
      deductions to the investors. Under Canadian GAAP, flow-through shares are accounted for as part of the issuance of capital stock at the price paid for the shares, net of any future income tax liability. Under United States GAAP, any difference
      between the market price of the Company's stock and the fair value of the flow-through shares must be recorded as a liability if a premium is paid by investors or as an asset if investors are purchasing the shares at a discount. The asset or
      liability is charged to income as the flow-through share proceeds are expended on qualifying expenditures.               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | During the year the Company did not issue any flow-through shares and accordingly there was no difference between Canadian and United States GAAP.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | During the year ended April 30, 2006, the Company issued 4,000,000 flow-through shares for total proceeds of $4,000,000. As the market price of the Companys stock was less than the fair value of the flow-through shares
      issued, a premium of $398,454 has been recorded for the expended cash on qualifying expenditures and a flow- through share liability of $401,546 was recorded for the unexpended amount as of April 30, 2006. During the year ended April 30,
      2005, the Company issued 6,830,000 flow-through shares for total proceeds of $2,120,000. As the market price of the Companys stock was less than the fair value of the flow-through shares issued, a premium of $124,940 was recorded for
      the expended cash on qualifying transactions and a flow-through share liability of $93,260 for the unexpended amount as of April 30, 2005.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Loss per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Under both Canadian and United States generally accepted accounting principles basic loss per share is calculated using the weighted average number of common shares outstanding during the year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    | Under United States generally accepted accounting principles, the weighted average number of common shares outstanding excludes any shares held in escrow for which the release is subject to certain performance conditions. The
      weighted average number of shares outstanding under United States generally accepted accounting principles for the years ended April 30, 2007, 2006 and 2005 were 62,293,444, 46,983,232, and 24,114,631 respectively.                                                                                                                                                                                                                                                                                                                                                                                                                   

F-32

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|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2007                      
|(Expressed in Canadian dollars)     
|                                    

|14. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES(contd.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | New accounting pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | In July 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48). FIN 48 clarifies the accounting and
      reporting for uncertainties in income tax law. FIN 48 prescribes a comprehensive model for the financial statement recognition, measurement, presentation, and disclosure of uncertain tax positions taken or expected to be taken in income tax returns.
      FIN 48 is effective for fiscal years beginning after December 15, 2006. The adoption of FIN 48 is not anticipated to have an impact on the Companys financial position or results of operations.                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 establishes a framework for measuring the fair value of assets and liabilities. This framework is intended to provide increased
      consistency in how fair value determinations are made under various existing accounting standards which permit, or in some cases require, estimates of fair market value. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007,
      and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including any financial statements for an interim period within that
      fiscal year. The Company is currently assessing the impact of SFAS No. 157 the Companys financial position and results of operations, but does not anticipate a material impact.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | In February, 2007, the FASB issued SFAS No. 159 The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits entities to choose to measure many financial assets and financial liabilities
      at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently assessing the
      impact of SFAS No. 159 on our financial position and results of operations, but are does not anticipate a material impact.                                                                                                                                                                                                                                                                                                                       

F-33

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ITEM 19. EXHIBITS

|12.1 | Section 302 CEO Certification
|---- | -----------------------------
|     |                              
|12.2 | Section 302 CFO Certification
|     |                              
|13.1 | Section 906 CEO Certification
|     |                              
|13.2 | Section 906 CFO Certification

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SIGNATURES

The registrant hereby certifies that it meets all of the
requirements for filing on Form 20-F, as amended by Form 20-F/A (Amendment No.
1), and that it has duly caused and authorized the undersigned to sign this
annual report on its behalf.

CROSSHAIR EXPLORATION & MINING
CORP.



/s/ Mark J.
Morabito
By:   Mark J. Morabito
         President and Chief
Executive Officer

Date: June 25, 2008

46

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