UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION




WASHINGTON,
D.C.  20549




FORM
20-F




(Mark
One)






 ̈REGISTRATION STATEMENT PURSUANT
      TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF
      1934
  OR
  þ  
       ANNUAL REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 For
the fiscal year ended April 30, 2009
  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 Morabito, Phone:  (604) 681-8030,
      mark@crosshairexploration.com
                                                            Suite 1240, 1140 West Pender
      Street, Vancouver, B.C. Canada V6E
4G1


(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
      registeredCommon
      Shares, without par value
              NYSE
      Amex Equities





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




None(Title
      of Class)





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




None


(Title of
Class)




Indicate the number of outstanding
shares of each of the issuer's classes of capital or common stock as of the
close of the period covered by the annual report:  112,184,313




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


 ̈
    Yes
              þ
No




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


 ̈
    Yes
              þ
No




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or 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.


þ
    Yes
               ̈
No




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-K (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


 ̈
    Yes
               ̈
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 þ




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




U.S.
      GAAP  ̈
            International
      Financial Reporting Standards as issued
              by
      the International Accounting Standards Board   ̈
            Other
      þ




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.


þ Item
      17
               ̈ 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
              þ
No





Index to
Exhibits on Page 65





CROSSHAIR
EXPLORATION & MINING CORP.


FORM
20-F ANNUAL REPORT


TABLE
OF CONTENTS






Part
      I
                    
                    PageItem 1.
                    Identity of Directors, Senior Management and
      Advisers
                    3Item 2.
                    Offer Statistics and Expected Timetable
                    3Item 3.
                    Key Information
                    3Item 4.
                    Information on the Company
                    14Item 4A.
                    Unresolved Staff Comments
                    37Item 5.
                    Operating and Financial Review and
Prospects
                    37Item 6.
                    Directors, Senior Management and Employees
                    44Item 7.
                    Major Shareholders and Related Party
      Transactions
                    59Item 8.
                    Financial Information
                    61Item 9.
                    The Offer and Listing
                    62Item 10.
                    Additional Information
                    63Item 11.
                    Quantitative and Qualitative Disclosures About Market
      Risk
                    71Item 12.
                    Description of Securities Other Than Equity
      Securities
                    72Part
      IIItem 13.
                    Defaults, Dividend Arrearages and
    Delinquencies
                    73Item 14.
                    Material Modifications to the Rights of Security Holders and
      Use of Proceeds
                    73Item 15.
                    Controls and Procedures
                    73Item 16A.
                    Audit Committee Financial Expert
                    74Item 16B.
                    Code of Ethics
                    74Item 16C.
                    Principal Accountant Fees and Services
                    74Item 16D.
                    Exemptions from the Listing Standards for Audit
      Committees
                    75Item 16E.
                    Purchases of Equity Securities by the Issuer and Affiliated
      Purchasers
                    75Item 16F.
                    Changes in Registrant’s Certifying
    Accountant
                    75Item 16G
                    Corporate Governance
                    75Part
      IIIItem 17.
                    Financial Statements
                    77Item 18.
                    Financial Statements
                    112Item 19.
                    Exhibits
                    112Glossary of Geological Terms
                    115


i


RESOURCE
AND RESERVE ESTIMATES




The terms
“mineral reserve,” “proven mineral reserve” and “probable mineral reserve” used
in our disclosure are Canadian mining terms that are defined in accordance with
National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI
43-101”) under the guidelines set out in the Canadian Institute of Mining,
Metallurgy and Petroleum (the “CIM”) Best Practice Guidelines for the Estimation
of Mineral Resource and Mineral Reserves (the “CIM Standards”), adopted by the
CIM Council on December 11, 2005. These definitions differ from the definitions
in the United States Securities and Exchange Commission (the “SEC”) Industry
Guide 7 under the U.S. Securities Act of 1933, as amended (the “Securities
Act”). Under Industry Guide 7 standards, a “final” or “bankable” feasibility
study is required to report reserves, the three-year historical average price is
used in any reserve or cash flow analysis to designate reserves and the primary
environmental analysis or report must be filed with the appropriate governmental
authority.




The terms “mineral resource,” “measured mineral resource,”
“indicated mineral resource” and “inferred mineral resource” used in our
disclosure are Canadian mining terms that are defined in accordance with NI
43-101 under the guidelines set out in the CIM Standards; however, these terms
are not defined terms under Industry Guide 7 and are normally not permitted to
be used in reports and registration statements filed with the SEC. Investors are
cautioned not to assume that any part or all of mineral deposits in these
categories will ever be converted into reserves. “Inferred mineral resources”
have a great amount of uncertainty as to their existence, and great uncertainty
as to their economic and legal feasibility. It cannot be assumed that all or any
part of an inferred mineral resource will ever be upgraded to a higher category.
Under Canadian rules, estimates of inferred mineral resources may not form the
basis of feasibility or pre-feasibility studies. Investors are cautioned not to
assume that all or any part of an inferred mineral resource exists or is
economically or legally mineable.




Accordingly,
information contained in this report and the documents incorporated by reference
herein containing descriptions of our mineral deposits may not be comparable to
similar information made public by U.S. companies subject to the reporting and
disclosure requirements under the United States federal securities laws and the
rules and regulations thereunder.




FORWARD-LOOKING
STATEMENTS




Certain
statements in this document constitute “forward-looking statements” under
applicable securities laws.  Forward-looking statements can be
identified by the use of terminology such as “anticipate,” “believe,” “plan,”
“estimate,” “expect,” and “intend,” and statements that an action or event
“may,” “might,” “could,” or “should,” or be taken or occur, or other similar
expressions. These forward-looking statements are not guarantees or predictions
of future performance and involve known and unknown risks, uncertainties and
other factors, many of which are beyond our control and which may cause our
actual results, performance or achievements, or other future events, to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements.  Such factors
include, among others, the following risks:




·
            the
      risks associated with outstanding litigation, if
  any;




·
            risks
      associated with project
development;




·
            the
      need for additional financing;




·
            operational
      risks associated with mining and mineral processing, including risks
      related to accidents, equipment breakdowns, labour disputes or other
      unanticipated difficulties with or interruptions in operations which may
      or may not be insured;




·
            fluctuations
      in metal prices;




·
            title
      matters;




·
            environmental
      liability claims and insurance;




1


·
            reliance
      on key personnel;




·
            the
      potential for conflicts of interest among certain officers, directors or
      promoters with certain other
projects;




·
            the
      absence of dividends;




·
            currency
      fluctuations;




·
            competition;




·
            dilution;




·
            the
      volatility of our common share price and
volume;




·
            tax
      consequences to U.S. shareholders;




·
            risks
      related to us being subject to the penny stock
  rules;




·
            risks
      related to us being a foreign private issuer;
  and




·
            risks
      related to us possibly being a passive foreign investment
      company.




Some of
the important risks and uncertainties that could affect forward-looking
statements are described further in “Item 3. Key Information—D. Risk
Factors.”  Except as required by applicable regulations or by law, we
do not undertake any obligation to publicly update or review any forward-looking
statements whether as a result of new information, future events or
otherwise.





FINANCIAL
AND OTHER INFORMATION




In this
Annual Report, unless otherwise specified, all dollar amounts are expressed in
Canadian Dollars (“CDN$” or “$”).  The Government of Canada permits a
floating exchange rate to determine the value of the Canadian Dollar against the
U.S. Dollar (US$).







2


PART
      I





ITEM 1.
            IDENTITY
      OF DIRECTORS, SENIOR MANAGEMENT AND
ADVISERS




Not
applicable




ITEM
      2.
            OFFER
      STATISTICS AND EXPECTED TIMETABLE




Not
applicable




ITEM
      3.
            KEY
      INFORMATION




3.A.           Selected
Financial Data




Our
selected financial data for the fiscal years ended April 30, 2009, 2008, 2007,
2006 and 2005 was derived from our financial statements that have been audited
by Davidson & Company LLP, independent Chartered Accountants, as indicated
in their audit reports.  Davidson & Company LLP is a member of the
Canadian Institute of Chartered Accountants.




The
selected financial data should be read in conjunction with and is qualified in
its entirety by reference to the financial statements and notes thereto included
elsewhere in this Annual Report.




To date,
we have not generated sufficient cash flow from operations to fund ongoing
operational requirements and cash commitments.  We have financed our
operations principally through the sale of our equity
securities.  While we believe we have sufficient capital and liquidity
to finance current operations, nevertheless, our ability to continue operations
is dependent on our ability to obtain additional financing.  See “Item
3. Key Information—D. Risk Factors.”




The
information in the following table is derived from our financial statements,
which have been prepared in accordance with Canadian Generally Accepted
Accounting Principles (“GAAP”) and Canadian/USA Generally Accepted Auditing
Standards (“GAAS”).  All material numerical differences between Canadian
GAAP and US GAAP, are described in footnotes to the financial
statements.




3







For
      the Year Ended April 30,2009
                                                                                  
                                                                                  
                                                                                  2008
                                                                                  
                                                                                  
                                                                                  2007
                                                                                  
                                                                                  
                                                                                  2006
                                                                                  
                                                                                  
                                                                                  2005CANADIAN
      GAAPRevenue
                                                                                  
                                                                                  
                                                                                  --
                                                                                  
                                                                                  
                                                                                  
                                                                                  --
                                                                                  
                                                                                  
                                                                                  
                                                                                  --
                                                                                  
                                                                                  
                                                                                  
                                                                                  --
                                                                                  
                                                                                  
                                                                                  
                                                                                  --Income
      (Loss) for the Period
                                                                                  
                                                                                  $
                                                                                  (20,724,237
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (12,933,204
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (5,533,011
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (2,175,473
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (645,386
                                                                                  )Basic
      Income (Loss) Per Share
                                                                                  
                                                                                  $
                                                                                  (0.22
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (0.18
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (0.09
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (0.05
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (0.03
                                                                                  )Dividends
      Per
      Share
                                                                                  
                                                                                  
                                                                                  --
                                                                                  
                                                                                  
                                                                                  
                                                                                  --
                                                                                  
                                                                                  
                                                                                  
                                                                                  --
                                                                                  
                                                                                  
                                                                                  
                                                                                  --
                                                                                  
                                                                                  
                                                                                  
                                                                                  --Weighted
      Average Shares (#)
                                                                                  
                                                                                  
                                                                                  93,584,687
                                                                                  
                                                                                  
                                                                                  
                                                                                  72,997,081
                                                                                  
                                                                                  
                                                                                  
                                                                                  62,434,069
                                                                                  
                                                                                  
                                                                                  
                                                                                  47,264,482
                                                                                  
                                                                                  
                                                                                  
                                                                                  24,677,131Period-end
      Shares
      (#)
                                                                                  
                                                                                  
                                                                                  112,184,313
                                                                                  
                                                                                  
                                                                                  
                                                                                  84,595,825
                                                                                  
                                                                                  
                                                                                  
                                                                                  70,912,072
                                                                                  
                                                                                  
                                                                                  
                                                                                  58,356,045
                                                                                  
                                                                                  
                                                                                  
                                                                                  37,610,540Working
      Capital
                                                                                  
                                                                                  $
                                                                                  2,641,169
                                                                                  
                                                                                  
                                                                                  $
                                                                                  13,272,006
                                                                                  
                                                                                  
                                                                                  $
                                                                                  15,390,704
                                                                                  
                                                                                  
                                                                                  $
                                                                                  14,093,821
                                                                                  
                                                                                  
                                                                                  $
                                                                                  4,512,628Mineral
      Properties
                                                                                  
                                                                                  $
                                                                                  29,336,828
                                                                                  
                                                                                  
                                                                                  $
                                                                                  27,071,981
                                                                                  
                                                                                  
                                                                                  $
                                                                                  14,551,292
                                                                                  
                                                                                  
                                                                                  $
                                                                                  3,919,761
                                                                                  
                                                                                  
                                                                                  $
                                                                                  2,483,805Long-Term
      Debt
                                                                                  
                                                                                  
                                                                                  --
                                                                                  
                                                                                  
                                                                                  
                                                                                  --
                                                                                  
                                                                                  
                                                                                  
                                                                                  --
                                                                                  
                                                                                  
                                                                                  
                                                                                  --
                                                                                  
                                                                                  
                                                                                  
                                                                                  --Capital
      Stock
                                                                                  
                                                                                  $
                                                                                  67,793,186
                                                                                  
                                                                                  
                                                                                  $
                                                                                  60,948,053
                                                                                  
                                                                                  
                                                                                  $
                                                                                  44,135,660
                                                                                  
                                                                                  
                                                                                  $
                                                                                  29,135,054
                                                                                  
                                                                                  
                                                                                  $
                                                                                  16,399,309Shareholders’
      Equity
                                                                                  
                                                                                  $
                                                                                  31,849,308
                                                                                  
                                                                                  
                                                                                  $
                                                                                  40,795,458
                                                                                  
                                                                                  
                                                                                  $
                                                                                  30,308,076
                                                                                  
                                                                                  
                                                                                  $
                                                                                  18,139,951
                                                                                  
                                                                                  
                                                                                  $
                                                                                  6,998,171Total
      Assets
                                                                                  
                                                                                  $
                                                                                  33,365,659
                                                                                  
                                                                                  
                                                                                  $
                                                                                  42,270,262
                                                                                  
                                                                                  
                                                                                  $
                                                                                  31,664,543
                                                                                  
                                                                                  
                                                                                  $
                                                                                  18,366,392
                                                                                  
                                                                                  
                                                                                  $
                                                                                  7,310,943US GAAP1 2 3 4
      5Net
      Income
      (Loss)
                                                                                  
                                                                                  $
                                                                                  (16,296,230
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (24,195,442
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (14,843,892
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (4,374,432
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (2,472,312
                                                                                  )Loss
      Per
      Share
                                                                                  
                                                                                  $
                                                                                  (0.17
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (0.33
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (0.24
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (0.09
                                                                                  )
                                                                                  
                                                                                  $
                                                                                  (0.10
                                                                                  )Mineral
      Properties
                                                                                  
                                                                                  $
                                                                                  10,690,539
                                                                                  
                                                                                  
                                                                                  $
                                                                                  3,201,950
                                                                                  
                                                                                  
                                                                                  $
                                                                                  2,076,775
                                                                                  
                                                                                  
                                                                                  $
                                                                                  756,125
                                                                                  
                                                                                  
                                                                                  $
                                                                                  609,824Shareholders’
      Equity
                                                                                  
                                                                                  $
                                                                                  13,172,334
                                                                                  
                                                                                  
                                                                                  $
                                                                                  16,389,177
                                                                                  
                                                                                  
                                                                                  $
                                                                                  17,833,559
                                                                                  
                                                                                  
                                                                                  $
                                                                                  14,574,769
                                                                                  
                                                                                  
                                                                                  $
                                                                                  5,030,930Total
      Assets
                                                                                  
                                                                                  $
                                                                                  14,719,370
                                                                                  
                                                                                  
                                                                                  $
                                                                                  18,400,231
                                                                                  
                                                                                  
                                                                                  $
                                                                                  19,190,026
                                                                                  
                                                                                  
                                                                                  $
                                                                                  15,202,756
                                                                                  
                                                                                  
                                                                                  $
                                                                                  5,436,962


1
            The
      cumulative net loss under US GAAP at April 30, 2009 is
      approximately $71 million.


2
            Under
      US GAAP, options granted to non-employees as compensation for services
      provided are fair valued and an expense
  recorded.


3
            Under
      SEC interpretation of US GAAP, all exploration costs on mineral properties
      prior to the establishment of proven or probable reserves are expensed as
      incurred.


4
            Under
      Canadian income tax legislation, we are permitted to issue shares whereby
      we agree to incur qualifying expenditures (as defined under the Income Tax
      Act of Canada) on our mineral properties 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 US GAAP, any difference between the market
      price of our common shares 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.


5
            Under
      both Canadian and US GAAP, basic loss per share is calculated using the
      weighted average number of common shares outstanding during the
      year.  Under US GAAP, the weighted average number of common
      shares outstanding excludes any shares held in escrow for which the
      release is subject to certain performance
  conditions.







Exchange
Rates




The
following table sets forth the high and low rates of exchange for the Canadian
Dollar for each month during the previous six months. The table also sets forth
the average exchange rates for the Canadian Dollar for the five most recent
fiscal years ended April 30th.  The yearly average rate means the
average of the exchange rates based on the daily rates during each fiscal
period.




4




For
purposes of this table, the rates of exchange are those quoted by the Bank of
Canada.  The table sets forth the number of Canadian Dollars required under
that formula to buy one U.S. Dollar.




Period
                  
                  High (1)
                  Low (1)May
      2009
                  
                  1.1954
                  1.0898April
      2009
                  
                  1.2707
                  1.1875March
      2009
                  
                  1.3066
                  1.2192February
      2009
                  
                  1.2731
                  1.2160January
      2009
                  
                  1.2765
                  1.1761December
      2008
                  
                  1.3008
                  1.1872


Average (2)Fiscal
      year ended April 30, 2009
                        1.1501Fiscal
      year ended April 30, 2008
                        1.0175Fiscal
      year ended April 30, 2007
                        1.1341Fiscal
      year ended April 30, 2006
                        1.1779Fiscal
      year ended April 30, 2005
                        1.
      2637


The
exchange rate was $1.1324 on June 15, 2009.




(1)
            Means
      the intra-day high/low rate during the
period.




(2)
            Means
      the average of the noon day rates on the last day of each month during the
      period.




3.B.
            Capitalization
      and Indebtedness




Not
applicable




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




Not
applicable




3.D.
            Risk
      Factors




We are
subject to a number of risks due to the nature of our business, including our
present exploration state.  The following describes the material risks
that could affect us.




There
has been significant economic uncertainty since the second half of 2008 and it
has affected the Company’s operations.




Since the
second half of 2008, there has been a negative trend with regard to the market
for metal commodities and related products as a result of global economic
uncertainty, reduced confidence in financial markets, bank failures and credit
availability concerns. These macroeconomic events have negatively affected the
mining and minerals sectors in general. The Company’s market capitalization has
been significantly reduced. Although these circumstances will likely improve
over the longer term, the short term impact upon the Company’s liquidity and its
ability to raise the capital required to execute its business plan going forward
will be negative. As a result, the Company will consider its plans and options
carefully in fiscal 2010.




5


No
known reserves or resources




Our
properties are in the exploration stage and are without a known body of
commercial mineral deposits.




We have
no mineral producing properties at this time. Only those mineral deposits that
we can economically and legally extract or produce, based on a comprehensive
evaluation of cost, grade, recovery and other factors, are considered
“resources” or “reserves.” We have not defined or delineated any proven or
probable reserves or resources on any of our properties. Although the
mineralized material and mineralized deposit estimates included herein have been
carefully prepared by us, or, in some instances have been prepared, reviewed or
verified by independent mining experts, these amounts are estimates only and no
assurance can be given that any particular level of recovery of gold, silver or
other minerals from mineralized material will in fact be realized or that an
identified mineralized deposit will ever qualify as a commercially mineable (or
viable) reserve.




Our
planned exploration programs may not result in profitable commercial mining
operations




Our
operations involve exploration, and there is no guarantee that any of our
activities will result in commercial production of any mineral
deposits.  The exploration for and development of mineral deposits
involves significant financial and other risks which even a combination of
careful evaluation, experience and knowledge may not eliminate. Most exploration
projects do not result in the discovery of commercially mineable
deposits.  Major expenses are required to locate and establish mineral
reserves, to develop metallurgical processes, and to construct mining and
processing facilities at a particular site. Our planned exploration programs may
not result in a profitable commercial mining operation.  Whether a
mineral deposit will be commercially viable depends on a number of factors, some
of which are: the particular attributes of the deposit, such as quantity and
quality of the minerals, costs and efficiency of the recovery methods that can
be employed; proximity to infrastructure; financing costs; mineral prices, which
are highly cyclical; and government regulations, including regulations relating
to prices, taxes, royalties, land  tenure, land use, importing and
exporting of minerals, and environmental protection.  The exact effect
of these factors cannot be accurately predicted but could have a material
adverse effect upon our operations and/or our ability to receive an adequate
return on our invested capital.  There is no certainty that our
expenditures  made towards the search and evaluation of uranium, iron
oxide, copper, gold and other minerals and base metals will result in
discoveries of mineral resources, mineral reserves or any other mineral
occurrences, or in profitable commercial mining operations.




Mining
operations generally involve a high degree of risk




Our
operations are subject to all the hazards and risks normally encountered in the
exploration, development and production of uranium and other minerals, including
environmental pollution, accidents or spills, industrial accidents, labour
disputes, changes in the regulatory environment, natural phenomena, unusual and
unexpected geologic formations, seismic activity, rock bursts, cave-ins,
flooding and other conditions involved in the drilling and removal of material,
any of which could result in damage to, or destruction of, mines and other
producing facilities, damage to life or property, environmental damage, delays
in or cessation of production, exploration or development, monetary losses, cost
increases which could make us uncompetitive, and lead to possible legal
liability. Although adequate precautions to minimize risk will be taken, mining
operations are subject to hazards such as equipment failure or failure of
retaining dams around tailings disposal areas which may result in environmental
pollution and consequent liability.  In addition, due to the
radioactive nature of the materials handled in uranium mining, applicable
regulatory requirements result in additional costs that must be
incurred.




Our
resource estimates may not be reliable




There is
no certainty that any of our mineral resources will be economically mineable.
Until a deposit is actually mined and processed the quantity of mineral
resources and grades must be considered as estimates only.  Valid
estimates made at a given time may significantly change when new information
becomes available. In addition, the quantity of mineral resources may vary
depending on, among other things, metal prices.  Any material change
in quantity of mineral resources, grade or stripping ratio may affect the
economic viability of our properties or any project we undertake. In addition,
there can be no assurance that mineral or other metal recoveries in small scale
laboratory tests will be duplicated in a larger scale test under on-site
conditions or during production.




6


Fluctuations
in prices of uranium, iron oxide, copper, gold and other minerals and base
metals, results of drilling, metallurgical testing and production and the
evaluation of studies, reports and plans subsequent to the date of any estimate
may require revision of such estimate. Any material reductions in estimates of
mineral resources could have a material adverse effect on our results of
operations and financial condition.




We
rely on a limited number of properties




Our only
properties of interest are currently the Central Mineral Belt properties in
Labrador, the Golden Promise, South Golden Promise and Victoria Lake properties
in Newfoundland and the Sinbad, Bootheel and Buckpoint properties located in the
United States. As a result, unless we acquire additional property interests, any
adverse developments affecting these properties could have a material adverse
effect upon our business and would materially and adversely affect our potential
mineral resource production, profitability, financial performance and results of
operations.




Competition
from other energy sources and public acceptance of nuclear energy may affect the
demand for uranium




Nuclear
energy competes with other sources of energy, including oil, natural gas, coal
and hydro-electricity.  These other energy sources are to some extent
interchangeable with nuclear energy, particularly over the longer
term.  Lower prices of oil, natural gas, coal and hydro-electricity
may result in lower demand for uranium concentrate and uranium conversion
services.  Furthermore, the growth of the uranium and nuclear power
industry beyond its current level will depend upon continued and increased
acceptance of nuclear technology as a means of generating
electricity.  Because of unique political, technological and
environmental factors that affect the nuclear industry, the industry is subject
to public opinion risks which could have an adverse impact on the demand for
nuclear power and increase the regulation of the nuclear power
industry.




Competition
in the uranium industry may adversely affect our ability to acquire additional
properties




The
international uranium industry is highly competitive.  The uranium
mining industry is global and consists of a small, decreasing number of large
players.  Competition for new mining properties from these larger,
more established companies may prevent us from acquiring interests in additional
properties or mining operations.  Accordingly, there can be no
assurance that we will acquire any interest in additional operations that would
yield reserves or result in commercial mining operations.




The
Nunatsiavut moratorium may adversely affect our ability to raise
capital




In order
to develop the tools to evaluate the impact of large-scale development projects
and the environmental impact, on April 8, 2008, Labrador’s Nunatsiavut
Government announced a moratorium on uranium mining on Inuit land it governs
until March 31, 2011 after which the issue is to be revisited.  As the
majority of our uranium properties do not fall under Nunatsiavut jurisdiction,
such moratorium is not expected to materially affect the Company’s operations or
prospects.  However, the moratorium may have an adverse impact on
neighbouring projects and may negatively impact market sentiment towards uranium
activity in the area, making it more difficult for us to raise the capital
required for the development of our projects.




We
do not have a history of mineral production or operations




We have
never had any interest in mineral producing properties.  There is no
assurance that commercial quantities of minerals will be discovered at our
current properties or any future properties, nor is there any assurance that our
exploration programs thereon will yield any positive results.  Even if
commercial quantities of minerals are discovered, there can be no assurance that
any of our properties will ever be brought to a stage where Mineral Resources
can profitably be produced thereon.  Factors which may limit our
ability to produce Mineral Resources from our properties include, but are not
limited to, the price of the Mineral Resources which are being explored for,
availability of additional capital and financing and the nature of any mineral
deposits.




7


We do not
have an extensive operating history and there can be no assurance of our ability
to operate our projects profitably in the future.




Our
insurance will not cover all the potential risks associated with our
operations




Our
business is subject to a number of risks and hazards generally, including
adverse environmental conditions, industrial accidents, labour disputes, unusual
or unexpected geological conditions, ground or slope failures, cave-ins, changes
in the regulatory environment and natural phenomena such as inclement weather
conditions, floods and earthquakes.  Such occurrences could result in
damage to mineral properties or production facilities, personal injury or death,
environmental damage to our properties or other properties, delays in mining,
monetary losses and possible legal liability.




Our
insurance will not cover all the potential risks associated with a mining
company’s operations.  We may also be unable to maintain insurance to
cover these risks at economically feasible premiums.  Insurance
coverage may not be available or may not be adequate to cover any resulting
liability. Moreover, there are risks against which we cannot insure or against
which we may elect not to insure.  Insurance against risks such as
environmental pollution or other hazards as a result of exploration and
production is not generally available to us or to other companies in the uranium
mining industry. We might also become subject to liability for pollution or
other hazards which we may not be insured against or which we may elect not to
insure against because of premium costs or other reasons. Losses from these
events may cause substantial delays and require us to incur significant costs
that could have a material adverse effect upon our financial condition, results
of operations, competitive position and potentially our financial
viability.




Our
operations are subject to environmental regulation




All
phases of our operations are subject to environmental regulation in the various
jurisdictions in which we operate or may operate in the future. These
regulations mandate, among other things, the maintenance of air and water
quality standards and land reclamation. They also set forth limitations on the
generation, transportation, storage and disposal of solid and hazardous
waste.  Environmental legislation is evolving in a manner that will
require stricter standards and enforcement, increased fines and penalties for
non-compliance, more stringent environmental assessments of proposed projects,
and a heightened degree of responsibility for companies and their officers,
directors and employees.  There is no assurance that future changes in
environmental regulation, if any, will not adversely affect our operations.
Environmental hazards may exist on the properties on which we hold interests
which are unknown to us at present and which have been caused by previous or
existing owners or operators of the properties.




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




Our
operations are dependent on adequate infrastructure




Mining,
processing, development and exploration activities depend, to one degree or
another, on adequate infrastructure.  Reliable roads, bridges, power
sources and water supply are important determinants, which affect capital and
operating costs.  Unusual or infrequent weather phenomena, sabotage,
government or other interference in the maintenance or provision of such
infrastructure could adversely affect our operations, financial condition and
results of operations.




Our
properties may be subject to undetected title defects




It is
possible there may still be undetected title defects affecting our properties.
Title insurance generally is not available, and our ability to ensure that we
have obtained secure claim to individual mineral properties or
mining




8


concessions
may be severely constrained. Furthermore, we have not conducted surveys of the
claims in which we hold interests and, therefore, the precise area and location
of such claims may be in doubt. Accordingly, our properties may be subject to
prior unregistered liens, agreements, transfers or claims, and title may be
affected by, among other things, undetected defects which could have a material
adverse impact on our operations.  In addition, we may be unable to
operate our properties as permitted or to enforce our rights with respect to our
properties.




We
may be subject to additional costs for land reclamation




It is
difficult to determine the exact amounts which will be required to complete all
land reclamation activities in connection with our
properties.  Reclamation bonds and other forms of financial assurance
represent only a portion of the total amount of money that will be spent on
reclamation activities over the life of a mine.  Accordingly, it may
be necessary to revise planned expenditures and operating plans in order to fund
reclamation activities.  Such costs may have a material adverse impact
upon our financial condition and results of operations.




The
inability to obtain necessary permits would adversely affect our ability to
operate our business




We may
not receive the necessary permits or receive them on acceptable terms, if at
all, in order to conduct further exploration and to develop our
properties.  The failure to obtain such permits, or delays in
obtaining such permits, could adversely affect our operations.




Government
approvals, approval of aboriginal people and permits are currently and may in
the future be required in connection with our operations. To the extent such
approvals are required and not obtained; we may be curtailed or prohibited from
continuing our mining operations or from proceeding with planned exploration or
development of mineral properties.




We
face strong competition for the acquisition of mining properties




The
mining industry is competitive in all of its phases. We face strong competition
from other mining companies in connection with the acquisition of properties
producing, or capable of producing, base metals.  Many of these
companies have greater financial resources, operational experience and technical
capabilities than we do.  As a result of this competition, we may be
unable to maintain or acquire attractive mining properties on terms we consider
acceptable, if at all. Consequently, our revenues, operations and financial
condition could be materially adversely affected.




We
do not have a hedging policy and are subject to risk from declines in mineral
prices




We do not
have a hedging policy and we have no current intention of adopting such a
policy.  Accordingly, we have no protections from declines in mineral
prices.




We
will require additional capital for our mining operations




The
development and exploration of our mining properties will require substantial
additional financing.  Failure to obtain sufficient financing may
result in the delay or indefinite postponement of exploration, development or
production on our properties or even a loss of property interest. There can be
no assurance that additional capital will be available when needed or that, if
available, the terms of financing such capital will be acceptable to
us.  In addition, any future financing may be dilutive to our existing
shareholders.




Future
production from our mining properties, if any, is dependent upon the prices of
uranium, iron oxide, copper, gold and other minerals and base metals being
adequate to make these properties economically viable




Uranium
prices received, if any, could be such that our properties cannot be mined at a
profit.  The price of our common shares, and our financial results and
exploration, development and mining activities may in the future be
significantly and adversely affected by declines in the price of uranium, iron
oxide, copper, gold and other minerals and base metals.  The price of
uranium, iron oxide, copper, gold and other minerals and base metals fluctuates
widely and is affected by numerous factors beyond our control such as the sale
or purchase of commodities by




9


various
central banks and financial institutions, interest rates, exchange rates,
inflation or deflation, fluctuation in the value of the United States dollar and
foreign currencies, global and regional supply and demand, the political and
economic conditions and production costs of major mineral-producing countries
throughout the world, and the cost of  substitutes, inventory levels
and carrying charges.  With respect to uranium, such factors include
the demand for nuclear power, political and economic conditions in uranium
producing and consuming countries, uranium supply from secondary sources,
uranium production levels and costs of production.  Future serious
price declines in the market value of uranium, iron oxide, copper, gold and
other minerals and base metals could cause development of and commercial
production from our properties to be impracticable.  Depending on the
price of uranium, iron oxide, copper, gold and other minerals and base metals,
cash flow from mining operations may not be sufficient and we could be forced to
discontinue production and may lose our interest in, or may be forced to sell,
some of our properties.  Future production from our mining properties,
if any, is dependent upon the prices of uranium, iron oxide, copper, gold and
other minerals and base metals being adequate to make these properties
economically viable.




In
addition to adversely affecting our reserve estimates and our financial
condition, declining commodity prices can impact operations by requiring a
reassessment of the feasibility of a particular project. Such a reassessment may
be the result of a management decision or may be required under financing
arrangements related to a particular project. Even if a project is ultimately
determined to be economically viable, the need to conduct such a reassessment
may cause substantial delays or may interrupt operations until the reassessment
can be completed.




Exchange
rate fluctuations may effectively increase our costs of exploration and
production




Exchange
rate fluctuations may affect the costs that we incur in our
operations.  Uranium, iron oxide, copper, gold and other minerals and
base metals are generally sold in U.S. dollars and our costs are incurred
principally in Canadian dollars.  The appreciation of non-U.S. dollar
currencies against the U.S. dollar can increase the cost of exploration and
production in U.S. dollar terms, which could materially and adversely affect our
profitability, results of operations and financial condition.




Our
operations are subject to extensive governmental regulation that may adversely
affect our operating costs




Our
mining, processing, development and mineral exploration activities are subject
to various laws governing prospecting, development, production, taxes, labour
standards and occupational health, mine safety, toxic substances, land use,
water use, land claims of local people, and other matters.  Although
our exploration and development activities are currently carried out in
accordance with all applicable rules and regulations, new rules and regulations
may be enacted or existing rules and regulations may be applied in a manner
which could limit or curtail production or development.  Amendments to
current laws and regulations governing operations and activities of mining and
milling or more stringent implementation thereof could have a substantial
adverse impact on our operations. Worldwide demand for uranium is directly tied
to the demand for energy produced by the nuclear electric industry, which is
also subject to extensive government regulations and policies.




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




The
market price of our common shares may experience substantial
volatility




In recent
years, the securities markets in the United States and Canada have experienced a
high level of price and volume volatility, and the market price of securities of
many mineral exploration companies have experienced wide fluctuations in price
which have not necessarily been related to the operating performance, underlying
asset values or prospects of such companies.  The price of our common
shares is also likely to be significantly affected by short-term changes in
prices of uranium, iron oxide, copper, gold and other minerals and base metals,
or in our financial condition or results of operations as reflected in our
quarterly earnings reports.  Other factors unrelated to our
performance that may have an effect on the price of our common shares include
the following: the extent of analytical coverage available to investors
concerning our business may be limited if investment banks with
research




10


capabilities
do not follow our securities; lessening in trading volume and general market
interest in our securities may affect an investor’s ability to trade significant
numbers of our common shares; the size of our public float may limit the ability
of some institutions to invest in our securities; and a substantial decline in
the price of our common shares that persists for a significant period of time
could cause our securities to be delisted from such exchange, further reducing
market liquidity.




We
have not paid dividends in the past and do not expect to pay dividends in the
foreseeable future




No
dividends on our common shares have been paid to date and we have no earnings.
We currently plan to retain all future earnings and other cash resources, if
any, for the future operation and development of our
business.  Payment of future dividends, if any, will be at the
discretion of our Board of Directors after taking into account many factors,
including our operating results, financial condition, and current and
anticipated cash needs.




Future
sales of common shares by existing shareholders could adversely affect the
trading price of our common shares




Sales of
a large number of our common shares in the public markets, or the potential for
such sales, could decrease the trading price of the common shares and could
impair our ability to raise capital through future sales of common
shares.




We
are dependent upon the services of our key executives




We are
dependent upon the services of key executives, including our directors and a
small number of highly skilled and experienced executives and personnel. Due to
our relatively small size, the loss of our Chief Executive Officer, Mark
Morabito, or our inability to attract and retain additional highly-skilled
employees may adversely affect our future operations.




Our
directors and officers have certain conflicts of interest




Certain
of our directors and officers also serve as directors and/or officers of other
companies involved in natural resource exploration and development and,
consequently, there exists the possibility for such directors and officers to be
in a position of conflict.




We have no positive cash flow and no recent
history of earnings and we are dependent upon public and private contributions
of equity to obtain capital in order to sustain our operations




None of
our properties have advanced to the commercial production stage and we have no
history of earnings or positive cash flow from operations.  Our cumulative
loss, as of the year ended April 30, 2009, according to U.S. GAAP, is
approximately $71 million.  We do not know if we will ever generate
material revenue from mining operations or if we will ever achieve
self-sustaining commercial mining operations.  Historically, the only
source of funds available to us has been through the sale of our equity
securities. Any future additional equity financing would cause dilution to
current shareholders.




As of
June 15, 2009 we had 12,915,000 share purchase options, 694,500 share purchase
units (each unit consisting of one share and one share purchase warrant) and
18,477,800 share purchase warrants  If all of these securities were
exercised, the number of common shares issued and outstanding would increase
from 112,184,313 to 144,271,613.  This represents an increase of
28.60% in the number of shares issued and outstanding and would result in
significant dilution to current shareholders.




Dilution
through employee, director and consultant stock options could adversely affect
our shareholders by decreasing shareholder value




Because
our success is highly dependent upon our employees, we have granted to some or
all of our key employees, directors and consultants options to purchase common
shares as non-cash incentives.  To the extent that significant numbers of
such options may be granted and exercised, the interests of our other
shareholders may be




11


diluted.
As of June 15, 2009, there were 12,915,000 share purchase options outstanding,
which, if exercised, would result in an additional 12,915,000 common shares
being issued.




If
we become subject to the SEC’s penny stock rules, the risks associated with
penny stock classification could affect the marketability of our equity
securities and shareholders could find it difficult to sell their common
shares




If we do
not maintain the NYSE Amex Equities (“NYSE Amex”) listing for our common shares
or a listing of our common stock on another national securities exchange in the
United States, and if the trading price of our common shares is less than US
$5.00 per share, our common stock will become subject to the SEC’s “penny stock”
rules as defined in Exchange Act Rule 3a51-1.  The SEC has adopted the
penny stock rules to regulate broker-dealer practices in connection with
transactions in penny stocks.  Penny stocks generally are equity securities
with a price of less than US $5.00, other than securities registered on certain
national securities exchanges, provided that current price and volume
information with respect to transactions in such securities is provided by the
exchange.




Transaction
costs associated with purchases and sales of penny stocks are likely to be
higher than those for other securities.  The penny stock rules require
a broker-dealer, prior to a transaction in a penny stock not otherwise exempt
from the rules, to deliver a standardized risk disclosure document that provides
information about penny stocks and the nature and level of risks in the penny
stock market.  The broker-dealer must also provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction, and monthly account
statements showing the market value of each penny stock held in the customer’s
account.  The bid and offer quotations, and the broker-dealer and
salesperson compensation information, must be given to the customer orally or in
writing prior to effecting the transaction and must be given to the customer in
writing before or with the customer’s confirmation.




In
addition, the penny stock rules require that prior to a transaction in a penny
stock not otherwise exempt from such rules, the broker-dealer must make a
special written determination that the penny stock is a suitable investment for
the purchaser and receive the purchaser’s written agreement to the transaction.
 These disclosure requirements may have the effect of reducing the level of
trading activity in the secondary market for our equity securities in the United
States and shareholders may find it more difficult to sell their
shares.




U.S.
investors may not be able to enforce their civil liabilities against us or our
directors, controlling persons and officers




It may be
difficult to bring and enforce suits against us.  We are incorporated in
the province of British Columbia under the Business Corporations Act (British
Columbia) (formerly the Company Act).  Our directors and officers are
residents of Canada, and all or substantial portions of their assets are located
outside of the United States, predominately in Canada.  As a result, it may
be difficult for U.S. holders of our common shares to effect service of process
on these persons within the United States or to realize in the United States
upon judgments rendered against them.  In addition, a shareholder should
not assume that the courts of Canada (i) would enforce judgments of U.S. courts
obtained in actions against us or such persons predicated upon the civil
liability provisions of the U.S. federal securities laws or other laws of the
United States, or (ii) would enforce, in original actions, liabilities against
us or such persons predicated upon the U.S. federal securities laws or other
laws of the United States.




However,
U.S. laws would generally be enforced by a Canadian court provided that those
laws are not contrary to Canadian public policy, are not foreign penal laws or
laws that deal with taxation or the taking of property by a foreign government
and provided that they are in compliance with applicable Canadian legislation
regarding the limitation of actions.  Also, a Canadian court would
generally recognize a judgment obtained in a U.S. Court except, for
example:




a)
            where
      the U.S. court that rendered the judgment had no jurisdiction according to
      applicable Canadian law;




b)
            the
      judgment was subject to ordinary remedy (appeal, judicial review and any
      other judicial proceeding which renders the judgment not final, conclusive
      or enforceable under the laws of the applicable state) or not final,
      conclusive or enforceable under the laws of the applicable
      state;




12




c)
            the
      judgment was obtained by fraud or in any manner contrary to natural
      justice or rendered in contravention of fundamental principles of
      procedure; or




d)
            a
      dispute between the same parties, based on the same subject matter has
      given rise to a judgment rendered in a Canadian court or has been decided
      in a third country and the judgment meets the necessary conditions for
      recognition in a Canadian court.




As
a "foreign private issuer”, we are exempt from the Section 14 proxy rules and
Section 16 of the Exchange Act which may result in shareholders having less
complete and timely data




The
submission of proxy and annual shareholder meeting information (prepared to
Canadian standards) on Form 6-K may result in shareholders having less complete
and timely data than if we were subject to the SEC’s domestic issuer rules.
 The exemption from Section 16 rules regarding sales of common shares by
our officers, directors and greater than 10% shareholders also may result in
shareholders having less data.




If
we are characterized as a passive foreign investment company (“PFIC”), our
shareholders may be subject to adverse U.S. federal income tax
consequences.




We have
not made a determination as to whether we are considered a PFIC as such term is
defined in the U.S. Internal Revenue Code of 1986 (the “Code”), for U.S. federal
income tax purposes for the current tax year and any prior tax
years.  A non-U.S. corporation generally will be considered a PFIC of
any tax year if either (1) at least 75% of its gross income is passive income or
(2) at least 50% of the value of its assets (based on an average of the
quarterly values of the assets during a taxable year) is attributable to assets
that produce or are held for the production of passive income.




In
general, if we are or become a PFIC, any gain recognized on the sale of our
common stock and any “excess distributions” (as specifically defined in the U.S.
Internal Revenue Code of 1986) paid on the common stock must be ratably
allocated to each day in a U.S. taxpayer’s holding period for the
securities.  The amount of any such gain or excess distribution
allocated to prior years of such U.S. taxpayer’s holding period for the common
stock generally will be subject to U.S. federal income tax at the highest tax
applicable to ordinary income in each such prior year, and the U.S. taxpayer
will be required to pay interest on the resulting tax liability for each such
prior year, calculated as if such tax liability had been due in each such prior
year.




Litigation




On April
27, 2009, Crosshair commenced an action in British Columbia Supreme Court
against Universal Uranium Ltd. (“Universal”) alleging that Universal had
knowledge of trades that artificially inflated the market price of shares of
Universal at the time that Crosshair agreed to purchase property and securities
of Universal.  The action relates to certain agreements Crosshair
entered into with Universal to acquire all of Universal’s interest in its
project in the Central Mineral Belt of Labrador and to purchase securities of
Universal by way of a private placement.





Crosshair
has received confirmation from the Transfer Agent that Universal will not
receive any further shares or warrants from escrow until there is final
resolution to the dispute.  As of April 30, 2009, Universal has
received 2,856,000 shares in the first two traunches to date with 7,144,000
shares and 7,500,000 warrants remaining in escrow.





Universal
filed a Statement of Defence and Counterclaim in the B.C. Supreme Court on May
13, 2009.  Crosshair will file a Statement of Defence to the
counterclaim made by Universal and maintains its confidence that its action
against Universal is grounded in both fact and law; however, there can be no
assurance of a favorable outcome.





The
nature of the Company’s business may subject it to other regulatory
investigations, claims, lawsuits, and other proceedings. The results of these
legal proceedings cannot be predicted with certainty. There can be no assurances
that these matters will not have a material adverse effect on the
Company.


13




ITEM 4.
              INFORMATION
      ON THE COMPANY


4.A.           History
and Development of the Company




Introduction




Crosshair
Exploration & Mining Corp. (the “Company” or “Crosshair”) was incorporated
as a specially limited company pursuant to the Company Act (British
Columbia) (replaced by the Business Corporations Act
(British Columbia) effective March 29, 2004) on September 2, 1966 under the name
Shasta Mines & Oil
Ltd. (Non-Personal Liability).  We converted from a Private Company
to a Public Company on February 20, 1967.  On February 4, 1975 we changed
our name to International
Shasta Resources Ltd. (Non-Personal Liability) and consolidated our share
capital on the basis of one new share for five old shares and increased our
share capital from 600,000 common shares to 3,000,000 common shares.  On
September 14, 1977 we increased our authorized share capital from 3,000,000
common shares to 5,000,000 common shares.  On April 5, 1982, we increased
our authorized share capital from 5,000,000 common shares to 10,000,000 common
shares by Special Resolution.  On March 5, 1986 we converted from a
Specially Limited Company into a Limited Company under the name of International
Shasta Resources Ltd. and increased our authorized share capital from 10,000,000
common shares to 30,000,000 common shares.  On May 20, 1994, we changed our
name to Consolidated Shasta
Resources Inc. and consolidated our share capital on the basis of
one new share for ten old shares and increased our authorized share capital from
3,000,000 common shares to 20,000,000 common shares.  On November 23, 1994
we changed our name to Lima
Gold Corporation and on September 21, 1999 we changed our name to International Lima Resources
Corp. and consolidated our share capital on the basis of one new share
for three old shares and increased our authorized share capital from 6,666,667
common shares to 20,000,000 common shares.  On November 5, 2003 we
increased our authorized share capital from 20,000,000 common shares to
100,000,000 common shares.  On March 1, 2004 we changed our name to Crosshair Exploration & Mining
Corp.  On June 1, 2004 we replaced our Memorandum with a Notice of
Articles as is required by the Business Corporations Act(British Columbia). On March 11, 2005 we changed our authorized capital
to an unlimited number of common shares.




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, Chief Executive Officer.




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
began trading on the TSX Venture Exchange with the trading symbol “CXX” on March
1, 2004.  On February 10, 2006, we graduated to Tier 1 on the TSX
Venture Exchange.  On May 7, 2007, our common shares began trading on
the American Stock Exchange (now \NYSE Amex) with the trading symbol
“CXZ.”  On May 12, 2008, our common shares began trading on the
Toronto Stock Exchange with the trading symbol “CXX” and ceased trading on the
TSX Venture Exchange.




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.




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,




14


2004.
 On June 1, 2004 we replaced our Memorandum with a Notice of Articles as is
required by the BCBCA.  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.




On March
31, 2009, Crosshair and Target Exploration and Mining Corp. (“Target”)
successfully closed a plan of arrangement whereby Crosshair acquired all the
outstanding common shares of Target and Target has become a wholly owned
subsidiary of Crosshair.  Target shareholders received approximately
14.7 million common shares of Crosshair (1.2 Crosshair shares for each Target
common share outstanding) with an estimated market value of approximately $2.6
million. In addition, each outstanding Target warrant and stock option which
gives the holder the right to acquire common shares of Target was exchanged for
a warrant or stock option which gives the holder the right to acquire common
shares of Crosshair on the exchange ratio of 1.2 Crosshair shares for each
Target warrant or stock option exercised, with all other terms of such warrants
and options (such as term and expiry) remaining unchanged.  As a
result of the acquisition of Target, Crosshair now has an interest in both the
Bootheel and Sinbad projects in Wyoming and Utah, USA respectively.




Property
Acquisitions




Since the
beginning of fiscal 2009, we have acquired the following
properties:




Labrador




On July
29, 2008, the Company entered into an agreement with Universal to acquire all of
Universal's interest (60%) in its joint venture project with Silver Spruce
Resources (“Silver Spruce”) in Labrador (the “CMB JV”) for consideration of
$500,000 cash, 10,000,000 common shares with a value of $5,100,000 and 7,500,000
warrants having a value of $1,500,418.  Universal retains a 2% net
smelter return (“NSR”) royalty on its 60% interest in the property, which may be
reduced to 1.5% in consideration for a cash payment of $1,000,000.




Also on
July 29, 2008, Crosshair purchased, by way of private placement, 2,222,222 units
of Universal at a price of $0.45 per unit.  Each unit consists of one
common share of Universal and one share purchase warrant entitling Crosshair to
purchase an additional common share of Universal at a price of $0.65 each for a
period of 24 months.




Newfoundland




Crosshair
entered into the Golden Promise Option and Joint Venture Agreement dated April
8, 2009 between Crosshair and Paragon, pursuant to which it acquired a 60%
interest in the Golden Promise Gold Project in Central Newfoundland, Canada with
an option to acquire up to a 70% interest. This agreement terminated the
original property option earn-in agreement with Paragon, and Crosshair also
abandoned the previously approved Plan of Arrangement with Gemini whereby
Crosshair was to transfer its gold and volcanic-hosted massive sulphide projects
located in Newfoundland to Gemini in exchange for shares for
Gemini.  As a result of the current market conditions, the board of
directors of Crosshair determined that it was no longer in the best interest of
shareholders to spin-out the Golden Promise, South Golden Promise and Victoria
Lake properties into a separate publicly traded company to be known as
Gemini.





Pursuant
to the Golden Promise Option and Joint Venture Agreement, Crosshair issued
2,655,000 common shares with a market value of approximately $645,000 to Paragon
to purchase the 60% interest in Golden Promise.  Crosshair will
provide Paragon with a $2.0 million carried interest in initial exploration
expenditures to be completed prior to May 2013.  Crosshair can extend
the timeframe to complete the initial exploration program by 12 months upon
issuing 250,000 common shares to Paragon.





Upon the
successful completion of the initial $2.0 million exploration program, Crosshair
can elect to earn an additional 10% interest (to 70%) in Golden Promise by
providing Paragon with an additional $1.0 million carried interest in additional
exploration expenditures within 24 months.  Crosshair can extend the
timeframe to complete the additional exploration program by 12 months upon
issuing 100,000 common shares to Paragon.  In the event




15


Crosshair
does not complete the additional expenditure program within the required
timeframe, Crosshair can purchase the remaining 10% interest by paying Paragon
the difference between actually incurred exploration expenditures and $1.0
million or revert to the 60% interest.




Wyoming,
U.S.A.




On March
31, 2009, Crosshair acquired the Bootheel and Buck Point properties in Wyoming
through a plan of arrangement with Target.  The Bootheel and Buck
Point properties in Wyoming are currently owned by The Bootheel Project LLC and
consist of 269 Federal Mining claims, two state Leases, and 3,155.7 acres of Fee
land held under a Mineral Lease and Surface Access Agreement with MJ Ranches
Inc. (“MJ Ranches”).  Under the Bootheel Project LLC Exploration,
Development & Mine Operating Agreement dated June 7, 2007, as amended
December 21, 2007, and February 28, 2008, between Ur- Energy USA Inc. (“URE”),
two of its subsidiaries, Target, now a wholly owned subsidiary of Crosshair, and
448018 Exploration, Inc. (“448018”), a wholly owned subsidiary of Target, we may
earn a 75% interest in The Bootheel Project LLC, subject to certain royalties,
by completing expenditures totaling US$3 million and issuing 125,000 common
shares on or before June 7, 2011.




Under
Agreements dated February 5, 2008 between MJ Ranches Inc, and 448018 as manager,
The Bootheel Project LLC leased MJ Ranches’ 75% ownership of the minerals
located under four sections and the surface access rights to six
sections.  The initial term of the agreement is for five years with
provision for two renewals.  Payment for the initial five year term is
US$252,651 paid in advance, increased for inflation for the renewal
periods.  The Fee Lands are subject to a sliding scale royalty tied to
the sales price of uranium.




The
Bootheel Project LLC now comprises a 100% mineral interest in 269 Federal
Unpatented Mining Claims, two state leases and a 75% mineral interest in four
fee sections for a total of 8,524 gross acres and surface access rights to 7,882
acres.




Utah,
U.S.A.




On March
31, 2009, Crosshair acquired the Sinbad Property in Utah, USA through the
acquisition via plan of arrangement of Target. Target originally acquired a 100%
interest in certain uranium mining claims located in Emery County, Utah, known
as the Sinbad property pursuant to a Purchase and Sale Agreement dated February
13, 2007 between Target and Crosshair. Under the terms of the Agreement, Target
made a cash payment to Crosshair in the amount of $31,698 and granted to
Crosshair a 2% net smelter royalty, half of which may be purchased by Target at
any time for $1,000,000.




The
Sinbad property is comprised of 62 mineral claims (approximately 1,280 acres)
located in Emery County Utah, 20 miles southwest of Green River and less than
one mile south of Interstate 70.  Target, through its wholly-owned
subsidiary 448101, acquired an additional 604 acres adjoining the Sinbad
property pursuant to a State Lease with the State of Utah dated March 1,
2007.




Property
Terminations




Since the
beginning of fiscal 2009, we have dropped a total of 80 claims from our 100%
owned CMB Project in Labrador, after exploration failed to identify any high
priority targets for follow up on those claims.  Upon a review of the
existing data, we have also dropped a total of 672 claims from the land package
acquired from Universal.




We also
allowed a total of 70 claims on the South Golden Promise property to lapse after
mechanical trenching to investigate a number of soil geochemistry anomalies
failed to identify any bedrock mineralization.  A total of 50 claims
on the Victoria Lake property have also been allowed to lapse.




16


Capital
Expenditures




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






Fiscal Year
                                        
                                        ExpendituresFiscal
      2007
                                        
                                        $
                                        10,631,531
                                        (1)Fiscal
      2008
                                        
                                        $
                                        12,784,242
                                        (2)Fiscal
      2009
                                        
                                        $
                                        16,264,847
                                        (3)





(1)           These
funds were spent as outlined below:









Expense ($)
                  
                  CMB
                  
                  
                  Golden Promise
                  
                  
                  Other
      ClaimsDrilling
      and
      trenching
                  
                  $
                  2,569133
                  
                  
                  $
                  1,154,688
                  
                  
                  $
                  --Geology
                  
                  
                  2,104,864
                  
                  
                  
                  111,076
                  
                  
                  
                  3,127Geophysics
                  
                  
                  2,341,508
                  
                  
                  
                  79,961
                  
                  
                  
                  --Administration
                  
                  
                  350,936
                  
                  
                  
                  97,044
                  
                  
                  
                  --Technical
      analysis
                  
                  
                  441,019
                  
                  
                  
                  57,525
                  
                  
                  
                  --Acquisition
      costs
                  
                  
                  986,750
                  
                  
                  
                  333,900
                  
                  
                  
                  --Credits
      received
                  
                  
                  --
                  
                  
                  
                  --
                  
                  
                  
                  --





(2)           These
funds were spent as outlined below:








Expense ($)
                  
                  CMB
                  
                  
                  CMB JV
                  
                  
                  Bootheel Project
                  
                  
                  Golden Promise
                  
                  
                  Other ClaimsDrilling
      and trenching
                  
                  $
                  3,868,218
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  495,884
                  
                  
                  $
                  -Geology
                  
                  
                  5,169,084
                  
                  
                  
                  --
                  
                  
                  
                  --
                  
                  
                  
                  122,293
                  
                  
                  
                  --Geophysics
                  
                  
                  477,364
                  
                  
                  
                  --
                  
                  
                  
                  --
                  
                  
                  
                  112,145
                  
                  
                  
                  --Administration
                  
                  
                  627,678
                  
                  
                  
                  --
                  
                  
                  
                  --
                  
                  
                  
                  34,499
                  
                  
                  
                  --Technical
      analysis
                  
                  
                  653,085
                  
                  
                  
                  --
                  
                  
                  
                  --
                  
                  
                  
                  5,575
                  
                  
                  
                  --Future
      reclamation
                  
                  
                  163,884
                  
                  
                  
                  --
                  
                  
                  
                  --
                  
                  
                  
                  2,852
                  
                  
                  
                  --Acquisition
      costs
                  
                  
                  1,119,000
                  
                  
                  
                  --
                  
                  
                  
                  --
                  
                  
                  
                  155,300
                  
                  
                  
                  --JCEAP
      refunds received
                  
                  
                  (150,000
                  )
                  
                  
                  --
                  
                  
                  
                  --
                  
                  
                  
                  (72,619
                  )
                  
                  
                  --





(3)           These
funds were spent as outlined below:









Expense ($)
                          
                          CMB
                          
                          
                          CMB JV
                          
                          
                          Bootheel Project
                          
                          
                          Golden Promise
                          
                          
                          Other ClaimsDrilling
      and trenching
                          
                          $
                          464,663
                          
                          
                          $
                          --
                          
                          
                          $
                          --
                          
                          
                          $
                          6,438
                          
                          
                          $
                          --Geology
                          
                          
                          2,964,458
                          
                          
                          
                          29,750
                          
                          
                          
                          48,741
                          
                          
                          
                          19,790
                          
                          
                          
                          --Geophysics
                          
                          
                          3,903
                          
                          
                          
                          27,057
                          
                          
                          
                          --
                          
                          
                          
                          3,745
                          
                          
                          
                          --Administration
                          
                          
                          241,485
                          
                          
                          
                          1,451
                          
                          
                          
                          19,962
                          
                          
                          
                          19,346
                          
                          
                          
                          --Technical
      analysis
                          
                          
                          428,500
                          
                          
                          
                          --
                          
                          
                          
                          1,580
                          
                          
                          
                          10,586
                          
                          
                          
                          --Future
      reclamation
                          
                          
                          26,394
                          
                          
                          
                          44,854
                          
                          
                          
                          --
                          
                          
                          
                          --
                          
                          
                          
                          --


17







Acquisition
      costs
                
                
                370,000
                
                
                
                7,132,327
                
                
                
                3,600,137
                
                
                
                746,122
                
                
                
                229,796JCEAP
      refunds received
                
                
                (150,000
                )
                
                
                --
                
                
                
                --
                
                
                
                --
                
                
                
                --Recovery
      – JV partner
                
                
                --
                
                
                
                (24,294
                )
                
                
                --
                
                
                
                --
                
                
                
                --Administration
      fees
                
                
                --
                
                
                
                (1,944
                )
                
                
                --
                
                
                
                --
                
                
                
                --





We expect
to incur capital expenditures of approximately $150,000 for fiscal year
2010.  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:




Gold




·
            South
      Golden Promise, Victoria Lake and Golden Promise properties located in
      Newfoundland, Canada.




Uranium




·
            Central
      Mineral Belt properties located in Labrador,
  Canada.




·
            CMB
      JV Property located in Labrador,
Canada.




·
            The
      Bootheel Project LLC located in Wyoming,
U.S.A.




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.




In April
2008, Labrador’s Nunatsiavut government announced a moratorium on uranium mining
for the next three years on Inuit land it governs.  As the majority of
our uranium properties do not fall under Nunatsiavut jurisdiction, this
moratorium is not expected to directly affect our operations or
prospects.




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.




18


Dependency
upon Patents/Licenses/Contracts/Processes




Not
applicable




Sources/Availability
of Raw Materials




Not
applicable




4.C.
            Organization
      Structure




Crosshair
is a corporation subject to the Business Corporations Act (British Columbia
(BCBCA).  Crosshair owns 100% of the issued and outstanding shares in
each of the following subsidiaries:




1.
            Target
      Exploration and Mining Corp. (“Target”), a British Columbia
      Corporation.




a.
            Target
      owns all of the issued and outstanding shares in 448018 Exploration Inc.,
      a Nevada Corporation




i.
            448018
      Exploration Inc., has the contractual right to earn-in to a 75% interest
      in The Bootheel Project LLC, a Colorado limited liability corporation by
      spending a cumulative US $3,000,000 in qualifying exploration
      expenditures; and issuing 125,000 common shares on or before June 7,
      2011.  The Bootheel Project LLC, is owned by Ur-Energy Inc.
      (“URE”) until such time as 448018 Exploration Inc. achieves the US
      $3,000,000 in qualifying exploration expenditures; and issues 125,000
      common shares on or before June 7,
2011.




2.
            Gemini
      Metals Corp.




4.D.
            Property,
      Plants and Equipment




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 and the States of Wyoming
and Utah, U.S.A.  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 5,009 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 $9,357. We had an office at Suite 301, 66 Kenmount Road, St.
John’s, Newfoundland, Canada until May 31, 2009 when the office was closed due
to current economic conditions and the company’s program to reduce monthly
expenditures.




National
Instrument 43-101 Compliance




Except as
otherwise indicated, C. Stewart Wallis, P.Geo., President  of
Crosshair and a Qualified Person as defined by NI 43-101, has reviewed and is
responsible for the technical information contained in this Annual Report on
From 20-F.  Further information about the Company’s mineral properties
can be found in the following technical reports: (i) CMB property - Form 43-101
Technical Report on the Central Mineral Belt (CMB) Uranium Project, Labrador,
Canada dated July 31, 2008 (the “CMB Report”), prepared by Gary H. Giroux,
P.Eng. MASc,. and Jeffery A. Morgan, B.Sc. (Hons), P.Geo., who are “qualified
persons” within the meaning of NI 43-101; (ii) CMB JV – the Form 43-101
Technical Report on the CMBNW Property, Labrador, Canada dated June 22, 2009
(the “CMB JV Report”) written by David A. Ross, M.Sc., P. Geo of Scott Wilson
Roscoe Postle Associates Inc., (iii) Bootheel – the Form 43-101 Technical Report
on the Shirley Basin Uranium Properties, Wyoming, prepared for Target dated July
8, 2007 written by Thomas C. Pool, P.E. (the “Bootheel Report”), and (iv) – the
Form 43-101 Technical Report on the Golden Promise, South Golden Promise and
Victoria Lake Properties dated April 30, 2008,




19


amended
September 23, 2008, (the “GP Report”) written by Gary H. Giroux, P.Eng. MASc.
and Larry R. Pilgrim, B.Sc., P.Geo.  A copy of these reports are
available on SEDAR at www.sedar.com.




Newfoundland









Golden Promise Property and
Agreements




Paragon
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 on a portion of the property surrounding the Jaclyn Zones.  A
total of 192 claims (4,800 hectares) comprise the option arrangement with
William Mercer with payments totaling $230,000 ($230,000 paid) and 100,000
Paragon common shares, all of which have been issued.  The option
arrangement with Mr. Courtney involves 6 claims (150 hectares) with payments
totaling $35,000 ($35,000 paid). Both vendors are entitled to a 2% NSR subject
to a $1 million buyback of 50% of the NSR at anytime. Paragon 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.




Under the
terms of an option agreement dated May 2, 2006, as amended April 18, 2008, with
Paragon, we acquired an option to earn a 60% interest in the Golden Promise
Property.  To date, we have issued 60,000 common shares, made cash
payments totaling $100,000 and spent $1,334,000 on project
expenditures.  To complete the exercise of the option, we were
required to issue 20,000 shares by May 1, 2009 and incur project expenditures of
at least $1,416,000 by May 1, 2009 and another $1,250,000 by May 1,
2010.




Under the
terms of a Purchase and Sale Agreement dated June 4, 2008 between Gemini Metals
Corp. (“Gemini”), Crosshair and Paragon, our option agreement described above
was terminated and Paragon’s interest in the Golden




20


Promise
Property was to be contributed to Gemini in exchange for shares of
Gemini.  Under the terms of this agreement, on closing of the proposed
transaction, Gemini would hold 100% interest in the Golden Promise
Property.  This agreement was terminated pursuant to the terms of
Golden Promise Option and Joint Venture Agreement dated as of April 8, 2009
between Crosshair and Paragon as described below.




Crosshair
entered into the Golden Promise Option and Joint Venture Agreement dated April
8, 2009 between Crosshair and Paragon, pursuant to which it acquired a 60%
interest in the Golden Promise Gold Project in Central Newfoundland, Canada with
an option to acquire up to a 70% interest. This agreement terminated the
original property option earn-in agreement with Paragon, and Crosshair also
abandoned the previously approved Plan of Arrangement with Gemini whereby
Crosshair was to transfer its gold and volcanic-hosted massive sulphide projects
located in Newfoundland to Gemini in exchange for shares for
Gemini.  As a result of the current market conditions, the board of
directors of Crosshair determined that it was no longer in the best interest of
shareholders to spin-out the Golden Promise, South Golden Promise and Victoria
Lake properties into a separate publicly traded company to be known as
Gemini.





Pursuant
to the Golden Promise Option and Joint Venture Agreement, Crosshair issued
2,655,000 common shares with a market value of approximately $645,000 to Paragon
to purchase the 60% interest in Golden Promise.  Crosshair will
provide Paragon with a $2.0 million carried interest in initial exploration
expenditures to be completed prior to May 2013.  Crosshair can extend
the timeframe to complete the initial exploration program by 12 months upon
issuing 250,000 common shares to Paragon.





Upon the
successful completion of the initial $2.0 million exploration program, Crosshair
can elect to earn an additional 10% interest (to 70%) in Golden Promise by
providing Paragon with an additional $1.0 million carried interest in additional
exploration expenditures within 24 months.   Crosshair can extend the
timeframe to complete the additional exploration program by 12 months upon
issuing 100,000 common shares to Paragon.  In the event Crosshair does
not complete the additional expenditure program within the required timeframe,
Crosshair can purchase the remaining 10% interest by paying Paragon the
difference between actually incurred exploration expenditures and $1.0 million
or revert to the 60% interest.





The
Golden Promise Property consists of five map-staked licenses located east, and
northeast of Red Indian Lake in west central Newfoundland on National
Topographic System (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.





The five
blocks of licenses cover 25,825 hectares in 1,033 map-staked claims. Each claim
is 500 by 500 meters, 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.





Accessibility




The
property is 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




21


Route 370
approximately 10 kilometers southwest of the town of
Badger.  Exploration in the region prior to 2002 traditionally focused
on the productive 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 very rich ores
that carried high combined 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
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 in July of 2002.




Geological
Setting




The
property lies within the Dunnage Zone, a major tectonic and stratigraphic
succession of Cambrian to Middle 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 has been 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.  The Badger Group conformably overlies Caradocian black shale,
which in turn overlies 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 overlie
the Victoria Lake sequences of volcaniclastic and fine grained sedimentary
rocks.  A unit of black shale of Caradocian age, a regional
stratigraphic marker, separates the Badger Group from the Victoria Lake
Group.  The dominant structural trend is northeasterly.  All
rock units have been folded into a series of tight, isoclinal, upright,
northeast plunging folds and have been cut by northeasterly
faults.  Mafic dykes occupy the faults at several
locations.




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 cm) close to vein
margins.  Fine grained arsenopyrite is the most common accessory
mineral with lesser amounts of pyrite, galena, sphalerite and chalcopyrite (<
1%) occurring locally.




At least
5 zones of gold mineralization are known to occur at Golden
Promise.  They include the Jaclyn Main, Jaclyn South, Jaclyn North,
Christopher and Shawn’s Shot occurrences, of which the most important are the
Jaclyn Main, Jaclyn South and Jaclyn North Zones.  The most
significant mineralization occurs at the Jaclyn Main Zone, which has been
defined by diamond drilling over a strike length of 800 meters and to a vertical
depth of 265 meters. A total of 71 diamond drill holes (10,315 meters) have
targeted the Jaclyn Main Zone, 68 of which have intersected
it.  Significant intersections include GP02-01 which returned 16.57
grams per tonne gold over 2.55 meters, GP06-52 which returned 93.71 grams per
tonne gold over 1.40 meters, GP07-91 which returned 43.83 grams per tonne gold
over 1.45 meters, GP07-92 which returned 10.41 grams per tonne gold over 4.70
meters, and GP07-93 which returned 20.89 grams per tonne gold over 1.90
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.




22


An NI
43-101 Technical Report titled Golden Promise, South Golden Promise and Victoria
Lake Properties dated April 30, 2008, was completed by authors Gary H. Giroux,
P.Eng. MASc. and Larry R. Pilgrim, B.Sc., P.Geo.  Based on the results
of 68 drill holes that penetrated the Jaclyn Main Zone, and using a 1 gram per
tonne gold cutoff, Gary H. Giroux calculated an inferred resource of 89,500
ounces of gold in the Jaclyn Main Zone contained within a total of 921,000
tonnes of rock averaging 3.02 grams per tonne gold.  The report was
then amended by both authors on September 23, 2008 to include additions to the
recommended work programs including a second phase work program on the Golden
Promise Property of a bulk sample program, as well as further drilling and
metallurgical work.




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,
comprises two subparallel quartz veins, one of which is up to 3.4 meters
thick.  The zone has been tested by four drill holes from which the
best result obtained 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 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 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 Main, Jaclyn North and Jaclyn South Zones.  From June 2007
through December 2007 a 23 hole 3,926 meter drill program was completed in the
Jaclyn area.  The focus of the drilling was the continued evaluation
of the Jaclyn Main Zone (19 holes, 3,135 meter), and Jaclyn North Zone (4 holes,
790 meter).




Rubicon
and subsequently Paragon have managed the Golden Promise exploration program
since we optioned the property for which they have collected an 8% management
fee.  Successive drilling programs to date have been successful in
extending the known limits of the Jaclyn Zone to 800 meters along strike and to
vertical depths of 265 meters.  The Zone remains open along strike and
to depth.




As of
January 2007, over $3.7 million in exploration work has been carried out on the
property since 2002.  By April 30, 2008, we had spent approximately
$1.54 million on exploration of the property.  The aggregate work
includes 98 drill holes of which 71 have been drilled on the Jaclyn Main Zone,
10 holes at Jaclyn North , 4 holes at Jaclyn South, 2 holes at Justin’s Hope, 3
holes at Jaclyn East, 4 holes at Jaclyn West, 2 holes at the Christopher Zone
and 2 holes at the Shawn’s Shot occurrence.  The drilling followed an
extensive soil sampling, prospecting and trenching program, which included
excavation of 30 surface trenches, ~6,000 soil samples and ~2,400 rock, float
and grab 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 Main
Zone in particular.




South Golden Promise(and Victoria
Lake)Propertyand
Agreements




Paragon
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 are entitled to a 2.5% Net
Smelter Return.  Paragon 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 completed its obligations under
its




23


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.




Under the
terms of an agreement dated February 14, 2003 with Paragon, we earned a 60%
interest in the South Golden Promise Property in consideration for issuing a
total of 400,000 common shares and incurring a minimum of $1,750,000 in
exploration expenditures.




The South
Golden Promise Property agreement includes two separate blocks of licenses,
these being the South Golden Promise and the Victoria Lake claim blocks, which
collectively cover 14,150 hectares in 566 map-staked claims. Each claim is 500
by 500 meters, 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.




Paragon
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 carried 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 and Victoria Lake properties consist of two separate blocks of
licences located east and southwest of Red Indian Lake in west central
Newfoundland, in the Grand Falls – Buchans Electoral District.  The
South Golden Promise property is underlain by similar geology to that of the
Golden Promise property, which is contiguous and immediately northeast of the
South Golden Promise claims.  The South Golden Promise agreement also
includes the Victoria Lake claims, where exploration has focused on massive
sulphide deposits as opposed to gold, which is the focus of exploration at
Golden Promise and South Golden Promise.




Accessibility




The South
Golden Promise claims 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, which is the most southwestern of the two claim blocks, is 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 for gold.




The
sedimentary sequences that host the Jaclyn gold mineralization received very
little exploration by previous explorers.  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 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.  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




24


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 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.  The claims
covering this gold showing were abandoned by us in 2009.




Property
Geology




The South
Golden Promise claims are 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 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 as
traced by folds in the Caradocian shale. The folds are tight and upright with a
gentle plunge to the northeast.  A penetrative foliation is commonly
developed 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 the 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 depth by diamond drilling.  A total of 16 holes were
completed at South Golden Promise with two holes returning visible gold-bearing
quartz veining which assayed 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 recommended 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 us.  Favorably altered, sulphide-bearing felsic volcanic units were
encountered in several of the holes.  The drilling program was managed
by Paragon personnel who have extensive experience in the region and who
received 8% of the program costs as a management fee.  During 2008, a
borehole Pulse EM survey was conducted to test for off-hole conductors that may
represent massive sulphides.  Interpretation of the data identified
several anomalies suggestive of conductive sources within the vicinity of the
diamond drill holes.  Further work including diamond drilling has been
recommended.




The GP
Report included recommendations for future work programs for Golden Promise,
South Golden Promise and Victoria Lake properties.




25




Labrador—Central
Mineral Belt









CMB Property and
Agreements




On
October 14, 2004, we entered into an agreement with a private individual, local
prospector Lewis Murphy, 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,
comprising 67 claims in Central Labrador. On March 1, 2005 we acquired another
187 claims from Lewis Murphy. The amended and restated Moran Lake option
agreement calls for exploration expenditures of $3,000,000 ($9.9 million of
exploration work has been carried out as of April 30, 2007), the issuance of
1,600,000 common shares, of which 1,100,000 common shares have been issued, and
cash payments of $575,000, of which $300,000 has been paid, with the balance of
the shares and cash payable over a five-year term.  The agreement also
requires completion of a bankable feasibility study for the commencement of
commercial production on the property within 24 months of completion of the
aforementioned obligations.




We
subsequently carried out a detailed digital compilation of all the historic work
that has been carried out on the property.




To date,
we have issued 1,600,000 common shares, made cash payments totaling $575,000 and
spent more than the required minimum $3,000,000 on project expenditures. On May
21, 2008, we entered into an agreement with Mr. Murphy whereby we received a
three year extension on the requirement to complete the bankable feasibility
study such that the study will be due on or before November 10, 2013.
Additionally, beginning November 10, 2009, the Company is required to make
advance royalty payments in the amount of $200,000 per year until
the




26


commencement
of commercial production.  A bankable feasibility study is a
comprehensive study of the property in which all geological, engineering, legal,
operating, economic, social, environmental and other relevant factors are
considered in sufficient detail that it could reasonably serve as the basis for
a final decision by a financial institution to finance the development of the
property for mineral production.




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, 2009, we have spent
$777,373 in exploration costs, issued 225,000 common shares and made cash
payments of $140,000, thereby earning a 100% interest in these
claims.




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 could have earned 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.  On April 1, 2008, we terminated our option on the Stormy Lake
block and the Partridge River block.




Property
Description and Location




The
Central Mineral Belt 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, the property is about 75 km from tidewater to the northeast.  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.




Accessibility




Helicopter
and fixed wing service out of Goose Bay are the most efficient means of access
to the property.  Local infrastructure is confined to the limited
facilities of the community of Postville, which has 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
portion of central Labrador has a sub-Arctic climate, with strong seasonal
contrasts marked by short cool summers and long cold
winters.  Freeze-up typically begins in late October and lasts until
early to mid June.  Snow cover is relatively heavy and usually lasts
seven to eight months.  Daytime temperatures during the winter
typically range from -15o Celsius to -30o Celsius, while daytime summer
temperatures typically range from 15o Celsius to 25o Celsius.




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 a 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.




27


History




Uranium
was first discovered near Moran Lake by British Newfoundland Exploration Limited
(“Brinex”), 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 meter 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
meters. 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
meter 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 meter 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 meters to explore the unconformity and what became later known
as 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 considered to have good uranium
potential and an 8 hole, 1,400 meter drill program was proposed but never
carried out as Shell abandoned its interest in the area due to a decline in
uranium prices.




Lewis
Murphy acquired the Moran Lake claims in 2003 and optioned the ground to us 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, we invoked the analogy with Iron Oxide
Copper Gold (IOCG) deposit types, as at the Olympic Dam copper-uranium deposit
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 encompassing 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, F and iron (as pyrite and hematite).




28


The Moran
Lake Group 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 1,200 meter up to 3,000 meter in
thickness and is overlain conformably by 100 meter to 300 meter 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 portion 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 Bruce River 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




After
acquiring the property in October of 2004, we immediately launched a
comprehensive review and compilation of all previous exploration carried out in
the area.  The results of the review confirmed that the property had
considerable potential to host several types of uranium deposits including
uranium-rich iron oxide copper gold deposits (IOCG).




Exploration
work on the property by us has included line cutting, airborne and ground
geophysical surveys, lake sediment sampling, till geochemical and alpha track
surveys, biogeochemical surveys, prospecting, limited hand trenching, mechanical
trenching, geological mapping and diamond drilling.  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 two different blocks on the property.  The ground geophysical
surveys include gravity, induced potential (IP), and horizontal loop EM
(Max-Min) surveys.  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.




The CMB
Report, an Independent NI 43-101 Technical Report prepared in accordance with
the standards of NI 43-101 and the definitions of the CIM Standards, was
commissioned in 2008 which included an updated resource estimate for the Upper
and Lower C Zones based on drilling up to May 2008, as well as resource
estimates for two new zones of uranium mineralization discovered by Crosshair,
these being the Trout Pond (Area 1) and Armstrong zones.  The CMB
Report reportedtotal indicated
resource for the Upper C Zone is 5.19 million pounds of U3O8 (6.92
million tonnes grading 0.034% U3O8). The
Upper C Zone also contains additional resources in the inferred
category which, when combined with the inferred resources in the Lower C Zone,
Trout Pond and Armstrong zones total5.83 million pounds of U3O8 (8.17
million tonnes grading 0.032% U3O8).With the exception of the
Lower C Zone, these estimates are reported at a block cut-off of 0.015%U3O8.The cut-off grades are considered
appropriate for the location and cost profile that can be expected for open pit
mining.  In the case of the Lower C Zone, a cut-off grade of 0.035%
U3O8is used for reporting purposes,
reflecting higher costs associated with underground mining.




Drilling




We
launched our first drill program in February 2006, completing approximately
2,750 meters of drilling in 19 holes at the C Zone.  Further drilling
using two drill rigs and totaling over 18,500 meters was carried out during the
summer of 2006, followed by an additional 9,400 meters of drilling during the
winter of 2007.  The 2007 summer program was our most aggressive
program, with over 28,000 meters of drilling using three rigs.  This
was followed by over 12,000 meters during the 2008 winter
program.  The drilling programs focused on defining
uranium




29


mineralization
at the C Zone, which represents the most advanced uranium target on the
property, but also tested targets at Area 1, Armstrong, B Zone, Area 51, Moran
Heights, Madsen Lake and Croteau Lake.




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 2007, we carried out
further drilling at the C Zone as well as limited drilling at Area 1 and the
Armstrong and Dominion showings.  Total drilling in the winter of 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.




The
summer 2007 drill program totaled 28,745 meters in 121
holes.  Eighty-nine of those holes (15,727 meter) were targeting the C
Zone, with the goal of upgrading and expanding the existing NI 43-101
resource.  Drilling intercepted the highest and thickest grades to
date including 0.202% U3O8 over 22.4
meters as part of a wider zone grading 0.100% U3O8 over 46.3
meters in hole ML-122 and 0.100% U3O8 over 45.7
meters as part of a much wider interval that assayed 0.074% U3O8 over 71.3
meters in ML-87.  A total of 26 holes (2,820 meters) were drilled at
Area 1 in the 2007 summer program and 6 holes (784 meters) at Croteau
Lake.




Our 2008
winter drill program consisted of 55 holes totaling 12,198
meters.  Drilling was focused at Armstrong, which is believed to
anchor the southern end of the same 4.5 kilometer long trend that hosts the C
Zone to the north and Area 1 in the middle.  A total of 6,366 meters
in 30 holes were drilled in this recently discovered zone, with highlights from
ML-AR-26, which returned 0.20% U3O8 over 9.5
meters including 1.10% U3O8 over 1.6
meters.




The
summer 2008 drill program consisted of 3,516 meters in 19
holes.  Eleven of the holes (2,035 meters) tested the C Zone, while 6
of the holes (1,276 meters) tested targets at Area 1 and two holes (205 meters)
were drilled at Madsen Lake in the central portion of the CMB
Property.




With our
latest drilling, we have expanded the C Zone to a strike length of 1,500 meters,
Area 1 to 600 meters and Armstrong to 300 meters.  All zones of
mineralization are open for expansion, both along strike and to
depth.




In
December 2008, a previously unidentified zone of uranium mineralization,
referred to as the “Apollo Zone” was discovered.  During the summer of
2008, follow-up prospecting of several anomalies identified in 2006 revealed
significant uranium mineralization over a 500 meter strike length. The Apollo
Zone returned grab samples assaying up to 0.50% U3O8 in outcrop
and 0.20% U3O8 in local
boulders. This new zone appears to lie along strike of the Boiteau Lake Showing
(0.79% U3O8) announced
by Bayswater Uranium Corp. in November 2008.  The Boiteau Lake Showing
lies very close to the Crosshair/Bayswater property boundary and the trend is
open along strike for the 7 kilometers between the showing and the Apollo
Zone.  The Apollo Zone lies approximately 11 kilometers NE from the C
Zone uranium resource and approximately 3 kilometers south of previously
discovered Blue Star, where sampling by Crosshair in 2006 returned values of up
to 1.37% U3O8 outcrop.
To date on the Moran Lake property, we have completed 366 holes totaling over
65,000 meters.  One hundred and ninety-three holes have been drilled
at the C Zone, 55 at Area 1, and 32 at Armstrong.  Several other areas
have also been drill tested, including the B Zone, Moran Heights, Area 51,
Croteau Lake, and Madsen Lake.  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 and Portage 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% U3O8
from grab sampling along a four kilometer




30


strike
length of anomalous radioactivity.  Geological mapping, rock sampling,
as well as Alpha Track, till sampling and lake sediment surveys were carried out
in 2007.




CMB-JV Property and
Agreement




In July
2008, we acquired a 60% interest in 4,741 claims in the Central Mineral Belt
from Universal by paying CDN $500,000 and issuing 10,000,000 common shares and
7,500,000 warrants to Universal.  The claims were part of a property
agreement between Universal and Silver Spruce, under which Universal had earned
a 60% interest.  The claims are host to the Two Time
deposit.




Property
Description and Location




The
CMB-JV Project comprises 2,759 map-staked claims in several separate claim
blocks located roughly 150 kilometers north of the town of Happy Valley – Goose
Bay, Labrador.  Approximately half of the claims are contiguous with
Crosshair’s 100% owned claims located near Moran Lake, while most of the
remaining claims are situated south and southeast of the coastal community of
Postville on Kaipokok Bay.




Property
Geology




The
CMB-JV Project is situated within the Central Mineral Belt (CMB) of Labrador, a
geological province comprising six Proterozoic sequences of volcanic,
sedimentary and plutonic rocks ranging in age from about 2.0 to 1.3 billion
years and include, from oldest to youngest, the Post Hill, Moran Lake, Aillik,
Bruce River, Letitia Lake and Seal Lake Groups.  The CMB includes
portions of 4 major tectonic provinces, these being the Nain, Makkovik and
Grenville provinces, and the Hopedale Block of the Archean Nain
Province.  The easternmost claims of the CMB-JV Project lie within the
Makkovik Province, while the westernmost claims of the CMB-JV Project generally
lie along the boundary between the Nain, Churchill and Grenville
Province.




Exploration




Exploration
by Silver Spruce and Universal includes an airborne magnetic radiometric survey
over all the claims, as well as limited follow-up over most of the claims
including geological mapping, prospecting and lake sediment
sampling.  Exploration to date has focused on the claim blocks hosting
the Two Time deposit, where work has been more extensive and includes line
cutting, ground scintillometer surveying, soil, till, lake, and stream sediment
sampling, ground radon (RadonEx) surveying, prospecting, trenching, geological
mapping, and diamond drilling.




The most
significant discovery to date on the CMB-JV claims has been the Two Time
deposit, which was discovered as a result of follow-up of a high priority
airborne radiometric anomaly.  The Two Time zone is hosted within
brecciated and fractured granitic to dioritic intrusive rocks of the Kanairiktok
Intrusive Suite characterized by hematite, carbonate, and chlorite
alteration.  A number of other showings and prospects have also been
discovered on the claim block, including the Firestone Showing, Doucette, HF, J,
F, and W occurrences.




Drilling




The only
drilling carried out on the CMB-JV Project has been on the ‘CMB-NW (Northwest)’
claim block, which is contiguous with the northern portion of Crosshair’s 100%
owned CMB Project.  Diamond drilling carried out to date by Silver
Spruce and Universal totals 11,196 meters in 44 holes.  Highlights
include 0.118% U3O8 over 28.00
meters in hole CMB-07-06, 0.101% U3O8 over 33.00
meters in hole CMB-07-14, and 0.112% U3O8 over 19.00
meters in hole CMB-07-34.




Based on
the drilling results, an NI 43-101 compliant indicated resource of 2.33 million
pounds of U3O8 (1.82
million tonnes grading 0.058% U3O8) and
additional inferred resource of 3.73 million pounds of U3O8 (3.16
million tonnes grading 0.053% U3O8) was
estimated for the Two Time zone using a cut-off grade of 0.03% U3O8.  The
resource estimate is disclosed in the CMB JV Report which was prepared in
accordance with the standards of NI 43-101 and the definitions of the CIM
Standards.  The Two Time zone remains open to depth and along strike
to the south.




31






Wyoming
–  Bootheel and Buck Point Properties









On March
31, 2009, we acquired the Bootheel and Buck Point Properties in Wyoming, USA
through the acquisition via Plan of Arrangement of Target.




On June
7, 2007, Target, now a wholly owned Crosshair subsidiary, entered into an
agreement to form the Bootheel Project, LLC with URE whereby Target may acquire
a 75% participating interest in two uranium properties, the Bootheel and Buck
Point properties located in the Shirley Basin, Albany County, Wyoming (the
“Bootheel Project”) by completing expenditures totalling US $3 million and
issuing 125,000 common shares on or before June 7, 2011.  All shares
have been issued and US $2.63 million has been spent as of April 30,
2009.




Under
Agreements dated February 5, 2008 between M J Ranches, and 448018 as manager,
the Bootheel Project LLC leased MJ Ranches’ 75% ownership of the minerals
located under four sections and the surface access rights to six sections
adjacent to portions of the ground controlled by The Bootheel Project
LLC.  The initial term of the agreement is for five years with
provision for two renewals.  Payment for the initial five year term is
$252,651 paid in advance, increased for inflation for the renewal
periods.  The Fee Lands are subject to a sliding scale Royalty tied to
the sales price of uranium.




The
Bootheel Project LLC now comprises a 100% mineral interest in 269 Federal
Unpatented Mining Claims, two state leases and a 75% mineral interest in four
fee sections for a total of 8,524 gross acres and surface access rights to 7,882
acres.







32





The
following information on the Bootheel Project is summarized from the Bootheel
Report, an Independent Technical Report compliant with NI 43-101.




Property Location




The
Bootheel and Buck Point properties are located on the southeast edge of the
Shirley Basin approximately 60 miles southeast of Casper, Wyoming.




Accessibility




The
Shirley Basin properties are readily accessible year round by an extensive
system of State and County gravel roads and dirt ranching roads, which extend
from highways #30, #287 and #487 south and east of the town of Medicine
Bow.  The Fetterman Road, an all season County maintained gravel road
transects the Bootheel property.




History




Uranium
was discovered in the Shirley Basin in 1955 by Teton Exploration Drilling Co.,
who found ore-grade material by drilling west of the Little Medicine Bow River
in the western part of the Shirley Basin, 30 mi south of Casper.  In
the summer of 1957, several thousand claims were staked over 150 square
mi.  By the end of 1959, over 1,000,000 ft of drilling had been
completed through the mineralized Wind River Formation, and into underlying
pre-Tertiary rocks.  In 1959, Utah Mining Corp. later Utah
Construction and Mining Co. (Utah) sank a shaft on their property and the first
uranium was produced in March 1960, with ore shipped to the Lucky Mc mill in the
Gas Hills area west of Casper.  Late in 1964, the company stopped
underground mining and commenced an in-situ leach operation using sulphuric acid
and ion exchange for recovery.  Production amounted to approximately
200,000 pounds of U3O8 per year
through 1970 (Pool 2000).  In 1970, the ISR operation was replaced by
a conventional mine and mill.





In July
1960, Petrotomics Co. (Petrotomics) commenced an open-pit operation in the same
area and in 1962 a solvent extraction facility was built on the
property.  A second pit commenced operation in 1966.  By
late 1969, there were three operating mines in the Shirley Basin, those of
Petrotomics and Utah, as well as Kerr McGee Corp. (Kerr-McGee) (Figure
4-1).





Total
production from the Basin amounted to about 34 million lbs of uranium. The last
mine closed in 1992 and most of the pits have been reclaimed.  Cogema
Mining Inc. retains one pit, which is used for the disposal of low-level
radioactive waste from the ISR operations in the Powder River
Basin.





The
Bootheel property was originally staked in 1958 by Kerr McGee Corp. Kerr McGee
drilling (283 holes) discovered both shallow oxidized and deeper uranium
mineralization in sandstones but dropped the property in 1962.  The
company re-acquired the property in 1968, and again abandoned
it.  Rocky Mountain Energy Corporation (Union Pacific Railroad) also
conducted limited drilling in the early 1970s.  In 1977, Cherokee
Exploration Inc. (Cherokee) obtained a land package, as well as the Kerr McGee
database and formed an exploration and drilling participation agreement with
Uranium Resources and Development Company (URADCO), a subsidiary of Pennsylvania
Power and Light.  Drilling from 1978 to 1980 partly delineated both
shallow and deep sandstone mineralization.  Drilling by Kerr McGee
Corporation, Cherokee Exploration Inc. (“Cherokee”), URADCO and others
intersected significant uranium mineralization in sandstones at depths ranging
from 150 to 600 feet. Grades and thickness range from 2 feet at 0.12% U3O8 to 22.5
feet at 0.071% U3O8.




Dames
& Moore estimated a historical resource included in a report dated 1980, for
parts of the property.  Nuclear Assurance Corporation (NAC) completed
a study in 1982 reporting the reserves and resources shown in Table
6-1.  As was industry standard for reporting in the 1980s, tonnages
are not provided in the reports.  Reserves are reported using a
minimum grade of 0.02% eU3O8 and a GT
of 0.12 ft%.




33






TABLE
      6-1   HISTORICAL RESOURCESClassification
            Age
      of Formation
            Av.
      Thick. (ft)
            Av
      grade (%eU3O8)
            Av
      GT
            Pounds
      eU3O8Measured
      + Indicated Reserves
            Jurassic
            14.9
            0.037
            0.55
            2,625,000Measured
      + Indicated Resources
            Tertiary
            4.9
            0.078
            0.38
            1,095,000Inferred
      Resources
            Jurassic
            11.4
            0.044
            0.50
            2,801,000Geological
      Resources
            Jurassic,
      Cretaceous.
            Not
      reported
            N
      R
            N
      R
            4,462,000TOTAL
            
            
            
            
            10,983,000







These
resources are historical in nature and were compiled before the implementation
of NI 43-101 reporting standards.  Readers are cautioned that recent
independent verification of the data has not been performed and we have not
completed sufficient exploration to verify the historical resource and reserve
estimates.  The categories of mineralization used are not those
prescribed by the Canadian Institute of Mining, Metallurgy and Petroleum and
stipulated in NI 43-101 but with the exception of the Geological Resources they
would correspond to indicated or inferred resources under those
guidelines.  We are not treating the historical estimates as NI 43-101
defined resources or reserves verified by a qualified person and the historical
estimates should not be relied upon.





In 1995,
Cherokee sold the project and database to Cameco Corp. (“Cameco”) who carried
out limited drilling and evaluation of the in-situ recovery potential. Although
the results were very favourable, Cameco abandoned the property in 1998 due to
the low uranium price ($10 per pound). Total drilling on the property is
estimated to be over 600,000 feet. The known uranium zone on the property
remains open for expansion.




The
Bootheel Project LLC acquired a database from Power Resources Inc. that includes
reports, gamma logs, drill logs and other data which primarily cover the Federal
mining claims but also include some historic data from the surrounding fee
land.





On
January 15, 2009 the Bootheel Project LLC acquired additional data from Cameco
Resources which covers the four fee sections under lease from MJ
Ranches.  The data includes historical geological and gamma logs
covering 660 drill holes totalling approximately 290,000
feet.  Compilation to date indicates that there have been
approximately 1,900 drill holes totalling in excess of 600,000 ft, completed on
the property and the surrounding area.





The Buck
Point property was drilled in 1979 and 1980 by Cherokee and Mobil Oil
Corp.   Mineralization has been found in at least six sandstone
units over a 250 ft. interval, with grades up to 0.10% U3O8.  No
further work has been carried out on the property since then.




.                      Property Geology




The
Bootheel project is located at the south-eastern margin of the Shirley Basin,
along the western flank of the Laramie Mountains.  Tertiary sediments
occupy the entire surface area of the property and unconformably overlie a
gently dipping, relatively undisturbed sequence of Paleozoic and Mesozoic
sediments.  A moderate degree of block faulting and some gentle
folding are the main structural features and mostly affect pre-Tertiary
rocks.





Uranium
mineralization occurs within seven different sandstone beds within the gently
dipping Jurassic and Cretaceous stratigraphy and within the overlying Tertiary
Wind River Formation.  Five horizons host significant mineralization
and have the potential to host economic resources: 1) Jurassic Sundance
Formation containing the Canyon Springs B and D Beds, 2) Cretaceous Dakota
Sandstone, 3) Cretaceous Rusty Beds Sandstone, 4) Cretaceous Muddy Sandstone and
5) Tertiary Wind River Formation.  Three other Cretaceous horizons
(Lakota Sandstone, Fuson Shale and Wall Sandstone) contain scattered weak
mineralization, but are not considered exploration targets at this
time.





Two major
zones of mineralization are recognized within the Sundance
Formation.  The main zone in Sections 36 and 1 stretches for over
7,000 ft in length and reaches widths of up to 400 ft and is described as a
series of tabular





34





zones.  In
Sections 6 and 7 the mineralization shows the characteristic roll front shape
with the main northeast –trending nose extending approximately 1,900 ft in
length.  These zones vary from 2 to 60 ft in thickness, averaging from
0.017% to 0.216% eU3O8 occurring
at depths of 158 to 585 ft.  Length of the individual bodies ranges
from 300 to 1,300 ft.





Three
Cretaceous sandstone units host uranium mineralization.  The Dakota
Sandstone ranges from 4 to 47 ft thick and contains abundant pyrite and
carbonaceous material.  Uranium mineralization ranging from 2 to 14 ft
thick, grades from 0.026% to 0.23% eU3O8 and occurs
from 163 to 325 ft below the surface.  The main zone is about 300 ft
wide and 1,000 ft long.  The Rusty Beds range from 5 to 87 ft thick,
and contain abundant pyrite and carbonaceous debris.  Mineralization
is 2 to 18 ft thick, grades from 0.020% to 0.11% eU3O8 and occurs
from 232 to 297 ft below the surface.  Mineralization occurs in three
small zones, 300 to 400 ft in size.  The Muddy Sandstone is 18 to 45
ft thick and is the least well mineralized of the Cretaceous units, with only
one zone, about 200 ft by 400 ft in dimension, drilled to date.  This
zone ranges from 2 to 6 ft thick, grades from 0.145% to 0.157% eU3O8 and is
relatively shallow at 138 to 149 ft below the surface.





Tertiary
Wind River Formation mineralization is typically thin, high grade, meandering
and somewhat laterally discontinuous.  The Wind River ranges from 25
to 270 ft thick, averaging 150 ft.  The mineralized zones are
typically 2 to 24 ft thick, averaging 5 ft, from 0.016% to 0.520% eU3O8 and occur
from 50 to 215 ft below the surface.  The two main zones are up to 700
ft in width and 1,670 ft in length.





Exploration and
Development




The 2008
drilling program, designed to further test the mineralized Sundance Formation,
consisted of 93 vertical holes averaging 540 feet in depth and totaling 50,163
ft.  Of these holes, 12 were spot cored through the Sundance Formation
resulting in 708.5 ft of core.  Drilling commenced in June and was
completed September 20, 2008.  Virtually all historic drill hole sites
within the main resource zone were resurveyed.  Holes drilled within
the existing historical resource areas are highlighted by:




·
            0.055%
      e U3O8 over
      51.0 feet in hole 06-3008




·
            0.042%
      e U3O8 over
      23.0 feet in hole 36-3000




·
            0.132%
      e U3O8 over
      4.0 feet and 0.068% eU3O8 over 14.5 feet in hole
  06-3010




Holes
drilled outside of the existing historic resource areas are highlighted
by:




·
            0.075%
      e U3O8 over
      15.5 feet in hole 01-3069




·
            0.050%
      e U3O8over
      23.5 feet in hole 01-3070




·
            0.052%
      e U3O8 over
      13.5 feet in hole 01-3044




The final
historic drill data set acquired from Cameco in January 2009 is currently being
compiled by our geological team and will be combined with the results from over
50,000 feet of drilling completed by Target at Bootheel in 2008. This
compilation will allow the company to complete an NI 43-101 resource estimate
for the Bootheel Project by mid 2009.




In
addition to the drilling program, the historic holes were relocated, limited
ground radiometric and water sampling surveys were carried
out.   On February 5, 2009 Target reported that preliminary
bottle roll tests had confirmed historical metallurgical test work indicating
uranium recoveries of 87% or better using sodium bicarbonate as a
lixiviant.







35





Utah









On March
31, 2009, Crosshair acquired the Sinbad Property in Utah, USA through the
acquisition of Target via plan of arrangement.




Target
originally acquired a 100% interest in certain uranium mining claims located in
Emery County, Utah, known as the Sinbad property pursuant to a Purchase and Sale
Agreement dated February 13, 2007 between Target and Crosshair. Under the terms
of the Agreement, Target made a cash payment to Crosshair in the amount of
$31,698 and granted Crosshair a 2% net smelter royalty, half of which may be
purchased by Target at any time for $1,000,000.




The
Sinbad property is comprised of 62 mineral claims (approximately 1,280 acres)
located in Emery County Utah, 20 miles southwest of Green River and less than
one mile south of Interstate 70.  Target acquired an additional 604
acres adjoining the Sinbad property pursuant to a State Lease with the State of
Utah dated March 1, 2007.




The
property is adjacent to the Sinbad Uranium Mine, a former producer that was shut
down in 1982. An undetermined amount of uranium was mined via a decline to a
depth of approximately 220 feet below the surface.







36





Based on
company maps dated 1982, the Sinbad mine contains un-mined bodies of
mineralization grading from 0.21% to 0.40% eU3O8 (equivalent U3O8 determined by
gamma ray logging). Mineralization is hosted in the Chinle Formation sandstone
which hosts numerous other uranium deposits in Utah. The United States
Geological Survey reports that at least seven million pounds of U3O8 was
produced from mines located within the San Rafael Swell, a geological district
that includes the Sinbad property. Uranium mineralization occurs as tabular
bodies at the base of the formation close to the unconformity with the
underlying Moenkopi Formation.




Target
has completed geological mapping and a radon gas survey over the Sinbad
property. This work delineated several drill targets and a 15 hole, 3,300 foot
drill program was completed in the fall of 2007. The drill program tested the
projected extension of the Chinle Formation mineralized channels north-westward
from the historic Sinbad Uranium Mine. The program also tested several of the
radon anomalies.  High grade uranium was intercepted in multiple
horizons as shown in the following drill highlights:




·
            0.10%
      eU3O8 over
      1.4 feet (194.5 feet -- 195.9 feet) and 1.07% e U3O8 over
      1.6 feet (203.6 feet -- 205.2 feet) in hole SB-07-13
  and




·
            0.11%
      e U3O8 over
      1.3 feet (174.3 feet to 175.6 feet), 0.12% eU3O8 over 2.6 feet (177.9 feet
      to 180.5 feet) and 0.28% e U3O8 over
      4.9 feet (181.5 feet -- 186.4 feet) in hole
  SB-07-14.




Reclamation
has been completed on the property.




ITEM 4A.
            UNRESOLVED
      STAFF COMMENTS




Not
applicable




ITEM
      5.
            OPERATING
      AND FINANCIAL REVIEW AND PROSPECTS




The
following discussion for the fiscal years ended April 30, 2009, 2008, and 2007
should be read in conjunction with our audited financial statements for the
referenced periods and the notes thereto, and in particular Note 17 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 and its focus is 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.  The Company’s shares trade on Toronto Stock Exchange and on
NYSE AMEX Exchange.




The
Company is currently focusing on exploration activities in the province of
Newfoundland and Labrador, Canada and the States of Wyoming and Utah, USA on the
following properties:






·
            Central
      Mineral Belt (“CMB”) Uranium Project in
  Labrador.




·
            Central
      Mineral Belt Joint Venture (“CMB JV”) Uranium Project with Silver Spruce
      Resources Ltd. in Labrador.




·
            Golden
      Promise Project, consisting of the Golden Promise, Southern Golden Promise
      and Victoria Lake Properties in
Newfoundland




·
            Bootheel
      Uranium (“Bootheel”) Project with URE in
Wyoming




·
            Sinbad
      Uranium Project in Utah





37




Recent
Canadian Accounting Pronouncements




Capital
Disclosures




In
December 2006, the CICA issued Handbook Section 1535, Capital Disclosures, which
establishes standards for disclosing information about an entity’s capital and
how it is managed.  The entity’s disclosure should include information
about its objectives, policies and processes for managing capital and disclosure
whether or not it has complied and the consequences of non-compliance with any
capital requirements to which it is subject.  Refer to Note
13.




Financial Instruments




Disclosures
and financial instruments – presentation.  In December 2006, the CICA
issued Handbook Sections 3862, Financial Instruments – Disclosures, and 3863,
Financial Instruments – Presentation.  Section 3862 modifies the
disclosure requirements of Section 3861, Financial Instruments – Disclosure and
Presentation, including required disclosure for the assessment of the
significance of financial instruments for an entity’s financial position and
performance and of the extent of risks arising from financial instruments to
which the Company is exposed and how the Company manages those risks, whereas
Section 3863 carries forward the presentation related requirements of Section
3861.  Refer to Note 14.




Going Concern




Amendments
to Handbook Section 1400, General Standards of Financial Statement Presentation,
require management to assess an entity’s ability to continue as a going
concern.  When management is aware of material uncertainties related
to events or conditions that may cast doubt on an entity’s ability to continue
as a going concern, those uncertainties must be disclosed.  In
assessing the appropriateness of the going concern assumption, the standard
requires management to consider all available information about the future,
which is at least, but not limited to, twelve months from the balance sheet
date.  The Company has performed an assessment as of the Balance Sheet
Date and believes there to be no impact on its financial statements due to this
new standard.




Credit Risk and the Fair Value of
Financial Assets and Liabilities (EIC-173)




In
January 2009, the Emerging Issues Committee (“EIC”) issued EIC -173 “Credit Risk
and the Fair Value of Financial Assets and Financial Liabilities.” This abstract
requires companies to take counterparty credit risk into account when measuring
the fair value of financial assets and liabilities, including derivatives. This
new standards is effective for the Company’s annual consolidated financial
statements for the year ended April 30, 2009. The Company does not believe there
to be any impact on its financial statements due to this new
standard.




Mining Exploration Costs
(EIC-174)




On March
27, 2009, the CICA approved EIC-174 “Mining Exploration Costs.” This guidance
clarified that an entity that has initially capitalized exploration costs has an
obligation in the current and subsequent accounting periods to test such costs
for recoverability whenever events or changes in circumstances indicate that its
carrying amount may not be recoverable.




This new
standards is effective for the Company’s annual consolidated financial
statements for the year ended April 30, 2009. The Company does not believe there
to be any impact on its financial statements due to this new
standard.




Goodwill and Intangible Assets (Section
3064)




In
February 2008, the CICA issued Section 3064, “Goodwill and Intangible Assets”,
which replaces Section 3062, “Goodwill and Other Intangible Assets”. This new
standards provides guidance on the recognition, measurement, presentation and
disclosure of goodwill and intangible assets. Concurrent with the adoption of
this standard, EIC 27, “Revenue and Expenditures in the Pre-operating Period”,
will be withdrawn. The Company does not expect the







38





adoption
of this section to have a significant effect on its financial
statements.  This section will be adopted effective May 1,
2009.




Business Combinations (Section
1582)




In
January 2009, the CICA issued Section 1582 “Business Combinations” to replace
Section 1581. Prospective application of the standard will be effective May 1,
2011, with early adoption permitted. This new standard effectively harmonizes
the business combinations standard under Canadian GAAP with International
Financial Reporting Standards. The new standard revises guidance on the
determination of the carrying amount of the assets acquired and liabilities
assumed, goodwill and accounting for non-controlling interests at the time of a
business combination. The Company does not expect the adoption of this section
to have a significant effect on its financial statements.




Consolidated Financial Statements
(Section 1601) and Non-Controlling Interests (Section 1602)




The CICA
concurrently issued Section 1601 “Consolidated Financial Statements” and Section
1602 “Non-Controlling Interests” which replace Section 1600 “Consolidated
Financial Statements.” Section 1601 provides revised guidance on the preparation
of consolidated financial statements and Section 1602 addresses accounting for
non-controlling interests in consolidated financial statements subsequent to a
business combination. Theses standards are effective May 1, 2011, unless they
are early adopted at the same time as Section 1582 “Business Combinations.” The
Company does not expect the adoption of this section to have a significant
effect on its financial statements.




International Financial Reporting
Standards (“IFRS”)




In 2006,
the Canadian Accounting Standards Board (“AcSB”) published a new strategic plan
that will significantly affect financial reporting requirements for Canadian
companies. The AcSB strategic plan outlines the convergence of Canadian GAAP
with IFRS over an expected five year transitional period. In February 2008 the
AcSB announced that 2011 is the changeover date for publicly-listed companies to
use IFRS, replacing Canadian GAAP. This date is for interim and annual financial
statements relating to fiscal years beginning on or after January 1, 2011. The
transition date of May 1, 2011 will require the restatement for comparative
purposes of amounts reported by the Company for the year ended April 30, 2011.
In July 2008 AcSB announced that early adoption will be allowed in 2009 subject
to seeking exemptive relief.  The conversion to IFRS may have a
material effect on our:




·
              reported
      financial position and results of operations;·
              systems
      of internal controls and procedures over financial reporting, including
      related business processes; information technology and data
      systems;·
              disclosure
      controls and procedures;·
              current
      financial reporting training curriculum; and·
              downstream
      business activities such as our corporate hedging programs, joint venture
      agreements and other contractual arrangements, debt covenants,
      compensation programs and tax planning arrangements.




The
Company is currently assessing the financial reporting impact of the transition
to IFRS and the changeover date. We expect to complete the detailed IFRS
conversion plan by October 31, 2009. We are in the process of completing our
detailed technical analysis of Canadian GAAP-IFRS accounting differences.
Furthermore, IFRS accounting standards, and the interpretation thereof, are
constantly evolving and therefore are subject to change through the end of 2011.
Consequently, we will continuously monitor IFRS accounting developments and
update our conversion plan and public disclosure as necessary.







39





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, 2009, 2008 and
2007.




We have
adopted the fair value based approach to share-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 fiscal year ended April 30, 2009 compared to the fiscal
year ended April 30, 2008




For
fiscal year ended April 30, 2009 the Company reported a net loss of $20,724,237
or $0.22 per common share, compared with a net loss of $12,933,204 or $0.18 per
common share for the prior fiscal year.   The weighted average
number of common shares for fiscal 2009 increased to 93,584,687 from 72,997,081
for the previous year.  The increase in the average number of shares
outstanding was primarily due to share issuances related to the following
property acquisitions:




·
            CMB
      JV (10,000,000 shares) from Universal in the 1st
      quarter of fiscal 2009


·
            Target
      (holder of an interest in the Bootheel Project) (14,633,488 shares) in the
      4th
      quarter of fiscal 2009


·
            Golden
      Promise from Paragon (2,655,000 shares) in the 4th
      quarter of 2009





Additionally,
the 11,575,000 shares issued in regards to the bought deal financing that was
completed during the fourth quarter of fiscal 2008 were outstanding for all of
fiscal 2009.




Fiscal
2009 includes the operations and activities of Target for the month of April
2009 as a result of the closing of the plan of arrangement on March 31,
2009.  The financial impact of the single month is not considered
material to the following discussion.




Expenses




Expenses
for the current year were $6,914,903, $4,137,065 (37%)  lower than in
fiscal 2008 due primarily to significantly lower stock-based compensation
expense and a reduction in overall expenses as a result of the cash conservation
program implemented late in the second quarter of 2009.  Cash expenses
were $3,281,699, $518,681 (14%) lower than fiscal 2008.




Stock-based
compensation expense for 2009 was $3,785,316 (53%) lower than in 2008 due
largely to certain stock options being cancelled as a result of significantly
fewer staff related to corporate downsizing and fewer stock options vesting in
the current period partially offset by new incentive stock options being granted
to employees and management as a means to retain core staff during the downturn
in the industry.




Wages and
salaries increased slightly in 2009 by $59,118 (5%) from 2008 due primarily to
severances paid out for employees terminated in the corporate cash conservation
and expenditure reduction programs partially offset by a reduction in support
for exploration related activities and a lower staff compliment.







40





Audit and
accounting expenditures increased by $68,542 (67%) over fiscal 2008 primarily as
a result of the audit requirements related to compliance with the Sarbanes Oxley
404 legislation.




Investor
relations expenditures decreased by $285,418 (63%) from fiscal 2008 due to the
implementation of the cash conservation program significantly reducing investor
and public relations activities.




Legal
expenditures increased by $97,003 (76%) over fiscal 2008 as a result of fees
being expensed that were previously deferred due to the termination of the
proposed Gemini spin-out transaction and additional fees associated with
compliance with the Sarbanes Oxley 404 legislation.




Office
and administrative expenses decreased by $291,378 (47 %) due to the
implementation of the cash conservation program and the reduction in the number
of employees.




Other
Income (Expenses)




Other
expenses increased in fiscal 2009 by $13,229,398 to $15,110,634 compared with
$1,881,236 in 2008 primarily as a result of the $14,000,000 non-cash impairment
charge on the company’s uranium interests in the Central Mineral Belt of
Labrador.  The company has determined that reasonable evidence existed
that indicated the carrying value of the properties exceeded the fair value and
that the decline in fair value was more than
temporary.   Additionally, the company’s interest income was
$232,306 lower than the prior year due to the lower average cash balances and
the loss on Marketable securities decreased by $786,917 from 2008 to $1,290,195
due to the significantly reduced carrying value on the company’s consolidated
balance sheets.  Crosshair has accounted for its investment in
marketable securities as “Held for Trading” in accordance with CICA Standard
3855 on Financial Instruments. Held-for-trading financial assets are measured at
fair value and changes in fair value are recognized in net income.




Future
Income Tax Recovery




The
company recognized a recovery of future income tax of $1,301,300 related to the
renouncing in the current fiscal year certain deductions for Canadian
exploration expenditures incurred on the Company’s resource properties from the
prior year’s flow through securities offering to shareholders.  During
the year ended April 30, 2008, the Company issued 3,575,000 common shares on a
flow-through basis for gross proceeds of $5,005,000 which were renounced in
fiscal 2009.  The flow-through agreement requires the Company to
renounce certain deductions for Canadian exploration expenditures incurred on
the Company’s resource properties.




Mineral
Property Expenditures




During
the current fiscal year, the Company incurred total mineral property
expenditures of $16,264,847 due primarily to the acquisition of CMB JV in
Labrador ($7,132,327), the acquisition of Target ($3,829,933), the acquisition
of Golden Promise in Newfoundland ($746,122) and exploration and drilling
activity on the CMB Moran Lake property totaling
$4,349,403.   Mineral property expenditures incurred in the prior
year were $12,784,242 primarily related to the drilling, geological and
geophysical activities associated with Moran Lake ($11,928,313) and Golden
Promise/South Golden Promise property ($855,929).




Working
Capital




Working
capital was $2,641,169 as at April 30, 2009 compared with $13,272,006 as at
April 30, 2008, down $10,630,837. The decrease was mainly due to cash used in
operations ($3,414,510), mineral property investing activities
($6,053,579)   Accounts payable and accrued liabilities decreased
by $353,529 which was partially offset by a reduction to accounts receivable of
$426,812.







41





Results
of Operations for the fiscal year ended April 30, 2008 compared to the fiscal
year ended April 30, 2007




Expenses




The
results of operations for the year were generally as expected.  The
two most significant components of the $12,933,204 loss for the year were
non-cash events: $7,097,948 attributable to the fair value of stock-based
compensation benefits recorded and $2,077,112 attributable to the unrealized
loss of marketable securities held.  Together these two items
represent almost 72% of the reported loss.




The
number of personnel has increased significantly over the past two years to
support the Company’s extensive property acquisition and exploration programs,
and overall corporate development.  Under the Company’s stock option
plan, stock options vest over a two year period. The fair value of stock options
granted is recognized as these options vest.  Therefore, similar
charges can be expected in future quarters over the next year.




The
volatility of the stock markets that began last summer continued during this
quarter, resulting in a significant write-down of marketable securities on
hand.




Investor
relations activity was up significantly this year to almost $452,988 about 2.5
times the previous year, because of an increase in the number of shows attended,
contracting of third party investor relations entities, and holding the
Company’s annual general meeting of shareholders in St. John’s, Newfoundland,
site of the Company’s properties.  Spending on outside investor
relations consultants is expected to decline during fiscal 2009, and a greater
emphasis will be placed on utilizing in-house investor relations personnel,
which is expected to result in reduced investor relations costs.




Costs for
rent and related office and administration were up significantly during the year
as both the Company’s Vancouver and Newfoundland offices expanded to accommodate
the growing number of personnel needed to support operations.  These
costs are expected to continue for the near future.  Hiring additional
personnel also contributed to an increase in salaries and wages expenses of
almost $368,721 that will continue at least in the short term.




Mineral
Property Expenditures




During
the fiscal year ended April 30, 2008, the company incurred mineral property
expenditures of $12,784,242 on our properties (including $262,500 paid in cash
and $1,011,800 from the issuance of 420,000 common shares related to acquisition
costs, with the balance being exploration expenditures) compared to $10,631,531
(including $242,500 paid in cash and $1,078,150 from the issuance of 445,000
common shares related to acquisition costs, with the balance being exploration
expenditures) incurred during the fiscal year ended April 30,
2007.  During the fiscal year ended April 30, 2008, we had property
write-offs/sales totaling $263,553 compared to $Nil during the fiscal year ended
April 30, 2007.




Inflation




The
Company’s activities have predominately occurred in Canada where annualized
inflation rates have been 5% or less for the past decade and are not expected to
materially affect our operations.




Currency
Fluctuations




The
Company maintains is accounts in Canadian dollars, and has historically raised
new financing in Canadian dollars.  With the acquisition of Target,
the Company now has operations in the United States which subject it to
fluctuations between the Canadian and United States
currencies.  Generally, the Company purchases sufficient US dollars to
offset a significant portion of known US obligations in order to minimize
foreign exchange fluctuations.







42







5.B.           Liquidity
and Capital Resources




Liquidity
– April 30, 2009, April 30, 2008 and April 30, 2007




As of
April 30, 2009, the Company had cash and cash equivalents of $2,827,274 (April
30, 2008 - $13,275,874, April 30, 2007 - $14,311,417) and working capital of
$2,641,169 (April 30, 2008 - $13,272,006, April 30, 2007 -
$15,390,704).  Cash used in operating activities during the year ended
April 30, 2009 was $3,414,510 compared with $5,501,079 in 2008 due largely to an
increase in non-cash working capital of $2,120,686 primarily as a result of the
payment of accounts payable upon receipt of the $15,005,000 financing received
in April 2008.  The Company’s cash and cash equivalents are held in a
Schedule 1 Canadian financial institution and its affiliated brokerage house in
highly liquid accounts and interest bearing investments.  No amounts
have been or are invested in asset-backed commercial paper.




Capital
Resources




The
Company believes it has sufficient working capital to finance its intended
operations, and maintain its priority mineral property licenses for the next 12
months.  To date, the Company’s operations, exploration and
development activities have been almost entirely financed from equity
financings.  The Company will continue to identify financing
opportunities in order to provide additional financial flexibility and to
continue the development of its property portfolio, meet land claim expenditure
requirements and other commitments.  While the Company has been
successful raising the necessary funds in the past, there can be no assurance it
can do so in the future.




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, we have 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
share-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, 2009, we had the following contractual obligations:






43




Payments
      due by periodContractual
      Obligations
                                                                                  
                                                                                  Total
                                                                                  
                                                                                  
                                                                                  Less
      than 1 year
                                                                                  
                                                                                  
                                                                                  1-3
      years
                                                                                  
                                                                                  
                                                                                  3-5
      years
                                                                                  
                                                                                  
                                                                                  More
      than 5 yearsCapital
      (Finance) Lease Obligations
                                                                                  
                                                                                  $
                                                                                  --
                                                                                  
                                                                                  
                                                                                  $
                                                                                  --
                                                                                  
                                                                                  
                                                                                  $
                                                                                  --
                                                                                  
                                                                                  
                                                                                  $
                                                                                  --
                                                                                  
                                                                                  
                                                                                  $
                                                                                  --Operating
      Lease Obligations
                                                                                  
                                                                                  
                                                                                  305,718
                                                                                  
                                                                                  
                                                                                  
                                                                                  160,138
                                                                                  
                                                                                  
                                                                                  
                                                                                  145,580
                                                                                  
                                                                                  
                                                                                  
                                                                                  --
                                                                                  
                                                                                  
                                                                                  
                                                                                  --Total
                                                                                  
                                                                                  $
                                                                                  305,718
                                                                                  
                                                                                  
                                                                                  $
                                                                                  160,138
                                                                                  
                                                                                  
                                                                                  $
                                                                                  145,580
                                                                                  
                                                                                  
                                                                                  $
                                                                                  --
                                                                                  
                                                                                  
                                                                                  $
                                                                                  --







ITEM 6.
            DIRECTORS,
      SENIOR MANAGEMENT AND EMPLOYEES




6.A.           Directors
and Senior Management




Name
                Age
                PositionMark
      J. Morabito
                42
                CEO
      and DirectorC.
      Stewart Wallis
                64
                President
      and DirectorJay
      Sujir2
                51
                Non-Executive
      Chairman
                  and
      DirectorDavid
      Ying Tat Lee 2
                60
                DirectorIan
      B. Smith 1
      2
                64
                DirectorLeo
      Power 1
                48
                DirectorChris
      Collingwood
                61
                DirectorDerrick
      (Rick) Gill 1
                61
                DirectorJoseph
      Miller
                46
                Chief
      Financial Officer




1           Member
of Audit Committee


2           Member
of Compensation Committee





We are an
exploration stage junior exploration company.  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 all of our
full-time employees.




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.  On February 18, 2008, Mr. Morabito ceased to be our President,
when Paul Hosford was appointed to that position.  Mr. Morabito was
appointed as President on October 21, 2008 following Mr. Hosford’s resignation
from that position.  On March 31, 2009, Mr. Morabito ceased to be our
President, when Stewart Wallis was appointed to that position.  Mr.
Morabito remains our CEO.




Mr.
Morabito devotes 70% of his time during a typical work week to our business.
 Mr. Morabito also serves on the board of directors of Santa Fe Metals
Corporation, Silver Quest Resources Ltd. and Excelsior Mining
Corp.  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.




C. Stewart Walliswas a member
of our Board of Directors from June 2003 until July 27, 2008.  Mr.
Wallis was appointed to our Board of Directors and was appointed President of
the Company on March 31, 2009.  Mr. Wallis also serves on the board of
directors of Patrician Diamonds Inc.  Mr. Wallis is the Managing
Director of Sundance Geological Ltd., a private entity owned and controlled by
him, which provides geological services, including evaluations and
prefeasibility studies, for individuals and mining companies based throughout
the world.  He received his Bachelor of Science Degree in Geology from
McMaster University, located in Hamilton, Canada.  His







44





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 Sujirwas appointed our
Non-executive Chairman on September 10, 2007 and has been a member of our Board
of Directors since February 2003.  Mr. Sujir is currently the
President and CEO and a Director of Cantrell Capital Corp. and MKM Resources
Ltd.  Mr. Sujir also serves on the boards of directors of AMI
Resources Inc., Escape Gold Inc., Midasco Capital Corp., Norwood Resources Ltd.,
Santa Fe Metals Corporation, Slater Mining Corporation, Uracan Resources Ltd.,
Westward Explorations Ltd. and Yamiri Energy and Gold Inc.  Mr. Sujir
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.  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.




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 President and CEO and a director of Santa Fe
Metals Corporation.  Mr. Smith also serves on the boards of directors
of EURO Ressources S.A. and Excelsior Mining Corp.




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 number of business interests throughout Newfoundland and
Labrador.  He also serves on the board of directors of New Island
Resources Inc. and Newfoundland Goldbar Resources Inc.




Chris Collingwood joined our
Board of Directors in October 2007.  Mr. Collingwood is the Chairman
and CEO of Baine Johnston Corp., a privately held Newfoundland firm active in
commercial and industrial real estate, commercial insurance and having
investments in a number of other Newfoundland companies.




Derrick (Rick) Gill joined our
Board of Directors in May 2008.  Mr. Gill has more than 30 years’
experience as an executive and director of public and private companies
operating throughout North and South America. Mr. Gill is a principal consultant
and director of Strategic Concepts Inc. (“SCI”), which provides strategic
planning, financial modeling and business development services to numerous
resource companies. Mr. Gill co-founded SCI in 1990.  He also serves
on the board of directors of Linear Gold Corp.




Joseph Miller has been our
Chief Financial Officer since September 2, 2008.  Mr. Miller has over
20 years experience in financial management of public companies, including
numerous energy and resource companies based in Alberta.  Prior to
joining Crosshair, Mr. Miller was the Chief Financial Officer of GPS Industries
Inc. and was responsible for the overall financial management of the company,
including internal and external public reporting and SEC reporting and filings,
and initiating the Sarbanes Oxley compliance program identifying and focusing on
the high risk processes and controls.  From 1999 to 2007, Mr. Miller
was employed by Transalta Corporationin
Calgary, Alberta, first as the Manager of Financial Planning and Analysis and
then as the Director of Financial Operations.  Mr. Miller received his
CMA designation in 1992 and is a member of the Certified Management Accountants
of British Columbia.  He received his diploma in Business
Administration from Mount Royal College in 1989.







45





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




Compensation
of Executive Officers and Directors




The
following table sets out the compensation information for the fiscal year ended
April 30, 2008, for our directors and executive officers.




Compensation
of Executive Officers/Directors in Fiscal 2009





Annual
      CompensationSalary
                                                                                                                                                                                                                                                                                                        ($)
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      Bonus
                                                                                                                                                                                                                                                                                                        ($)
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      Other
      Annual Compensation
                                                                                                                                                                                                                                                                                                        ($)Name
      and
                                                                                                                                                                                                                                                                                                        Principal
      Position
                                                                                                                                                                                                                                                                                                      Year
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      Securities
      Under Options Granted (#)
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      Option
      Exercise Price
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      Option
      Expiration DateMark
      J. Morabito
                                                                                                                                                                                                                                                                                                        CEO,
      President1
      and Director
                                                                                                                                                                                                                                                                                                      2009
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      150,000
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      10,927
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      500,000
                                                                                                                                                                                                                                                                                                        333,333
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      0.27
                                                                                                                                                                                                                                                                                                        0.15
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      2013/09/15
                                                                                                                                                                                                                                                                                                        2013/10/23Stewart
      Wallis
                                                                                                                                                                                                                                                                                                        President2
      and Director3
                                                                                                                                                                                                                                                                                                      2009
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      17,0004
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      100,000
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      0.27
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      2013/09/15Paul
      Hosford
                                                                                                                                                                                                                                                                                                        President5
                                                                                                                                                                                                                                                                                                      2009
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      108,041
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      50,000
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      13,408
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      300,00012
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      0.27
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      2013/09/15Douglas
      R. Brett
                                                                                                                                                                                                                                                                                                        CFO6
                                                                                                                                                                                                                                                                                                      2009
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      31,250
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      200,000
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      0.27
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      2013/09/15Joseph
      Miller
                                                                                                                                                                                                                                                                                                        CFO7
                                                                                                                                                                                                                                                                                                      2009
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      100,000
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      12,500
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      5,656
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      150,000
                                                                                                                                                                                                                                                                                                        166,667
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      0.50
                                                                                                                                                                                                                                                                                                        0.15
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      2013/08/01
                                                                                                                                                                                                                                                                                                        2013/10/23Geir
      Liland
                                                                                                                                                                                                                                                                                                        Director8
                                                                                                                                                                                                                                                                                                      2009
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      5,00011
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      150,000
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      0.27
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      2013/09/15Jay
      Sujir
                                                                                                                                                                                                                                                                                                        Director
                                                                                                                                                                                                                                                                                                      2009
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      54,0009
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      100,000
                                                                                                                                                                                                                                                                                                        350,000
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      0.27
                                                                                                                                                                                                                                                                                                        0.27
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      2013/09/15
                                                                                                                                                                                                                                                                                                        2013/10/27David
      Lee
                                                                                                                                                                                                                                                                                                        Director
                                                                                                                                                                                                                                                                                                      2009
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      12,00011
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      100,000
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      0.27
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      2013/09/15Ian
      Smith
                                                                                                                                                                                                                                                                                                        Director
                                                                                                                                                                                                                                                                                                      2009
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      12,00011
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      150,000
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      0.27
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      2013/09/15Leo
      Power
                                                                                                                                                                                                                                                                                                        Director
                                                                                                                                                                                                                                                                                                      2009
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      12,00011
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      200,000
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      0.27
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      2013/09/15Chris
      Collingwood
                                                                                                                                                                                                                                                                                                        Director
                                                                                                                                                                                                                                                                                                      2009
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      8,00011
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      200,000
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      0.27
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      2013/09/15Derrick
      Gill
                                                                                                                                                                                                                                                                                                        Director
                                                                                                                                                                                                                                                                                                      2009
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      8,50011
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      250,000
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      0.88
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      2013/05/23Ronald
      Atlas
                                                                                                                                                                                                                                                                                                        Director10
                                                                                                                                                                                                                                                                                                      2009
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      --
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      6,50011
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      150,00013
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      $
                                                                                                                                                                                                                                                                                                      0.27
                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                      2013/09/15




1
            Mr.
      Morabito was appointed President on October 21, 2008 and ceased to be
      President on March 31, 2009.


2
            Mr.
      Wallis was appointed President on March 31,
  2009.


3
            Mr.
      Wallis ceased to be a director on July 27, 2008 and was appointed a
      director on March 31, 2009.





46





4
            Included
      directors’ fees in the amount of $4,500 and geological consulting fees in
      the amount of $12,500 paid to Sundance Geological Ltd., a private entity
      owned and controlled by Mr. Wallis.


5
            Mr.
      Hosford ceased to be President on October 21,
  2008.


6
            Mr.
      Brett ceased to be CFO on September 2,
2008.


7
            Mr.
      Miller was appointed CFO on September 2,
2008.


8
            Mr.
      Liland ceased to a director on September 15,
  2008.


9
            Includes
      directors’ fees of $12,000 and fees for acting as Chairman of
      $42,000.  Excludes $24,998 in legal fees paid to Anfield Sujir
      Kennedy & Durno, Barristers & Solicitors, a limited liability
      partnership of which Mr. Sujir is a
partner.


10
            Mr.
      Atlas was appointed a director on July 27, 2008 and ceased to be a
      director on January 9, 2009.


11
            Director’s
      fees paid to non-executive
directors.


12
            These
      options were cancelled on October 21,
2008.


13.
            112,500
      of these options were cancelled on January 1, 2009 and the remaining
      37,500 were cancelled on February 1,
2009.





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.  Effective December 31, 2008, the
director compensation was discontinued as part of the Company’s cash
conservation program.  Prior to December 31, 2008, directors were
compensated as follows:




·
            Every
      director received a monthly fee of $1,000 and an additional monthly fee of
      $500 in the event that the director serves on a committee.




·
            The
      Chairman received an additional monthly fee of $3,500 until April 30,
      2009, at which point it was also
discontinued.




In the
fiscal year ended April 30, 2009, the Company paid or accrued a total of
$100,500 in directors’ fees.  Crosshair may, from time to time grant
options to purchase common shares to the directors.




Employment
and Consulting Agreements




The
Company entered into an employment agreement with Mark J. Morabito on May 1,
2006 pursuant to which the Company employed Mr. Morabito as its President and
Chief Executive Officer commencing on May 1, 2006.  Under the terms of the
agreement, Mr. Morabito receives an annual salary of $200,000 and an annual
bonus, payable quarterly, of up to $200,000.  Mr. Morabito received an
initial grant of options to purchase up to 1,000,000 common shares at a price of
$1.32 per share and is to receive options to purchase up to 500,000 common
shares annually.  In the event that Mr. Morabito’s employment is terminated
other than for just cause (including, but not limited to, a change of control or
constructive dismissal), he would be entitled to receive, at his option, 24
months notice of termination or a lump sum payment amount equal to two times his
annual salary, continued participation in the Company’s incentive plans and
benefits until the expiration of the notice period and the continuation of any
existing stock options until the expiration of the notice period.  On May
1, 2008, in light of the change to Mr. Morabito’s responsibilities with the
Company, Mr. Morabito’s annual salary was reduced to $150,000 and his maximum
annual bonus was reduced to $100,000.  On May 1, 2009 as part of the
Company’s cash conservation efforts, Mr. Morabito’s employment agreement was
amended, reducing the annual compensation to $120,000, suspending cash bonus
payments in return for a 20% reduction in the hours worked.  The amending
agreement is in effect for a period of 6 months at which time it may be extended
for an additional 6 months at the sole discretion of the Company.




On July
31, 2008, the Company entered into an employment agreement with Joseph Miller
pursuant to which the Company employed Mr. Miller as its Chief Financial Officer
commencing on September 2, 2008.  Under the terms of the Agreement, Mr.
Miller receives a salary of $150,000 and an annual bonus of up to $50,000,
payable semi-annually, with the final amount being determined by the Company’s
Compensation Committee.  Mr. Miller received an initial grant of options to
purchase up to 150,000 common shares at a price of $0.50 per share and is to
receive options to purchase up to 100,000 common shares annually.  In the
event that Mr. Miller’s employment is terminated other than for just cause
(including, but not limited to, a change of control or constructive dismissal),
he would be entitled to receive, at his option, 24 months notice of termination
or a lump sum payment amount equal to





47





two times
his annual salary, continued participation in the Company’s incentive plans and
benefits until the expiration of the notice period and the continuation of any
existing stock options until the expiration of the notice period.  On May
1, 2009 as part of the Company’s cash conservation efforts, Mr. Miller’s
employment agreement was amended, reducing the annual compensation to $120,000,
suspending cash bonus payments in return for a 20% reduction in the hours
worked.  The amending agreement is in effect for a period of 6 months at
which time it may be extended for an additional 6 months at the sole discretion
of the Company.





Post
Employment Compensation





No funds
were set aside or accrued by us during Fiscal 2009 to provide pension,
retirement or similar benefits for Directors, Executive Officers or Senior
Management.




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, seven of whom were elected
at our annual general meeting of shareholders held on September 15, 2008, and
one of whom was appointed on March 31, 2009.  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.




The
following table indicates the date on which each of our directors was appointed
a director of our company:




Name of Director
                  Director sinceMark
      Morabito
                  November
      12, 1998Stewart
      Wallis1
                  March
      31, 2009Jay
      Sujir
                  February
      19, 2003David
      Lee
                  February
      17, 2004Ian
      Smith
                  September
      21, 2006Leo
      Power
                  November
      17, 2006Chris
      Collingwood
                  October
      25, 2007Derrick
      Gill
                  May
      27, 2008




1
            Mr.
      Wallis served as a director from June 19, 2003 to July 29,
      2008.  He was appointed a director on March 31,
      2009.







There are
no service contracts with the Directors providing for benefits upon termination
of employment except as described under the heading “Employment and Consulting
Agreements” above.




Board
of Director Committees




Audit
Committee




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 following
disclosure is required pursuant to National Instrument 52-110 (“NI 52-110”)
adopted by the Canadian Securities Administrators.




The
Audit Committee's Charter




Following
is a copy of the charter of our audit committee:







48





Purpose




The Audit
Committee (the “Committee”) is a committee of
and appointed by the Board of Directors (the “Board”) of Crosshair
Exploration & Mining Corp. (the “Corporation”) to assist the
Board in fulfilling its oversight responsibilities relating to financial
accounting and reporting process and internal controls for the Corporation. The
Committee’s primary duties and responsibilities are to:




·
            conduct
      such reviews and discussions with management and the external auditors
      relating to the audit and financial reporting as are deemed appropriate by
      the Committee;


·
            assess
      the integrity of internal controls and financial reporting procedures of
      the Corporation and ensure implementation of such controls and
      procedures;


·
            ensure
      that there is an appropriate standard of corporate conduct including, if
      necessary, adopting a corporate code of ethics for senior financial
      personnel;


·
            review
      the quarterly and annual financial statements and management’s discussion
      and analysis of the Corporation’s financial position and operating results
      and report thereon to the Board for approval of
  same;


·
            select
      and monitor the independence and performance of the Corporation’s external
      auditors, including attending at private meetings with the external
      auditors and reviewing and approving all renewals or dismissals of the
      external auditors and their
remuneration;


·
            establish
      procedures for the receipt of complaints and submissions relating to
      accounting matters;


·
            except
      as set forth below, pre-approve all audit and non-audit services provided
      by the Corporation’s external auditors;
and


·
            provide
      oversight to related party transactions entered into by the
      Corporation.




The
Committee has the authority to conduct or authorize any investigation
appropriate to its responsibilities, and it may request the external auditors,
as well as any officer of the Corporation, or outside counsel for the
Corporation, to attend a meeting of the Committee or to meet with any members
of, or advisors to, the Committee to provide pertinent information as
necessary.  The Committee shall have unrestricted access to the books
and records of the Corporation and has the authority to retain, at the expense
of the Corporation, special legal, accounting, or other consultants or experts
to assist in the performance of the Committee’s duties.




The
Committee shall review and assess the adequacy of this Charter annually and
submit any proposed revisions to the Board for approval.




In
fulfilling its responsibilities, the Committee will carry out the specific
duties set out in Part IV of this Charter.




Authority
of the Audit Committee




The
Committee shall have the authority to:




(a)           engage
independent counsel and other advisors as it determines necessary to carry out
its duties;




(b)           set
and pay the compensation for advisors employed by the Committee;




(c)           communicate
directly with the internal and external auditors.




Composition
and Meetings




1.
            The
      Committee and its membership shall meet all applicable legal, regulatory
      and listing requirements, including, without limitation, those of the
      British Columbia Securities Commission, the Toronto Stock Exchange, the
      U.S. Securities and Exchange Commission, NYSE Amex, the Business Corporations
      Act (British Columbia) and all applicable securities regulatory
      authorities.







49





2.
            The
      Committee shall be composed of three or more directors as shall be
      designated by the Board from time to time. The members of the Committee
      shall appoint from among themselves a member who shall serve as
      Chair.




3.
            Each
      member of the Committee shall be “independent” and “financially literate”,
      for the purposes of Multilateral Instrument 52-110 (“MI 52-110”), as it
      may be amended from time to time.  MI 52-110 currently provides
      that a member is independent if the member has no direct or independent
      material relationship with the Corporation.  A “material”
      relationship is one which could, in the view of the Board, be reasonably
      expected to interfere with the exercise of a member’s judgment. There are
      certain relationships that are, however, deemed to be “material” under MI
      52-110.  In assessing a proposed nominee to the Committee, the
      Board shall refer to MI 52-110 and any other requirements or guidelines
      under applicable securities laws and any stock exchanges on which the
      Corporation’s securities are
listed.




4.
            The
      Committee shall meet at least quarterly, at the discretion of the Chair or
      a majority of its members, as circumstances dictate or as may be required
      by applicable legal or listing requirements. A minimum of two and at least
      50% of the members of the Committee present either in person or by
      telephone shall constitute a
quorum.




5.
            If
      within one hour of the time appointed for a meeting of the Committee, a
      quorum is not present, the meeting shall stand adjourned to the same hour
      on the next business day following the date of such meeting at the same
      place. If at the adjourned meeting a quorum as hereinbefore specified is
      not present within one hour of the time appointed for such adjourned
      meeting, such meeting shall stand adjourned to the same hour on the second
      business day following the date of such meeting at the same place. If at
      the second adjourned meeting a quorum as hereinbefore specified is not
      present, the quorum for the adjourned meeting shall consist of the members
      then present.




6.
            If
      and whenever a vacancy shall exist, the remaining members of the Committee
      may exercise all of its powers and responsibilities so long as a quorum
      remains in office.




7.
            The
      time and place at which meetings of the Committee shall be held, and
      procedures at such meetings, shall be determined from time to time by, the
      Committee. A meeting of the Committee may be called by letter, telephone,
      facsimile, email or other communication equipment, by giving at least 48
      hours notice, provided that no notice of a meeting shall be necessary if
      all of the members are present either in person or by means of conference
      telephone or if those absent have waived notice or otherwise signified
      their consent to the holding of such
meeting.




8.
            Any
      member of the Committee may participate in the meeting of the Committee by
      means of conference telephone or other communication equipment, and the
      member participating in a meeting pursuant to this paragraph shall be
      deemed, for purposes hereof, to be present in person at the
      meeting.




9.
            The
      Committee shall keep minutes of its meetings which shall be submitted to
      the Board. The Committee may, from time to time, appoint any person who
      need not be a member, to act as a secretary at any
  meeting.




10.
            The
      Committee may invite such officers, directors and employees of the
      Corporation and its subsidiaries as the Committee may see fit, from time
      to time, to attend at meetings of the
Committee.




11.
            Any
      matters to be determined by the Committee shall be decided by a majority
      of votes cast at a meeting of the Committee called for such purpose.
      Actions of the Committee may be taken by an instrument or instruments in
      writing signed by all of the members of the Committee, and such actions
      shall be effective as though they had been decided by a majority of votes
      cast at a meeting of the Committee called for such purpose. All decisions
      or recommendations of the Committee shall require the approval of the
      Board prior to implementation.




The
Committee members will be elected annually at the first meeting of the Board
following the annual general meeting of shareholders.







50





Responsibilities


Financial
Accounting and Reporting Process and Internal Controls




1.
            The
      Committee shall review the annual audited financial statements and interim
      financial statements of the Corporation to satisfy itself that they are
      presented in accordance with applicable generally accepted accounting
      principles (“Canadian and US GAAP” as required) and report thereon to the
      Board and recommend to the Board whether or not same should be approved
      prior to their being filed with the appropriate regulatory
      authorities.  The Committee shall also review the interim
      financial statements of the Corporation. With respect to the annual
      audited financial statements, the Committee shall discuss significant
      issues regarding accounting policies, principles, practices, estimates,
      reserves and judgments of management with management and the external
      auditors, as and when the Committee deems it appropriate to do so, and
      shall satisfy itself that the annual audited financial statements are
      accurate, complete and represent fairly the Corporation’s financial
      position and performance and that the audit function has been effectively
      carried out.  If desirable, the Committee may engage the
      Corporation’s external auditors to carry out a review of the interim
      financial statements.




2.
            The
      Committee shall review management’s discussion and analysis relating to
      the Corporation’s annual and interim financial statements (“MD&A”)
      MD&A and any other public disclosure documents, including annual and
      interim earnings press releases, required to be reviewed by the Committee
      under any applicable laws before the Corporation publicly discloses this
      information or files this information with securities regulatory
      authorities.




3.
            The
      Committee shall be satisfied that adequate procedures are in place for the
      review of the Corporation’s public disclosure of financial information
      extracted or derived from the Corporation’s annual and interim financial
      statements, MD&A and annual and interim earnings press releases, and
      periodically assess the adequacy of these
  procedures.




4.
            The
      Committee shall review the annual
budget.




5.
            The
      Committee shall review any internal control reports prepared by management
      and the evaluation of such reports by the external auditors, together with
      management’s response.




6.
            The
      Committee shall evaluate whether management is setting the appropriate
      “control culture” by communicating the importance of internal control and
      the management of risk and ensuring that all employees have an
      understanding of their roles and
  responsibilities.




7.
            The
      Committee shall consider how management is held to account for security of
      computer systems and applications, and the contingency plans for
      processing financial information in the event of a systems
      breakdown.




8.
            The
      Committee shall review, in consultation with the external auditors, the
      integrity of the Corporation’s financial reporting processes, both
      internal and external.




9.
            The
      Committee shall consider the external auditors’ judgments about the
      quality and appropriateness, not just the acceptability, of the
      Corporation’s accounting principles and financial disclosure practices, as
      applied in its financial reporting, particularly about the degree of
      aggressiveness or conservatism of its accounting principles and underlying
      estimates and whether those principles are common practices or are
      minority practices.




10.
            The
      Committee shall meet no less frequently than annually with the external
      auditors and the Chief Financial Officer or, in the absence of a Chief
      Financial Officer, with the officer of the Corporation in charge of
      financial matters, to review accounting practices, internal controls and
      such other matters as the Committee, Chief Financial Officer or, in the
      absence of a Chief Financial Officer, the officer of the Corporation in
      charge of financial matters, deem
appropriate.




11.
            The
      Committee shall consider and approve, if appropriate, major changes to the
      Corporation’s accounting principles and practices as suggested by
      management with the concurrence of
the







51





external
      auditor and ensure that the management’s reasoning is described in
      determining the appropriateness of changes in accounting principles and
      disclosure.




12.
            The
      Committee shall inquire of management and the external auditors about
      significant risks or exposures, both internal and external, to which the
      Corporation may be subject and assess the steps management has taken to
      minimize such risks, including by obtaining the external auditors’ opinion
      of how effectively such risks are being managed or
    controlled.




13.
            The
      Committee shall review the post-audit or management letter containing the
      recommendations of the external auditors and management’s response and
      subsequent follow-up to any identified
  weaknesses.




14.
            The
      Committee shall provide oversight to related party transactions entered
      into by the Corporation.




15.
            The
      Committee shall review policies and procedures with respect to officers’
      expense accounts and management perquisites and benefits, including their
      expenditures related to executive travel and entertainment, and review the
      results of the procedures performed in these areas by the external
      auditor, based on terms of reference agreed upon by the external auditor
      and the Committee.




Independent
Auditors




1.
            The
      Committee shall recommend to the Board the external auditors to be
      nominated, for the purpose of preparing or issuing an auditor’s report or
      performing other audit, review or attest services for the Corporation, and
      the compensation of the external
auditors.




2.
            The
      Committee shall instruct the external auditors to report directly to the
      Committee and ensure that significant findings and recommendations made by
      the external auditors are received and discussed by the Committee on a
      timely basis.




3.
            The
      Committee shall be directly responsible for overseeing the work of the
      external auditors, including the resolution of disagreements between
      management and the external auditors regarding financial reporting, and
      shall review the performance of the external auditors and approve any
      proposed discharge of the external auditors when circumstances
      warrant.




4.
            The
      Committee shall periodically consult the external auditors out of the
      presence of management about any matters that the Committee or the
      external auditors believes should be discussed privately, including,
      without limitation, significant risks or exposures, internal controls and
      other steps that management has taken to control such risks, and the
      fullness and accuracy of the Corporation’s financial
      statements.  Particular emphasis should be given to the adequacy
      of internal controls to expose any payments, transactions or procedures
      that might be deemed illegal or otherwise
  improper.




5.
            Except
      as otherwise indicated in this Charter, the Committee shall pre-approve
      all audit and non-audit services not prohibited by Canadian securities
      laws and regulations to be provided by the external auditors and delegate,
      if desirable, to one or more of its members the authority to pre-approve
      any such audit or permitted non-audit services, provided that any such
      pre-approval is presented to the Committee at its next scheduled meeting
      following the pre-approval.




6.
            The
      Committee shall monitor and assess the relationship between management and
      the external auditors, including reviewing any management letters or other
      reports of the external auditors and discussing and resolving any material
      differences of opinion between management and the external
      auditors.




7.
            The
      Committee shall monitor, review, confirm and discuss with the external
      auditors, on an annual basis, all significant relationships the external
      auditors have with the Corporation and the range of services provided to
      determine the independence and objectivity of the external
      auditors.







52





8.
            Prior
      to the audit, the Committee shall review the external auditors’ audit
      plan, including the scope, procedures, timing and staffing of the audit,
      and the Committee may authorize the external auditors to perform
      supplemental reviews or audits as the Committee may deem
      desirable.




9.
            The
      Committee shall review with the external auditors the results of the
      annual audit and, if applicable, the results of the quarterly review,
      including matters related to the conduct of the audit and the review, as
      the case may be.




10.
            The
      Committee shall obtain timely reports from the external auditors
      describing critical accounting policies and practices, alternative
      treatments of information within Canadian GAAP that were discussed with
      management, their ramifications, and the external auditors’ preferred
      treatment and material written communications between the Corporation and
      the external auditors.




11.
            The
      Committee shall review fees paid by the Corporation to the external
      auditors and other professionals in respect of audit and non-audit
      services on an annual basis.




12.
            The
      Committee shall review and approve the Corporation’s hiring policies
      regarding partners, employees and former partners and employees of the
      present and former external auditors of the
  Corporation.




Process
Improvement




1.
            The
      Committee shall establish regular and separate systems of reporting to the
      Committee by each of management and the external auditors regarding any
      significant judgments made in management’s preparation of the financial
      statements and the view of each as to appropriateness of such
      judgments.




2.
            Following
      completion of the annual audit and quarterly reviews (if applicable), the
      Committee shall review separately with each of management and the external
      auditors any significant changes to planned procedures, any difficulties
      encountered during the course of the audit and reviews, including any
      restrictions on the scope of work or access to required information and
      the cooperation that the external auditors received during the course of
      the audit and reviews.




3.
            The
      Committee shall review and resolve any significant disagreements among
      management and the external auditors in connection with the preparation of
      the financial statements and, where there are significant unsettled
      issues, the Committee shall ensure that there is an agreed course of
      action for the resolution of such
matters.




4.
            The
      Committee shall review with the external auditor and management
      significant findings during the year and the extent to which changes or
      improvements in financial or accounting practices, as approved by the
      Committee, have been implemented. This review should be conducted at an
      appropriate time subsequent to implementation of changes or improvements,
      as decided by the Committee.




Ethical
and Legal Compliance




1.
            The
      Committee shall establish procedures for the receipt, retention and
      treatment of complaints received by the Corporation regarding accounting,
      internal accounting controls or auditing matters, and the confidential,
      anonymous submission by employees of the Corporation of concerns regarding
      questionable accounting or auditing
matters.




2.
            The
      Committee shall review the effectiveness of the system for monitoring
      compliance with laws and regulations and the results of management’s
      investigation and follow-up of any
  non-compliance.




3.
            The
      Committee shall review management’s monitoring of the Corporation’s system
      that is in place to ensure that the Corporation’s financial statements,
      reports and other financial information disseminated to governmental
      organizations and the public satisfy legal
  requirements.







53





4.
            The
      Committee shall ensure that there is an appropriate standard of corporate
      conduct including, if necessary, adopting a corporate code of ethics for
      senior financial personnel.




5.
            The
      Committee shall obtain regular updates from management and others,
      including internal and external auditors and legal counsel, concerning the
      Corporation’s compliance with financial related laws and regulations such
      as tax and financial reporting laws and regulations, legal withholding
      requirements, occupational health and safety laws and personal information
      and protection of privacy laws.




6.
            The
      Committee shall be satisfied that all regulatory compliance matters have
      been considered in the preparation of financial
  statements.




7.
            The
      Committee shall review the findings of any examination by regulatory
      agencies.




Other
Responsibilities




While the
Committee has the responsibilities and duties set out in this Charter, it is not
the duty of the Committee to plan or conduct audits, to prepare or audit
financial statements or to design or implement an effective system of internal
controls.  Such matters are the responsibility of management and the
internal and external auditors of the Corporation, as the case may be. In
addition to the responsibilities and duties of the Committee set out in this
Charter, the Committee shall perform any other activities consistent with this
Charter and all applicable legal, regulatory and listing requirements (including
those of the applicable securities regulatory authorities and the stock
exchanges on which the Corporation’s securities are listed), as the Committee or
the Board deems necessary or appropriate.




Procedures for Receipt of Complaints
and Submissions




Relating to Accounting
Matters




1.
            The
      Corporation shall inform employees on the Corporation’s intranet, if there
      is one, or via a newsletter or e-mail that is disseminated to all
      employees at least annually, of the individual (the “Complaints Officer”)
      designated from time to time by the Committee to whom complaints and
      submissions can be made regarding accounting, internal accounting controls
      or auditing matters or issues of concern regarding questionable accounting
      or auditing matters.




2.
            The
      Complaints Officer shall be informed that any complaints or submissions so
      received must be kept confidential and that the identity of employee(s)
      making complaints or submissions shall be kept confidential and shall only
      be communicated to the Committee or the Chair of the
      Committee.




3.
            The
      Complaints Officer shall be informed that he or she must report to the
      Committee as frequently as such Complaints Officer deems appropriate, but
      in any event no less frequently than on a quarterly basis prior to the
      quarterly meeting of the Committee called to approve interim and annual
      financial statements of the
Corporation.




4.
            Upon
      receipt of a report from the Complaints Officer, the Committee shall
      discuss the report and take such steps as the Committee may deem
      appropriate.




The
Complaints Officer shall retain a record of a complaint or submission received
for a period of six years following resolution of the complaint or
submission.




Procedures for Approval of Non-Audit
Services




1.
            The
      Corporation’s external auditors shall be prohibited from performing for
      the Corporation the following categories of non-audit
      services:




(a)
            bookkeeping
      or other services related to the Corporation’s accounting records or
      financial statements;




(b)
            financial
      information systems design and
implementation;







54





(c)
            appraisal
      or valuation services, fairness opinion or contributions-in-kind
      reports;




(d)
            actuarial
      services;




(e)
            internal
      audit outsourcing services;




(f)
            management
      functions;




(g)
            human
      resources;




(h)
            broker
      or dealer, investment advisor or investment banking
    services;




(i)
            legal
      services;




(j)
            expert
      services unrelated to the audit;
and




(k)
            any
      other service that the Canadian Public Accountability Board or any other
      applicable regulatory authority determines is
    impermissible.




2.
            In
      the event that the Corporation wishes to retain the services of the
      Corporation’s external auditors for tax compliance, tax advice or tax
      planning, the Chief Financial Officer of the Corporation shall consult
      with the Chair of the Committee, who shall have the authority to approve
      or disapprove on behalf of the Committee, such non-audit services in
      accordance. All other non-audit services shall be approved or disapproved
      by the Committee as a whole as set forth
herein.




3.
            The Chief Financial Officer of
      the Corporation shall maintain a record of non-audit services approved by
      the Chair of the Committee or the Committee for each fiscal year and
      provide a report to the Committee no less frequently than on a quarterly
      basis.




Composition
of the Audit Committee




The
members of our Audit Committee are Ian Smith, Leo Power and Derrick Gill, each
of whom is an independent director and financially literate.




Relevant
Education and Experience




Ian Smith
has over 40 years experience in corporate operations, project management and
consulting with the international base metals, precious metals and coal
industries.  Mr. Smith was the President, Chief Executive Officer,
Chief Operating Officer and a director of bcMetals Corporation from October 2004
to February 2007.  He was granted his Chartered Professional
Management Aus. IMM in October 2000 and has been a Fellow with the Aus. IMM
since 1990.  Mr. Smith obtained his BE (Mining) from the University of
Queensland, Australia in 1966.




Leo Power
received his MBA from the Joint Kellogg-Schulich Executive MBA Program at York
University. He 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 relations consultant.  Mr. Power also has number of
business interests throughout Newfoundland & Labrador.




Derrick
Gill received his BComm. in Accounting from Memorial University of Newfoundland
in 1969.  Mr. Gill has over 30 years’ experience as an executive and
director of public and private companies operating throughout North and South
America and has served on the audit committees of public companies. Mr. Gill is
a principal consultant and director of Strategic Concepts Inc. (“SCI”), which
provides strategic planning, financial modeling and business development
services to numerous resource companies. Mr. Gill co-founded SCI in
1990.  He also serves on the board of directors of Linear Gold Corp.
Inc.







55





Audit
Committee Oversight




At no
time since the commencement of our most recently completed financial year was a
recommendation of the Committee to nominate or compensate an external auditor
not adopted by the Board of Directors.




Reliance
on Certain Exemptions




At no
time since the commencement of our most recently completed financial year have
we relied on the exemption in Section 2.4 of Multilateral Instrument 52-110
(De Minimis Non-audit
Services), or an exemption from NI 52-110, in whole or in part, granted
under Part 8 of NI 52-110.  We are not relying on the exemption in
Section 6.1 of NI 52-110.




Pre-Approval
Policies and Procedures




The
Committee has adopted specific policies and procedures for the engagement of
non-audit services as set out in our Audit Committee Charter.




Compensation
Committee




We have
established a Compensation Committee, which currently consists of Ian Smith, Jay
Sujir and David Lee.  The Compensation Committee does not operate
pursuant to a written charter.




The
mandate established for the Compensation Committee is for the purposes
of:




1.
            considering
      appropriate levels of compensation for our directors and officers and
      making recommendations to the Board as to the remuneration and other
      compensation to be provided to our Directors, the President and our other
      officers; and




2.
            carrying
      out periodic performance assessments of the President and
    CEO.




6.D.           Employees




The
following table sets out the number of full-time employees who worked for us at
the end of the last three completed fiscal years as well as the maximum number
of temporary workers who worked for us during each fiscal year:




Fiscal year ended
                  Number
      of Full Time
                    Employees
      at theend
                    of the fiscal year
                  Maximum
      number of
                    Temporary
      Workers
                    during the fiscal yearApril
      30, 2009
                  12
                  52April
      30, 2008
                  26
                  55April
      30, 2007
                  18
                  18







As of
April 30, 2009, we had twelve full-time employees, nine of whom worked in
Vancouver and three of whom worked in Newfoundland and Labrador.  All
of our temporary workers are employed in Newfoundland and Labrador and these
persons generally work in our exploration camps.  As of the date of
this report, the Company has 9 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 June 15, 2009.  As
of June 15, 2009, we had 112,184,313 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 June 15, 2009.







56






Name
                  Number
      of
                    Common
      Shares
                  Percent
      of
                    Outstanding
                    Common
      SharesMark
      J.
      Morabito
                  3,859,618
      1
                  3.44%Stewart
      Wallis
                  1,384,600
      2
                  1.23%Joseph
      Miller
                  116,667
      3
                  *Jay
      Sujir
                  701,000
      4
                  *David
      Y.T.
      Lee
                  320,000
      5
                  *Geir
      Liland 12
                  635,712
      6
                  *Leo
      Power
                  390,700
      7
                  *Ian
      Smith
                  262,500
      8
                  *Chris
      Collingwood
                  512,300
      9
                  *Derrick
      Gill
                  125,000
      11
                  *Douglas
      R. Brett 12
                  150,000
                  *Paul
      Hosford 12
                  Nil
                  NilRonald
      Atlas 12
                  Nil
                  NilDirectors
      and Executive Officers as a group
                  8,445,397
                  7.53%





*           Indicates
less than one percent.


1
            Includes
      options to purchase 2,595,413 common shares exercisable within 60 days of
      June 15, 2009 and warrants to purchase 120,000 common shares expiring July
      31, 2009.


2
            Includes
      options to purchase 535,000 common shares exercisable within 60 days of
      June 15, 2009 and warrants to purchase 15,000 common shares expiring July
      31, 2009.


3
            Includes
      options to purchase 116,667 common shares exercisable within 60 days of
      June 15, 2009.


4
            Includes
      options to purchase 487,000 common shares exercisable within 60 days of
      June 15, 2009 and warrants to purchase 25,000 common shares expiring July
      31, 2009.


5
            Includes
      options to purchase 225,000 common shares exercisable within 60 days of
      June 15, 2009.


6
            Includes
      options to purchase 437,500 common shares exercisable within 60 days of
      June 15, 2009 and warrants to purchase 30,000 common shares expiring July
      31, 2009.


7
            Includes
      options to purchase 350,000 common shares exercisable within 60 days of
      June 15, 2009.


8
            Includes
      options to purchase 262,500 common shares exercisable within 60 days of
      June 15, 2009.


9
            Includes
      options to purchase 250,000 common shares exercisable within 60 days of
      June 15, 2009.


10
            Includes
      options to purchase 125,000 common shares exercisable within 60 days of
      June 15, 2009.


11
            Includes
      options to purchase 150,000 common shares exercisable within 60 days of
      June 15, 2009.


12
            These
      persons ceased to be directors and/or executive officers of the Company
      during the fiscal year ended April 30, 2009: Mr. Liland ceased to a
      director on September 15, 2008; Mr. Brett ceased to be CFO on September 2,
      2008; Mr. Hosford ceased to be President on October 21, 2008; and Mr.
      Atlas ceased to be a director on January 9,
  2009.




The
following table presents the stock options granted to the aforementioned persons
and unexercised as of June 15, 2009.  The stock options are for common
shares.




Name
                                          Date
      of Grant
                                          
                                          Number
      of Underlying Common Shares
                                          
                                          
                                          Vested
      1
                                          
                                          
                                          Exercise
      Price
                                          
                                          Expiration
      DateMark
      J. Morabito
                                          28-May-09
                                          
                                          
                                          300,000
                                          
                                          
                                          
                                          0
                                          
                                          
                                          $
                                          0.27
                                          
                                          28-May-14Mar.
      31, 20092
                                          
                                          
                                          169,960
                                          
                                          
                                          
                                          127,470
                                          
                                          
                                          
                                          1.00
                                          
                                          Aug.
      29, 2012Mar.
      31, 20092
                                          
                                          
                                          180,000
                                          
                                          
                                          
                                          180,000
                                          
                                          
                                          
                                          0.35
                                          
                                          Aug.
      29, 2011Mar.
      31, 20092
                                          
                                          
                                          130,040
                                          
                                          
                                          
                                          130,040
                                          
                                          
                                          
                                          0.25
                                          
                                          Aug.
      16, 2010Oct.
      23, 2008
                                          
                                          
                                          333,333
                                          
                                          
                                          
                                          83,333
                                          
                                          
                                          
                                          0.15
                                          
                                          Oct.
      23, 2013Sept.
      15, 2008
                                          
                                          
                                          500,000
                                          
                                          
                                          
                                          375,000
                                          
                                          
                                          
                                          0.27
                                          
                                          Sept.
      15, 201301-May-06
                                          
                                          
                                          1,000,000
                                          
                                          
                                          
                                          1,000,000
                                          
                                          
                                          
                                          1.32
                                          
                                          01-May-11Jan.
      18, 2006
                                          
                                          
                                          400,000
                                          
                                          
                                          
                                          400,000
                                          
                                          
                                          
                                          1.00
                                          
                                          Jan.
      18, 2011Feb.
      4, 2005
                                          
                                          
                                          300,000
                                          
                                          
                                          
                                          300,000
                                          
                                          
                                          
                                          0.45
                                          
                                          Feb.
      4, 2010






57






Name
                                          Date
      of Grant
                                          
                                          Number
      of Underlying Common Shares
                                          
                                          
                                          Vested
      1
                                          
                                          
                                          Exercise
      Price
                                          
                                          Expiration
      DateStewart
      Wallis
                                          28-May-09
                                          
                                          
                                          300,000
                                          
                                          
                                          
                                          0
                                          
                                          
                                          $
                                          0.27
                                          
                                          28-May-14Mar.
      31, 20092
                                          
                                          
                                          480,000
                                          
                                          
                                          
                                          360,000
                                          
                                          
                                          
                                          1.00
                                          
                                          Aug.
      29, 2012Sept.
      15, 2008
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          75,000
                                          
                                          
                                          
                                          0.27
                                          
                                          Sept.
      15, 2013Jan.
      18, 2006
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          1.00
                                          
                                          Jan.
      18, 2011Joseph
      Miller
                                          28-May-09
                                          
                                          
                                          125,000
                                          
                                          
                                          
                                          0
                                          
                                          
                                          $
                                          0.27
                                          
                                          28-May-14Oct.
      23, 2008
                                          
                                          
                                          166,667
                                          
                                          
                                          
                                          41,667
                                          
                                          
                                          
                                          0.15
                                          
                                          Oct.
      23, 2013Aug.
      1, 2008
                                          
                                          
                                          150,000
                                          
                                          
                                          
                                          75,000
                                          
                                          
                                          
                                          0.50
                                          
                                          Aug.
      1, 2013Jay
      Sujir
                                          28-May-09
                                          
                                          
                                          200,000
                                          
                                          
                                          
                                          0
                                          
                                          
                                          $
                                          0.27
                                          
                                          28-May-14Oct.
      27, 2008
                                          
                                          
                                          350,000
                                          
                                          
                                          
                                          262,000
                                          
                                          
                                          
                                          0.27
                                          
                                          Oct.
      27, 2013Sept.
      15, 2008
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          75,000
                                          
                                          
                                          
                                          0.27
                                          
                                          Sept.
      15, 2013Jan.
      18, 2006
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          1.00
                                          
                                          Jan.
      18, 2011Feb.
      4, 2005
                                          
                                          
                                          50,000
                                          
                                          
                                          
                                          50,000
                                          
                                          
                                          
                                          0.45
                                          
                                          Feb.
      4, 2010David
      Y.T. Lee
                                          28-May-09
                                          
                                          
                                          140,000
                                          
                                          
                                          
                                          0
                                          
                                          
                                          $
                                          0.27
                                          
                                          28-May-09Sept.
      15, 2008
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          75,000
                                          
                                          
                                          
                                          0.27
                                          
                                          Sept.
      15, 2008Jan.
      18, 2006
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          1.00
                                          
                                          Jan.
      18, 2011Feb.
      4, 2005
                                          
                                          
                                          50,000
                                          
                                          
                                          
                                          50,000
                                          
                                          
                                          
                                          0.45
                                          
                                          Feb.
      4, 2010Geir
      Liland
                                          15-Sep-08
                                          
                                          
                                          150,000
                                          
                                          
                                          
                                          112,500
                                          
                                          
                                          $
                                          0.27
                                          
                                          Sept.
      15, 201324-May-06
                                          
                                          
                                          150,000
                                          
                                          
                                          
                                          150,000
                                          
                                          
                                          
                                          1.32
                                          
                                          24-May-11Jan.
      18, 2006
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          1.00
                                          
                                          Jan.
      18, 201114-Jun-05
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          75,000
                                          
                                          
                                          
                                          0.45
                                          
                                          14-Jun-10Leo
      Power
                                          28-May-09
                                          
                                          
                                          150,000
                                          
                                          
                                          
                                          0
                                          
                                          
                                          $
                                          0.27
                                          
                                          28-May-14Sept.
      15, 2008
                                          
                                          
                                          200,000
                                          
                                          
                                          
                                          150,000
                                          
                                          
                                          
                                          0.27
                                          
                                          Sept.
      15, 201324-May-06
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          1.32
                                          
                                          24-May-11Jan.
      5, 2006
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          100,000
                                          
                                          
                                          
                                          0.90
                                          
                                          Jan.
      5, 2011Ian
      Smith
                                          28-May-09
                                          
                                          
                                          150,000
                                          
                                          
                                          
                                          0
                                          
                                          
                                          $
                                          0.27
                                          
                                          28-May-14Sept.
      15, 2008
                                          
                                          
                                          150,000
                                          
                                          
                                          
                                          112,500
                                          
                                          
                                          
                                          0.27
                                          
                                          Sept.
      15, 2013Aug.
      21, 2006
                                          
                                          
                                          150,000
                                          
                                          
                                          
                                          150,000
                                          
                                          
                                          
                                          1.43
                                          
                                          Aug.
      21, 2011Chris
      Collingwood
                                          28-May-09
                                          
                                          
                                          140,000
                                          
                                          
                                          
                                          0
                                          
                                          
                                          $
                                          0.27
                                          
                                          01-May-11Sept.
      15, 2008
                                          
                                          
                                          200,000
                                          
                                          
                                          
                                          150,000
                                          
                                          
                                          
                                          0.27
                                          
                                          Jan.
      18, 201101-May-06
                                          
                                          
                                          50,000
                                          
                                          
                                          
                                          50,000
                                          
                                          
                                          
                                          1.32Jan.
      18, 2006
                                          
                                          
                                          50,000
                                          
                                          
                                          
                                          50,000
                                          
                                          
                                          
                                          1.00Derrick
      Gill
                                          28-May-09
                                          
                                          
                                          240,000
                                          
                                          
                                          
                                          0
                                          
                                          
                                          $
                                          0.27
                                          
                                          28-May-1423-May-08
                                          
                                          
                                          250,000
                                          
                                          
                                          
                                          125,000
                                          
                                          
                                          
                                          0.88
                                          
                                          23-May-13Douglas
      Brett
                                          Sept.
      15, 2008
                                          
                                          
                                          200,000
                                          
                                          
                                          
                                          150,000
                                          
                                          
                                          $
                                          0.27
                                          
                                          Sept.
      15, 2013Paul
      Hosford
                                          N/A
                                          
                                          
                                          N/A
      3
                                          
                                          
                                          Nil
                                          
                                          
                                          
                                          N/A
                                          
                                          N/ARonald
      Atlas
                                          N/A
                                          
                                          
                                          N/A
      4
                                          
                                          
                                          Nil
                                          
                                          
                                          
                                          N/A
                                          
                                          N/A






1
            Includes
      those options that are exercisable within 60 days of June 15,
      2009.


2
            Options
      previously granted by Target Exploration & Mining Corp. which
      transferred to the Company on closing of the acquisition of Target by the
      Company on March 31, 2009.


3
            All
      stock options previously granted to Mr. Hosford were cancelled as at
      November 21, 2008.





58





4
            All
      stock options previously granted to Mr. Atlas were cancelled as at
      February 9, 2009.





We do not
have any arrangements for involving our employees in our capital.  We
do not have a share purchase plan or 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.




Stock OptionPlan




We may
grant stock options to directors, senior management and employees pursuant to
our stock option plan dated July 31, 2008.  Under the 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, 2009, we granted
stock options to purchase an aggregate of 4,800,001 common shares.  During
the year, no stock options to purchase common shares were exercised and stock
options to purchase an aggregate of 6,040,501 common shares were
cancelled.




Target Stock
Options




As a term
of the plan of arrangement between Crosshair and Target that was effective on
March 31, 2009, all existing holders of options to purchase common shares in
Target had their options exchanged for stock options of the Company that
entitled the holder to exercise their Target options for common shares of the
Company on the basis of 1.2 common shares of the Company for each Target option
exercised (the “Target Exchanged Options”).  As at March 31, 2009
there were 2,000,000 Target Exchanged Options outstanding, exercisable into a
total of 2,400,000 common shares of the Company.  Between March 31,
2009 and April 30, 2009, a total of 600,000 Target Exchanged Options were
cancelled.  As of April 30, 2009, a total of 1,400,000 Target
Exchanged Options to purchase a total of 1,680,000 common shares of the Company
were outstanding.  No additional Target Exchanged Options are to be
issued as of March 31, 2009.




ITEM 7.
            MAJOR
      SHAREHOLDERS AND RELATED PARTY
TRANSACTIONS




7.A.           Major
Shareholders




To the
knowledge of management, no person beneficially owns 5% or more of our issued
and outstanding common shares, except Universal who owns 7,144,000 common shares
or 6.37% of the 112,184,313 common shares issued and outstanding as at June 15,
2009.  Universal also owns share purchase warrants to purchase up to
7,500,000 common shares, which share purchase warrants expire July 29,
2011.




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 June
15, 2009, we had 112,184,313 common shares issued and outstanding to
approximately 492 shareholders of record.  We believe that the number
of beneficial owners is substantially greater than the number of record holders
because a portion of our outstanding common shares are held in broker “street
names” for the benefit of individual investors or other
nominees.  Management believes that there are 119 shareholders of
record located in the U.S., who own an aggregate of approximately 4.53% of our
outstanding common shares.  In addition to these record holders there
may be more persons located in the U.S. 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.  We are not aware of any
arrangements that would result in a change of control of our
company.




7.B.           Related
Party Transactions




Other
than as disclosed below, for the year ended April 30, 2009 and the period from
May 1, 2009 to the date of this annual report, we have not entered into any
transactions or loans between us and any: (a) enterprises that







59





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.




·
            On
      March 31, 2009, the Company acquired Target (a company with directors and
      officers in common) by way of a plan of arrangement for total
      consideration of $2,509,592 made up of $195,271 in cash and 14,663,488
      common shares, 2,283,300 warrants and 1,680,000 stock options. (see Note 4
      to the accompanying financial
statements)




·
            At
      April 30, 2009, management fees of $26,250 (April 30, 2008 - $Nil, April
      30, 2007 - $Nil) were owed to former directors’ of
  Target.




·
            Incurred
      management fees of $31,250 (2008 – $56,250, 2007 - $Nil) to a private
      company controlled by Douglas R. Brett for his duties as Chief Financial
      Officer.




·
            Incurred
      legal fees of $24,998 (2008 – $122,577, 2007 - $25,882) to a legal firm of
      Anfield Sujir Kennedy & Durno, a partner of which, Jay Sujir, is a
      director of the Company.  At April 30, 2009, $24,998 (April 30,
      2008 - $106,961, April 30, 2007 - $Nil) was owed to this
      party.




·
            Incurred
      geological consulting fees of $12,500 (2008 – $15,600, 2007 - $33,075) to
      a private company owned by Stewart Wallis, a director of the Company. At
      April 30, 2009, $47,250 (April 30, 2008 - $Nil, April 30, 2007 - $5,830)
      was owed to this party.




·
            Incurred
      independent directors’ fees of $100,500 (2008 - $108,500, 2007 -
      $60,500).  Included in accounts payable and accrued liabilities
      at April 30, 2009 is an amount of $27,058 (April 30, 2008 - $Nil April 30,
      2007 - $Nil) owed to the directors.




·
            Paid
      rent for its Newfoundland office of $97,153 (2008 - $45,660, 2007 - $Nil))
      to a private company, of which Chris Collingwood is a
      director.   The landlord agreed to terminate the lease with
      the Company effective January 31, 2009. The Company is currently renting
      office space in the same building on a month to month
      basis.  Subsequent to April 30, 2009, the Company terminated the
      use of this office space.




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







60




ITEM 8.
              FINANCIAL
      INFORMATION
  8.A.           Consolidated
Statements and Other Financial Information




Financial
Statements




Our
financial statements are stated in Canadian Dollars and are prepared in
accordance with Canadian 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, 2009, April
30, 2008 and April 30, 2007 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 our financial
position at the relevant time.




Legal/Arbitration
Proceedings




1.
            On
      April 28, 2009 the Company commenced an action in British Columbia Supreme
      Court against Universal alleging that Universal had knowledge of trades
      that artificially inflated the market price of shares of Universal at the
      time that Crosshair agreed to purchase property and securities of
      Universal.  The action relates to certain agreements Crosshair
      entered into with Universal to acquire all of Universal’s interest in its
      project in the Central Mineral Belt of Labrador and to purchase securities
      of Universal by way of a private placement. Crosshair has received
      confirmation from the Transfer Agent that Universal will not receive any
      further shares or warrants from escrow until there is final resolution to
      the dispute.  As of April 30, 2009, Universal has received
      2,856,000 shares in the first two traunches to date with 7,144,000 shares
      and 7,500,000 warrants remaining in escrow.  Universal filed a
      Statement of Defence and Counterclaim in the B.C. Supreme Court on May
      13th, 2009.  Crosshair will file a Statement of Defence to the
      counterclaim made by Universal and maintains its confidence that its
      action against Universal is grounded in both fact and law however; there
      can be no assurance of a favorable
outcome.





2.
            On
      May 30, 2007, a Statement of Claim was filed by a former supplier claiming
      unpaid invoices in the amount of approximately $81,000 plus interest and
      costs, against which we have filed a
  counterclaim.





Due to
the uncertainty in respect of the above proceedings, the Company has not
reserved or accrued any amounts in relation to the potential outcomes.  All
legal costs and result of any settlements are recorded as incurred.





The
nature of the Company’s business may subject it to other regulatory
investigations, claims, lawsuits, and other proceedings. The results of these
legal proceedings cannot be predicted with certainty. There can be no assurances
that these matters will not have a material adverse effect on the
Company.





8.B.           Significant
Changes




Since
April 30, 2009, the date of our most recent financial statements, the following
significant changes have occurred:




·
            On
      May 1, 2009, as part of the Company’s cash conservation efforts, all
      employees agreed to reduce their annual compensation to 80% of previously
      agreed amounts and suspend cash bonus payments in return for a 20%
      reduction in the hours worked.  These amending agreements are in
      effect for a period of 6 months at which time they may be extended for an
      additional 6 months at the sole discretion of the
  company.







61










·
            On
      May 28, 2009, the Company granted 2,745,000 stock options at an exercise
      price of $0.27 per share with a 5 year expiry
  date.




ITEM 9.
            THE
      OFFER AND LISTING




9.A.           Offer
and Listing Details




The
following table lists the high and low prices for our common shares for the last
six months, fiscal quarters for the last two completed fiscal years, and the
last five fiscal year ends.  Our common shares have traded on the
Toronto Stock Exchange since May 12, 2008 and were traded on the TSX Venture
Exchange before that date.




Period
                      
                      High
                      
                      
                      LowJune
      1 - 15, 2009
                      
                      $
                      0.30
                      
                      
                      $
                      0.23Month
      ended May 31, 2009
                      
                      $
                      0.36
                      
                      
                      $
                      0.23Month
      ended April 30, 2009
                      
                      $
                      0.30
                      
                      
                      $
                      0.14Month
      ended March 31, 2009
                      
                      $
                      0.17
                      
                      
                      $
                      0.13Month
      ended February 28, 2009
                      
                      $
                      0.19
                      
                      
                      $
                      0.13Month
      ended January 31, 2009
                      
                      $
                      0.33
                      
                      
                      $
                      0.16Month
      ended December 31, 2008
                      
                      $
                      0.22
                      
                      
                      $
                      0.09Fiscal
      quarter ended April 30, 2009
                      
                      $
                      0.30
                      
                      
                      $
                      0.13Fiscal
      quarter ended January 21, 2009
                      
                      $
                      0.33
                      
                      
                      $
                      0.09Fiscal
      quarter ended October 31, 2008
                      
                      $
                      0.50
                      
                      
                      $
                      0.10Fiscal
      quarter ended July 31, 2008
                      
                      $
                      0.99
                      
                      
                      $
                      0.47Fiscal
      quarter ended April 30, 2008
                      
                      $
                      1.68
                      
                      
                      $
                      0.64Fiscal
      quarter ended January 31, 2008
                      
                      $
                      2.89
                      
                      
                      $
                      1.28Fiscal
      quarter ended October 31, 2007
                      
                      $
                      2.68
                      
                      
                      $
                      1.15Fiscal
      quarter ended July 31, 2007
                      
                      $
                      3.18
                      
                      
                      $
                      1.84Fiscal
      year ended April 30, 2009
                      
                      $
                      0.99
                      
                      
                      $
                      0.10Fiscal
      year ended April 30, 2008
                      
                      $
                      3.18
                      
                      
                      $
                      0.64Fiscal
      year ended April 30, 2007
                      
                      $
                      4.20
                      
                      
                      $
                      1.23Fiscal
      year ended April 30, 2006
                      
                      $
                      1.80
                      
                      
                      $
                      0.31Fiscal
      year ended April 30, 2005
                      
                      $
                      0.92
                      
                      
                      $
                      0.13





Our
common shares began trading on the American Stock Exchange (now NYSE Amex) on
May 7, 2007.  The following table lists the high and low prices for
our common shares on NYSE Amex for the last six months and fiscal quarters for
the last completed fiscal year.




Period
                          
                          High
                          
                          
                          
                          LowJune
      1 - 15, 2009
                          
                          $
                          0.27
                          
                          
                          
                          $
                          0.20Month
      ended May 31, 2009
                          
                          $
                          0.32
                          
                          
                          
                          $
                          0.19Month
      ended April 30, 2009
                          
                          $
                          0.31
                          
                          
                          
                          $
                          0.11Month
      ended March 31, 2009
                          
                          $
                          0.15
                          
                          
                          
                          $
                          0.10Month
      ended February 29, 2009
                          
                          $
                          0.16
                          
                          
                          
                          $
                          0.10Month
      ended January 31, 2009
                          
                          $
                          0.28
                          
                          
                          
                          $
                          0.12Month
      ended December 31, 2008
                          
                          $
                          0.18
                          
                          
                          
                          $
                          0.07Fiscal
      quarter ended April 30, 2009
                          
                          $
                          0.31
                          
                          `
                          
                          $
                          0.10





62










Fiscal
      quarter ended January 31, 2009
                  
                  $
                  0.28
                  
                  
                  $
                  0.07Fiscal
      quarter ended October 31, 2008
                  
                  $
                  0.48
                  
                  
                  $
                  0.07Fiscal
      quarter ended July 31, 2008
                  
                  $
                  0.88
                  
                  
                  $
                  0.45Fiscal
      quarter ended April 30, 2008
                  
                  $
                  1.71
                  
                  
                  $
                  0.63Fiscal
      quarter ended January 31, 2008
                  
                  $
                  3.14
                  
                  
                  $
                  1.25Fiscal
      quarter ended October 31, 2007
                  
                  $
                  2.85
                  
                  
                  $
                  1.06Fiscal
      quarter ended July 31, 2007*
                  
                  $
                  3.15
                  
                  
                  $
                  1.71Fiscal
      Year ended April 30, 2009
                  
                  $
                  0.88
                  
                  
                  $
                  0.07Fiscal
      Year ended April 30, 2008**
                  
                  $
                  3.15
                  
                  
                  $
                  0.63




*from May
7, 2007 to July 31, 2007




**from
May 7, 2007 to April 30, 2008




9.B.           Plan
of Distribution




Not
applicable




9.C.           Markets




Our
common shares are listed on NYSE Amex under the trading symbol
“CXZ”.  Our common shares are also listed on the Toronto Stock
Exchange under the trading symbol “CXX”.  There are currently no
restrictions on the transferability of these shares under Canadian securities
laws.




9.D.           Selling
Shareholders




Not
applicable




9.E.           Dilution




Not
applicable




9.F.           Expenses
of the Issue




Not
applicable




ITEM 10.
            ADDITIONAL
      INFORMATION




10.A.                      Share
Capital




Not
applicable




10.B.                      Memorandum
and Articles of Association




This
information is incorporated by reference to our Form 20-F Registration
Statement, “Item 10.  Additional Information—Memorandum and Articles
of Association” as filed on April 25, 2006.




10.C.                      Material
Contracts




We have
entered into the following material contracts during the two years immediately
preceding the date of this annual report and which are currently in
effect:




1.
            On
      November 19, 2007 we entered into a shareholder rights plan agreement, as
      amended and restated effective March 31, 2008, with Computershare Investor
      Services Inc.  The agreement was ratified by shareholders at a
      meeting held on May 16, 2008 and has a term of three years.  The
      purpose of the







63





shareholder
      rights plan is to provide time for all parties to adequately consider any
      takeover bid or similar transaction involving our
  shares.




2.
              On
      March 26, 2008, we entered into an underwriting agreement with Canaccord
      Capital Corporation and Thomas Weisel Partners Canada Inc. (collectively,
      the “Underwriters”) for the sale, on a “bought deal” basis, of 8,000,000
      units of the Company at a price of $1.25 per unit (each unit consisting of
      one common share and one share purchase warrant where each share purchase
      warrant entitles the holder to purchase an additional common share until
      October 4, 2009 at a price of $1.80 per common share) and 3,575,000
      flow-through common shares of the Company at a price of $1.40 per
      flow-through common share.  Under the terms of the underwriting
      agreement, we paid the Underwriters commission in the amount of $900,300
      and issued 694,500 brokers’ warrants.  Each brokers’ warrant
      entitles the holder to purchase a brokers’ unit at a price of $1.25 per
      brokers’ unit until October 4, 2009.  Each brokers’ unit
      consists of one common share and one common share purchase warrant (a
      “Brokers’ Underlying Warrant”) and each Brokers’ Underlying Warrant
      entitles the holder to purchase an additional common share at a price of
      $1.80 per share until October 4,
2009.
  3.
              On
      April 4, 2008 we entered into a Warrant Indenture with Computershare Trust
      Company of Canada, which provides for the issue of up to 9,800,600 common
      share purchase warrants issued in connection with our bought deal
      prospectus offering.  A total of 8,000,000 common share purchase
      warrants were actually issued under the warrant indenture, all of which
      remain outstanding.
  4.
              On
      July 29, 2008, we entered into a purchase and sale agreement with
      Universal under which Crosshair acquired all of Universal's interest in
      its project in the CMB of Labrador.  As consideration for
      Universal's interest in the Property, Crosshair will pay to Universal
      $500,000 and issue 10,000,000 common shares and 7,500,000
      warrants.  Each warrant will entitle Universal to purchase an
      additional common share in the capital of Crosshair at $1.00 per share for
      a period of three years from closing, subject to early expiry in the event
      that the average trading price of Crosshair's common shares exceeds $2.00
      for a period of 20 days while the warrants are outstanding.  The
      securities issued to Universal will be subject to escrow for two years
      following the Closing, to be released in equal tranches in three month
      intervals. Universal will grant Crosshair's management a voting proxy over
      any Crosshair shares it holds or acquires on exercise of the
      warrants.  These escrow and voting provisions will expire if
      Universal distributes the securities to its
      shareholders.  Universal will retain a 2% net smelter return
      royalty on its 60% interest in the Property, of which a 0.5% net smelter
      return royalty may be purchased by Crosshair for
    $1,000,000.
  5.
              On
      July, 29, 2008, we entered into an Escrow Agreement with Universal and
      Computershare Investor Services Inc. as Escrow Agent, pursuant which the
      10,000,000 common shares and 7,500,000 warrants issued to Universal
      pursuant to the Purchase and Sale Agreement described above in item 4,
      were placed into escrow for a period of two years, with shares and
      warrants being released in equal tranches in three month
      intervals.
  6.
              On
      July 29, 2008, we entered into a Voting Trust Agreement with Universal
      with respect to the voting of the shares and shares issued upon exercise
      of the warrants subject to the Escrow Agreement described in item 5
      above.
  7.
              On
      July 29, 2008, we entered into a Settlement and Release Agreement with
      Universal and Silver Spruce with respect to Crosshair’s acquisition of
      Universal’s interest in the CMB JV property in Labrador,
      Canada.
  8.
                On
      July 29, 2008, Crosshair purchased by way of private placement, 2,222,222
      units of Universal at a price of $0.45 per unit.  Each unit
      consists of one common share of Universal and one share purchase warrant
      entitling Crosshair to purchase an additional common share of Universal at
      a price of $0.65 each for a period of 24
months.
 9.
                    On
      July 31, 2008 we entered into a employment agreement with Joseph Miller
      whereby we engage Mr. Miller’s services as our Chief Financial
      Officer.  See Item 6.B. Compensation – Compensation
      of


64


Executive
      Officers and Directors – Employment and Consulting Agreements for a
      description of this
agreement.


10.
              On
      January 28, 2009 we entered into a Combination Agreement with Target
      Exploration and Mining Corp. whereby Crosshair acquired all the
      outstanding common shares of Target and Target has become a wholly owned
      subsidiary of Crosshair.  Target shareholders received
      approximately 14.7 million common shares of Crosshair (1.2 shares for each
      Target common share outstanding) with an estimated market value of
      approximately $2.6 million.  Each Target warrant and stock
      option which gives the holder the right to acquire common shares of Target
      was exchanged for a warrant or stock option which gives the holder the
      right to acquire common shares of Crosshair on the exchange ratio of 1.2
      Crosshair shares for each Target Warrant or stock option exercised, with
      all other terms of such warrants and options (such as term and expiry)
      remaining unchanged.
  11.
              On
      April 8, 2009 we entered into the Golden Promise Option and Joint Venture
      agreement with Paragon Minerals Corp. whereby Crosshair acquired a 60%
      interest in the Golden Promise Gold Project in Central Newfoundland,
      Canada with an option to acquire up to a 70% interest. This agreement
      terminated the original property option earn-in agreement with Paragon,
      and Crosshair also abandoned the previously approved Plan of Arrangement
      with Gemini Metals Corp. (“Gemini”) whereby Crosshair was to transfer its
      gold and volcanic-hosted massive sulphide projects located in Newfoundland
      to Gemini in exchange for shares for Gemini.  As a result of the
      current market conditions, the board of directors of Crosshair determined
      that it was no longer in the best interest of shareholders to spin-out the
      assets of Golden Promise, South Golden Promise and Victoria Lake
      properties into a separate publicly traded company to be known as
      Gemini.  Crosshair issued 2,655,000 common shares with a market
      value of approximately $645,000 to Paragon to purchase the 60% interest in
      Golden Promise with an option to increase its interest to
      70%.  Crosshair will provide Paragon with a $2.0 million carried
      interest in initial exploration expenditures to be completed prior to May
      2013.  Crosshair can extend the timeframe to complete the
      initial exploration program by 12 months upon issuing 250,000 common
      shares to Paragon.  Upon the successful completion of the
      initial $2.0 million exploration program, Crosshair can elect to earn an
      additional 10% interest (to 70%) in Golden Promise by providing Paragon
      with an additional $1.0 million carried interest in additional exploration
      expenditures within 24 months.   Crosshair can extend the
      timeframe to complete the additional exploration program by 12 months upon
      issuing 100,000 common shares to Paragon.  In the event
      Crosshair does not complete the additional expenditure program within the
      required timeframe, Crosshair can purchase the remaining 10% interest by
      paying Paragon the difference between actually incurred exploration
      expenditures and $1.0 million or revert to the 60%
    interest.
  10.D.                      Exchange
Controls


10.
            On
      April 8, 2009 we entered into the Golden Promise Option and Joint Venture
      agreement with Paragon Minerals Corp. whereby Crosshair acquired a 60%
      interest in the Golden Promise Gold Project in Central Newfoundland,
      Canada with an option to acquire up to a 70% interest. This agreement;
      terminated the original property option earn-in agreement with Paragon;
      and Crosshair also abandoned the previously approved Plan of Arrangement
      with Gemini Metals Corp. (“Gemini”) whereby Crosshair was to transfer its
      gold and volcanic-hosted massive sulphide projects located in Newfoundland
      to Gemini in exchange for shares for Gemini.  As a result of the
      current market conditions, the board of directors of Crosshair determined
      that it was no longer in the best interest of shareholders to spin-out the
      assets of Golden Promise, South Golden Promise and Victoria Lake
      properties into a separate publicly traded company to be known as
      Gemini.  Crosshair issued 2,655,000 common shares with a market
      value of approximately $645,000 to Paragon to purchase the 60% interest in
      Golden Promise with an option to increase its interest to
      70%.  Crosshair will provide Paragon with a $2.0 million carried
      interest in initial exploration expenditures to be completed prior to May
      2013.  Crosshair can extend the timeframe to complete the
      initial exploration program by 12 months upon issuing 250,000 common
      shares to Paragon.  Upon the successful completion of the
      initial $2.0 million exploration program, Crosshair can elect to earn an
      additional 10% interest (to 70%) in Golden Promise by providing Paragon
      with an additional $1.0 million carried interest in additional exploration
      expenditures within 24 months.   Crosshair can extend the
      timeframe to complete the additional exploration program by 12 months upon
      issuing 100,000 common shares to Paragon.  In the event
      Crosshair does not complete the additional expenditure program within the
      required timeframe, Crosshair can purchase the remaining 10% interest by
      paying Paragon the difference between actually incurred exploration
      expenditures and $1.0 million or just revert to 60%
      interest.




10.D.                      Exchange
Controls




Canada
has no system of exchange controls.  There are no Canadian restrictions on
the repatriation of capital or earnings of a Canadian public company to
non-resident investors.  There are no laws in Canada or exchange
restrictions affecting the remittance of dividends, profits, interest, royalties
and other payments to non-resident holders of our securities, except as
discussed in “10.E. Taxation” below.




There are
no limitations under the laws of Canada or in our organizing documents on the
right of foreigners to hold or vote our securities, except that the Investment
Canada Act may require review and approval by the Minister of Industry (Canada)
of certain acquisitions of "control" of us by a "non-Canadian". The threshold
for acquisitions of control is generally defined as being one-third or more of
the voting shares of our company. "Non-Canadian" generally means
an individual who is not a Canadian citizen, or a corporation, partnership,
trust or joint venture that is ultimately controlled by
non-Canadians.




10.E.                      Taxation




Certain
Canadian Federal Income Tax Consequences




The
discussion under this heading summarizes the principal Canadian federal income
tax consequences of acquiring, holding and disposing of shares of our common
stock for a shareholder who at all relevant times, for the





65





purposes
of the Income Tax Act
(Canada) (the “Canadian Tax
Act”) and the
Canada-United States Tax Convention (1980) (the "Convention") (i) is not
resident or deemed to be resident in Canada, but is a resident of the U.S., (ii)
is a "qualifying person" for the purposes of the Convention, (iii) deals at
arm's length with us, and (iv) will acquire and hold our common shares as
capital property for the purposes of the Canadian Tax Act.  This
summary does not apply to a shareholder who uses or holds, or is deemed to use
or hold, its shares in our Company in connection with carrying on a business in
Canada, or to a shareholder that is either an insurer carrying on business in
Canada and elsewhere or an “authorized foreign bank” as defined in the Canadian Tax
Act.  This summary is based on the current provisions of the
Canadian Tax Act, the
regulations thereunder in force as of the date hereof (the “Regulations”), all
proposals to amend the Canadian Tax Act or the
Regulations publicly announced by the federal Minister of Finance (Canada) prior
to the date hereof (the “Tax Proposals”), and an understanding of the current
published administrative practices of the Canada Revenue Agency.  This
summary is not exhaustive of all Canadian federal income tax considerations
applicable to a shareholder of our company and, except for the Tax Proposals,
this summary does not take into account or anticipate any changes in the Canadian Tax Act, the
Regulations or the administrative or assessing policies of the Canada Revenue
Agency, whether by legislative, governmental or judicial decisions or action,
nor does this summary take into account provincial, territorial or other foreign
tax legislation or considerations, which may differ significantly from those
discussed herein.  There can be no assurance that the Tax Proposals
will be enacted in the form proposed, or at all.




This
summary is of a general nature only and is not intended to be, nor should it be
considered to be, legal or tax advice to any particular
shareholder.  The tax consequences to any particular shareholder will
depend on a variety of factors including the shareholder’s own particular
circumstances.  Therefore, all shareholders should consult their own
tax advisors with respect to their own particular circumstances.




The
provisions of the Canadian Tax
Act are subject to income tax treaties to which Canada is a party,
including the Canada-United
States Income Tax Convention(1980), as amended (the
“Convention”).




Dividends on Common
Shares




Under the
Canadian Tax Act, a
non-resident of Canada is generally subject to Canadian withholding tax at the
rate of 25% on dividends paid or deemed to have been paid to him or her by a
corporation resident in Canada.  We are responsible for withholding this
tax at the source. The Convention generally limits the rate of withholding tax
on dividends to 15% of the gross amount of such dividends paid to shareholders
or, if the shareholder is a company that beneficially owns at least 10% of the
voting stock of the payor corporation, 5% of the gross amount of the
dividends.




The
Convention generally exempts from Canadian income tax dividends paid to a
religious, scientific, literary, educational or charitable organization or to an
organization constituted and operated exclusively to administer a pension,
retirement or employee benefit fund or plan, if the organization is a resident
of the U.S. and is exempt from income tax under the laws of the
U.S.




Dispositions of Common
Shares




Under the
Canadian Tax Act, a
taxpayer’s capital gain or capital loss from a disposition of a share of our
common shares is the amount, if any, by which his or her proceeds of disposition
exceed (or are exceeded by, respectively) the aggregate of his or her adjusted
cost base of the share and reasonable expenses of disposition.  The capital
gain or loss must be computed in Canadian currency using a weighted average
adjusted cost base for identical properties.  One half of capital gains net
of one half of any capital losses are included in income.  The amount by
which a shareholder’s capital loss exceeds the capital gain in a year may be
deducted from a capital gain realized by the shareholder in the three previous
years or any subsequent year, subject to certain restrictions in the case of a
corporate shareholder.




Under the
Canadian Tax Act, a
non-resident of Canada is subject to Canadian tax on taxable capital gains, and
may deduct allowable capital losses, realized on a disposition of “taxable
Canadian property.”  Shares of our common stock will constitute taxable
Canadian property of a shareholder at a particular time if the shareholder used
the shares in carrying on business in Canada, or if at any time in the five
years immediately preceding the disposition





66







25% or
more of the issued shares of any class or series in our capital stock were owned
by a shareholder, persons with whom the shareholder did not deal at arm's length
or the shareholder together with all such persons and in certain other
circumstances.  The Convention generally relieves U.S. residents who
qualify for benefit thereunder from liability for Canadian tax on capital gains
derived on a disposition of shares unless:




(a)
            the
      value of the shares is derived principally from real property situated in
      Canada, including the right to explore for or exploit natural resources
      and rights to amounts computed by reference to
  production;




(b)
            the
      shareholder was an individual who was resident in Canada for 120 months
      during any period of 20 consecutive years preceding, and at any time
      during the 10 years immediately preceding, the disposition and the shares
      were owned by him or her when he or she ceased to be resident in Canada;
      or




(c)
            the
      shares formed part of the business property of a “permanent establishment”
      that the holder has or had in Canada within the 12 months preceding the
      disposition.




Material
U.S.Federal Income Tax Consequences




U.S. Federal Income Tax
Consequences




The
following is a discussion of material U.S. federal income tax consequences
generally applicable to a U.S. Holder (as hereinafter defined) of our common
shares under current law.  This discussion does not address all potentially
relevant federal income tax matters and it does not address consequences
peculiar to persons subject to special provisions of federal income tax law,
such as those described below as excluded from the definition of a U.S. Holder.
 In addition, this discussion does not cover any state, local or foreign
tax consequences.  Accordingly, holders and prospective holders of our
common shares are urged to consult their own tax advisors about the specific
federal, state, local, and foreign tax consequences to them of purchasing,
owning and disposing of our common shares, based upon their individual
circumstances.




The
following discussion is based upon the sections of the Code, Treasury
Regulations, published Internal Revenue Service (“IRS”) rulings, published
administrative positions of the IRS and court decisions that are currently
applicable, any or all of which could be materially and adversely changed,
possibly on a retroactive basis, at any time and which are subject to differing
interpretations. This discussion does not consider the potential effects, both
adverse and beneficial, of any proposed legislation which, if enacted, could be
applied, possibly on a retroactive basis, at any time.




U.S.
Holders




As used
in this annual report, a “U.S.
Holder” means a holder of our common shares who is a citizen or
individual resident of the United States, a corporation or partnership created
or organized in or under the laws of the United States or of any political
subdivision thereof, a corporation created or organized in or under the laws of
the United States or any political subdivision thereof, or an entity created or
organized in or under the laws of the United States or of any political
subdivision thereof which has elected to be treated as a corporation for U.S.
federal income tax purposes (under Treasury Regulation Section 301.7701-3), an
estate whose income is taxable in the U.S. irrespective of source or a trust
subject to the primary supervision of a court within the U.S. and control of a
U.S. fiduciary as described in Section 7701(a)(30) of the Code.  This
summary does not address the tax consequences to, and the term U.S. Holder does
not include, persons subject to specific provisions of federal income tax law,
such as tax-exempt organizations, qualified retirement plans, individual
retirement accounts and other tax-deferred accounts, financial institutions,
insurance companies, real estate investment trusts, regulated investment
companies, broker-dealers, non-resident alien individuals, persons or entities
that have a “functional
currency” other than the U.S. dollar, shareholders subject to the
alternative minimum tax, shareholders who hold common shares as part of a
straddle, hedging or conversion transaction, and shareholders who acquired their
common shares through the exercise of employee stock options or otherwise as
compensation for services.  This summary is limited to U.S. Holders who own
common shares as capital assets, within the meaning of Section 1221 of the Code,
and who own





67





(directly
and indirectly, pursuant to applicable rules of constructive ownership) no more
than 5% of the value of our total outstanding stock.  This summary does not
address the consequences to a person or entity holding an interest in a
shareholder or the consequences to a person of the ownership, exercise or
disposition of any options, warrants or other rights to acquire common shares.
In addition, this summary does not address special rules applicable to U.S.
persons (as defined in Section 7701(a)(30) of the Code) holding common shares
through a foreign partnership or to foreign persons holding common shares
through a domestic partnership.




Distributions on Our Common
Shares




In
general, U.S. Holders receiving dividend distributions (including constructive
dividends) with respect to our common shares are required to include in gross
income for U.S. federal income tax purposes the gross amount of such
distributions (without reduction of any Canadian income or other tax withheld
from such distributions), equal to the U.S. dollar value of such distributions
on the date of receipt (based on the exchange rate on such date), to the extent
that we have current or accumulated earnings and profits.  Such Canadian
tax withheld may be credited, subject to certain limitations, against the U.S.
Holder’s federal income tax liability or, alternatively, may be deducted in
computing the U.S. Holder’s federal taxable income by those who itemize
deductions (See more detailed discussion at “Foreign Tax Credit” below).
Dividends received from us by a non-corporate U.S. Holder during taxable years
beginning before January 1, 2011, generally, will be taxed at a maximum rate of
15% provided that such U.S. Holder has held to shares for more than 60 days
during the 120-day period beginning 60 days before the ex-dividend date and that
certain other conditions are met (“qualified dividend income”).  For
this purpose, dividends will include any distribution paid by us with respect to
our common shares but only to the extent such distribution is not in excess of
our current and accumulated earnings and profits, as determined under U.S.
Federal income tax principles.  To the extent that distributions exceed our
current or accumulated earnings and profits, they will be treated first as a
return of capital up to the U.S. Holder’s adjusted basis in the common shares
and thereafter as gain from the sale or exchange of property.  For this
purpose, “qualified dividend
income” generally includes dividends paid on stock in U.S. corporations
as well as dividends paid on stock in certain non-U.S. corporations if, among
other things, (i) the shares of the non-U.S. corporation (including ADRs backed
by such shares) are readily tradable on an established securities market in the
U.S., or (ii) the non-U.S. corporation is eligible with respect to substantially
all of its income for the benefits of a comprehensive income tax treaty with the
U.S. which contains an exchange of information program.   We currently
anticipate that if we were to pay any dividends with respect to our shares, if
we have current or accumulated earnings and profits, then to the extent of such
earnings and profits the dividends should constitute “qualified dividend income”
for U.S. federal income tax purposes and that U.S. Holders who are individuals
should be entitled to the reduced rates of tax, as applicable.




In the
case of foreign currency received as a dividend that is not converted by the
recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a
tax basis in the foreign currency equal to its U.S. dollar value on the date of
receipt.  Generally any gain or loss recognized upon a subsequent sale or
other disposition of the foreign currency, including the exchange for U.S.
dollars, will be ordinary income or loss and will not be eligible for the
special tax rate applicable to qualified dividend income.




Dividends
paid on our common shares will not generally be eligible for the dividends
received deduction provided to corporations receiving dividends from certain
United States corporations. A U.S. Holder that is a corporation may, under
certain circumstances, be entitled to a 70% deduction of the United States
source portion of dividends received from us (unless we qualify as a “foreign personal holding
company” or a “passive
foreign investment company”, as defined below) if such U.S. Holder owns
shares representing at least 10% of our voting power and value, or to a 85%
deduction if the U.S. Holder owns shares representing at least 20% o the voting
power and value of the Company.  The availability of this deduction is
subject to several complex limitations that are beyond the scope of this
discussion.




Disposition of Our Common
Shares




In
general, U.S. Holders will recognize gain or loss upon the sale of our common
shares equal to the difference, if any, between (i) the amount of cash plus the
fair market value of any property received, and (ii) the shareholder’s tax basis
in our common shares.  Preferential tax rates apply to long-term capital
gains of U.S. Holders that are





68





individuals,
estates or trusts.  In general, gain or loss on the sale of our common
shares will be long-term capital gain or loss if our common shares are a capital
asset in the hands of the U.S. Holder and are held for more than one year.
 Deductions for net capital losses are subject to significant limitations.
 For U.S. Holders that are not corporations, any unused portion of such net
capital loss may be carried over to be used in later tax years until such net
capital loss is thereby exhausted.  For U.S. Holders that are corporations
(other than corporations subject to Subchapter S of the Code), an unused net
capital loss may be carried back three years preceding the loss year and carried
forward five years following the loss year to be offset against capital gains
until such net capital loss is thereby exhausted.




Passive Foreign Investment
Company




We have
not determined whether or not we meet the definition of PFIC, within the meaning
of Sections 1291 through 1298 of the Code for the current tax year and any prior
tax years.  We may or may not qualify as a PFIC in subsequent years
due to changes in our assets and business operations.  A U.S. Holder
who holds stock in a foreign corporation during any year in which such
corporation qualifies as a PFIC is subject to numerous special U.S. federal
income taxation rules.  The following is a discussion of these special
rules as they apply to U.S. Holders of our common shares.




Section
1297 of the Code defines a PFIC as a corporation that is not formed in the U.S.
if, for any taxable year, either (i) 75% or more of its gross income is “passive income,” which
includes interest, dividends and certain rents and royalties or (ii) the average
percentage, by fair market value (or, if the corporation is not publicly traded
and either is a controlled foreign corporation or makes an election, by adjusted
tax basis), of its assets that produce or are held for the production of passive
income is 50% or more.




U.S.
Holders owning shares of a PFIC are subject to a special tax and to an interest
charge based on the value of deferral of U.S. tax attributable to undistributed
earnings of a PFIC for the period during which the shares of the PFIC are owned.
 This special tax would apply to any gain realized on the disposition of
shares of a PFIC.  In addition, the gain is subject to U.S. federal income
tax as ordinary income, taxed at top marginal rates, rather than as capital gain
income.  The special tax would also be payable on receipt of excess
distributions (any distributions received in the current year that are in excess
of 125% of the average distributions received during the 3 preceding years or,
if shorter, the shareholder’s holding period).  However, if the U.S. Holder
makes for any tax year a timely election to treat a PFIC as a qualified electing
fund (“QEF”) with respect to such shareholder’s interest therein, the
above-described rules generally will not apply.  Instead, the electing U.S.
Holder would include annually in his gross income his pro rata share of the
PFIC’s ordinary earnings and any net capital gain regardless of whether such
income or gain was actually distributed.  Special rules apply to U.S.
Holders who own their interests in a PFIC through intermediate entities or
persons.  Generally, shareholders do not make a QEF election unless
they have sufficient information to determine their proportionate share of a
corporation’s net capital gain and ordinary earnings. We have not calculated
these amounts for any shareholder, and do not anticipate making these
calculations in the foreseeable future. Therefore, U.S. Holders of our common
shares should consult their own financial advisor, legal counsel or accountant
regarding the QEF election before making this election.




U.S.
Holders who hold, actually or constructively, marketable stock of a foreign
corporation that qualifies as a PFIC may elect to mark such stock to the market
(a “mark-to-market election”).  If such an election is made, such U.S.
Holder will not be subject to the special taxation rules of PFIC described above
for the taxable years for which the mark-to-market election is made.  A
U.S. Holder who makes such an election will include in income for the taxable
year an amount equal to the excess, if any, of the fair market value of our
common shares as of the close of such tax year over such U.S. Holder’s adjusted
basis in such shares.  In addition, the U.S. Holder is allowed a deduction
for the lesser of (i) the excess, if any, of such U.S. Holder’s adjusted tax
basis in the shares over the fair market value of such shares as of the close of
the tax year, or (ii) the excess, if any of (A) the mark-to-market gains for our
common shares included by such U.S. Holder for prior tax years, including any
amount which would have been included for any prior year but for Section 1291
interest on tax deferral rules discussed above with respect to a U.S. Holder,
who has not made a timely QEF election during the year in which he holds (or is
deemed to have held) our common shares and the Company is a PFIC (“Non-Electing
U.S. Holder”), over (B) the mark-to-market losses for shares that were allowed
as deductions for prior tax years.  A U.S. Holder’s adjusted tax basis in
our common







69









The IRS
has issued proposed regulations that, subject to certain exceptions, would treat
as taxable certain transfers of PFIC stock by a Non-Electing U.S. Holder that
are generally not otherwise taxed, such as gifts, exchanges pursuant to
corporate reorganizations, and transfers at death. Generally, in such cases, the
basis of our common shares in the hands of the transferee and the basis of any
property received in the exchange for those shares would be increased by the
amount of gain recognized.  A U.S. Holder who has made a timely QEF
election (as discussed above) would not be taxed on certain transfers of PFIC
stock, such as gifts, exchanges pursuant to corporate reorganizations, and
transfers at death.  The transferee’s basis in this case will depend on the
manner of the transfer. The specific tax effect to the U.S. Holder and the
transferee may vary based on the manner in which the common shares are
transferred.  Each U.S. Holder should consult a tax advisor with respect to
how the PFIC rules affect their tax situation.




The
PFIC and QEF election rules are complex.  U.S. Holders should consult a tax
advisor regarding the availability and procedure for making the QEF election as
well as the applicable method for recognizing gains or earnings and profits
under the foregoing rules.




Controlled Foreign
Corporation




If more
than 50% of the total combined voting power of all classes of shares entitled to
vote or the total value of our common shares is owned, actually or
constructively, by citizens or residents of the United States, U.S. domestic
partnerships or corporation, or estates or trusts other than foreign estates or
trusts (as defined by Code Section 7701(a)(31)), each of which owns, actually or
constructively, 10% or more of our total combined voting power of all classes of
shares entitled to vote (“U.S. Shareholder”), we would be treated as a
controlled foreign corporation (“CFC”) under Subpart F of the Code.  This
classification could affect many complex results, one of which is the inclusion
by the U.S. shareholders of certain income of a CFC which is subject to current
U.S. tax.  The United States generally taxes U.S. Shareholders of a CFC
currently on their pro rata shares of the Subpart F income of the CFC. Such U.S.
Shareholders are generally treated as having received a current distribution out
of the CFC’s Subpart F income and are also subject to current U.S. tax on their
pro rata shares of increases in the CFC’s earnings invested in U.S. property.
 The foreign tax credit described above may reduce the U.S. tax on these
amounts.  In addition, under Section 1248 of the Code, gain from the sale
or exchange of shares of the CFC by a U.S. Holder which is or was a U.S.
Shareholder at any time during the five-year period ending on the date of the
sale or exchange is treated as ordinary income to the extent of earnings and
profits of the CFC attributable to the shares sold or exchanged.  If a
foreign corporation is both a PFIC and a CFC, the foreign corporation generally
will not be treated as a PFIC with respect to U.S. Shareholders of the CFC.
 This rule generally is effective for taxable years of U.S. Shareholders
beginning after 1997 and for taxable years of foreign corporations ending with
or within such taxable years of U.S. Shareholders.  Special rules apply to
U.S. Shareholders who are subject to the special taxation rules under Section
1291 discussed above with respect to a PFIC.  Because of the complexity of
Subpart F, a more detailed review of these rules is outside of the scope of this
discussion.  We do not believe that we currently qualify as a
CFC.  However, there can be no assurance that we will not be
considered a CFC for the current or any future taxable year.




Foreign Tax
Credit.




A U.S.
Holder who pays (or has withheld from distributions) Canadian or other foreign
income tax with respect to the ownership of our common shares  may be
entitled, at the option of the U.S. Holder, to either receive a deduction or a
tax credit for U.S. federal income tax purposes with respect to such foreign tax
paid or withheld. There are significant and complex limitations that apply to
the foreign tax credit, among which is the general limitation that the credit
cannot exceed the proportionate share of the U.S. Holder’s U.S. income tax
liability that the U.S. Holder’s "foreign source" income bears to his or its
worldwide taxable income. In applying this limitation, the various items of
income and deduction must be classified as either "foreign source" or "U.S.
source." Complex rules govern this classification process.







70





In addition, U.S. Holders that are corporations and
that own 10% or more of our voting stock may be entitled to an "indirect"
foreign tax credit under Section 902 of the Code with respect to the payment of
dividends by us under certain circumstances and subject to complex rules and
limitations.The
availability of the foreign tax credit and




Information Reporting;
Backup Withholding.




Certain
information reporting and backup withholding rules may apply with respect to
certain payments related to our common shares. In particular, a payor or
middleman within the U.S., or in certain cases outside the U.S., will be
required to withhold at a current rate of 28% (which rate is scheduled for
periodic adjustment) of any payments to a U.S. Holder regarding dividends paid
by the Company, or proceeds from the sale of, such common shares within the
U.S., if a U.S. Holder fails to furnish its correct taxpayer identification
number (generally on Form W-9) or otherwise fails to comply with, or establish
an exemption from, the backup withholding tax requirements. Any amounts withheld
under the U.S. backup withholding tax rules will be allowed as a refund or a
credit against the U.S. Holder’s U.S. federal income tax liability, provided the
required information is furnished to the IRS. U.S. U.S. Holders should consult
their own financial advisor, legal counsel or accountant regarding the
information reporting and backup withholding rules applicable to our common
shares.




10.F.                      Dividends
and Paying Agents




Not
applicable




10.G.                      Statement
by Experts




Not
applicable




10.H.                      Documents
on Display




Material
contracts and publicly available corporate records may be viewed at our
registered and records office located at Suite 1240, 1140 West Pender Street,
Vancouver, British Columbia.




We are a
reporting company under the Exchange Act and a “foreign private issuer” as
defined in the Exchange Act.   A foreign private issuer is exempt
from the provisions of the Exchange Act which prescribe the furnishing and
content of proxy statements to shareholders and relating to short swing profits
reporting and liability.  Readers may review a copy of our filings
with the SEC, including exhibits and schedules filed with it, at the public
reference facilities maintained by the Securities and Exchange Commission at 100
F Street N.E., Washington, D.C. 20549.  Copies of such material may also be
obtained from the Public Reference Section of the Securities and Exchange
Commission at 100 F Street, NE, Washington, D.C. 20549, at prescribed rates.
Information may be obtained regarding the Washington D.C. Public Reference Room
by calling the Securities and Exchange Commission at 1-800-SEC-0330 or by
contacting the Securities and Exchange Commission over the Internet at its
website at http://www.sec.gov.




ITEM 11.
            QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK




Currency
Exchange Rate Sensitivity




The
results of our operations are subject to currency translation risk and currency
transaction risk. Regarding currency translation risk, our operating results and
financial position are reported in Canadian dollars in our consolidated
financial statements. We incur certain costs in US dollars. The fluctuation of
the US dollar in relation to the Canadian dollar will therefore have an impact
upon our profitability and may also affect the value of our assets and the
amount of shareholders’ equity.







71





In
regards to transaction risk, our functional currency is the Canadian dollar and
our activities are predominantly executed using the Canadian dollar. We incur a
relatively small portion of our expenses in U.S. dollars. To date, we have
completed all of our equity financing in Canadian dollars. We have not entered
into any agreements or purchased any instruments to hedge any possible currency
risks at this time due to the small amount of exposure.




Interest
Rate Sensitivity




We
currently have no short term or long term debt requiring interest payments. As a
result, we have not entered into any agreement or purchased any instrument to
hedge against possible interest rate risks at this time.




Commodity
Price Sensitivity




Our
future revenue and profitability will be dependent, to a significant extent,
upon prevailing spot market prices for metals. In the past metal prices have
been volatile. Prices are subject to wide fluctuations in response to changes in
supply of and demand for metals, market uncertainty and a variety of additional
factors that are beyond our control. Our mineral properties are in the
exploration phase and accordingly we are not generating any operating revenues
and are therefore not subject to any short term volatility in the prices of
metals. As we are in the exploration phase, the above factors have had no
material impact on operations or income. We have not entered into any futures or
forward contracts.




ITEM 12.
            DESCRIPTION
      OF SECURITIES OTHER THAN EQUITY
SECURITIES




Not
applicable







72





PART
      II








ITEM
      13.
            DEFAULTS,
      DIVIDEND ARREARAGES AND
DELINQUENCIES




Not
applicable




ITEM 14.
            MATERIAL
      MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
      PROCEEDS




Not
applicable




ITEM
      15.
            CONTROLS
      AND PROCEDURES




Disclosure
Controls and Procedures




At the
end of the period covered by this report, an evaluation of the effectiveness of
the design and operations of our “disclosure controls and procedures” (as such
term is defined in Rule 13a-15(e) of the Exchange Act) was carried out by our
principal executive officer and principal financial officer. Based upon that
evaluation, our principal executive officer and principal financial officer have
concluded as of the end of the period covered by this report that the design and
operation of our disclosure controls and procedures are effective at the
reasonable assurance level to ensure that information required to be disclosed
by us in reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in SEC
rules and forms, and is accumulated and communicated to management, including
our principal executive officer and principal financial officer, to allow timely
decisions regarding required disclosures.




Notwithstanding
the foregoing, because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that our disclosure
controls and procedures will detect or uncover every situation involving the
failure of persons within our company and our subsidiaries to disclose material
information otherwise required to be set forth in our periodic
reports.  Our disclosure controls and procedures are designed to
provide reasonable assurance of achieving their objective of ensuring that
information required to be disclosed in the reports that we file or submit under
the Exchange Act is communicated to management to allow timely decisions
regarding required disclosure.




Management
Report on Internal Control Over Financial Reporting




The
management of Crosshair Exploration Mining Corp. (the “Company”) is responsible
for establishing and maintaining adequate internal control over financial
reporting. The Company’s internal control over financial reporting is designed
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles.





Management
conducted an evaluation of the effectiveness of company level internal controls
over financial reporting on a risk based approach using elements of the
framework in Internal Control - Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Because of its inherent
limitations, internal control over financial reporting may not prevent or detect
misstatements. Therefore, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement
preparation and presentation. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.





Based on
management’s assessment and those criteria, management believes that the
internal control over financial reporting as of April 30, 2009 was
effective.







73










Management’s
internal control report was not subject to attestation by the Corporation’s
independent registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Corporation to provide only
management’s report.





As
permitted by the Exchange Act Rules, we did not conduct an evaluation of the
effectiveness of internal controls at our Target Exploration and Mining
Corp. (“Target”) subsidiary and operation as that organization came into
existence on March 31, 2009.  The effectiveness of internal controls at
Target will be evaluated as of April 30, 2010.





Changes
in Internal Control Over Financial Reporting




Other
than those described elsewhere in this form 20-F, there was no change in our
internal control over financial reporting that occurred during our most recently
completed fiscal year ended April 30, 2009 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




Our Board
of Directors 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.




Our Board
of Directors has determined that Mr. Smith is an independent director in
accordance with the definition set forth in Section 803 of the American Stock
Exchange Company Guide.




ITEM
      16B.
            CODE
      OF ETHICS




We have
adopted a code of ethics that applies to our chief executive officer, the chief
financial officer, and other members of senior management. As adopted, the Code
of Ethics sets forth standards that are designed to prevent wrongdoing and to
promote:




·
            honesty
      and integrity, including the ethical handling of actual or apparent
      conflicts of interest between personal and professional
      relationships;




·
            full,
      fair, accurate, timely and understandable disclosure in reports and
      documents that we file with, or submit to, the SEC and in other public
      communications made by us;




·
            compliance
      with applicable governmental laws, rules and
  regulations;




·
            protection
      of and respect for the confidentiality of information acquired in the
      course of work;




·
            responsible
      use of and control over assets and
resources;




·
            the
      prompt internal reporting of violations of the Code of Ethics to an
      appropriate person or persons identified in the Code of Ethics;
      and




·
            accountability
      for adherence to the Code of
Ethics.




ITEM
      16C.
            PRINCIPAL
      ACCOUNTANT FEES AND SERVICES




Our Board
of Directors appointed Davidson & Company as independent auditors to audit
our financial statements for the fiscal year ended April 30, 2009. The aggregate
fees billed for professional services rendered by the aforementioned independent
auditor in their capacity as our principal accountant during the last fiscal
year is set forth below. Our Audit Committee pre-approved all of the following
amounts billed to us prior to incurring the expenses associated
therewith.







74










Financial
      Year Ending
                  Audit
      Fees1
                  Audit
      Related Fees2
                  Tax
      Fees3
                  All
      Other Fees42009/04/30
                  $50,000
                  $13,400
                  $1,200
                  $12,5002008/04/30
                  $50,000
                  $14,250
                  $1,750
                  $36,750







1The
aggregate fees billed for professional services rendered by our principal
accountants for the audit of our annual financial statements and other fees that
are normally provided by our principal accountant in connection with our
audits.




2The
aggregate fees billed for assurance and related services by our principal
accountant that are reasonably related to the performance of the audit or review
of our financial statements.




3The
aggregate fees billed for professional services rendered by our principal
accountant for tax compliance, tax advice and tax planning.




4Other
fees billed by our principal accountant included general review of certain
company documentation, such as our Form 20-F registration filing and, in 2009,
our bought deal prospectus offering, unrelated to auditing
activities.




Pre-Approval
Policies and Procedures:




All
services to be performed by our auditor must be approved in advance by the Audit
Committee. The Audit Committee has considered whether the provision of services
other than audit services is compatible with maintaining the auditors’
independence and has adopted a policy governing the provision of these services.
This policy requires the pre-approval by the Audit Committee of all audit and
non-audit services provided by the external auditor, other than anyde minimis non-audit
services allowed by applicable law or regulation.




Pre-approval
from the Audit Committee can be sought for planned engagements based on budgeted
or committed fees. No further approval is required to pay pre-approved fees.
Additional pre-approval is required for any increase in scope or in final
fees.




Of the
total aggregate fees paid by the Corporation to its accountants during the
fiscal year ended December 31, 2007, $nil, or 0% of the aggregate fees, were
approved by the Audit Committee pursuant to thede minimis exception
provided by Section (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.




ITEM 16D.
            EXEMPTIONS
      FROM THE LISTING STANDARDS FOR AUDIT
COMMITTEES




Not
applicable




ITEM
      16E.
            PURCHASES
      OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
    PURCHASERS




Not
applicable




ITEM 16F.
            CHANGES IN REGISTRANT’S CERTIFYING
      ACCOUNTANT




Not applicable




ITEM 16G.
            CORPORATE
  GOVERNANCE




Our common shares are listed on NYSE
Amex.  Section 110 of the NYSE Amex Company Guide permits NYSE Amex to
consider the laws, customs and practices of the foreign issuer’s country of
domicile in relaxing certain NYSE Amex listing criteria, and to grant exemptions
from NYSE Amex listing criteria based on these considerations. A corporation
seeking relief under these provisions is required to provide written
certification from independent local counsel that the non-complying practice is
not prohibited by home country law. Significant ways in which our corporate
governance practices differ from the NYSE Amex standards followed by domestic







75





companies include a reduced quorum requirement for
shareholder meetings (two shareholders holding at least 5% of the shares
entitled to be voted versus one-third of the outstanding shares under NYSE Amex
standards), no requirement for shareholder approval of material amendments to
outstanding stock options (required under NYSE Amex standards), and a higher
threshold requirement for obtaining shareholder approval of large issuances of
common shares (required when the issuance could result in a 25% increase in the
number of outstanding common shares, as opposed to 20% under NYSE Amex
standards).










76




PART
      III





ITEM
      17.
              FINANCIAL
      STATEMENTS




Our
financial statements are stated in Canadian Dollars and are prepared in
accordance with Canadian 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 9, 2009




Balance
Sheet at April 30, 2009 and 2008




Statement
of Operations and Deficit for the years ended


April 30,
2009, 2008 and 2007




Statement
of Cash Flows for the years ended


April 30,
2009, 2008 and 2007




Notes to
the Financial Statements for the year ended


April 30,
2009







77





CROSSHAIR
EXPLORATION & MINING CORP.
   CONSOLIDATED
FINANCIAL STATEMENTS
 
 
 APRIL
30, 2009
 
 (Expressed
in Canadian Dollars)
 
 
 
 
 
 
  The
accompanying notes are an integral part of these consolidated financial
statements.
 78
  DAVIDSON & COMPANY
  LLPChartered
      Accountants:  A Partnership of Incorporated
      Professionals
 
   INDEPENDENT
AUDITORS’ REPORT
 
 
 To the
Shareholders of
 Crosshair
Exploration & Mining Corp.
 
 
 We have
audited the consolidated balance sheets of Crosshair Exploration & Mining
Corp. as at April 30, 2009 and 2008 and the consolidated statements of
operations, shareholders' equity and cash flows for the years ended April 30,
2009, 2008 and 2007.  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 consolidated  financial statements present fairly, in
all material respects, the financial position of the Company as at April 30,
2009 and 2008 and the results of its operations and cash flows for the years
ended April 30, 2009, 2008 and 2007 in accordance with Canadian generally
accepted accounting principles.
 
 "DAVIDSON
& COMPANY LLP"
 Vancouver,
      Canada
              Chartered
      AccountantsJune
      9, 2009
 
 
 COMMENTS
BY AUDITORS FOR U.S. READERS ON CANADA –
 U.S.
REPORTING DIFFERENCE
 
 In the
United States, reporting standards for auditors require the addition of an
explanatory paragraph (following the opinion paragraph) when the financial
statements are affected by conditions and events that cast substantial doubt on
the Company's ability to continue as a going concern, such as those described in
Note 1 to the financial statements.  Our report to the shareholders
dated June 9, 2009 is expressed in accordance with Canadian reporting standards
which do not permit a reference to such events and conditions in the auditors'
report when these are adequately disclosed in the financial
statements.
 
 
 "DAVIDSON
& COMPANY LLP"
 
 Vancouver,
      Canada
              Chartered
      AccountantsJune
      9, 2009
   1200 -
609 Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, BC, Canada, V7Y
1G6
 Telephone
(604) 687-0947  Fax (604) 687-6172
  79
  
 CROSSHAIR
EXPLORATION & MINING CORP.
 CONSOLIDATED
BALANCE SHEETS
 AS AT
APRIL 30
 (Expressed
in Canadian Dollars)
   ASSETS
                                                      
                                                      2009
                                                      
                                                      
                                                      2008Current
      assetsCash and cash
      equivalents
                                                      
                                                      $
                                                      2,827,274
                                                      
                                                      
                                                      $
                                                      13,275,874Marketable securities (cost:
      $3,695,052 & $2,695,052, respectively)
                                                      
                                                      
                                                      292,156
                                                      
                                                      
                                                      
                                                      582,351Receivables
                                                      
                                                      
                                                      44,544
                                                      
                                                      
                                                      
                                                      442,519Prepaid
    expenses
                                                      
                                                      
                                                      317,062
                                                      
                                                      
                                                      
                                                      273,8283,481,036
                                                      
                                                      
                                                      
                                                      14,574,572Other
      receivables (net of provision for bad debt)
                                                      
                                                      
                                                      31,000
                                                      
                                                      
                                                      
                                                      115,826Reclamation
      bonds
                                                      
                                                      
                                                      34,109
                                                      
                                                      
                                                      
                                                      -Equipment(Note
      3)
                                                      
                                                      
                                                      482,686
                                                      
                                                      
                                                      
                                                      507,883Mineral properties (Note
      5)
                                                      
                                                      
                                                      29,336,828
                                                      
                                                      
                                                      
                                                      27,071,981$
                                                      33,365,659
                                                      
                                                      
                                                      $
                                                      42,270,262LIABILITIES
      AND SHAREHOLDERS' EQUITYCurrent
      liabilitiesPayables and accrued
      liabilities
                                                      
                                                      $
                                                      741,369
                                                      
                                                      
                                                      $
                                                      1,192,271Due to related parties (Note
      10)
                                                      
                                                      
                                                      98,498
                                                      
                                                      
                                                      
                                                      110,295839,867
                                                      
                                                      
                                                      
                                                      1,302,566Future reclamation costs
      (Note 6)
                                                      
                                                      
                                                      676,484
                                                      
                                                      
                                                      
                                                      172,2381,516,351
                                                      
                                                      
                                                      
                                                      1,474,804Shareholders'
      equityCapital stock  (Note
      8)AuthorizedUnlimited number of common
      shares without par valueIssued: 112,184,313 (April 30,
      2008 – 84,595,825) common shares
                                                      
                                                      
                                                      67,793,186
                                                      
                                                      
                                                      
                                                      60,948,053Contributed surplus (Note
      8)
                                                      
                                                      
                                                      15,429,680
                                                      
                                                      
                                                      
                                                      10,496,726Deficit
                                                      
                                                      
                                                      (51,373,558
                                                      )
                                                      
                                                      
                                                      (30,649,321
                                                      )31,849,308
                                                      
                                                      
                                                      
                                                      40,795,458$
                                                      33,365,659
                                                      
                                                      
                                                      $
                                                      42,270,262
  Nature
and continuance of operations (Note 1)
 Commitments
(Note 7)
 Contingency
(Note 15)
 Subsequent
event (Note 16)
    
 On
      behalf of the Board:“Mark
      J. Morabito”
              Director
              “Ian
      Smith”
              DirectorMark
      J. Morabito
              
              Ian
      B. Smith
  
 The
accompanying notes are an integral part of these consolidated financial
statements.
 80
  CROSSHAIR
EXPLORATION & MINING CORP.
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 YEARS
ENDED APRIL 30
 (Expressed
in Canadian Dollars)
 
 2009
                  
                  
                  2008
                  
                  
                  2007EXPENSESAccretion (Note
    6)
                  
                  $
                  28,089
                  
                  
                  $
                  5,502
                  
                  
                  $
                  -Amortization
                  
                  
                  199,213
                  
                  
                  
                  148,138
                  
                  
                  
                  43,882Audit and
      accounting
                  
                  
                  171,486
                  
                  
                  
                  102,944
                  
                  
                  
                  38,604Provision
      for bad debt
                  
                  
                  93,270
                  
                  
                  
                  -
                  
                  
                  
                  -Consulting
                  
                  
                  174,541
                  
                  
                  
                  192,359
                  
                  
                  
                  171,724Directors fees (Note
      10)
                  
                  
                  100,500
                  
                  
                  
                  108,500
                  
                  
                  
                  60,500Insurance
                  
                  
                  79,272
                  
                  
                  
                  68,426
                  
                  
                  
                  35,897Investor
    relations
                  
                  
                  167,570
                  
                  
                  
                  452,988
                  
                  
                  
                  308,548Legal (Note
10)
                  
                  
                  225,048
                  
                  
                  
                  128,045
                  
                  
                  
                  212,486Management fees (Note
      10)
                  
                  
                  39,583
                  
                  
                  
                  71,250
                  
                  
                  
                  50,000Office and
      administration
                  
                  
                  331,776
                  
                  
                  
                  623,154
                  
                  
                  
                  562,642Property
      Investigations
                  
                  
                  1,118
                  
                  
                  
                  -
                  
                  
                  
                  1,602Rent
                  
                  
                  190,232
                  
                  
                  
                  156,358
                  
                  
                  
                  83,979Stock-based compensation (Note
      8)
                  
                  
                  3,312,632
                  
                  
                  
                  7,097,948
                  
                  
                  
                  3,696,601Transfer agent and filing
      fees
                  
                  
                  353,445
                  
                  
                  
                  330,777
                  
                  
                  
                  87,017Travel
                  
                  
                  95,546
                  
                  
                  
                  273,115
                  
                  
                  
                  306,978Wages and
    salaries
                  
                  
                  1,351,582
                  
                  
                  
                  1,292,464
                  
                  
                  
                  923,7436,914,903
                  
                  
                  
                  11,051,968
                  
                  
                  
                  6,584,203OTHER
      INCOME (EXPENSES)Interest
income
                  
                  
                  175,425
                  
                  
                  
                  407,731
                  
                  
                  
                  345,287Management
    income
                  
                  
                  -
                  
                  
                  
                  20,000
                  
                  
                  
                  40,000Gain
      on disposition of capital assets
                  
                  
                  21,516
                  
                  
                  
                  -
                  
                  
                  
                  -Gain
      on disposition of Sinbad Claims
                  
                  
                  -
                  
                  
                  
                  15,849
                  
                  
                  
                  -Loss
      on foreign exchange
                  
                  
                  (17,380
                  )
                  
                  
                  -
                  
                  
                  
                  -Realized
      gains–marketable securities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  701,494Unrealized
      losses–marketable securities
                  
                  
                  (1,290,195
                  )
                  
                  
                  (2,077,112
                  )
                  
                  
                  (35,589
                  )Impairment/
      write-off of mineral properties
                  
                  
                  (14,000,000
                  )
                  
                  
                  (247,704
                  )
                  
                  
                  -(15,110,634
                  )
                  
                  
                  (1,881,236
                  )
                  
                  
                  1,051,192Loss
      before income tax
                  
                  $
                  (22,025,537
                  )
                  
                  $
                  (12,933,204
                  )
                  
                  $
                  (5,533,011
                  )Future
      income tax recovery (Note 11)
                  
                  
                  1,301,300
                  
                  
                  
                  -
                  
                  
                  
                  -Loss
      for the year
                  
                  $
                  (20,724,237
                  )
                  
                  $
                  (12,933,204
                  )
                  
                  $
                  (5,533,011
                  )Basic
      and diluted loss per common share
                  
                  $
                  (0.22
                  )
                  
                  $
                  (0.18
                  )
                  
                  $
                  (0.09
                  )Weighted
      average number of common shares outstanding
                  
                  
                  93,584,687
                  
                  
                  
                  72,997,081
                  
                  
                  
                  62,434,069
 
 
  The
accompanying notes are an integral part of these consolidated financial
statements.
 81
  CROSSHAIR
EXPLORATION & MINING CORP.
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 YEARS
ENDED APRIL 30
 (Expressed
in Canadian Dollars)
 2009
                  
                  
                  2008
                  
                  
                  2007CASH
      FLOWS FROM OPERATING ACTIVITIESLoss for the
    year
                  
                  $
                  (20,724,237
                  )
                  
                  $
                  (12,933,204
                  )
                  
                  $
                  (5,533,011
                  )Items not affecting
      cash:Accretion
                  
                  
                  28,089
                  
                  
                  
                  5,502
                  
                  
                  
                  -Accrued
      income on other receivables
                  
                  
                  (8,444
                  )
                  
                  
                  -
                  
                  
                  
                  -Amortization
                  
                  
                  199,213
                  
                  
                  
                  148,138
                  
                  
                  
                  43,882Provision
      for bad debt
                  
                  
                  93,270
                  
                  
                  
                  -
                  
                  
                  
                  -Future
      income tax recovery
                  
                  
                  (1,301,300
                  )
                  
                  
                  -
                  
                  
                  
                  -Stock-based
      compensation
                  
                  
                  3,312,632
                  
                  
                  
                  7,097,948
                  
                  
                  
                  3,696,601Unrealized
      gain–foreign exchange
                  
                  
                  (29,238
                  )
                  
                  
                  -
                  
                  
                  
                  -Unrealized
      losses–marketable securities
                  
                  
                  1,290,195
                  
                  
                  
                  2,077,112
                  
                  
                  
                  35,589Realized
      gain – marketable securities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (701,494
                  )Write-off
      / impairment of mineral properties
                  
                  
                  14,000,000
                  
                  
                  
                  247,704
                  
                  
                  
                  -Gain on
      disposition of Sinbad Claims
                  
                  
                  -
                  
                  
                  
                  (15,849
                  )
                  
                  
                  -Acquisition
      of marketable securities
                  
                  
                  (1,000,000
                  )
                  
                  
                  (872,076
                  )
                  
                  
                  (1,121,482
                  )Non-cash working capital item
      changesReceivables
                  
                  
                  426,812
                  
                  
                  
                  (113,416
                  )
                  
                  
                  (215,602
                  )Due
      from related party
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  4,167Prepaid
expenses
                  
                  
                  (43,234
                  )
                  
                  
                  (70,390
                  )
                  
                  
                  (64,646
                  )Payables and accrued
      liabilities
                  
                  
                  353,529
                  
                  
                  
                  (1,163,602
                  )
                  
                  
                  52,531Due
      to related parties
                  
                  
                  (11,797
                  )
                  
                  
                  91,054
                  
                  
                  
                  5,020Net cash used in operating
      activities
                  
                  
                  (3,414,510
                  )
                  
                  
                  (5,501,079
                  )
                  
                  
                  (3,798,445
                  )CASH
      FLOWS FROM INVESTING ACTIVITIESAcquisition
      costs on acquisition of Target
                  
                  
                  (195,271
                  )
                  
                  
                  -
                  
                  
                  
                  -Cash
      acquired on acquisition of Target
                  
                  
                  210,572
                  
                  
                  
                  -
                  
                  
                  
                  -Proceeds
      on sale of mineral property
                  
                  
                  -
                  
                  
                  
                  31,698
                  
                  
                  
                  -Mineral
    properties
                  
                  
                  (5,965,764
                  )
                  
                  
                  (10,587,059
                  )
                  
                  
                  (8,480,906
                  )Acquisition of
      equipment
                  
                  
                  (103,116
                  )
                  
                  
                  (289,941
                  )
                  
                  
                  (283,593
                  )Net cash used in investing
      activities
                  
                  
                  (6,053,579
                  )
                  
                  
                  (10,845,342
                  )
                  
                  
                  (8,764,499
                  )CASH
      FLOWS FROM FINANCING ACTIVITIESIssuance of shares for cash,
      net of costs
                  
                  
                  (16,992
                  )
                  
                  
                  15,310,838
                  
                  
                  
                  12,926,385Advances
      made to Target
                  
                  
                  (963,519
                  )
                  
                  
                  -
                  
                  
                  
                  -Net cash provided by (used in)
      financing activities
                  
                  
                  (980,511
                  )
                  
                  
                  15,310,838
                  
                  
                  
                  12,926,385Net
      change in cash and cash equivalents during the year
                  
                  
                  (10,448,600
                  )
                  
                  
                  (1,035,543
                  )
                  
                  
                  363,411Cash
      and cash equivalents, beginning of the year
                  
                  
                  13,275,874
                  
                  
                  
                  14,311,417
                  
                  
                  
                  13,947,976Cash
      and cash equivalents, end of the year
                  
                  $
                  2,827,274
                  
                  
                  $
                  13,275,874
                  
                  
                  $
                  14,311,417Cash
      and cash equivalentsCash
                  
                  $
                  787,274
                  
                  
                  $
                  4,927,439
                  
                  
                  $
                  28,402Liquid short term
      investments
                  
                  
                  2,040,000
                  
                  
                  
                  8,348,435
                  
                  
                  
                  14,283,015$
                  2,827,274
                  
                  
                  $
                  13,275,874
                  
                  
                  $
                  14,311,417
 Supplemental
disclosures with respect to cash flows (Note 9)
   The
accompanying notes are an integral part of these consolidated financial
statements.
 82
  
 CROSSHAIR
EXPLORATION & MINING CORP.
 CONSOLIDATED
STATEMENT OF SHAREHOLDERS’ EQUITY
 (Expressed
in Canadian Dollars)
 
 Capital
      StockNumber
      of Shares
                                  
                                  
                                  Amount
                                  
                                  
                                  Contributed
                                    Surplus
                                  
                                  
                                  Deficit
                                  
                                  
                                  TotalBalance
      at April 30, 2006
                                  
                                  
                                  58,356,045
                                  
                                  
                                  $
                                  29,135,054
                                  
                                  
                                  $
                                  1,188,003
                                  
                                  
                                  $
                                  (12,183,106
                                  )
                                  
                                  $
                                  18,139,951Issued
      for:Property
      acquisition
                                  
                                  
                                  445,000
                                  
                                  
                                  
                                  1,078,150
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  1,078,150Exercise of stock
      options
                                  
                                  
                                  2,672,764
                                  
                                  
                                  
                                  2,400,146
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  2,400,146Exercise of agent
      warrants
                                  
                                  
                                  273,863
                                  
                                  
                                  
                                  277,571
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  277,571Exercise of
      warrants
                                  
                                  
                                  8,674,025
                                  
                                  
                                  
                                  10,537,396
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  10,537,396Incentive program
      participation
                                  
                                  
                                  490,375
                                  
                                  
                                  
                                  707,343
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  707,343Stock-based
      compensation for the year
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  3,696,601
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  3,696,601Less:
      Fair market value of options
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (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
                                  )
                                  
                                  
                                  30,308,076Issued
      for:Private
    placement
                                  
                                  
                                  11,575,000
                                  
                                  
                                  
                                  15,005,000
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  15,005,000Share
      issuance costs
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (1,399,794
                                  )
                                  
                                  
                                  238,392
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (1,161,402
                                  )Property
      acquisition
                                  
                                  
                                  420,000
                                  
                                  
                                  
                                  1,011,800
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  1,011,800Return to
    treasury
                                  
                                  
                                  (114
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Exercise of stock
      options
                                  
                                  
                                  1,288,984
                                  
                                  
                                  
                                  1,694,828
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  1,694,828Exercise of agent
      warrants
                                  
                                  
                                  37,383
                                  
                                  
                                  
                                  47,434
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  47,434Exercise of
      warrants
                                  
                                  
                                  362,500
                                  
                                  
                                  
                                  453,125
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  453,125Stock-based
      compensation for the year
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  7,097,948
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  7,097,948Less:
      fair market value of options and warrants
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (728,147
                                  )
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (728,147
                                  )Loss
      for the year
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (12,933,204
                                  )
                                  
                                  
                                  (12,933,204
                                  )Balance
      at April 30, 2008
                                  
                                  
                                  84,595,825
                                  
                                  
                                  
                                  60,948,053
                                  
                                  
                                  
                                  10,496,726
                                  
                                  
                                  
                                  (30,649,321
                                  )
                                  
                                  
                                  40,795,458
 Issued
      for:Share
      issuance costs
                                
                                
                                -
                                
                                
                                
                                (16,992
                                )
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (16,992
                                )Property
      acquisition
                                
                                
                                12,925,000
                                
                                
                                
                                5,969,008
                                
                                
                                
                                1,500,418
                                
                                
                                
                                -
                                
                                
                                
                                7,469,426Target
      plan of arrangement (Note 4)
                                
                                
                                14,663,488
                                
                                
                                
                                2,194,417
                                
                                
                                
                                119,904
                                
                                
                                
                                -
                                
                                
                                
                                2,314,321Stock-based
      compensation for the year
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                3,312,632
                                
                                
                                
                                -
                                
                                
                                
                                3,312,632Tax
      benefit renounced to flow-through shareholders
                                
                                
                                -
                                
                                
                                
                                (1,301,300
                                )
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (1,301,300
                                )Loss
      for the year
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (20,724,237
                                )
                                
                                
                                (20,724,237
                                )Balance
      at April 30, 2009
                                
                                
                                112,184,313
                                
                                
                                $
                                67,793,186
                                
                                
                                $
                                15,429,680
                                
                                
                                $
                                (51,373,558
                                )
                                
                                $
                                31,849,308
  
 The
accompanying notes are an integral part of these consolidated financial
statements.
 83
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
 
 1.           NATURE
AND CONTINUANCE OF OPERATIONS
  Crosshair
Exploration & Mining Corp. (the "Company" or “Crosshair”) was incorporated
under the laws of British Columbia on September 2, 1966.  Its
principal business activities are the acquisition, exploration and development
of mineral properties. All of the Company’s resource properties are located in
North America.
  The
Company is in the process of exploring and developing its mineral properties and
has not yet determined whether the properties contain ore reserves that are
economically recoverable.  The recoverability of the amounts shown for
mineral 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 using Canadian generally accepted
accounting principles (“GAAP”) on a going concern basis which assumes that the
Company will be able to realize its assets and discharge its liabilities in the
normal course of business for the foreseeable future.  The continuing
operations of the Company are dependent upon its ability to continue to raise
adequate financing and to commence profitable operations in the
future.
  The
current market conditions and volatility increase the uncertainty of the
Company’s ability to continue as a going concern given the need to both curtail
expenditures and to raise additional funds. The Company is experiencing, and has
experienced, negative operating cash flows. The Company will continue to search
for new or alternate sources of financing but anticipates that the current
market conditions may impact the ability to source such funds.
 
  2.           BASIS
OF PRESENTATION
  New
Canadian Accounting Pronouncements
 
 Capital
disclosures
 
 In
December 2006, the CICA issued Handbook Section 1535, Capital Disclosures, which
establishes standards for disclosing information about an entity’s capital and
how it is managed.  The entity’s disclosure should include information
about its objectives, policies and processes for managing capital and disclosure
whether or not it has complied and the consequences of non-compliance, with any
capital requirements to which it is subject.  Refer to Note
13.
 
 Financial
instruments
 
 Disclosures
and financial instruments – presentation.  In December 2006, the CICA
issued Handbook Sections 3862, Financial Instruments – Disclosures, and 3863,
Financial Instruments – Presentation.  Section 3862 modifies the
disclosure requirements of Section 3861, Financial Instruments – Disclosure and
Presentation, including required disclosure for the assessment of the
significance of financial instruments for an entity’s financial position and
performance and of the extent of risks arising from financial instruments to
which the Company is exposed and how the Company manages those risks, whereas
Section 3863 carries forward the presentation related requirements of Section
3861.  Refer to Note 14.
 
 Going
concern
 
 Amendments
to Handbook Section 1400, General Standards of Financial Statement Presentation,
require management to assess an entity’s ability to continue as a going
concern.  When management is aware of material uncertainties related
to events or conditions that may cast doubt on an entity’s ability to continue
as a going concern, those uncertainties must be disclosed.  In
assessing the appropriateness of the going concern assumption, the standard
requires management to consider all available information about the future,
which is at least, but not limited to, twelve months from the balance sheet
date.  Refer to Note 1
  84
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
 
 
 2.           BASIS
OF PRESENTATION (cont’d...)
  New
Canadian Accounting Pronouncements (cont’d...)
  Credit
      Risk and the Fair Value of Financial Assets and Liabilities
      (EIC-173)
 
 In
January 2009, the Emerging Issues Committee (“EIC”) issued EIC -173 “Credit Risk
and the Fair Value of Financial Assets and Financial Liabilities.” This abstract
requires companies to take counterparty credit risk into account when measuring
the fair value of financial assets and liabilities, including derivatives. This
new standard is effective for the Company’s annual consolidated financial
statements for the year ended April 30, 2009. The  Company has
performed an assessment as of April 30, 2009 and believes there to be no impact
on its financial statements due to this new standard.
 
 Mining
      Exploration Costs (EIC-174)
 
 On
      March 27, 2009, the CICA approved EIC-174 “Mining Exploration Costs.” This
      guidance clarified that an entity that has initially capitalized
      exploration costs has an obligation in the current and subsequent
      accounting periods to test such costs for recoverability whenever events
      or changes in circumstances indicate that its carrying amount may not be
      recoverable.
 
 This new
standard is effective for the Company’s annual consolidated financial statements
for the year ended April 30, 2009. The Company has performed an assessment as of
April 30, 2009 and believes there to be no impact on its financial statements
due to this new standard.
 
 Goodwill
and intangible assets (Section 3064)
 
 In
February 2008, the CICA issued Section 3064, “Goodwill and Intangible Assets”,
which replaces Section 3062, “Goodwill and Other Intangible Assets”. This new
standard provides guidance on the recognition, measurement, presentation and
disclosure of goodwill and intangible assets. Concurrent with the adoption of
this standard, EIC 27, “Revenue and Expenditures in the Pre-operating Period”,
will be withdrawn. The Company does not expect the adoption of this section to
have a significant effect on its financial statements.  This section
will be adopted effective May 1, 2009.
 
 Business
      combinations (Section 1582)
 
 In
      January 2009, the CICA issued Section 1582 “Business Combinations” to
      replace Section 1581. Prospective application of the standard will be
      effective May 1, 2011, with early adoption permitted. This new standard
      effectively harmonizes the business combinations standard under Canadian
      GAAP with International Financial Reporting Standards. The new standard
      revises guidance on the determination of the carrying amount of the assets
      acquired and liabilities assumed, goodwill and accounting for
      non-controlling interests at the time of a business combination. The
      Company does not expect the adoption of this section to have a significant
      effect on its financial statements.
 
 Consolidated
      Financial Statements (Section 1601) and Non-Controlling Interests (Section
      1602)
 
 The
      CICA concurrently issued Section 1601 “Consolidated Financial Statements”
      and Section 1602 “Non-Controlling Interests” which replace Section 1600
      “Consolidated Financial Statements.” Section 1601 provides revised
      guidance on the preparation of consolidated financial statements and
      Section 1602 addresses accounting for non-controlling interests in
      consolidated financial statements subsequent to a business combination.
      Theses standards are effective May 1, 2011, unless they are early adopted
      at the same time as Section 1582 “Business Combinations.” The Company does
      not expect the adoption of this section to have a significant effect on
      its financial statements.
  85
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
 
 
 2.           BASIS
OF PRESENTATION (cont’d...)
  New
Canadian Accounting Pronouncement (cont’d...)
  International
Financial Reporting Standards (“IFRS”)
  In 2006,
the Canadian Accounting Standards Board (“AcSB”) published a new strategic
plan that will significantly affect financial reporting requirements for
Canadian companies. The AcSB strategic plan outlines the convergence of
Canadian GAAP with IFRS over an expected five year transitional period. In
February 2008 the AcSB announced that 2011 is the changeover date for
publicly-listed companies to use IFRS, replacing Canadian GAAP. This date is
for interim and annual financial statements relating to fiscal years
beginning on or after 1 January 2011. The transition date of May 1, 2011
will require the restatement for comparative purposes of amounts reported
by the Company for the year ended April 30, 2011. In July 2008 AcSB
announced that early adoption will be allowed in 2009 subject to seeking
exemptive relief.  The conversion to IFRS may have a material
effect on our:
 
 ·           reported
financial position and results of operations;
  ·
              systems
      of internal controls and procedures over financial reporting, including
      related business processes; information technology and data
      systems;
  ·           disclosure
controls and procedures;
  ·           current
financial reporting training curriculum; and
  ·
              downstream
      business activities such as our corporate hedging programs, joint venture
      agreements and other contractual arrangements, debt covenants,
      compensation programs and tax planning
  arrangements.
  The
Company is currently assessing the financial reporting impact of the transition
to IFRS and the changeover date. We expect to complete the detailed IFRS
conversion plan by October 31, 2009. We are in the process of completing our
detailed technical analysis of Canadian GAAP-IFRS accounting differences.
Furthermore, IFRS accounting standards, and the interpretation thereof, are
constantly evolving and therefore are subject to change through the end of 2011.
Consequently, we will continuously monitor IFRS accounting developments and
update our conversion plan and public disclosure as necessary.
 
 Significant
accounting policies
 
 Consolidation
  These
consolidated financial statements include the accounts of Target Exploration
& Mining Corp, and 448018 Exploration Inc. (Note 4); both of which are
wholly owned subsidiaries. All significant inter-company transactions and
balances have been eliminated.
 
 Foreign
exchange
  The
financial position and results of the Company’s integrated foreign operations
have been translated into
 Canadian
funds using the temporal method as follows:
 
 i)
Monetary items, at the rate of exchange prevailing at the consolidated balance
sheet date;
 ii)
Non-monetary items, at the historical rate of exchange; and
 iii)
Exploration and administration costs, at the average rate during the year in
which the transaction occurred.
 
 Gains and
losses arising on currency translation are included in operations for the
year.
   86
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
 
 2.
              BASIS
      OF PRESENTATION (cont’d...)
 
 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.
  Financial
Instruments
  The
Company follows CICA Handbook Section 1530 “Comprehensive Income” (“Section
1530”), Section 3251 “Equity”, Section 3855 “Financial Instruments – Recognition
and Measurement” (“Section 3855”), Section 3861 “Financial Instruments –
Disclosure and Presentation” and Section 3865 “Hedges”.  These
sections, provide requirements for the recognition and measurement of financial
instruments and on the use of hedge accounting.  Section 1530
establishes standards for reporting and presenting comprehensive income which is
defined as the change in equity from transactions and other events from
non-owner sources.  Other comprehensive income refers to items
recognized in comprehensive income but that are excluded from net income
calculated in accordance with Canadian generally accepted accounting
principles.
 
 Under
Section 3855, all financial instruments are classified into five categories:
held-for-trading, held-to-maturity investments, loans and receivables,
available-for-sale financial assets or other financial
liabilities.  All financial instruments and derivatives are measured
in the balance sheet at fair value except for loans and receivables,
held-to-maturity investments and other financial liabilities which are measured
at amortized cost.  Subsequent measurement and changes in fair value
will depend on their initial classification as follows: (1) held-for-trading
financial assets are measured at fair value and changes in fair value are
recognized in net income; (2) available-for-sale financial instruments are
measured at fair value with changes in fair value recorded in other
comprehensive income until the instrument is derecognized or impaired; and (3)
all derivative instruments, including embedded derivatives, are recorded in the
balance sheet at fair value and changes in fair value are recorded in other
comprehensive income.
 
 The
Company has classified its cash and cash equivalents and marketable securities
as held-for-trading.  Receivables and other receivables are classified
as loans and receivables.  Accounts payable and accrued liabilities
and due to related parties are classified as other financial liabilities, all of
which are measured at amortized cost.  The Company has elected to
measure all derivatives and embedded derivatives at fair value and the Company
maintained its policy not to use hedge accounting.
 
 Section
3855 also provides guidance on accounting for transaction costs incurred upon
issuance of debt instruments or modification of a financial
liability.  Transaction costs are not deducted from the financial
liability and are amortized using the effective interest method over the life of
the related liability.
 
 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.
   87
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 2.           BASIS
OF PRESENTATION (cont’d...)
  
  Significant accounting policies
(cont’d...)
  Equipment
  Equipment
is recorded at cost.  The equipment noted below is amortized over its
useful lives using the following annual rates and methods:
  Computer
      and office equipment
                  30%
                  Declining
      balanceComputer
      software
                  45%
                  Declining
      balanceExploration
      equipment
                  20%
                  Declining
      balanceFurniture
      and fixtures
                  20%
                  Declining
      balanceLeasehold
      improvements
                  3
      years
                  Straight-line
 
  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
refunded to the Company 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.
  Future reclamation
costs
  The
Company follows the recommendations of CICA Handbook Section 3110, Asset
Retirement Obligations. This section requires recognition of a legal liability
for obligations relating to retirement of property, plant, and equipment, and
arising from the acquisition, construction, development, or normal operation of
those assets. Such asset retirement cost must be recognized at fair value, when
a reasonable estimate of fair value can be made, in the period in which it is
incurred, added to the carrying value of the asset, and amortized into income on
a systematic basis over its useful life. If the fair value of the liability
decreases due to changes in future cash flow estimates, a corresponding decrease
in the related asset is recorded. If the reduction exceeds the value of the
related asset, the remaining amount is reduced through earnings.
  
   88
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 2.           BASIS
OF PRESENTATION (cont’d...)
 
 Significant accounting policies
(cont’d...)
  Flow-through
shares
  Canadian
Income Tax Legislation permits an enterprise to issue securities referred to as
flow-through shares, whereby the investor can claim the tax deductions arising
from the renunciation of the related resource expenditures. When resource
expenditures are renounced to the investors and the Company has reasonable
assurance that the expenditures will be completed, future income tax liabilities
are recognized with a corresponding reduction to share capital.
  If a
company has sufficient unused tax losses and deductions to offset all or part of
the future income tax liabilities and no future income tax assets have been
previously recognized on such losses, a portion of such unrecognized losses
(losses multiplied by the effective corporate tax rate) is recorded as income up
to the amount of the future income tax liability that was previously recognized
on the renounced expenditures.
  Loss per
share
  Basic
loss per share is computed by dividing the loss for the year by the weighted
average number of common shares outstanding during the year.
  For
diluted per share computations, assumptions are made regarding potential common
shares outstanding during the year.  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 year, 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 year, 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.
  Impairment of long-lived
assets
 
 A
long-lived asset is tested for recoverability whenever events or changes in
circumstances indicate that its carrying amount may not be
recoverable.  An impairment loss is recognized when the carrying
amount of a long-lived asset exceeds its fair value.  For purposes of
recognition and measurement of an impairment loss, a long-lived asset is grouped
with other assets and liabilities to form an asset group at the lowest level for
which identifiable cash flows are largely independent of the cash flows of other
assets and liabilities.  Estimates of future cash flows used to test
recoverability of a long-lived asset include only the future cash flows that are
directly associated with, and that are expected to arise as a direct result of,
its use and eventual disposition.
 
  89
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 2.           BASIS
OF PRESENTATION (cont’d...)
  
  Significant accounting policies
(cont’d...)
  Reclassifications
  Certain
of the comparative figures for the prior year have been reclassified to conform
with the presentation adopted in the current year.
  
  
 3.           EQUIPMENT
  April
      30, 2009
                  
                  
                  April
      30, 2008Description
                  
                  Cost
                  
                  
                  Accumulated
      Amortization
                  
                  
                  Net
                    Book
      Value
                  
                  
                  Cost
                  
                  
                  Accumulated
      Amortization
                  
                  
                  Net
                    Book
      ValueFurniture
      & fixtures
                  
                  $
                  203,254
                  
                  
                  $
                  135,082
                  
                  
                  $
                  68,172
                  
                  
                  $
                  190,014
                  
                  
                  $
                  49,702
                  
                  
                  $
                  140,312Computer
      & office equipment
                  
                  
                  157,968
                  
                  
                  
                  70,360
                  
                  
                  
                  87,608
                  
                  
                  
                  109,065
                  
                  
                  
                  42,410
                  
                  
                  
                  66,655Computer
      software
                  
                  
                  60,953
                  
                  
                  
                  37,720
                  
                  
                  
                  23,233
                  
                  
                  
                  48,147
                  
                  
                  
                  24,736
                  
                  
                  
                  23,411Exploration
      equipment
                  
                  
                  396,292
                  
                  
                  
                  130,304
                  
                  
                  
                  265,988
                  
                  
                  
                  294,953
                  
                  
                  
                  76,667
                  
                  
                  
                  218,286Leasehold
      improvements
                  
                  
                  69,986
                  
                  
                  
                  32,301
                  
                  
                  
                  37,685
                  
                  
                  
                  69,986
                  
                  
                  
                  10,767
                  
                  
                  
                  59,219$
                  888,453
                  
                  
                  $
                  405,767
                  
                  
                  $
                  482,686
                  
                  
                  $
                  712,165
                  
                  
                  $
                  204,282
                  
                  
                  $
                  507,883
 
  
   90
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 4.           ACQUISITION
  Target Exploration &
Mining Corp.
 
 On
January 6, 2009, the Company entered into a plan of arrangement with Target
Exploration & Mining Corp. (“Target”), whereby the Company agreed to acquire
all of the outstanding common shares, warrants and stock options of Target. In
consideration, the Company issued common shares, warrants and stock options on a
1.2 ratio for each Target common share, warrant and stock option outstanding,
with all other terms of the warrants and stock options remaining unchanged. On
March 31, 2009, the plan of arrangement was completed and the Company issued
14,663,488 common shares, 2,283,300 warrants and 2,400,000 stock options to
Target shareholders and paid acquisition costs of $195,271, with a total value
of $2,509,592.
 
 The cost
of the asset acquisition should be based on the fair value of the consideration
given, except where the fair value of the consideration given is not clearly
evident. In the case of the Company, the fair value of the consideration given
was used which was allocated amongst the fair value of the assets and
liabilities of Target as of the date of acquisition.
 
 The
acquisition of Target constitutes a related party transaction, and since the
transaction has commercial substance and is not in the normal course of
operations, it has been measured at the exchange amount.
  
 The
total purchase price of $2,509,592 includes the following:
 
 Common
      shares issued
                      
                      $
                      2,194,417Fair
      value of options
                      
                      
                      107,594Fair
      value of warrants
                      
                      
                      12,310Acquisition
      costs
                      
                      
                      195,271$
                      2,509,592
 
 The
purchase price of $2,509,592 was allocated as follows:
 
 Cash
                      
                      $
                      210,572Receivables
                      
                      
                      28,837Reclamation
      bonds
                      
                      
                      34,109Equipment
                      
                      
                      7,228Mineral
      properties
                      
                      
                      3,829,933Current
      liabilities
                      
                      
                      (232,194
                      )Advances
      due to Crosshair
                      
                      
                      (963,519
                      )Future
      reclamation obligations
                      
                      
                      (405,374
                      )$
                      2,509,592
 
 These
consolidated financial statements include the results of operations of Target
from March 31, 2009, the date of acquisition.
  
 
  91
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 5.           MINERAL
PROPERTIES
  CMB
                    $
                  
                  
                  CMB
      JV
                    $
                  
                  
                  Bootheel
      Project
                    $
                  
                  
                  Golden
      Promise
                    $
                  
                  
                  Other
      Claims
                    $
                  
                  
                  Total
                    $Balance
      April 30, 2007
                  
                  
                  11,677,227
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  2,858,216
                  
                  
                  
                  15,849
                  
                  
                  
                  14,551,292-
                  
                  
                  
                  -Drilling
      and  trenching
                  
                  
                  3,868,218
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  495,884
                  
                  
                  
                  -
                  
                  
                  
                  4,364,102Geology
                  
                  
                  5,169,084
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  122,293
                  
                  
                  
                  -
                  
                  
                  
                  5,291,377Geophysics
                  
                  
                  477,364
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  112,145
                  
                  
                  
                  -
                  
                  
                  
                  589,509Administration
                  
                  
                  627,678
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  34,499
                  
                  
                  
                  -
                  
                  
                  
                  662,177Technical
    analysis
                  
                  
                  653,085
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  5,575
                  
                  
                  
                  -
                  
                  
                  
                  658,660Future
    reclamation
                  
                  
                  163,884
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  2,852
                  
                  
                  
                  -
                  
                  
                  
                  166,736Acquisition
costs
                  
                  
                  1,119,000
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  155,300
                  
                  
                  
                  -
                  
                  
                  
                  1,274,300JCEAP1
      refunds received
                  
                  
                  (150,000
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (72,619
                  )
                  
                  
                  -
                  
                  
                  
                  (222,619
                  )Write offs/sales
                  
                  
                  (247,704
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (15,849
                  )
                  
                  
                  (263,553
                  )Total
      for the year
                  
                  
                  11,680,609
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  855,929
                  
                  
                  
                  (15,849
                  )
                  
                  
                  12,520,689Balance
      April  30, 2008
                  
                  
                  23,357,836
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  $
                  3,714,145
                  
                  
                  
                  -
                  
                  
                  
                  27,071,981Drilling &
      trenching
                  
                  
                  464,663
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  6,438
                  
                  
                  
                  -
                  
                  
                  
                  471,101Geology
                  
                  
                  2,964,923
                  
                  
                  
                  29,750
                  
                  
                  
                  48,741
                  
                  
                  
                  19,790
                  
                  
                  
                  -
                  
                  
                  
                  3,063,204Geophysics
                  
                  
                  3,903
                  
                  
                  
                  27,057
                  
                  
                  
                  -
                  
                  
                  
                  3,745
                  
                  
                  
                  -
                  
                  
                  
                  34,705Administration
                  
                  
                  241,485
                  
                  
                  
                  1,451
                  
                  
                  
                  19,962
                  
                  
                  
                  19,346
                  
                  
                  
                  -
                  
                  
                  
                  282,244Technical
    analysis
                  
                  
                  428,500
                  
                  
                  
                  -
                  
                  
                  
                  1,580
                  
                  
                  
                  10,586
                  
                  
                  
                  -
                  
                  
                  
                  440,666Future
    reclamation
                  
                  
                  25,929
                  
                  
                  
                  44,854
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  70,783Acquisition
costs
                  
                  
                  370,000
                  
                  
                  
                  7,132,327
                  
                  
                  
                  3,600,137
                  
                  
                  
                  746,122
                  
                  
                  
                  229,796
                  
                  
                  
                  12,078,382JCEAP1
      refunds received
                  
                  
                  (150,000
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (150,000
                  )Recovery-
      JV partner
                  
                  
                  -
                  
                  
                  
                  (24,294
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (24,294
                  )Administration
      fees
                  
                  
                  -
                  
                  
                  
                  (1,944
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (1,944
                  )Impairment
      charge
                  
                  
                  (9,333,333
                  )
                  
                  
                  (4,666,667
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (14,000,000
                  )Total
      for year
                  
                  
                  (4,983,930
                  )
                  
                  
                  2,542,534
                  
                  
                  
                  3,670,420
                  
                  
                  
                  806,027
                  
                  
                  
                  229,796
                  
                  
                  
                  2,264,847Balance
      April 30, 2009
                  
                  
                  18,373,906
                  
                  
                  
                  2,542,534
                  
                  
                  
                  3,670,420
                  
                  
                  
                  4,520,172
                  
                  
                  
                  229,796
                  
                  
                  
                  29,336,828
 
 1 Junior Company Exploration Assistance
Program
 
 
 
 
  92
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 5.
              MINERAL PROPERTIES(cont’d...)
 
 Cumulative
totals as at April 30, 2009:
  CMB
                    $
                  
                  
                  CMB
      JV
                    $
                  
                  
                  Bootheel
                    Project
                    $
                  
                  
                  Golden
                    Promise
                    $
                  
                  
                  Other
      Claims
                    $
                  
                  
                  Totals
                    $Drilling
      & trenching
                  
                  
                  7,225,018
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,708,016
                  
                  
                  
                  -
                  
                  
                  
                  8,933,034Geology
                  
                  
                  12,884,990
                  
                  
                  
                  29,750
                  
                  
                  
                  48,741
                  
                  
                  
                  623,404
                  
                  
                  
                  -
                  
                  
                  
                  13,586,885Geophysics
                  
                  
                  1,762,457
                  
                  
                  
                  27,057
                  
                  
                  
                  -
                  
                  
                  
                  441,258
                  
                  
                  
                  -
                  
                  
                  
                  2,230,772Administration
                  
                  
                  1,609,065
                  
                  
                  
                  1,451
                  
                  
                  
                  19,962
                  
                  
                  
                  212,546
                  
                  
                  
                  -
                  
                  
                  
                  1,843,024Technical
    analysis
                  
                  
                  1,650,982
                  
                  
                  
                  -
                  
                  
                  
                  1,580
                  
                  
                  
                  260,008
                  
                  
                  
                  -
                  
                  
                  
                  1,912,570Future
    reclamation
                  
                  
                  190,277
                  
                  
                  
                  44,854
                  
                  
                  
                  -
                  
                  
                  
                  2,387
                  
                  
                  
                  -
                  
                  
                  
                  237,518Acquisition
costs
                  
                  
                  2,950,750
                  
                  
                  
                  7,132,327
                  
                  
                  
                  3,600,137
                  
                  
                  
                  1,367,322
                  
                  
                  
                  229,796
                  
                  
                  
                  15,280,332Recovery-
      JV partner
                  
                  
                  -
                  
                  
                  
                  (24,294
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (24,294
                  )Administration
      fees
                  
                  
                  -
                  
                  
                  
                  (1,944
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (1,944
                  )JCEAP1refunds received
                  
                  
                  (566,300
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (94,769
                  )
                  
                  
                  -
                  
                  
                  
                  (661,069
                  )Impairment
      charge
                  
                  
                  (9,333,333
                  )
                  
                  
                  (4,666,667
                  )
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (14,000,000
                  )Balance
      April 30, 2009
                  
                  
                  18,373,906
                  
                  
                  
                  2,542,534
                  
                  
                  
                  3,670,420
                  
                  
                  
                  4,520,172
                  
                  
                  
                  229,796
                  
                  
                  
                  29,336,828
 
 1 Junior Company Exploration Assistance
Program
   
 Central Mineral Belt
(“CMB”)
  Moran
Lake Property
  Pursuant
to an agreement dated October 14, 2004, the Company acquired an option to earn a
90% interest, subject to a 2% NSR and a 10% carried interest to the vendor, in
the Moran Lake Property, a uranium prospect located in Central Labrador,
Newfoundland, Canada.  The agreement was amended on March 1, 2005 to
include additional claims adjacent to the Moran Lake Property, known as Moran
Heights.
  To date,
the Company has issued 1,600,000 common shares, made cash payments totaling
$575,000 and spent more than the required minimum $3,000,000 on project
expenditures.  Beginning November 10, 2009, the Company is required to
make advance royalty payments in the amount of $200,000 per year until the
commencement of commercial production.  The Company is also required
to complete a bankable feasibility study that is due on or before November 10,
2013.
  Otter/Portage
Lake Property
  Pursuant
to an agreement dated December 2, 2005, the Company acquired an option to earn a
100% interest, subject to a 1.5% NSR, in the Otter and Portage Lake Properties
located in the Central Mineral Belt of Labrador.
  To date,
the Company has issued the total required 225,000 common shares, made cash
payments totaling $140,000 and spent more than the required minimum $600,000 on
project expenditures.
  Stormy
Lake/Partridge River Property
  The Company entered into an agreement
on May 1, 2007, to earn a 75% interest in certain claims located in the Central
Mineral Belt of Labrador.  In April 2008, the Company elected to
terminate this option and as a result, the Company has no further obligations
and the related mineral property costs of $247,704 were written-off in the last
quarter of 2008.
   93
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
   5.
              MINERAL PROPERTIES(cont’d...)
 
 CMB Joint
Venture
 
 Silver
Spruce Central Mineral Belt (“CMB”) Joint Venture
  In July
2008, the Company entered into an agreement with Universal Uranium Ltd.
("Universal") to acquire all of Universal's interest (60%) in its joint venture
project with Silver Spruce Resources Inc. in Labrador for consideration of
$500,000 cash, 10,000,000 common shares with a value of $5,100,000 and 7,500,000
warrants having a value of $1,500,418. The warrants were valued using the Black
Scholes model with the following assumptions: risk-free rate – 2.50%; expected
life – 3 years, and volatility – 84%. $95,581 of legal and regulatory costs was
also incurred in relation to this acquisition.  In addition the
Company also acquired exploration equipment with a fair value of $63,672 from
Universal.  The terms of the warrants are more fully described in Note
8.  Universal retains a 2% net smelter return (“NSR”) royalty on its
60% interest in the property, which may be reduced to 1.5% in consideration for
a cash payment of $1,000,000.  Crosshair also subscribed for 2,222,222
units of Universal at a price of $0.45 per unit.  Each unit consists
of one common share of Universal and one share purchase warrant entitling
Crosshair to purchase an additional common share of Universal at a price of
$0.65 on or before July 29, 2010.
 
 Bootheel
Project
 
 On March
31, 3009, the Company acquired the Bootheel and Buckpoint Properties in Wyoming,
USA through the acquisition via Plan of Arrangement of Target Exploration and
Mining Corp. (see Note 4). Under an agreement dated June 7, 2007, as amended
December 21, 2007, and February 28, 2008, between UR-Energy USA Inc. (“URE”),
several of its subsidiaries, Target, now a wholly owned Crosshair subsidiary,
and 448018, a wholly owned subsidiary of Target, the Company may earn a 75%
interest in BHP LLC, subject to certain royalties, by completing expenditures
totalling US$3 million and issuing 125,000 common shares on or before June 7,
2011.  As of April 30, 2009, the Company, through Target, has incurred
qualifying expenditures of US $ 2.8 million.
  Under
Agreements dated February 5, 2008 between M J Ranches Inc, and 448018 as
manager, BHP LLC leased MJ Ranches’ 75% ownership of certain minerals on fee
land that adjoins the Bootheel Property.  The initial term of the agreement
is for five years with provision for two renewals.  Payment for the initial
five year term is US $252,651 paid in advance, increased for inflation for the
renewal periods.  The acquired mineral rights are subject to a sliding
scale royalty tied to the sales price of uranium.
  Golden
Promise
 
 Golden
Promise Property
  On April
29, 2009, Crosshair acquired a 60% interest in the Golden Promise Gold Project
in Central Newfoundland, Canada with an option to acquire up to a 70% interest;
terminated the original property option earn-in agreement with Paragon Minerals
Corp. (“Paragon”); and abandoned the previously approved Plan of Arrangement
with Gemini Metals Corp. (“Gemini”) whereby Crosshair was to transfer certain
projects located in Newfoundland to Gemini in exchange for shares of
Gemini.  As a result of the current market conditions, the Board of
Directors of Crosshair determined that it was no longer in the best interest of
Shareholders to spin-out the assets of Golden Promise, South Golden Promise and
Victoria Lake into a separate publicly traded company to be known as
Gemini.
 
 As per
the original property option earn-in agreement the Company issued 20,000 common
shares during the year ended April 30, 2009 to Paragon at a value of
$12,400.
 
 Pursuant
to the amended agreement with Paragon dated April 8, 2009, Crosshair issued
2,655,000 common shares with a market value of $686,608.  Crosshair
will provide Paragon with a $2.0 million carried interest in initial exploration
expenditures to be completed prior to May 2013. Crosshair can extend the
timeframe to complete the initial exploration program by 12 months upon issuing
250,000 common shares to Paragon.
 
  94
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 5.
              MINERAL PROPERTIES(cont’d...)
 
 Upon the
successful completion of the initial $2.0 million exploration program, Crosshair
can elect to earn an additional 10% interest (to 70%) in Golden Promise by
providing Paragon with an additional $1.0 million carried interest in additional
exploration expenditures within 24 months.   Crosshair can extend the
timeframe to complete the additional exploration program by 12 months upon
issuing 100,000 common shares to Paragon.  In the event Crosshair does
not complete the additional expenditure program within the required timeframe,
Crosshair can purchase the remaining 10% interest by paying Paragon the
difference between actually incurred exploration expenditures and $1.0 million
or just retain the 60% interest.
 
 Southern
Golden Promise (Victoria Lake)
  The
Company has earned a 60% interest in mineral claims located in the Botwood Basin
area of Central Newfoundland known as Southern Golden Promise in consideration
for issuing a total 400,000 common shares and incurring a minimum of $1,750,000
exploration expenditures within specified deadlines.
  Other
Claims
  Sinbad
Claims
  On March
31, 2009, the Company acquired the Sinbad Property in Utah, USA through the
acquisition via plan of arrangement of Target Exploration and Mining Corp. (see
Note 4).
 
 6.
              FUTURE
      RECLAMATION COSTS
  April
      30, 2009
                  
                  
                  April
      30, 2008Asset
      retirement obligation – beginning balance
                  
                  $
                  172,238
                  
                  
                  $
                  -Liability
      incurred
                  
                  
                  70,783
                  
                  
                  
                  166,736Liability
      assumed – Target plan of arrangement
                  
                  
                  405,374
                  
                  
                  
                  -Accretion
      expense
                  
                  
                  28,089
                  
                  
                  
                  5,502Asset
      retirement obligation – ending balance
                  
                  $
                  676,484
                  
                  
                  $
                  172,238
 
 The
Company has legal obligations associated with its Moran Lake, Silver Spruce CMB
JV, Southern Golden Promise and Bootheel mineral properties for cleanup
costs.   These costs are anticipated to be incurred between 2011
and 2015.
 
 The total
undiscounted amount of estimated cash flows required to settle the obligations
is approximately $800,000, which was adjusted for inflation at the rate of 2%,
discounted at 8% and projected out to 2011.  Certain minimum amounts
of asset retirement obligations will occur each year with the significant
amounts to be paid on abandonment of the mineral property
interests.
  
   95
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 7.           COMMITMENTS
  The
Company has entered into operating lease agreements for its office premises in
Vancouver.  The annual commitments under these leases are: fiscal 2010
- $174,696 and 2011- $131,022.
  In
connection with the option agreement to earn in its 90% interest in the Moran
Lake Property, beginning November 10, 2009, the Company is required to make
advance royalty payments in the amount of $200,000 per year until the
commencement of commercial production.  The Company is also required
to complete a bankable feasibility study that is due on or before November 10,
2013. In addition, as at April 30, 2009, the Company is required to spend
approximately $57,000(net of recoveries from the government of Newfoundland and
our joint venture partner) to maintain the highest potential
claims.  In addition, the Company is required to spend approximately
$44,000 on the Golden Promise/South Golden Promise properties and US $ 36,000 on
the Bootheel project.
  8.           CAPITAL
STOCK AND CONTRIBUTED SURPLUS
  Share
and warrant issuances
  During
the year ended April 30, 2007, shares were issued as follows:
  ·
              20,000
      common shares valued at $1.27 per share were issued for acquisition costs
      associated with the Golden Promise Property, 100,000 common shares valued
      at $1.96 per share, were issued for acquisition costs associated with the
      Southern Golden Promise Property, 250,000 common shares valued at $2.44
      per share, were issued for acquisition costs associated with the Moran
      Lake Property and 75,000 common shares valued at $3.29 per share, were
      issued for acquisition costs associated with the Otter/Portage Lake
      Property.
  ·
              2,672,764
      shares pursuant to the exercise of stock options for gross proceeds of
      $1,404,075.  An amount of $996,071 representing the fair value
      of the options on granting was reclassified from contributed surplus to
      share capital on exercise.
  ·
              8,947,888
      shares pursuant to the exercise of shareholder and agent warrants for
      total gross proceeds of
$10,814,967.
  ·
              490,375
      common shares pursuant to a warrant incentive program, for gross proceeds
      of $707,343.  Under the terms of the program, holders of
      warrants expiring on November 3, 2007 were, for the two week period
      between February 13, 2007 and February 26, 2007, entitled to subscribe for
      an additional common share of the Company for every 10 warrants exercised,
      at the original exercise price.
  During
the year ended April 30, 2008, shares and warrants were issued as
follows:
  ·
              the
      Company completed a bought deal offering  with Canaccord Capital
      Corporation as lead underwriter, under which the Underwriter has purchased
      8,000,000 non flow-through units (“Units”) and 3,575,000 flow-through
      common shares at a price of $1.25 per Unit and $1.40 per Flow-Through
      Share, resulting in aggregate gross proceeds to the Company of
      $15,005,000. Each Unit consists of one common share and one transferable
      common share purchase warrant. Each Warrant entitles the holder thereof to
      purchase one common share at a price of $1.80 until October 4, 2009. Share
      issue costs of $1,161,402 were incurred in relation to this
      offering.  The Underwriter was also issued 694,500 warrants
      (“Underwriters Warrants”) exercisable at $1.25 per warrant and expires on
      October 4, 2009.  Each Underwriters’ warrant entitles the
      Underwriter to acquire one common share of the Company and one common
      share purchase warrant (“underlying warrant”) at a price of $1.80, up
      until October 4, 2009.
  
   96
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 8.
              CAPITAL
      STOCK AND CONTRIBUTED SURPLUS
(cont’d...)
  Share
and warrant issuances (cont’d...)
  ·
              20,000
      common shares valued at $2.64 per share were issued for acquisition costs
      associated with the Golden Promise Property, 50,000 common shares valued
      at $2.90 per share were issued for acquisition costs associated with the
      Stormy Lake and Partridge River Properties, 250,000 common shares valued
      at $2.28 per share were issued for acquisition costs associated with the
      Moran Lake Property and 100,000 common shares valued at $2.44 per share
      were issued for acquisition costs associated with the Otter/Portage Lake
      Property.
  ·
              114
      shares were returned to treasury to reduce the accumulated fractions held
      in the trustee account that was a result of rounding from ongoing
      exchanges processed for previous capital
  consolidations.
  ·
              1,288,984
      shares pursuant to the exercise of stock options at prices ranging from
      $0.25 to $1.43 per share for gross proceeds of $966,681.  An
      amount of $728,147 representing the fair value of the options on granting
      was reclassified from contributed surplus to share capital on
      exercise.
  ·
              399,883
      shares pursuant to the exercise of warrants at an exercise price of $1.25
      per share for gross proceeds of
$500,559.
  During
the year ended April 30, 2009, shares and warrants were issued as
follows:
  ·
              20,000
      common shares valued at $12,400 were issued for acquisition costs
      associated with the Golden Promise Property and 250,000 common shares
      valued at $170,000, were issued for acquisition costs associated with the
      Moran Lake Property.
  ·
              10,000,000
      common shares valued at $5,100,000 and 7,500,000 warrants valued at
      $1,500,418, were issued to Universal as consideration for Universal –
      Silver Spruce CMB Joint Venture Property (Note 5).  Each warrant
      entitles the holder to purchase one additional Crosshair common share at
      $1.00 for the three year period ending July 29, 2011.  The
      warrants are subject to early expiry if Crosshair’s shares trade at a
      value of $2.00 or more for a period of 20 days.  Both the shares
      and warrants are held in escrow and released as to 1,250,000 shares and
      937,500 warrants every three months commencing in October
      2008.  Universal has granted Crosshair’s management a voting
      proxy over shares it holds or acquires through the exercise of the
      warrants.  Universal can obtain a release from the escrow
      provisions and proxy rights in respect of shares and/or warrants it
      distributes to shareholders.
  ·
              In
      connection with the plan of arrangement of Target Exploration & Mining
      Corp., (see Note 4) the Company issued 14,663,488 common shares valued at
      $2,194,417, 2,400,000 options valued at $12,310 and 2,283,300 warrants
      valued at $107,593.
  ·
              In
      order to earn its 60% interest in the Golden Promise Property, the Company
      issued 2,655,000 common shares valued at $686,608 to Paragon Minerals
      Corp.
  ·
              As
      of April 30, 2009 Universal has 7,144,000 shares and 7,500,000 warrants
      that remain in escrow
  
   97
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 8.           CAPITAL
STOCK AND CONTRIBUTED SURPLUS (cont’d...)
  Warrants
  The
following is a summary of warrants outstanding at April 30, 2009, 2008 and 2007
and changes during the years then ended.
  April
      30, 2009
                  
                  
                  April
      30, 2008
                  
                  
                  April
      30, 2007Number
                    of
      Warrants
                  
                  
                  Weighted
                    Average
                    Exercise
      Price
                  
                  
                  Number
                    of
      Warrants
                  
                  
                  Weighted
                    Average
                    Exercise
      Price
                  
                  
                  Number
                    of
      Warrants
                  
                  
                  Weighted
                    Average
                    Exercise
      PriceOutstanding,
      beginning of the year
                  
                  
                  8,694,500
                  
                  
                  $
                  1.76
                  
                  
                  
                  399,883
                  
                  
                  $
                  1.25
                  
                  
                  
                  9,240,951
                  
                  
                  $
                  1.22Private
      placement/Issuance
                  
                  
                  9,783,300
                  
                  
                  
                  0.91
                  
                  
                  
                  8,694,500
                  
                  
                  
                  1.76
                  
                  
                  
                  106,820
                  
                  
                  
                  0.75Exercised
                  
                  
                  -
                  
                  
                  
                  - -
                  
                  
                  
                  (399,883
                  )
                  
                  
                  1.25
                  
                  
                  
                  (8,947,888
                  )
                  
                  
                  1.14Outstanding,
      end of the year
                  
                  
                  18,477,800
                  
                  
                  
                  1.31
                  
                  
                  
                  8,694,500
                  
                  
                  
                  1.76
                  
                  
                  
                  399,883
                  
                  
                  
                  1.25
 
 At April
30, 2009, the following warrants were outstanding:
 
 
 Outstanding
                  
                  Exercise
      Price ($)
                  
                  Expiry
      Date2,283,300
                  
                  0.60
                  
                  July
      31, 20098,694,500
                  
                  1.25/1.801
                  
                  October
      4, 20097,500,000
                  
                  1.00
                  
                  July
      29, 201118,477,800
 
 1 694,500
of these are agent warrants and exercisable at $1.25 per warrant
 
  Stock
options
  The
Company has a stock option plan whereby options may be granted to directors,
employees, consultants and certain other service providers.  Options
are subject to the minimum vesting requirement of two years, with 25% of the
total number of the options granted to be released every 6 months from the date
of grant, with the exception of the options that were cancelled and re-granted
to insiders during the second quarter, which had a vesting period of 12
months.  As per the stock option plan options can be granted for a
maximum term of 5 years.
  
   98
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 8.           CAPITAL STOCK AND CONTRIBUTED
SURPLUS (cont’d...)
  Stock options(cont’d...)
  The
following is a summary of stock options outstanding at April 30, 2009, 2008 and
2007 and changes during the years then ended.
  April
      30, 2009
                            
                            
                            April
      30, 2008
                            
                            
                            April
      30, 2007Number
                              of
      options
                            
                            
                            Weighted
                              Average
                              Exercise
      Price
                            
                            
                            Number
                              of
      options
                            
                            
                            Weighted
                              Average
                              Exercise
      Price
                            
                            
                            Number
                              of
      options
                            
                            
                            Weighted
                              Average
                              Exercise
      PriceOutstanding,
      beginning of year
                            
                            
                            9,593,000
                            
                            
                            $
                            1.71
                            
                            
                            
                            8,981,984
                            
                            
                            $
                            1.62
                            
                            
                            
                            6,364,748
                            
                            
                            $
                            0.68Exercised
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            (1,288,984
                            )
                            
                            
                            0.59
                            
                            
                            
                            (2,672,764
                            )
                            
                            
                            0.53Cancelled or
      expired
                            
                            
                            (6,090,501
                            )
                            
                            
                            1.36
                            
                            
                            
                            (1,100,000
                            )
                            
                            
                            2.23
                            
                            
                            
                            (700,000
                            )
                            
                            
                            0.84Granted
                            
                            
                            6,480,001
                            
                            
                            
                            0.39
                            
                            
                            
                            3,000,000
                            
                            
                            
                            1.76
                            
                            
                            
                            5,990,000
                            
                            
                            
                            2.04Outstanding,
      end of year
                            
                            
                            9,982,500
                            
                            
                            $
                            0.71
                            
                            
                            
                            9,593,000
                            
                            
                            $
                            1.71
                            
                            
                            
                            8,981,984
                            
                            
                            $
                            1.62Currently
      exercisable
                            
                            
                            7,162,010
                            
                            
                            $
                            0.83
  Due to
the prolonged decline in market conditions, and to aid in employee retention,
2,850,000 stock options previously granted to non-insiders were re-priced at
$0.87 per share.  In addition, insiders gave back to the Company
options to purchase 2,625,000 shares for cancellation, all of which were
re-granted during the second quarter, at $0.27 per option with a 12 month
vesting period.
 
 
 
  99
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 8.           CAPITAL STOCK AND CONTRIBUTED
SURPLUS (cont’d...)
  Stock options(cont’d...)
  At April
30, 2009, the following stock options were outstanding to directors, officers
and employees:
 
 Outstanding
                Exercisable
                
                Exercise
      Price ($)
                
                Expiry
      Date400,000
                400,000
                
                0.45
                
                February
      4, 201075,000
                75,000
                
                0.45
                
                June
      14, 2010130,040
                130,040
                
                0.25
                
                August
      16, 2010150,000
                150,000
                
                0.90
                
                January
      5, 2011850,000
                850,000
                
                1.00
                
                January
      18, 2011175,000
                175,000
                
                1.32
                
                April
      24, 20111,150,000
                1,150,000
                
                0.87/1.321
                
                May
      1, 2011250,000
                250,000
                
                1.32
                
                May
      24, 2011300,000
                300,000
                
                0.87/1.432
                
                August
      21, 2011264,000
                264,000
                
                0.35
                
                August
      29, 201124,000
                24,000
                
                0.52
                
                November
      15, 201150,000
                50,000
                
                0.87
                
                January
      12, 201250,000
                50,000
                
                2.50
                
                February
      1, 2012150,000
                150,000
                
                0.87
                
                March
      6, 201240,000
                40,000
                
                0.87
                
                March
      13, 2012200,000
                200,000
                
                0.87
                
                March
      23, 2012100,000
                100,000
                
                0.87
                
                April
      18, 2012150,000
                150,000
                
                0.87
                
                April
      23, 2012132,000
                132,000
                
                0.86
                
                May
      1, 2012100,000
                75,000
                
                0.87
                
                August
      1, 2012829,960
                622,470
                
                1.00
                
                August
      29, 2012150,000
                112,500
                
                0.87
                
                October
      15, 201275,000
                50,000
                
                0.87
                
                December
      7, 2012100,000
                50,000
                
                1.41
                
                February
      21, 2013180,000
                90,000
                
                0.62
                
                February
      26, 2013187,500
                112,500
                
                0.81
                
                April
      23, 2013250,000
                62,500
                
                0.88
                
                May
      23, 2013120,000
                30,000
                
                0.47
                
                June
      5, 2013150,000
                37,500
                
                0.50
                
                August
      1, 20131,900,000
                950,000
                
                0.27
                
                September
      15, 2013750,000
                187,500
                
                0.15
                
                October
      23, 2013350,000
                175,000
                
                0.27
                
                October
      27, 2013100,000
                -
                
                0.15
                
                December
      17, 2013100,000
                -
                
                0.20
                
                January
      29, 20149,982,500
                7,195,010
 
  1 100,000
of these stock options are exercisable at $0.87 per option and 1,050,000 are
exercisable at $1.32 per option.
 2 150,000
of these stock options are exercisable at $0.87 per option and 150,000 are
exercisable at $1.43 per option.
  
  100
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 8.           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, 2009 totaled $3,312,632 (2008 - $7,097,948,
April 30, 2007 - $3,696,601).  The weighted average price of options
granted in the year was $0.27 (April 30, 2008 - $1.76, April 30, 2007 -
$2.04).
  Where
stock options were re-priced, new fair values were calculated based on the new
exercise price and this new fair value used in determining compensation expense
over the remaining vesting periods of the options.  Due to re-pricing
the options, an additional $255,012 was recorded as stock-based
compensation.
  The
following weighted average assumptions were used for the Black-Scholes method of
valuation of stock options granted during the years ended April 30, 2009, 2008
and 2007:
  April
      30, 2009
                            
                            April
      30, 2008
                            
                            April
      30,2007Risk-free
      interest rate
                            3.09%
                            
                            3.06%
                            
                            3.79%Expected
      life of options
                            5
      years
                            
                            5
      years
                            
                            5
      yearsAnnualized
      volatility
                            92%
                            
                            154%
                            
                            239%Dividend
      rate
                            0%
                            
                            0%
                            
                            0%
 
 9.           
SUPPLEMENTAL DISCLOSURES WITH RESPECT TO CASH FLOWS
  The
following were significant non-cash investing and financing transactions during
year ended April 30, 2009:
  (a)
              10,270,000
      common shares valued at $5,282,400, 2,655,000 common shares valued at
      $686,608 and 7,500,000 warrants valued at $1,500,418 were issued for
      property acquisitions (Note 8).  Also, exploration equipment
      with a fair-market value of $63,672 was acquired in connection with the
      Universal – Silver Spruce CMB Joint Venture
  agreement.
  (b)
              Mineral
      property costs of $11,260 were incurred and included in accounts
      payable.
  (c)
              A
      mineral property impairment charge of $14,000,000 was charged in the last
      quarter of fiscal 2009.
  (d)
              Mineral
      property costs and the provision for future reclamation costs were
      increased by $70,783.
  (e)
              In
      connection with the plan of arrangement of Target Exploration & Mining
      Corp., (see Note 4) the Company issued 14,663,488 common shares valued at
      $2,194,417, 2,400,000 options valued at $12,310 and 2,283,300 warrants
      valued at $107,593.
  
   101
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 9.           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, 2008:
  (f)
              a
      fair value of $728,147 was recognized in respect of options and agent
      warrants exercised (Note 8).
  (g)
              a
      total of 420,000 common shares valued at $1,011,800 were issued for
      property acquisitions (Note 8).
  (h)
              included
      in accounts payable was $1,018,647 related to mineral property
      costs.
  (i)
              the
      Company issued a total of 694,500 agent warrants at a fair value of
      $238,392 as share issue costs.
  
 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 warrants exercised (Note
8).
  (b)
              the
      Company issued a total of 445,000 common shares at a value of $1,078,150
      for property acquisitions
(Note 8).
  (c)
              included
      in accounts payable was $810,505 related to mineral property
      costs.
  10.           RELATED
PARTY TRANSACTIONS
  The
Company entered into transactions with related parties as follows:
  ·
              during
      the year ended April 30, 2009 the Company acquired Target (a company with
      directors and officers in common) via a plan of
      arrangement.  (see Note
4)
  ·
              at
      April 30, 2009, management fees of $26,250 (April 30, 2008 - $Nil, April
      30, 2007 - $Nil) were owed to former directors of Target, and is included
      in due to related parties
  ·
              incurred
      management fees of $31,250 (2008 – $56,250, 2007 - $Nil) to a private
      company controlled by a former
officer.
  ·
              incurred
      legal fees of $24,998 (2008 – $122,577, 2007 - $25,882) to a law firm of
      which a director is a partner. At April 30, 2009, $24,998 (April 30,
      2008 - $106,961, April 30, 2007 - $Nil) was owed to this party and is
      included in due to related parties
  ·
              incurred
      geological consulting fees of $12,500 (2008 – $15,600, 2007 - $33,075) to
      a private company owned by a director. At April 30, 2009, $47,250 (April
      30, 2008 - $Nil, April 30, 2007 - $5,830) was owed to this party and is
      included in due to related parties
  ·
              incurred
      independent directors’ fees of $100,500 (2008 - $108,500, 2007 -
      $60,500).  Included in accounts payable and accrued liabilities
      at April 30, 2009 is an amount of $27,058 (April 30, 2008 - $Nil April 30,
      2007 - $Nil) owed to the directors.
  
   102
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 10.           RELATED
PARTY TRANSACTIONS (cont’d...)
  ·
              paid
      rent for its Newfoundland office of $97,153 (2008 - $45,660, 2007 - $Nil)
      to a private company that has a director in common.   The
      landlord agreed to terminate the lease with the Company effective January
      31, 2009. The Company is currently renting office space in the same
      building on a month to month basis.  Subsequent to April 30,
      2009, the Company terminated the use of this office
  space.
  These
transactions were incurred in the normal course of operations, other than the
Target acquisition (Note 4) and were undertaken with the same terms and
conditions as transactions with unrelated parties.  The amounts due to
related parties are unsecured, non-interest bearing and have no fixed terms of
repayment.
  11.           INCOME
TAXES
  A
      reconciliation of income taxes at statutory rates with the reported taxes
      is as follows:
 
 2009
                
                
                2008
                
                
                2007Loss
      before income tax recovery
                
                
                (22,025,538
                )
                
                
                (12,933,204
                )
                
                $
                (5,533,011
                )Expected
      income tax recovery at statutory rates
                
                $
                (7,322,831
                )
                
                $
                (4,299,902
                )
                
                $
                (1,961,735
                )Non-taxable
      items
                
                
                1,359,883
                
                
                
                3,942,847
                
                
                
                1,965,026Non-capital
      loss and resource expenditure benefits unrecognized
      (recognized)
                
                
                4,661,648
                
                
                
                357,055
                
                
                
                (3,291
                )Total
      income recovery
                
                $
                (1,301,300
                )
                
                $
                -
                
                
                $
                -
 
 
 The
      significant components of the Company's future tax assets are as
      follows:
 
 2009
                
                
                2008
                
                
                2007Future
      tax assets:Loss carry
    forwards
                
                $
                2,614,089
                
                
                $
                822,869
                
                
                $
                606,851Marketable
      securities
                
                
                442,330
                
                
                
                334,969
                
                
                
                11,033Equipment
                
                
                103,748
                
                
                
                55,156
                
                
                
                17,405Share
      issuance costs
                
                
                234,613
                
                
                
                373,537
                
                
                
                243,054Mineral property and related
      exploration expenditures
                
                
                5,873,818
                
                
                
                1,425,338
                
                
                
                917,9279,268,598
                
                
                
                3,011,869
                
                
                
                1,796,270Less:  valuation
      allowances
                
                
                (9,268,598
                )
                
                
                (3,011,869
                )
                
                
                (1,796,270
                )Net
      future tax assets
                
                $
                -
                
                
                $
                -
                
                
                $
                -
 
 During
      the year ended April 30, 2008, the Company issued 3,575,000 common shares
      on a flow-through basis for gross proceeds of $5,005,000.  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 $1,301,300 on the
      exploration expenditures to be renounced to shareholders were applied
      against capital stock in fiscal 2009 as the expenditures were renounced in
      the first quarter of fiscal 2009.
 
   103
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 12.           SEGMENTED
INFORMATION
  The
Company operates in one reportable operating segment, being the acquisition,
exploration and development of mineral properties in North America.
 
 April
      30, 2009
                  
                  
                  April
      30, 2008Equipment:United States
                  
                  $
                  7,106
                  
                  
                  $
                  -Canada
                  
                  
                  475,580
                  
                  
                  
                  507,883$
                  482,686
                  
                  
                  $
                  507,883Mineral
      properties:United States
                  
                  $
                  3,900,216
                  
                  
                  $
                  -Canada
                  
                  
                  25,436,612
                  
                  
                  
                  27,071,98129,336,828
                  
                  
                  
                  27,071,981$
                  29,819,514
                  
                  
                  $
                  27,579,864
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 13.           CAPITAL
MANAGEMENT
 
 The
Company’s objectives when managing capital are to safeguard the Company’s
ability to continue as a going concern in order to pursue the exploration and
development of its mineral properties, acquire additional mineral property
interests and to maintain a flexible capital structure which optimizes the costs
of capital at an acceptable risk.  In the management of capital, the
Company includes its cash and cash equivalent balances and components of
shareholders’ equity.
 
 The
Company manages the capital structure and makes adjustments to it in light of
changes in economic conditions and the risk characteristics of the underlying
assets.  To maintain or adjust the capital structure, the Company may
attempt to issue new shares, issue debt, acquire or dispose of assets or adjust
the amount of cash and cash equivalents and investments.
 
 In order
to facilitate the management of its capital requirements, the Company prepares
annual expenditure budgets that are updated as necessary depending on various
factors, including successful capital deployment and general industry
conditions.  The annual and updated budgets are approved by the Board
of Directors.
 
 At this
stage of the Company’s development, in order to maximize ongoing development
efforts, the Company does not pay out dividends.
 
 The
Company manages its exposure to USD currency fluctuations by keeping a
sufficient amount of US dollars on hand.
 
 The
Company’s investment policy is to invest its cash, not otherwise designated for
strategic investments, in highly liquid short-term interest-bearing R1-High
investment rated (DBRS) investments with maturities of 90 days or less from the
original date of acquisition.
 
 
  104
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 13.           CAPITAL
MANAGEMENT (cont’d...)
 
 The
Company expects its current capital resources to be sufficient to carry on its
operations through its current reporting period and beyond.
 
 The
Company currently is not subject to externally imposed capital
requirements.  There were no changes in the Company’s approach to
capital management.
 
 14.           FINANCIAL
INSTRUMENTS
 
 The
Company’s financial instruments are exposed to certain financial risks,
including currency risk, credit risk, liquidity risk, interest rate risk and
price risk.
  Currency
risk
  As at
April 30, 2009 and April 30, 2008, the Company’s expenditures are predominantly
in Canadian dollars, and any future equity raised is expected to be
predominantly in Canadian dollars.  As at April 30, 2009, the Company
has accounts payable denominated in US dollars of $133,216 and cash of $122,207
US dollars.  A 10% change in the Canadian dollar vs. the US dollar
would give rise to a $1,310 gain/loss.  In the future the Company
expects a significant amount of its expenditures to be in USD, related to the
exploration and development of its Bootheel Wyoming Property.
  Credit
risk
  Credit
risk is the risk of an unexpected loss if a customer or third party to a
financial instrument fails to meet its contractual obligations.
  Included
in other receivables is an unsecured amount of $31,000 (net of provision for bad
debt - $93,270), owing from an employee.  The maximum exposure for the
Company is $124,270, the full amount of this receivable.  Any recovery
above the current balance will be recorded to income upon receipt.
  The
Company’s cash and cash equivalents are held at a large Canadian financial
institution in interest bearing accounts.  The Company has no
investments in asset-backed commercial paper.
  The
Company’s accounts receivable consist mainly of GST receivable due from the
Government of Canada.
  Liquidity
risk
  Liquidity
risk is the risk that the Company will not be able to meet its financial
obligations as they fall due.
  The
Company manages liquidity risk through its capital management as outlined in
Note 13 to the consolidated financial statements.  Accounts payable
relating to mineral properties and other accounts payable and accrued
liabilities are due within the one year.
  Interest
rate risk
  Interest
rate risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market interest
rates.
  The risk
that the Company will realize a loss as a result of a decline in the fair value
of the short-term investments included in cash and cash equivalents is minimal
because these investments roll over daily.
   105
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 14.           FINANCIAL
INSTRUMENTS (cont’d...)
  Price
risk
  The
Company is exposed to price risk with respect to commodity prices, particularly
uranium.  The Company closely monitors commodity prices to determine
the appropriate course of action to be taken by the Company.
  Market
Risk
  The
Company currently maintains investments in certain marketable
securities.  There can be no assurance that the Company can exit these
positions if required, resulting in proceeds approximating the carrying value of
these securities.
  15.
              CONTINGENCY
  Litigation with Universal
Uranium Ltd.
 
 Crosshair
Exploration announced on April 28, 2009 that it has commenced an action in
British Columbia Supreme Court against Universal Uranium Ltd (“Universal”)
alleging that Universal had knowledge of trades that artificially inflated the
market price of shares of Universal at the time that Crosshair agreed to
purchase property and securities of Universal.  The action relates to
certain agreements Crosshair entered into with Universal to acquire all of
Universal’s interest in its project in the Central Mineral Belt of Labrador and
to purchase securities of Universal by way of a private placement.
 
 Crosshair
has received confirmation from the Transfer Agent that Universal will not
receive any further shares or warrants from escrow until there is final
resolution to the dispute.  As of April 30, 2009, Universal has
received 2,856,000 shares in the first two tranches to date with 7,144,000
shares and 7,500,000 warrants remaining in escrow.
 
 Universal
filed a Statement of Defence and Counterclaim in the B.C. Supreme Court on May
13th, 2009.  Crosshair will file a Statement of Defence to the
counterclaim made by Universal and maintains its confidence that its action
against Universal is grounded in both fact and law.
 
 
 16.           
SUBSEQUENT EVENT
 
 Stock
options
 
 Subsequent
to April 30, 2009, the Company granted 2,745,000 stock options at an exercise
price of $0.27 per option with a 5 year expiry date.
 
 
  
   106
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 17.
              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 ("US GAAP") are described and
quantified below.
  Balance
sheets
  The
impact of the differences between Canadian GAAP and United States GAAP on the
balance sheets would be as follows:
  2009
                  
                  
                  2008Balance,
                    Canadian
                    GAAP
                  
                  
                  Adjustments
                  
                  
                  Balance,
                    US
                    GAAP
                  
                  
                  Balance,
                    Canadian
                    GAAP
                  
                  
                  Adjustments
                  
                  
                  Balance,
                    US
                    GAAPAssets:Current
      assets
                  
                  $
                  3,481,036
                  
                  
                  $
                  -
                  
                  
                  $
                  3,481,036
                  
                  
                  $
                  14,574,572
                  
                  
                  $
                  -
                  
                  
                  $
                  14,574,572Long-term
      receivables
                  
                  
                  31,000
                  
                  
                  
                  -
                  
                  
                  
                  31,000
                  
                  
                  
                  115,826
                  
                  
                  
                  -
                  
                  
                  
                  115,826Bonds
                  
                  
                  34,109
                  
                  
                  
                  -
                  
                  
                  
                  34,109Equipment
                  
                  
                  482,686
                  
                  
                  
                  -
                  
                  
                  
                  482,686
                  
                  
                  
                  507,883
                  
                  
                  
                  -
                  
                  
                  
                  507,883Mineral
      properties
                  
                  
                  29,336,828
                  
                  
                  
                  (18,646,289
                  )
                  
                  
                  10,690,539
                  
                  
                  
                  27,071,981
                  
                  
                  
                  (23,870,031
                  )
                  
                  
                  3,201,950Total
      assets
                  
                  $
                  33,365,659
                  
                  
                  $
                  (18,646,289
                  )
                  
                  $
                  14,719,370
                  
                  
                  $
                  42,270,262
                  
                  
                  $
                  (23,870,031
                  )
                  
                  $
                  18,400,231LiabilitiesCurrent
      liabilities
                  
                  $
                  839,867
                  
                  
                  $
                  -
                  
                  
                  $
                  839,867
                  
                  
                  $
                  1,302,566
                  
                  
                  $
                  -
                  
                  
                  $
                  1,302,566Future
      reclamation costs
                  
                  
                  676,484
                  
                  
                  
                  -
                  
                  
                  
                  676,484
                  
                  
                  
                  172,238
                  
                  
                  
                  -
                  
                  
                  
                  172,238Flow-through
      share liability
                  
                  
                  -
                  
                  
                  
                  30,685
                  
                  
                  
                  30,685
                  
                  
                  
                  -
                  
                  
                  
                  536,250
                  
                  
                  
                  536,250Shareholders’
      equityCapital
      stock
                  
                  
                  67,793,186
                  
                  
                  
                  765,050
                  
                  
                  
                  68,558,236
                  
                  
                  
                  60,948,053
                  
                  
                  
                  (536,250
                  )
                  
                  
                  60,411,803Contributed
      surplus
                  
                  
                  15,429,680
                  
                  
                  
                  
                  
                  
                  
                  15,429,680
                  
                  
                  
                  10,496,726
                  
                  
                  
                  -
                  
                  
                  
                  10,496,726Deficit
                  
                  
                  (51,373,558
                  )
                  
                  
                  (19,442,024
                  )
                  
                  
                  (70,815,582
                  )
                  
                  
                  (30,649,321
                  )
                  
                  
                  (23,870,031
                  )
                  
                  
                  (54,519,352
                  )Total
      liabilities and
                    shareholders’
      equity
                  
                  $
                  33,365,659
                  
                  
                  $
                  (18,646,289
                  )
                  
                  $
                  14,719,370
                  
                  
                  $
                  42,270,262
                  
                  
                  $
                  (23,870,031
                  )
                  
                  $
                  18,400,231
 
 
 
  107
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 17.
              DIFFERENCES
      BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING
      PRINCIPLES (cont’d...)
 
  Statements
of operations
  The
impact of the differences between Canadian GAAP and United States GAAP on the
statements of operations would be as follows:
  2009
                  
                  
                  2008
                  
                  
                  2007Loss
      for the year under Canadian GAAP
                  
                  $
                  (20,724,237
                  )
                  
                  $
                  (12,933,204
                  )
                  
                  $
                  (5,533,011
                  )Adjustments:Mineral
      property expenditures incurred during the year
                  
                  
                  (4,115,682
                  )
                  
                  
                  (11,262,238
                  )
                  
                  
                  (9,310,881
                  )Mineral
      properties written off during the year
                  
                  
                  9,339,424
                  
                  
                  
                  -
                  
                  
                  
                  -Flow-through
      share premium paid in excess of market value
                  
                  
                  505,565
                  
                  
                  
                  -
                  
                  
                  
                  -Future income tax
      recovery
                  
                  
                  (1,301,300
                  )
                  
                  
                  -
                  
                  
                  
                  -Loss
      under US GAAP
                  
                  $
                  (16,296,230
                  )
                  
                  $
                  (24,195,442
                  )
                  
                  $
                  (14,843,892
                  )Weighted
      average number of common shares outstanding   under US
      GAAP
                  
                  
                  93,584,687
                  
                  
                  
                  72,997,081
                  
                  
                  
                  62,293,444Loss
      per share under US GAAP
                  
                  $
                  (0.17
                  )
                  
                  $
                  (0.33
                  )
                  
                  $
                  (0.24
                  )
 
 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:
  2009
                  
                  
                  2008
                  
                  
                  2007Net
      cash flows from operating activitiesUnder
      Canadian GAAP
                  
                  $
                  (3,414,510
                  )
                  
                  $
                  (5,501,079
                  )
                  
                  $
                  (3,798,445
                  )Mineral
      properties
                  
                  
                  (5,145,919
                  )
                  
                  
                  (10,076,855
                  )
                  
                  
                  (8,238,406
                  )Net
      cash used in operating activities under US GAAP
                  
                  
                  (8,560,429
                  )
                  
                  
                  (15,577,934
                  )
                  
                  
                  (12,036,851
                  )Net
      cash flows from financing activitiesUnder
      Canadian GAAP and US GAAP
                  
                  
                  (980,511
                  )
                  
                  
                  15,310,838
                  
                  
                  
                  12,926,385Net
      cash flows used in investing activitiesUnder
      Canadian GAAP
                  
                  
                  (6,053,579
                  )
                  
                  
                  (10,845,302
                  )
                  
                  
                  (8,764,499
                  )Mineral
      properties
                  
                  
                  5,145,919
                  
                  
                  
                  10,076,855
                  
                  
                  
                  8,238,406Net
      cash used in investing activities under US GAAP
                  
                  
                  (907,660
                  )
                  
                  
                  (768,447
                  )
                  
                  
                  (526,093
                  )Net
      increase in cash and cash equivalents during the year
                  
                  
                  (10,448,600
                  )
                  
                  
                  (1,035,543
                  )
                  
                  
                  363,441Cash
      and cash equivalents, beginning the year
                  
                  
                  13,275,874
                  
                  
                  
                  14,311,417
                  
                  
                  
                  13,947,976Cash
      and cash equivalents, end of year
                  
                  $
                  2,827,274
                  
                  
                  $
                  13,275,874
                  
                  
                  $
                  14,311,417
  
 108
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 17.
              DIFFERENCES BETWEEN CANADIAN
      AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES(cont’d...)
  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 US GAAP. Under US 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.
  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 US 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 ended April 30, 2008, the Company issued 3,575,000 flow-through shares
for total proceeds of $5,005,000.  As the market price of the
Company’s stock was less than the fair value of the flow-through shares issued,
a premium of $536,250 has been recorded for the expended cash on qualifying
expenditures and a flow-through share liability of $536,250 was recorded for the
unexpended amount as of April 30, 2008.
  In
relation to the April 2008 flow-through share issuance a premium of $505,565 has
been recorded for the expended cash on qualifying expenditures and a
flow-through share liability of $30,685 was recorded for the unexpended amount
as of April 30, 2009.
  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, 2009, 2008 and 2007 were 93,584,687,
72,997,081, and 62,293,444, respectively.
 
  109
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 17.
              DIFFERENCES BETWEEN CANADIAN
      AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES(cont’d...)
  New
Accounting Standards
 
 Effective
May 1, 2007, the Company adopted the provisions of FASB
Interpretation 48, Accounting for Uncertainty in Income
Taxes ("FIN No. 48"). FIN No. 48 prescribes a recognition
threshold that a tax position is required to meet before being recognized in the
financial statements. Additionally, FIN No. 48 provides guidance on
de-recognition, measurement, classification, interest and penalties, accounting
in interim periods, disclosure and transition. Under FIN No. 48, an entity
may only recognize or continue to recognize tax positions that meet a "more
likely than not" threshold.   The adoption of FIN No. 48 did not
have a cumulative effect on the Company’s financial statements.
 
 In September 2006, the FASB issued SFAS
No. 157, Fair Value
Measurements ("SFAS No. 157"), which defines fair value,
establishes a framework for measuring fair value in generally accepted
accounting principles, and expands disclosures about fair value measurements.
SFAS No. 157 applies to other existing accounting pronouncements that
require or permit fair value measurements. SFAS No. 157 does not require
any new fair value measurements. However, the application of this statement may
change the current practice for fair value measurements. SFAS No. 157 is
effective for fiscal years beginning after November 15, 2007, and interim
periods within those fiscal years. However, in February 2008, the FASB
issued a final Staff Position to allow filers to defer the effective date of
SFAS No. 157 for one year for nonfinancial assets and nonfinancial
liabilities that are recognized or disclosed at fair value in the financial
statements on a nonrecurring basis. The FASB Staff Position ("FSP") does not
defer recognition and disclosure requirements for financial assets and financial
liabilities or for nonfinancial assets and nonfinancial liabilities that are
remeasured at least annually. The Company is currently evaluating the impact
this statement will have on its financial position and results of operations and
does not expect this statement to have a material impact on its financial
position and results of operations.
  In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities—Including an amendment of FASB Statement
No. 155 ('SFAS No. 159"). SFAS No. 159 provides companies
with an option to report selected financial assets and liabilities at fair
value. SFAS 159 is effective as of the beginning of an entity's first
fiscal year that begins after November 15, 2007. The Company evaluated the
impact of this statement and determined this statement has no material impact on
its financial position and results of operations.
 
 In
December 2007, the FASB issued SFAS No. 141(R), Business Combinations
(revised—2007) ("SFAS No. 141(R)"). SFAS No. 141(R) is a
revision to previously existing guidance on accounting for business
combinations. The statement retains the fundamental concept of the purchase
method of accounting, and introduces new requirements for the recognition and
measurement of assets acquired, liabilities assumed and noncontrolling
interests. SFAS No. 141(R) also requires acquisition-related transaction
and restructuring costs to be expensed rather than treated as part of the cost
of the acquisition. SFAS No. 141(R) applies prospectively to business
combinations for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after December 15, 2008. The
Company is currently evaluating the impact this statement will have on its
financial position and results of operations and does not expect this statement
to have a material impact on its financial position and results of
operations.
 
 In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements ("SFAS No. 160"). The Statement
requires that noncontrolling interests be reported as stockholders equity, a
change that will affect the Company's financial statement presentation of
minority interests in its consolidated subsidiaries. The statement also
establishes a single method of accounting for changes in a parent's ownership
interest in a subsidiary as long as that ownership change does not result in
deconsolidation. The statement is effective for fiscal years beginning after
December 15, 2008. The Company is currently evaluating the impact of SFAS
No. 160 and does not expect this statement to have a material impact on its
financial position and results of operations.
 
  110
  CROSSHAIR
EXPLORATION & MINING CORP.
 NOTES TO
THE CONSOLIDATED FINANCIAL STATEMENTS
 APRIL 30,
2009
 (Expressed
in Canadian Dollars)
  
 17.
              DIFFERENCES BETWEEN CANADIAN
      AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES(cont’d...)
  New Accounting Standards(cont’d...)
 
 In
March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities ("SFAS No. 161"). SFAS
No. 161 amends and expands the disclosure requirements of SFAS
No. 133, Accounting for
Derivative Instruments and Hedging Activities, and requires entities to
provide enhanced qualitative disclosures about objectives and strategies for
using derivatives, quantitative disclosures about fair values and amounts of
gains and losses on derivative contracts, and disclosures about
credit-risk-related contingent features in derivative agreements. This statement
applies to all entities and all derivative instruments. SFAS 161 is
effective for financial statements issued for fiscal years and interim periods
beginning after November 15, 2008. The Company is currently evaluating the
impact of SFAS No. 161 and does not expect this statement to have a
material impact on its financial position and results of
operations.
 
 In April
2008, the FASB issued FSP FAS 142-3, Determination of the Useful Life of
Intangible Assets or FSP FAS 142-3. FSP FAS 142-3 amends the factors that should
be considered in developing renewal or extension assumptions used to determine
the useful life of a recognized intangible asset under SFAS No. 142, Goodwill
and Other Intangible Assets. The intent of the position is to improve the
consistency between the useful life of a recognized intangible asset under SFAS
No. 142 and the period of expected cash flows used to measure the fair value of
the intangible asset. FSP FAS 142-3 is effective for fiscal years beginning
after December 15, 2008. We are assessing the potential impact that the adoption
of FSP FAS 142-3 may have on our consolidated financial position, results of
operations or cash flows.
 
 In May
2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles or SFAS No. 162. SFAS No. 162 identifies the sources of
accounting principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with GAAP. This statement shall be effective 60 days
following the Securities and Exchange Commission’s approval of the Public
Company Accounting Oversight Board amendments to AU Section 411, The Meaning of
Present Fairly in Conformity With Generally Accepted Accounting Principles. We
do not believe that implementation of this standard will have a material impact
on our consolidated financial position, results of operations or cash
flows.
 
 In June
2008, the FASB issued FSP No. EITF 03-6-1, “Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities,”
(FSP EITF 03-6-1). FSP EITF 03-6-1 states that unvested share-based
payment awards that contain nonforfeitable rights to dividends or dividend
equivalents (whether paid or unpaid) are participating securities and shall be
included in the computation of earnings per share pursuant to the two-class
method. FSP EITF 03-6-1 is effective for fiscal years beginning after
December 15, 2008. Management has determined that the adoption of FSP EITF
03-6-1 will not have an impact on the Financial Statements.
 
 In June
2008, the FASB issued EITF Issue 07-5 (EITF 07-5), Determining whether an Instrument
(or Embedded Feature) is indexed to an Entity’s Own Stock. EITF No. 07-5
is effective for financial statements issued for fiscal years beginning after
December 15, 2008, and interim periods within those fiscal years. Early
application is not permitted. Paragraph 11(a) of SFAS No. 133 Accounting for Derivatives and
Hedging Activities, specifies that a contract that would otherwise meet
the definition of a derivative but is both (a) indexed to the Company’s own
stock and (b) classified in stockholders’ equity in the statement of financial
position would not be considered a derivative financial instrument. EITF 07-5
provides a new two-step model to be applied in determining whether a financial
instrument or an embedded feature is indexed to an issuer’s own stock and thus
able to qualify for the SFAS No. 133 paragraph 11(a) scope exception. EITF 07-5
is effective for us on May 1, 2009. Adoption of EITF 07-5 is not expected to
have a material impact on our financial statements.
  In
December 2008, the FASB issued FSP FAS 140-4 and FIN 46(R)-8, Disclosures by Public Entities
(Enterprises) About Transfers of Financial Assets and Interest in Variable
Interest Entities (FSP 140-4). FSP 140-4 requires additional disclosure
about transfers of financial assets and an enterprise’s involvement with
variable interest entities. FSP 140-4 is effective for the first reporting
period ending after December 15, 2008. The adoption of FSP 140-4 is not expected
to have a material impact on our consolidated financial
statements.


111




ITEM 18.
              FINANCIAL
      STATEMENTS


See “Item
17 – Financial Statements.”




ITEM
      19.
              EXHIBITS




1.1(1)
                Certificate
      of Incorporation dated September 2, 19661.2(1)
                Memorandum
      dated August 31, 19661.3(1)
                Certificate
      of Conversion to Public Company dated February 20, 19671.4(1)
                Certificate
      of Name Change from Shasta Mines & Oil Ltd. (NPL) to International
      Shasta Resources Ltd dated February 4, 19751.5(1)
                Certificate
      of Name Change from International Shasta Resources Ltd. to Consolidated
      Shasta Resources Inc dated May 20, 19941.6(1)
                Certificate
      of Name Change from Consolidated Shasta Resources Inc. to Lima Gold
      Corporation dated November 23, 19941.7(1)
                Certificate
      of Name Change from Lima Gold Corporation to International Lima Resources
      Corp. dated September 21, 19991.8(1)
                Certificate
      of Name Change from International Lima Resources Corp. to Crosshair
      Exploration & Mining Corp. dated March 1, 20041.9(1)
                Transition
      Application and Notice of Articles transitioning from the former Company
      Act (British Columbia) to the Business Corporations Act (British Columbia)
      dated June 1, 20041.10(1)
                Notice
      of Alteration removing the Pre-Existing Company Provisions filed September
      30, 20041.11(1)
                Notice
      of Alteration increasing the authorized share capital from 100,000,000
      common shares to an unlimited number of common shares filed March 11,
      20051.12(1)
                New
      Articles - 20042.1(1)
                Specimen
      Common Share certificate2.2(1)
                Sample
      of Warrant Terms and Conditions3.1
                Voting Trust Agreement between Crosshair and Universal
      dated July 29, 20084.1(1)
                Victoria
      Lake Property Agreement between Rubicon Minerals Corp. and Crosshair dated
      February 14, 2003.  (This agreement is in relation to the South
      Golden Promise Property)4.2(1)
                1st
      Amended Agreement with Rubicon Minerals Corp. regarding Victoria Lake
      Property dated April 29, 2004. (This agreement relates to the South Golden
      Promise Property)4.3(1)
                2nd
      Amended Agreement with Rubicon Minerals Corp. regarding Victoria Lake
      Property dated November 16, 2004. (This agreement relates to the South
      Golden Promise Property)4.4(2)
                Golden
      Promise Agreement between Rubicon Minerals Corp. and Crosshair Exploration
      dated May 1, 20064.5(1)
                Amended
      and Restated Moran Lake Agreement between Lewis Murphy and Crosshair dated
      March 1, 2005







112




4.6
                Stock Option Plan dated July 31,
  20084.7
                Sample Stock Option Grant
  Certificate4.8(3)
                Agreement
      with Triassic Properties Limited regarding Otter and Portage Lake, dated
      December 2, 20054.9(5)
                Independent
      Consulting Services Agreement with Douglas R. Brett, Inc. and Douglas R.
      Brett dated August 1, 20074.10(6)
                Amended
      and Restated Shareholder Rights Plan Agreement with Computershare Investor
      Services Inc. dated as of November 19, 2007, as amended and restated March
      31, 20084.11(7)
                Purchase
      and Sale Agreement dated June 4, 2008 with Gemini and
    Paragon4.12(7)
                Employment
      Agreement with Paul Hosford dated January 21, 20084.13(7)
                Underwriting
      Agreement with Canaccord Capital Corporation and Thomas Weisel Partners
      Canada Inc. dated March 26, 20084.14(7)
                Warrant
      Indenture dated April 4, 2008 with Computershare Trust Company of
      Canada4.15
                Employment Agreement with Joseph Miller dated July 31,
      20084.16
                Purchase and Sale Agreement between Crosshair and
      Universal dated July 29, 20084.17
                Escrow Agreement between Crosshair, Universal and
      Computershare Investor Services Inc. dated July 29,
    20084.18
                Settlement and Release Agreement made among Universal,
      Silver Spruce and Crosshair dated July 29, 20084.19
                Subscription Agreement between Universal and Crosshair
      with respect to Crosshair’s July 28, 2009 subscription for 2,222,222 units
      of Universal at a price of $0.45 per unit4.20(8)
                Combination
      Agreement made among Crosshair, 0843540 B.C. Ltd. and Target dated January
      28, 20094.21
                Golden Promise Option and Joint Venture Agreement
      between Crosshair and Paragon dated April 8, 20094.22
                List of Crosshair Subsidiaries4.23
                The Bootheel Project, LLC Exploration, Development &
      Mine Operating Agreement among 448018 Exploration, Inc., NFUR Bootheel,
      LLC, Target Exploration and Mining Corp., Ur-Energy USA Inc. and NFU
      Wyoming LLC dated June 7, 20074.24
                Amendment No. 1 to The Bootheel Project, LLC
      Exploration, Development & Mine Operating Agreement dated December 21,
      20074.25
                Uranium Lease and Surface and Damage Agreement between
      448018 Exploration, Inc. and M J Ranches dated February 5,
      20084.26
                Assignment of Uranium Lease and Surface and Damage
      Agreement between 448018 Exploration, Inc. and The Bootheel Project, LLC
      dated April 11, 20084.27
                Surface Impact Agreement between 448018 Exploration,
      Inc. and M J Ranches dated February 5,
2008





113




4.28
                Assignment of Surface Impact Agreement between 448018
      Exploration, Inc. and The Bootheel Project, LLC dated April 11,
      200811.1(4)
                Code
      of Ethics12.1
                Section 302 CEO Certification12.2
                Section 302 CFO Certification13.1
                Section 906 CEO Certification13.2
                Section 906 CFO Certification15.1
                Consent of Author – Thomas C. Pool,
    P.E.15.2
                Consent of Author – Gary H. Giroux, P.Eng.,
      MASc.15.3
                Consent of Author – Jeffery A. Morgan, B.Sc.,
      P.Geo.15.4
                Consent of Author – Gary H. Giroux, P.Eng.,
      MASc.15.5
                Consent of Author – Larry R. Pilgrim, B.Sc.,
      P.Geo.15.6
                Consent of Author –David A. Ross, M.Sc.,
      P.Geo






(1)
              Filed
      as an exhibit to our Registration Statement on Form 20-F filed April 25,
      2006.(2)
              Filed
      as an exhibit to our Registration Statement on Form 20-F filed July 21,
      2006.(3)
              Filed
      as an exhibit to our Annual Report on Form 20-F filed October 31,
      2006.(4)
              Filed
      as an exhibit to our Form 6-K filed April 8, 2009.(5)
              Filed
      as an exhibit to our Annual Report on Form 20-F filed October 31,
      2007.(6)
              Filed
      as an exhibit to our Form 6K filed April 16, 2008.(7)
              Filed
      as an exhibit to our Annual Report on Form 20-F filed July 29,
      2008.(8)
              Filed
      as an exhibit to our Form 6-K filed January 29,
  2009.






114







GLOSSARY OF GEOLOGICAL TERMS





The
following is a glossary of certain geological terms used in this Form 20-F
Annual Report:




Anomalousmeans having a
geochemical or geophysical character which deviates from
regularity.




Anticlinemeans a fold with
strata sloping downward on both sides from a common crest.




Archean means of or relating
to the oldest known rocks, those of the Precambrian Eon, Basaltmeans a hard, dense,
dark volcanic rock composed chiefly of plagioclase, pyroxene, and olivine, and
often having a glassy appearance.




Breccia means fragmental rock
whose components are angular and, therefore, as distinguished from
conglomerates, are not water worn. May be sedimentary or formed by crushing or
grinding along faults.




Chertmeans variety of silica
containing microcrystalline quartz.




Claimmeans the area that
confers mineral exploration/exploitation rights to the registered
(mineral/mining) holder under the laws of the governing
jurisdiction.




Clasticmeans a sedimentary
rock composed of fragments from pre-existing rock.




Conglomeratemeansa composite rock made up
of particles of varying size.




Contiguousmeans
adjacent.




Diamond Drillmeans a type of
rotary drill in which the cutting is done by abrasion rather than percussion.
 The cutting bit is set with diamonds and is attached to the end of long
hollow rods through which water is pumped to the cutting face.  The drill
cuts a core of rock which is recovered in long cylindrical sections, an inch or
more in diameter.




Dolostone means a sedimentary
rock composed primarily of dolomite, a mineral made up of calcium, magnesium,
carbon, and oxygen.




eU3O8means equivalent uranium
as determined from a gamma log measured by a downhole
probe.  Expressing the uranium content in this manner is standard
industry practice for uranium exploration in the USA.




Faultmeans a fracture in a
rock along which there has been relative movement between the two sides either
vertically or horizontally.




Foliationmeans the layered
structure common to metamorphic rocks.




Fracturemeans breaks in rocks
due to intensive folding or faulting.




Galenameans a soft blue-gray
mineral; a major source of lead.




Geologicalmeans pertaining to
geology, the study of the planet earth – the materials of which it is made, the
processes that act on these materials, the products formed, and the history of
the planet and its life forms since its origin.




Geochemicalmeans the
chemistry of the composition and alterations of the solid matter of the earth or
a celestial body.







115







Geophysicsmeans the study of
the earth by quantitative physical methods.




Gneisses means a banded or
foliated metamorphic rock, usually of the same composition as
granite.




Granitemeansplutonic igneous rock
having visibly crystalline texture; generally composed of feldspar and mica and
quartz.




Graphiticmeans pertaining to,
containing, derived from, or resembling, graphite.




Greywackemeans a variety of
sandstone generally characterized by its hardness, dark color, and
poorly-sorted, angular grains of quartz, feldspar, and small rock fragments set
in a compact, clay-fine matrix.




Hematitemeans an iron ore
that is a natural iron oxide that is reddish or brown in colour.




Hostmeans a rock or mineral
that is older than rocks or minerals introduced into it.




Indicated Mineral Resource -
is that part of a Mineral Resource for which quantity, grade or quality,
densities, shape and physical characteristics, can be estimated with a level of
confidence sufficient to allow the appropriate application of technical and
economic parameters, to support mine planning and evaluation of the economic
viability of the deposit. The estimate is based on detailed and reliable
exploration and testing information gathered through appropriate techniques from
locations such as outcrops, trenches, pits, workings and drill holes that are
spaced closely enough for geological and grade continuity to be reasonably
assumed.  This definition is from the Canadian Institute of Mining,
Metallurgy and Petroleum Standards on Mineral Resources and Mineral Reserves
adopted on December 11, 2005.




Inferred Mineral Resource - is
that part of a Mineral Resource for which quantity and grade or quality can be
estimated on the basis of geological evidence and limited sampling and
reasonably assumed, but not verified, geological and grade continuity. The
estimate is based on limited information and sampling gathered through
appropriate techniques from locations such as outcrops, trenches, pits, workings
and drill holes.  This definition is from the Canadian Institute of
Mining, Metallurgy and Petroleum Standards on Mineral Resources and Mineral
Reserves adopted on December 11, 2005.




Intrusionmeans a rock formed
by having moved while in a molten state into pre-existing rocks.




Limestone means a sedimentary
rock consisting mainly of calcium that was deposited by the remains of marine
animals.




Maficmeans relating to or
being a dark-coloured igneous group of minerals that have high magnesium and
iron content.




Mineral Resourcemeans a
concentration or occurrence of natural, solid, inorganic or fossilized organic
material in or on the Earth's crust in such form and quantity and of such a
grade or quality that it has reasonable prospects for economic extraction. The
location, quantity, grade, geological characteristics and continuity of a
mineral resource are known, estimated or interpreted from specific geological
evidence and knowledge.




Mineralizationmeans the
concentration of metals and their chemical compounds within a body of
rock.




Mudstonemeansa detrital sedimentary
rock composed of clay-sized particles.




Net Smelter Return and NSRmeansthe
amount of the excess, if any, of Revenue, less Costs.  All or any
exploration, development and mine construction costs and interest thereon are
not to be charged or deducted from the NSR.




NI 43-101means National
Instrument 43-101 Standards of
Disclosure for Mineral Projects, as adopted by the Canadian Securities
Administrators effective December 30, 2005.







116










Paleoproterozoic means
adjective implying conditions between 1.6 billon years ago and 2.5 billion years
ago.




Pyritemeansa cubic iron sulfide
mineral with a brassy metallic luster that is used as an iron ore, as a source
of sulfur, and in the production of sulfuric acid.




Quartzmeans a mineral
composed of silicon dioxide.




Sandstonemeans a type of
sedimentary rock made up of particles of sand, mostly quartz, bound together
with a mineral cement, along with some feldspar, mica and rock
debris.




Shalemeansa fine-grained detrital
sedimentary rock, formed by the compaction of clay, silt, or mud




Siltstonemeans a form of
fine-grained sandstone consisting of compressed silt.




Soil samplingmeans the
systematic collection of soil samples at a series of different locations in
order to study the distribution of soil geochemical values.




Stratigraphymeans Cultural
remains and natural sediments become buried over time, forming
strata.




Striaemeans grooves on a rock
surface caused by the movement of a glacier over the rock.  Provides a
direction for tracing boulders to their source.




Strikemeans the direction or
trend of a geologic structure.




Synclinemeans a fold in rocks
in which the rock layers dip inward from both sides toward the
axis.




Tuffmeans hard volcanic rock
composed of compacted volcanic ash.




UTM grid means Universal
Transverse Mercator grid.




Veinmeans a thin sheet-like
intrusion into a fissure or crack, commonly quartz-bearing.




Volcanicmeans a description
of rocks originating from volcanic activity.












117





SIGNATURES





The
registrant hereby certifies that it meets all of the requirements for filing on
Form 20-F 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. MorabitoBy:
                  Mark
      J. MorabitoChief
      Executive Officer


Date:
June 25, 2009