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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, 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

[ x ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the fiscal year endedApril
30, 2008

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.comSuite 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 registered**
|-------------------------------- | ----------------------------------------
|Common Shares, without par value | American Stock Exchange                 

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: **84,595,825**

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

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

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

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 [ x ] | Non-accelerated filer [ ]
|--------------------------- | ----------------------- | -------------------------

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 [ x ]
|------------- | --------------------------------------------------------------------------------------------------------------- | -----------

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.[ x ] 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[ x ] No

Index to Exhibits on Page 66

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|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|FORM 20-F ANNUAL REPORT             
|TABLE OF CONTENTS                   

|Part
      I |                                                                                    | Page
|------------ | ---------------------------------------------------------------------------------- | ----
|Item 1.      | Identity of
      Directors, Senior Management and Advisors                        | 3   
|Item 2.      | Offer Statistics and Expected Timetable                                            | 3   
|Item 3.      | Key Information                                                                    | 3   
|Item 4.      | Information on the Company                                                         | 13  
|Item 4A.     | Unresolved
      Staff Comments                                                    | 30  
|Item 5.      | Operating and Financial Review and Prospects                                       | 30  
|Item 6.      | Directors, Senior Management
      and Employees                                   | 38  
|Item 7.      | Major Shareholders and Related Party Transactions                                  | 49  
|Item 8.      | Financial
      Information                                                        | 51  
|Item 9.      | The Offer and Listing                                                              | 52  
|Item 10.     | Additional
      Information                                                       | 53  
|Item 11.     | Quantitative and Qualitative Disclosures About Market Risk                         | 61  
|Item 12.     | Description of
      Securities Other Than Equity Securities                       | 61  
|Part II      |                                                                                    |     
|Item 13.     | Defaults,
      Dividend Arrearages and Delinquencies                              | 62  
|Item 14.     | Material Modifications to the Rights of Security Holders
      and Use of Proceeds | 62  
|Item 15.     | Controls and
      Procedures                                                      | 62  
|Item 16.     | Reserved                                                                           | 63  
|Item 16A.    | Audit
      Committee Financial Expert                                             | 63  
|Item 16B.    | Code of Ethics                                                                     | 63  
|Item 16C.    | Principal
      Accountant Fees and Services                                       | 63  
|Item 16D.    | Exemptions from the Listing Standards for Audit Committees                         | 64  
|Item 16E.    | Purchases of
      Equity Securities by the Issuer and Affiliated Purchasers       | 64  
|Part III     |                                                                                    |     
|Item 17.     | Financial
      Statements                                                         | 65  
|Item 18.     | Financial Statements                                                               | 66  
|Item 19.     | Exhibits                                                                           | 66  
|             | Glossary of Geological Terms                                                       | 69  

i

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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 November 23, 2003. 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, should, or will 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

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- 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 sock rules;
- risks related to us being a foreign private issuer; and
- risks related to us possibility 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

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|      
|------
|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, 2008, 2007, 2006, 2005 and 2004 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

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|                              |   | For the Year Ended April 30, |  
|----------------------------- | - | ---------------------------- | -
|                              |   |                              |  
|                              |   | 2008                         |  
|                              |   |                              |  
|CANADIAN GAAP                 |   |                              |  
|Revenue                       |   | --                           |  
|Income (Loss) for the Period  |   | (12,933,204                  | )
|Basic Income (Loss) Per Share | $ | (0.18                        | )
|Dividends Per Share           |   | --                           |  
|Weighted Average Shares (#)   |   | 72,997,081                   |  
|Period-end Shares (#)         |   | 84,595,825                   |  
|Working Capital               | $ | 13,387,832                   |  
|Mineral Properties            | $ | 27,071,981                   |  
|Long-Term Debt                |   | --                           |  
|Capital Stock                 | $ | 60,948,053                   |  
|Shareholders Equity          | $ | 40,795,458                   |  
|Total Assets                  | $ | 42,270,262                   |  
|US GAAP1 2 3 4 5              |   |                              |  
|Net Income (Loss)             | $ | (24,195,442                  | )
|Loss Per Share                | $ | (0.33                        | )
|Mineral Properties            | $ | 3,201,950                    |  
|Shareholders Equity          | $ | 16,389,177                   |  
|Total Assets                  | $ | 18,400,231                   |  

|____________________
|--------------------
|1                   
|2                   
|3                   
|4                   
|5                   

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 on the last day of each month during the period.

4

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For purposes of this table, the rate of exchange means the noon
  buying rate in New York City for cable transfers in foreign currencies as certified
  for customs purposes by the Federal Reserve Bank of New York. The table sets
  forth the number of Canadian Dollars required under that formula to buy one
  U.S. Dollar.

Period
    High
    LowJune 2008
    1.0282
    1.0011May 2008
    1.0187
    0.9840April 2008
    1.0268
    1.0021March 2008
    1.0275
    0.9841February 2008
    1.0188
    0.9717January 2008
    1.0294
    0.9905


AverageFiscal year ended April 30, 2008
    1.02Fiscal year ended April 30, 2007
    1.14Fiscal year ended April 30, 2006
    1.19Fiscal year ended April 30, 2005
    1.27Fiscal year ended April 30, 2004
    1.34


The exchange rate was $1.0015 on July 15, 2008.

|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.

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.

5

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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.

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 and the Golden Promise, South Golden Promise and Victoria Lake
  properties. As a result, unless we acquire additional property interests, any
  adverse developments affecting the Central Mineral Belt properties and the Golden
  Promise, South Golden Promise and Victoria Lake 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.

6

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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 embargo may adversely affect our ability
to raise capital

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 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.

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.

7

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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 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 the
Central Mineral Belt properties and the Golden Promise, South Golden Promise and
Victoria Lake 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

8

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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 the Central Mineral Belt properties and the Golden Promise, South Golden
Promise and Victoria Lake 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 if 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 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 the Central Mineral Belt properties and the Golden
Promise, South Golden Promise and Victoria Lake 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

9

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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 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.

10

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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 any 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. Several of our officers and/or
directors, including Messrs. Morabito, Liland, Sujir and Wallis and Ms. Bolden,
also serve as directors and officers of Target Exploration and Mining Corp.
(Target). Target is also involved in natural resource exploration and
development. While Targets operations are focused in geographical locations
different from ours, it is possible that various opportunities may arise in
which Mr. Morabito and our other directors may experience a conflict of interest
and could result in a diversion of opportunities to Target. We have no formal
measures in place to prevent such conflicts of interest. As a result of such
conflicts, transactions between us and Target may not be on the same terms as
would a transaction negotiated by unaffiliated third parties at arms
length.

We have minimal 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, 2008, according
to U.S. GAAP, is $58.8 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 July 15, 2008 we had 7,293,000 share purchase options,
8,000,000 share purchase warrants, 694,500 Underwriters Warrants (as defined
below) and, if such Underwriters Warrants were exercised, 694,500 Underwriters
Underlying Warrants (as defined below) outstanding, each of which entitles the
holder thereof to purchase a common share of our company. If all of these
securities were exercised, the number of common shares issued and outstanding
would increase from 84,865,825 (as of July 15, 2008) to 101,547,825. This
represents an increase of 19.66% in the number of shares issued and outstanding
and would result in significant dilution to current shareholders.

11

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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 diluted. As of July 15, 2008, there were
7,293,000 share purchase options outstanding, which, if exercised, would result
in an additional 7,293,000 common shares being issued.

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

Our common shares are subject to penny stock rules as defined
in Exchange Act Rule 3a51-1. The SEC has adopted rules that regulate
broker-dealer practices in connection with transactions in penny stocks. Our
common shares are subject to these penny stock rules. Transaction costs
associated with purchases and sales of penny stocks are likely to be higher than
those for other securities. 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 or system).

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 where the judgment was rendered had
      no jurisdiction according to applicable Canadian
law;
|-- | --------------------------------------------------------------------------------------------------------------------

12

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|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;
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                       
|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 meeting of shareholder
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 specficially
defined in the U.S. Internal Revenue Code of d1986) 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.

|ITEM 4. | INFORMATION ON THE COMPANY
|------- | --------------------------

|4.A. | History and Development of the Company
|---- | --------------------------------------

Introduction

Crosshair Exploration & Mining Corp. was incorporated as a
specially limited company pursuant to the Company Act (British Columbia)
(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

13

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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 Corporationand 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.comEmail: 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 have been trading on the TSX Venture Exchange with the trading
symbol CXX since 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 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, 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.

Property Acquisitions

Since the beginning of fiscal 2008, we have acquired the
following properties:

Newfoundland

We staked an additional 34 claims at the South Golden Promise
property. These claims are contiguous with the western property boundary and
were staked to cover favourable geology along strike to the southwest of the
Linda/Snow White Vein.

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Labrador

In May 2007, we entered into a property option agreement with
Belmont Resources Inc. and International Montoro Resources Inc. to acquire a 75%
interest in four mineral licenses totaling 139 claims located in the central
mineral belt of Labrador known as the Stormy Lake and Partridge River claims.
Under the terms of the property option agreement, in order to earn a 75%
interest, we were required to carry out $800,000 in exploration expenditures and
issue to the optionors 175,000 common shares over a three year period. Effective
April 1, 2008, we terminated our option.

We also staked an additional 140 mineral claims contiguous with
the southern and southeastern portion of the property boundary of our Central
Mineral Belt property. The claims cover favourable geological and structural
settings known to be associated with uranium mineralization in the region.

Property Terminations

Since the beginning of fiscal 2008, we have terminated our
option on the Stormy Lake and Partridge River claims and returned the claims to
the vendors in good standing.

We also allowed a total of 76 claims on the Golden Promise
Property to lapse after preliminary prospecting and soil sampling failed to
return any high priority targets for follow-up.

Capital Expenditures

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

Fiscal Year
    
    ExpendituresFiscal 2006
    $
    1,435,956
    (1)Fiscal 2007
    $
    10,631,531
    (2)Fiscal 2008
    $
    12,520,689
    (3)


|(1) | These funds were spent as outlined below:
|--- | -----------------------------------------

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

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

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

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

|                       |   |         |   |   |          |  |   | Central   |   |   |               |  |   | Stormy    |   |   |         |  
|---------------------- | - | ------- | - | - | -------- |  | - | --------- | - | - | ------------- |  | - | --------- | - | - | ------- | -
|                       |   | South   |   |   | Golden   |  |   | Mineral   |   |   | Otter/Portage |  |   | Lake &    |   |   |         |  
|                       |   | Golden  |   |   | Promise  |  |   | Belt      |   |   | Lake          |  |   | Partridge |   |   | Sinbad  |  
|Expense ($)            |   | Promise |   |   | Property |  |   | Project   |   |   | Properties    |  |   | River     |   |   | Claims  |  
|Drilling and trenching | $ | 5,922   |   | $ | 489,962  |  | $ | 3,868,218 |   | $ | --            |  | $ | --        |   | $ | --      |  
|Geology                |   | 50,537  |   |   | 71,756   |  |   | 5,121,264 |   |   | 22,278        |  |   | 25,542    |   |   | --      |  
|Geophysics             |   | 112,145 |   |   | --       |  |   | 352,133   |   |   | 68,885        |  |   | 56,346    |   |   | --      |  
|Administration         |   | 614     |   |   | 33,885   |  |   | 585,538   |   |   | 22,592        |  |   | 19,548    |   |   | --      |  
|Technical analysis     |   | 5,575   |   |   | --       |  |   | 649,455   |   |   | 2,362         |  |   | 1,268     |   |   | --      |  
|Future reclamation     |   | 2,852   |   |   | --       |  |   | 163,884   |   |   | --            |  |   | --        |   |   | --      |  
|Acquisition costs      |   | 67,500  |   |   | 87,800   |  |   | 695,000   |   |   | 279,000       |  |   | 145,000   |   |   | --      |  
|Credits received       |   | (72,619 | ) |   | --       |  |   | (150,000  | ) |   | --            |  |   | --        |   |   | --      |  
|Write offs/sales       |   | --      |   |   | --       |  |   | --        |   |   | --            |  |   | (247,704  | ) |   | (15,849 | )

We expect to incur capital expenditures of approximately $7.7
million for fiscal year 2009. Our capital expenditures have been financed
through sales of our common shares.

|4.B. | Business Overview
|---- | -----------------

Historical Corporate Development

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

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

- South Golden Promise, Victoria Lake and Golden Promise properties located
  in Newfoundland, Canada, acquired through option agreements with Rubicon
  Minerals Corporation (Rubicon) in February 2003 and

16

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- Central Mineral Belt properties located in Labrador, Canada, acquired
  through separate option agreements in November 2004 (amended March 2005),
  December 2005 and May 2007, as well as through claim staking.

On June 5, 2008, we announced a proposal to form a separate
company, Gemini Metals Corp. (Gemini), to further explore the Golden Promise,
South Golden Promise and Victoria Lake projects (the Spin-out Properties). We
also announced that we had entered into an agreement with Paragon whereby
Paragon will contribute its interests in the Spin-out Properties to Gemini in
exchange for shares of Gemini resulting in 100% ownership by Gemini of the
Spin-out Properties. A portion of the shares of Gemini that we receive in
exchange for contributing our interests in the Spin-out Properties will be
spun-out to our shareholders. It is expected that our shareholders will receive
one share of Gemini for every 5.5 of our shares held. The transaction is subject
to shareholder, regulatory and court approval and our shareholders will be asked
to vote on this matter at our upcoming annual and special meeting of
shareholders.



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

17

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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.

Dependency upon
Patents/Licenses/Contracts/Processes

Not applicable

Sources/Availability of Raw Materials

Not applicable

|4.C. | Organization Structure
|---- | ----------------------

On May 14, 2008, Gemini was incorporated under the BCBCA as our
wholly-owned subsidiary.

Gemini is intended to be the vehicle through which we will
spin-out our interests in the Spin-out Properties. Following the spin-out to our
shareholders of a portion of the shares of Gemini that we receive in exchange
for contributing our interests in the Spin-out Properties, we expect to hold
approximately 19% of the issued and outstanding shares of Gemini.

|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. 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 also have an office at
Suite 202, 66 Kenmount Road, St. Johns, Newfoundland, Canada where our current
monthly rent is approximately $9,132.

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).

18

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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 must 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.

We have entered into an agreement whereby Paragons interest in
the Golden Promise Property will be contributed to Gemini in exchange for shares
of Gemini and our option agreement with Paragon will be terminated. Upon the
closing of the proposed transaction, Gemini will hold a 100% interest in the
Golden Promise 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. The details of the licenses covered by the option agreement are
described as follows:

Summary of Licenses under Option

|Licence |  | Claims |  |  | Hectares |  |  | NTS AREA      |  |  | Issuance Date    |  |   | Expenditures Required    | 
|------- |  | ------ |  |  | -------- |  |  | ------------- |  |  | ---------------- |  | - | ------------------------ | 
|15169M  |  | 256    |  |  | 6,400    |  |  | 12A/16        |  |  | June 21, 2002    |  | $ | 19,976.95 by 2011/06/21  | 
|15170M  |  | 254    |  |  | 6,350    |  |  | 12A/16        |  |  | June 21, 2002    |  | $ | 22,525.77 by 2010/06/21  | 
|15171M  |  | 256    |  |  | 6,400    |  |  | 12A/16        |  |  | June 21, 2002    |  | $ | 53,331.99 by 2010/06/21  | 
|15172M  |  | 225    |  |  | 5,625    |  |  | 2D/13, 12A/16 |  |  | June 21, 2002    |  | $ | 108,916.49 by 2011/06/21 | 
|11057M  |  | 42     |  |  | 1,050    |  |  | 12A/16        |  |  | October 28, 2004 |  | $ | 12,964,88 by 2008/10/28  | 
|Total:  |  | 1,033  |  |  | 25,825   |  |  |               |  |  |                  |  |   |                          | 

Property Location

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

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.

19

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History and Previous Work

The exploration history of the vast majority of the property
dates back only as far as 2002, when a prospector working in an area burned by a
major forest fire in 1999 located gold-bearing quartz boulders immediately north
of Route 370 approximately 10 kilometers southwest of the town of Badger.
Exploration in the region prior to 2002 traditionally focused on the 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 cms) close to vein
margins. Fine grained arsenopyrite is the most common accessory mineral with
lesser amounts of pyrite, galena, spahalerite and chalcopyrite (< 1%)
occurring locally.

At least 5 zones of gold mineralization are known to occur at
Golden Promise. They include the Jaclyn, Jaclyn South, Jaclyn North, Christopher
and Shawns Shot occurrences, of which the most important are the Jaclyn, Jaclyn
South and Jaclyn North Zones. The most significant mineralization occurs at the
Jaclyn Zone, which has been defined by diamond drilling over a strike length of
800 meters and to a vertical depth of 270 meters. A total of 71 diamond drill
holes (10,315 meter) 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 1.64 meters, GP02-05 which returned 11.41 grams per
tonne gold over 1.80 meters, GP02-09 which returned 7.05 grams per tonne gold

20

---

over 2.22 meters, GP07-83 which returned 6.51 grams per tonne
gold over 1.40 meters, and GP07-90 which returned 10-14 grams per tonne gold
over 1.40 meters. Drilling completed in August of 2006 intersected a new
hangingwall zone of mineralization which returned 93.71 grams per tonne gold
over 1.40 meters.

Based on the results of 68 drill holes that penetrated the
Jaclyn Main Zone, a resource estimate was completed by independent consultant
Gary H. Giroux, P.Eng. MASc. in early 2008. Using a 1 g/t gold cutoff, he
calculated an inferred resource of 86,500 ounces of gold in the Jaclyn Main Zone
contained within a total of 921,000 tonnes of rock averaging 3.02 g Au/t.

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, Jaclyn North and Jaclyn South Zones. From June 2007 through December
2007 a 23 hole 3,926 meter edrill 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 275 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 Property

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 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.

21

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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 two blocks of licenses cover 17,800 hectares in 712
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. The details of the licenses covered by the option agreement are
described as follows:

Summary of Licenses under Option

|Licence  |  | Claims |  |  | Hectares |  |  | NTS AREA   |  |  | Issuance Date     |  |   | Expenditures Required   | 
|-------- |  | ------ |  |  | -------- |  |  | ---------- |  |  | ----------------- |  | - | ----------------------- | 
|SGP      |  |        |  |  |          |  |  |            |  |  |                   |  |   |                         | 
|         |  |        |  |  |          |  |  | 12A/09,10, |  |  |                   |  |   |                         | 
|12460M   |  | 70     |  |  | 1,750    |  |  | 15,16      |  |  | November 22, 2004 |  | $ | 17,186.40 by 2008/11/22 | 
|12462M   |  | 256    |  |  | 6,400    |  |  | 12A/09, 16 |  |  | August 19, 2002   |  | $ | 20.69 by 2009/08/19     | 
|13591M   |  | 23     |  |  | 575      |  |  | 12A/16     |  |  | November 22, 2004 |  | $ | 1,332.13 by 2008/11/22  | 
|13766M   |  | 34     |  |  | 850      |  |  | 12A/15, 16 |  |  | August 16, 2002   |  | $ | 6,507.13 by 2008/08/16  | 
|11058M   |  | 20     |  |  | 500      |  |  | 12A/16     |  |  | October 28, 2004  |  | $ | 6,921.20 by 2008/10/28  | 
|11059M   |  | 4      |  |  | 100      |  |  | 12A/16     |  |  | October 28, 2004  |  | $ | 568.64 by 2010/10/28    | 
|Victoria |  |        |  |  |          |  |  |            |  |  |                   |  |   |                         | 
|08883M   |  | 166    |  |  | 4,150    |  |  | 12A/06     |  |  | July 2, 2002      |  | $ | 83,525.58 by 2009/07/02 | 
|12380M   |  | 139    |  |  | 3,475    |  |  | 12A/06     |  |  | July 5, 2004      |  | $ | 77,701.49 by 2013/07/05 | 
|Total:   |  | 712    |  |  |          |  |  |            |  |  |                   |  |   |                         | 

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 Property consists of two blocks of
licences located east and southwest of Red Indian Lake in west central
Newfoundland, in the Grand Falls  Buchans Electoral District. The property is
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 Property also includes the Victoria Lake claims which are
targeting massive sulphide deposits as opposed to gold at Golden Promise and
South Golden Promise

Accessibility

The properties are accessible from Badger on the Trans Canada
  Highway via Route 370 to Buchans Junction about 43 kilometers to the southwest
  of Badger, and from Grand Falls-Windsor, immediately east of the property. The
  Millertown  Lake Ambrose logging haulage road west southwest of Buchans
  Junction is the principal access road

22

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to the various claim blocks to the south and southwest. The
Exploits River, the provinces largest river system, crosses the northern portion
of the property. The Victoria Lake claim group, the southwestern most claims,
are best accessed by the main logging road leading west from the Exploits Dam
along the south shore of Red Indian Lake. Numerous older logging roads,
generally in poor shape, crosscut the property and afford locally limited
access.

History

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

The 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 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.

Property Geology

The South Golden Promise property, in particular the northern
and central portions, is underlain mainly by sedimentary and volcanic rocks of
the Ordovician Victoria Lake Group which are in turn overlain by the Badger
Group sedimentary rocks. The 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 Cardocian 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.

23

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At South Golden Promise, the work to date has outlined a
significant gold-bearing quartz vein system that has been exposed on surface for
170 meters and tested to about 50 meters in diamond drilling. A total of 16
holes were completed at South Golden Promise with two holes returning visible
gold bearing quartz veining returning a high of 19.5 grams per tonne gold over
1.15 meters. Further work including diamond drilling and trenching of soil
geochemical anomalies is 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
three-dimensional borehole Pulse EM survey was conducted to test for off-hole
conductors that may represent massive sulphides. Interpretation of the data by a
geophysicist is forthcoming. Further work including diamond drilling has been
recommended.

LabradorCentral Mineral Belt

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. 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. 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.

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

To date, we have issued 1,600,000 common shares, made cash
payments totaling $425,000 and spent more than the required minimum $3,000,000
on project expenditures. In order to earn our 90% interest in the Moran Lake
Property, we are still required to make a cash payment of $150,000 on or before
November 10, 2008 and complete the bankable feasibility study (as described
above).

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

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,

24

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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.

|Summary of Licences | 
|------------------- | 
|Licence             | 
|9781M               | 
|9783M               | 
|10367M              | 
|10368M              | 
|10715M              | 
|10716M              | 
|10717M              | 
|10718M              | 
|10719M              | 
|10720M              | 
|10722M              | 
|10723M              | 
|11395M              | 
|11770M              | 
|11833M              | 
|11834M              | 
|11835M              | 
|12616M              | 
|12617M              | 
|12618M              | 
|13427M              | 
|13634M              | 
|13635M              | 
|14515M              | 
|Total:              | 

25

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26

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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.

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 Z one 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 Z one 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 meter 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

27

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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 Olympic Dam in
Australia.

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

Property Geology

The Moran Lake Property was staked in a configuration to cover
as much mineralized Paleoproterozoic stratigraphy as was available 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).

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, prospecting, limited hand 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.

28

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An NI 43-101 report was commissioned in 2007 and included a revised
  resource estimate for the Upper and Lower C Zones based on our drilling to April
  2007 as well as previous drilling carried out by Shell Canada Resources Limited.
  The estimate included an indicated resource in the Upper C Zone of 3.19 million
  pounds U3O8 (3.75 million tonnes at 0.04%), as well as
  inferred resources of 4.59 million pounds U3O8 (6.32 million
  tonnes at 0.03%) in the Upper and Lower C Zones.

Another NI 43-101 report was commissioned in 2008 and will
include an updated resource estimate for the Upper and Lower C Zones based on
drilling up to May 2008.

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 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 totalling
  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.

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.

To date on the Moran Lake property, we have completed 344 holes
totaling just over 60,000 meters. One hundred and eighty-two holes have been
drilled at the C Zone, 49 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.

29

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Otter and Portage Lake Properties

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

|**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,
2008, 2007 and 2006 should be read in conjunction with our audited financial
statements for the referenced periods and the notes thereto, and in particular
Note 14 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

We are a mineral exploration company engaged in the acquisition
and exploration of mineral properties (primarily base and precious metals). We
do not have any producing mineral properties at this time and, accordingly, have
had no revenues during the past five fiscal years. Our business is primarily
focused on the exploration and evaluation of various mineral deposits in the
following projects:

- South Golden Promise (including South Golden Promise and Victoria Lake
  projects) and Golden Promise projects located in the Province of Newfoundland
  and Labrador, Canada, acquired through option agreements with Paragon in
  February 2003 and May 2006.
- Central Mineral Belt Project (including Moran Lake) located in Labrador,
  Province of Newfoundland and Labrador, Canada acquired through 2 separate
  option agreements in November 2004 and May 2007. Several successful drill
  programs have been completed on the Central Mineral Belt Project within the
  last few years, which have resulted in a significant uranium resource. From
  the success of previous drilling, an additional 8,000 meters is planned for
  the summer and fall of 2008, with the goal of increasing the existing resource
  as well as testing new targets.

Critical Accounting Policies

Our accounting policies are described in Note 2 of the
financial statements for the year ended April 30, 2008. We consider the
following policies to be most critical in understanding our financial
results:

**Use of Estimates**

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

30

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**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.

**Share-Based Compensation**

We have an employee stock option plan. We recognize an expense
arising from stock options granted to both employees and non-employees using the
fair value method. The fair value of option grants is generally established at
the date of grant using the Black Scholes option pricing model and the
compensation amount, equal to the options fair value, is then recognized over
the options vesting periods.

Recent Accounting Pronouncements

**Goodwill and Intangible Assets**

The Canadian Institute of Chartered Accountants (CICA) has
issued the new Handbook Section 3064, Goodwill and Intangible Assets, which
will replace Section 3062, Goodwill and Intangible Assets. The new standard
establishes revised standards for the recognition, measurement, presentation and
disclosure of goodwill and intangible assets. The new standard also provides
guidance for the treatment of preproduction and start-up costs and requires that
these costs be expensed as incurred. The new standard applies to annual and
interim financial statements relating to fiscal years beginning on or after
October 1, 2008. Management is currently assessing the impact of these new
accounting standards on its financial statements. Adoption of this standard will
result in the withdrawal of Emerging Issues Committee (EIC) 27.

**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 Canada's
own GAAP. The date is for interim and annual financial statements relating to
fiscal years beginning on or after January 1, 2011. The transition date of
January 1, 2011 will require the restatement for comparative purposes of amounts
reported by us for the year ended April 30, 2011. While we have begun assessing
the adoption of IFRS for 2011, the financial reporting impact of the transition
to IFRS cannot be reasonably estimated at this time.

**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. This new
standard became effective for us on May 1, 2008. We are reviewing this standard
and have not yet determined the impact, if any, on our financial statements.

31

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**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 we are exposed and how we manage
those risks, whereas Section 3863 carries forward the presentation related
requirements of Section 3861. These new standards became effective for us on May
1, 2008. We are currently evaluating the impact of this standard.

**Going Concern**

In April 2007, the CICA approved amendments to Handbook Section
1400, General Standards of Financial Statement Presentation. These amendments
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 new requirements of the
standard are applicable for interim and annual financial statements relating to
fiscal years beginning on or after January 1, 2008. They became effective for us
on May 1, 2008. We are currently evaluating the impact of this standard.

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,
2008, 2007 and 2006.

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,
2008 compared to the fiscal year ended April 30, 2007

For the fiscal year ended April 30, 2008, we incurred a net
loss of $12,933,204 ($0.18 per share) as compared to a net loss of $5,533,011
($0.09 per share) for the prior year. The loss is comprised of general and
administrative expenses of $11,051,968 (2007 - $6,584,203), property write-offs
of $247,704 (2007 - $Nil) and unrealized losses on marketable securities of
$2,077,112 (2007  realized/unrealized gains of $665,905). Management fees,
interest income and a property disposition of $443,580 (2007 - $385,287) offsets
the operating loss. We had no operating revenue in either period.

A summary of significant components of the net loss is as
follows:

- Share-based compensation - $7,097,948 (2007 - $3,696,601)

32

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- Auditing and accounting - $102,944 (2007 - $38,604)Fees for auditing
  and accounting were up because of additional work required in connection with
  our AMEX listing, with our move from the TSX Venture to the TSX Exchange, with
  additional reporting requirements for the USA and our bought deal prospectus
  offering.
- Investor relations - $452,988 (2007 - $308,548)Investor relations
  expenses were up significantly this fiscal year because of an increased number
  of shows and conferences attended, creation of a number reference materials
  such information videos and the contracting of third parties to assist our
  in-house staff. This amount is expected to decrease in the future as a greater
  reliance is placed on in-house staff.
- Office and administration - $623,154 (2007 - $562,642) and rent - $156,358
  (2007 - $83,979)These items were up because of the increased number of
  support staff and corresponding increased office space required at both the
  head office in Vancouver, BC and the field office in St. Johns, NL. As the
  increased rent covered only a partial year of expanded facilities, rent will
  be higher for fiscal 2009.
- Transfer agent and filing fees - $330,777 (2007 - $87,017)This amount
  was up significantly because of the new listing on AMEX in the USA and the
  graduation from the TSX Venture Exchange to the TSX Exchange. Fees for future
  years are expected to continue to be significantly higher than for fiscal 2007
  but comparable to or less than that for fiscal 2008.
- Wages and salaries - $1,292,464 (2007 - $923,743)This expense has
  increased because of personnel added and is expected to remain at this level
  or higher for at least the next year.
- Unrealized loss on marketable securities - $2,077,112 (2007  $35,589) and
  realized gains on marketable securities of $Nil (2007 - $701,494)No
  securities were sold during the fiscal year because of the ongoing, dramatic
  downturn in the financial markets in recent months and because of the belief
  in the underlying value in our investments.

33

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

For the fiscal year ended April 30, 2007, we incurred a net
loss of $5,533,011 ($0.09 per share) compared to a net loss of $2,175,473 ($0.05
per share) for the prior year. The net loss is represented by general and
administrative expenses of $6,584,203 (2006 - $2,410,229) and property
write-offs of $Nil (2006 - $1,518,429) which were partially offset by management
fees and interest income of $385,287 (2006 - $245,065) and net gains (realized
and unrealized) on marketable securities of $665,905 (2006 - $Nil). We had no
operating revenue in either period.

In the year ended April 30, 2007 compared to the same period in
the prior year, we increased our exploration, corporate and financing
activities. For example there was an increase in exploration activities on the
Moran Lake Property and Golden Promise Property and we hired and appointed new
employees, officers, directors and contractors. The additional administration,
accounting and management time was required as we increased our business
activities. As a result, our operating expenses increased by $4,173,974 in the
year ended April 30, 2007 compared to the same period of 2006.

A summary of significant components of the net loss is as
follows:

- Share-based compensation - $3,696,601 (2006 - $682,213)This
  non-cash item represents 67% of the net loss for the fiscal year (2006  31%).
  As explained in the section above, we have added a number of professional and
  support personnel to accelerate our drilling programs, and granted share
  purchase options to both attract and retain qualified personnel. The fair
  value of a share purchase option is calculated at the time of granting and
  amortized against income over its two- year vesting period. Large charges
  against income are expected to continue in the near future.
- Auditing and accounting - $38,604 (2006 - $143,212)Fees for
  auditing and accounting were down because of additional work required in
  fiscal 2006 in respect of transactions during that year.
- Investor relations - $308,548 (2006 - $130,364)Investor relations
  expenses were up significantly this fiscal year because of an increased number
  of shows and conferences attended, expansion of our in-house investor
  relations department and the number of transactions occurring during the year.
  This amount increased during fiscal 2008 but is expected to decrease in the
  future to a level less than that for fiscal 2007.
- Office and administration - $562,642 (2006 - $339,703)These items
  were up because of the increased number of support staff and corresponding
  increased support and administration expenses.
- Wages and salaries - $923,743 (2006 - $41,441) and management fees -
  $50,000 (2006 - $225,000)This expense increased dramatically because
  of personnel added and the conversion of some consultants to employee status.

Exploration Expenditures

During fiscal 2008 and fiscal 2007, we incurred the following
  expenditures on exploration of properties as follows:

34

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Apr. 2008 
        Quarter
      Jan. 2008 
        Quarter
      Oct. 2007 
        Quarter
      July 2007 
        Quarter
      Apr. 2007 
        Quarter
      Jan. 2007 
        Quarter
      Oct. 2006 
        Quarter
      July 2006 
        Quarter**Current Properties**Golden Promise
      36,630
      447,102
      88,662
      111,009
      167,450
      229,409
      205,548
      252,997Moran Lake Property 
        (Central Mineral Belt Project)
      2,996,731
      2,185,860
      4,402,478
      1,700,423
      2,557,718
      1,505,655
      2,888,512
      1,357,210Otter / Portage Lake 
        (Central Mineral Belt Project)
      Nil
      385,782
      9,335
      Nil
      Nil
      276,750
      149,918
      58,447South Golden Promise 
        (Victoria Lake)
      124,862
      5,872
      37,771
      4,021
      7,119
      297,887
      473,612
      200,172Properties written-offSinbad Claims
      Nil
      Nil
      Nil
      (15,849)
      Nil
      Nil
      2,351
      776Stormy Lake & Partridge River
      (247,704)
      101,323
      1,381
      145,000
      --
      --
      --
      --Total
      2,910,519
      3,125,939
      4,539,627
      1,944,604
      2,732,287
      2,309,701
      3,719,941
      1,869,602


During the fiscal year ended April 30, 2008, we spent a total
of $12,520,689 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 predominately occur 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 generally incurs costs in Canadian dollars whereas
potential revenues from the sale of commodities such as uranium or gold are
generally priced in United States dollars. As with most world currencies, the
Canadian dollar has appreciated against the United States dollar in recent
years, rising from a low of about CAD $1.00 to USD $0.62 in 2002 to a level of
CAD $1.00 to USD $1.00, plus or minus daily fluctuations of up to 5%, over the
past year. Some of the negative effect that may be realized from the
appreciation of the Canadian dollar against the United States dollar has been
partially offset by the rise in commodity prices in terms of United States
dollars over the same time period. Future fluctuations could affect our
operations, either positively or negatively.

|5.B. | Liquidity and Capital Resources
|---- | -------------------------------

Liquidity  April 30, 2008, April 30, 2007 and April 30,
2006

We had cash on hand of $13,275,874, $14,311,417 and $13,947,976
as of April 30, 2008, 2007 and 2006, respectively. Our working capital was
$13,387,832, $15,390,704 and $14,093,821 as of April 30, 2008, 2007 and 2006,
respectively.

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

35

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Financings  Fiscal 2008

In April 2008, we raised approximately $15.0 million through a
bought deal prospectus offering, with Canaccord Capital Corporation as the lead
underwriter (the Underwriter). The Underwriter purchased 8,000,000
non-flow-through units (the Units) and 3,575,000 flow-through common shares
(the Flow-through Shares) at a price of $1.25 per Unit and $1.40 per
Flow-through Share. Each Unit consisted 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.

The Underwriter received 694,500 warrants (the Underwriters
Warrants). Each Underwriters Warrant entitles the holder to purchase a unit
(an Underwriters Unit) at a price of $1.25 per Underwriters Unit until
October 4, 2009. Each Underwriters Unit consists of one common share and one
common share purchase warrant (an Underlying Warrant) and each Underlying
Warrant entitles the holder to purchase an additional common share at a price of
$1.80 per common share until October 4, 2009.

Financings  Fiscal 2007

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

Financings  Fiscal 2006

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

The Agent was entitled to a commission of 7% of the gross
proceeds of the placement, $460,547 of which was taken in cash and $322,193 in
402,741 Common Share Units. The Agent was also issued 1,297,750 compensation
options equal to 10% of the number of units sold. Each compensation option
entitled the Agent to acquire one Common Share Unit at an exercise price of
$0.85 for a period of two years. All of the compensation options were exercised
in full prior to the expiry date.

Capital Resources

Our authorized capital consists of an unlimited number of
common shares without par value. At April 30, 2008, we had 84,595,825 issued and
outstanding common shares compared to 70,912,072 at April 30, 2007, and at July
15, 2008, we had 84,865,825 issued and outstanding common shares.

We first adopted a formal written stock option plan on July 26,
2004. Under this plan, we could grant options for up to 2,752,240 common shares
to directors, employees, consultants and certain other service providers at
exercise prices to be determined by the Board of Directors by not less than
closing market price on the date preceding the grant less a discount of up to
25%. However, as a result of our listing on the Toronto Stock Exchange, we no
longer issue stock options at a discounted price. Option shares are subject to
the minimum vesting requirement, with 25% of the total number of the options
granted to be released every six months from the date of grant. The options can
be granted for a maximum term of five years. The stock option plan was approved
by the TSX Venture Exchange on September 21, 2004. On February 10, 2006 we
amended the stock option plan to grant options for up to 11,308,528 common
shares in order to reflect our increased issued and outstanding capital. On July
9, 2007 we

36

---

further amended the terms of the stock option plan to allow for
the extension of options by up to ten business days in the event that an option
expires during a time when our directors, employees and consultants are subject
to a black out period imposed by us.

During the year ended April 30, 2008, 1,288,984 stock options
were exercised, 1,100,000 stock options were cancelled or expired and 3,000,000
stock options were granted. As at April 30, 2008, we had 9,593,000 (of which
5,579,250 were exercisable) stock options outstanding at exercise prices ranging
from $0.45 per share to $3.10 per share with expiry dates ranging from February
4, 2010 to April 23, 2013. Subsequent to April 30, 2008, 250,000 stock options
were granted, 2,350,000 stock options were cancelled and 2,850,000 stock options
were repriced. If exercised, the remaining 7,293,000 stock options would
increase our available cash by $7,350,070.

As at April 30, 2008, we had 8,000,000 warrants outstanding at
an exercise price of $1.80 per share with an expiry date of October 4, 2009,
694,500 Underwriters Warrants outstanding at an exercise price of $1.25 per
Underwriter's Warrant. Each Underwriters Warrant entitles the holder to acquire
one common share and one common share purchase warrant, and each such warrant
entitles the holder to purchase an additional common share at a price of $1.80
per common share until October 4, 2009. If exercised, these warrants, which
total 9,389,000, would increase our available cash by $16,518,225.

Contributed surplus was $10,496,726 as at April 30, 2008 (April
30, 2007 - $3,888,533). The increase of $6,608,193 represents $7,097,948 of the
fair value of the options released in the year ended April 30, 2008 less
$489,755 of the fair value of stock options and warrants exercised. The fair
value of the outstanding options and compensation options was calculated using
the Black-Scholes method of valuation.

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

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

|5.D. | Trend Information
|---- | -----------------

We are a mineral exploration company. Consequently, 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, 2008, we had the following contractual
obligations:

37

---

|                                    |   |         |  |   | Payments due by period |  |   |           | 
|----------------------------------- | - | ------- |  | - | ---------------------- |  | - | --------- | 
|                                    |   |         |  |   | Less than 1            |  |   |           | 
|Contractual Obligations             |   | Total   |  |   | year                   |  |   | 1-3 years | 
|Capital (Finance) Lease Obligations | $ | --      |  | $ | --                     |  | $ | --        | 
|Operating Lease Obligations         |   | 763,506 |  |   | 284,280                |  |   | 763,506   | 
|Total                               | $ | 763,506 |  | $ | 284,280                |  | $ | 763,506   | 

|ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND
      EMPLOYEES
|------- | ------------------------------------------------

|6.A. | Directors and Senior Management
|---- | -------------------------------

Name
    Age
    PositionMark J. Morabito
    41
    CEO and DirectorC. Stewart Wallis (2)
    64
    DirectorJay Sujir (2)
    50
    Non-Executive Chairman
      and DirectorDavid Ying Tat Lee (1) (2)
    59
    DirectorGeir L. Liland
    59
    DirectorIan B. Smith (1)
    63
    DirectorLeo Power (1)
    47
    DirectorChris Collingwood
    61
    DirectorDerrick (Rick) Gill
    60
    DirectorPaul Hosford
    49
    President andChief Operating OfficerDouglas R. Brett
    55
    Chief Financial Officer


|___________________
|-------------------
|(1)                
|(2)                

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

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

Mark J. Morabitohas been our President and CEO since
February of 2003 and a Director since November of 1998. On February 18, 2008,
Mr. Morabito ceased to be our President, when Paul Hosford 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. He is also currently the CEO and a Director of Target. Target
currently trades on the TSX Venture Exchange under the symbol TEM. Target is
not engaged, and does not plan to be engaged, in mining exploration in the same
geographical areas as us, nor do

38

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we plan to pursue mining and exploration opportunities in areas
in which Target operates. Mr. Morabito owns 4.48% of the issued and outstanding
shares of Target. We have no formal measures in place to prevent a conflict of
interest and independent directors are required to approve any transactions we
complete with Target. All transactions with Target are disclosed as related
party transactions and reviewed. We believe the transactions we have completed
with Target have been fair to us and to our disinterested shareholders.
Effective September 1, 2007, we entered into a cost sharing arrangement with
Target whereby Target reimburses us for 30% of common operating expenditures
including rent and salaries of certain employees who divide their time between
Target and us.

Mr. Morabito also serves on the board of directors of Santa Fe
Metals Corporation and Silver Quest Resources Ltd. 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 Wallishas been a member of our Board of
Directors since June 2003 and is also the President and a director of Target and
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 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. He is currently a director of AMI Resources Inc., Escape Group
Inc., Midasco Capital Corp., Target, Tequila Minerals Corp., 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.

Geir L. Liland joined our Board of Directors in June
2005 and served as our Chief Financial Officer from May 2, 2006 to July 31,
2007. He is currently a Director of Apoka Capital Corporation, egX Group, Inc.,
GMV Minerals Inc., HSF Capital Corporation, Pacific Imperial Mines Inc.,
Precient NeuroPharma Inc., Tapango Resources Ltd., Target and Uranium North
Resources Corp. Mr. Liland serves as a consultant to companies listed on
Canadian stock exchanges. He received his Bachelor of Arts (Economics and
Commerce) from Simon Fraser University in Burnaby, British Columbia. From 1978
until 1982 he studied accounting, auditing and taxation at the Chartered
Accountants Institute of British Columbia.

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

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.

39

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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.

Paul Hosford was appointed our President and Chief
Operating Officer in February 2008. Mr. Hosford brings with him more than 24
years of international engineering experience in mine design, operations and
project management. He is a Professional Engineer and a member of the Canadian
Institute of Mining and Metallurgy. Prior to joining our company, Mr. Hosford
was in a management role with Barrick Gold Corp. and prior to Barrick, he spent
twelve years with Hatch Vancouver as a senior level consultant on world class
projects. Since receiving his B.Sc Chemical Engineering (Honours) from the
University of Edinburgh in 1982, he has gained extensive international mine
planning, development and operational experience.

Douglas R. Brett has been our Chief Financial Officer
since August 1, 2007. Mr. Brett has more than 20 years experience in public
practice accounting. Mr. Brett is a Chartered Accountant and has been a member
of the Institute of Chartered Accountants of British Columbia since December
1982. He obtained his B.Sc. in computer science and mathematics from the
University of British Columbia.

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 Officer/Directors in Fiscal 2008 | 
|---------------------------------------------------------------- | 
|                                                                 | 
|                                                                 | 
|                                                                 | 
|                                                                 | 
|                                                                 | 
|                                                                 | 
|Name and                                                         | 
|Principal Position                                               | 
|                                                                 | 
|Mark J. Morabito CEO,
      President1and Director               | 
|                                                                 | 
|Paul Hosford
      President2                                    | 
|                                                                 | 
|Geir Liland
      CFO3and Director                               | 
|                                                                 | 
|Douglas R. Brett
      CFO5                                      | 
|                                                                 | 
|Stewart Wallis
      Director                                    | 

40

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|                           |  | Annual Compensation |  |  | Long Term Compensation | 
|-------------------------- |  | ------------------- |  |  | ---------------------- | 
|                           |  |                     |  |  |                        | 
|                           |  |                     |  |  |                        | 
|                           |  |                     |  |  |                        | 
|                           |  |                     |  |  |                        | 
|                           |  |                     |  |  |                        | 
|Name and                   |  |                     |  |  | Salary                 | 
|Principal Position         |  | Year                |  |  | ($)                    | 
|                           |  |                     |  |  |                        | 
|Jay Sujir Director         |  | 2008                |  |  | --                     | 
|                           |  |                     |  |  |                        | 
|David Lee Director         |  | 2008                |  |  | --                     | 
|                           |  |                     |  |  |                        | 
|Ian Smith Director         |  | 2008                |  |  | --                     | 
|                           |  |                     |  |  |                        | 
|Leo Power Director         |  | 2008                |  |  | --                     | 
|                           |  |                     |  |  |                        | 
|Chris Collingwood Director |  | 2008                |  |  | --                     | 

|1 | Mr. Morabito ceased to be President on February 18,
      2008.                                                                                                                                                                                                  
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2 | Mr. Hosford was appointed President on February 18,
      2008.                                                                                                                                                                                                  
|3 | Mr. Liland ceased to be CFO on July 31, 2007.                                                                                                                                                                                                                    
|4 | Includes $15,000 paid to Mr. Liland for acting as CFO and
      directors fees of $8,000 paid to Mr. Liland after he ceased to be
    CFO.                                                                                                                      
|5 | Mr. Brett was appointed CFO on August 1, 2007.                                                                                                                                                                                                                   
|6 | Included directors fees in the amount of $18,000 and
      geological consulting fees in the amount of $15,600 paid to Sundance
      Geological Ltd., a private entity owned and controlled by Mr.
    Wallis.                                                 
|7 | Includes directors fees of $16,500 and fees for acting
      as Chairman of $5,000. Excludes $122,577 in legal fees paid to Anfield
      Sujir Kennedy & Durno, Barristers & Solicitors, a limited
      liability partnership of which Mr. Sujir is a partner.
|8 | Directors fees paid to non-executive
  directors.                                                                                                                                                                                                               

During the fiscal year ended April 30, 2008, a total of 850,000
stock options were granted to our directors and executive officers as
follows:

|Stock Options Granted
      to Executive Officers/Directors in Fiscal 2008
|--------------------------------------------------------------------------
|                                                                          
|                                                                          
|                                                                          
|Name of Director or                                                       
|Executive Officer                                                         
|                                                                          
|Douglas R. Brett                                                          
|                                                                          
|Chris Collingwood                                                         
|                                                                          
|Paul Hosford                                                              

|1 | On June 16, 2006, these options were cancelled by mutual
      agreement.           
|- | ------------------------------------------------------------------------------------
|2 | On June 16, 2007, 300,000 of these options were cancelled
      by mutual agreement.

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

The following table gives certain information concerning stock
option exercises during the year ended April 30, 2008 by our executive officers
and directors. It also gives information concerning stock option values.

41

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|Aggregated Stock
      Options Exercises in Fiscal 2008 | 
|------------------------------------------------------- | 
|Fiscal Yearend
      Unexercised Stock Options          | 
|Fiscal Yearend Stock
      Option Values                | 
|Executive
      Officers/Directors                      | 
|                                                        | 
|                                                        | 
|                                                        | 
|Name                                                    | 
|Mark Morabito                                           | 
|Stewart Wallis                                          | 
|Jay Sujir                                               | 
|David Ying Tat Lee                                      | 
|Geir Liland                                             | 
|Ian Smith                                               | 
|Leo Power                                               | 
|Chris Collingwood                                       | 
|Doug Brett                                              | 
|Paul Hosford                                            | 

|1 | Based on the closing price of the common shares on the
      TSX Venture Exchange on April 30, 2008, being $0.65 per common
    share.
|- | --------------------------------------------------------------------------------------------------------------------------------------

Director Compensation

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

Stock Option Plan

We may grant stock options to directors, senior management and
employees pursuant to our stock option plan dated July 9, 2007. 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, 2008, we
granted stock options to purchase an aggregate of 3,000,000 common shares.
During the year, stock options to purchase an aggregate of 1,097,000 common
shares were exercised and stock options to purchase an aggregate of 1,100,000
common shares were cancelled.

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

42

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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.

The Company entered into an employment agreement with Paul
Hosford on January 21, 2008 pursuant to which the Company employed Mr. Hosford
as its President and Chief Operating Officer commencing on February 18, 2008.
Under the terms of the agreement, Mr. Hosford receives an annual salary of
$250,000 and an annual bonus of up to $100,000, payable semi-annually, with the
final amount being determined by the Companys Compensation Committee based upon
Mr. Hosfords performance. Mr. Hosford received an initial grant of options to
purchase up to 500,000 common shares at a price of $1.41 per share and is to
receive options to purchase up to 200,000 common shares annually. In the event
that Mr. Hosford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 August 1, 2007, we entered into an independent consulting
services agreement (the Consulting Agreement) with Douglas R. Brett, Inc. (the
Contractor) and Douglas R. Brett. Pursuant to the Consulting Agreement, we
engaged the Contractor to provide financial services and appointed Mr. Brett as
our Chief Financial Officer. Mr. Brett will personally provide to us such
advisory and consulting services on behalf of the Contractor as we may request
from time to time. According to the Consulting Agreement, Mr. Bretts Services
will require an average of between 40 and 60 hours of his time per month. In
exchange for Mr. Bretts services, we will pay to the Contractor $6,250 per
month plus goods and services taxes. In addition, we agreed to grant to the
Consultant options to acquire up to 200,000 common shares at a price per share
equal to the prevailing fair market value, such options subject to the terms of
our stock option plan. The term of the Consulting Agreement shall automatically
cease at 11:59 p.m. (Vancouver time) on August 1, 2008 (the Term), unless
earlier terminated as hereinafter provided or unless the parties have agreed in
writing to renew the Consulting Agreement. We and the Contractor each have the
right to terminate the Consulting Agreement at any time by giving to the other
party at least 30 days prior written notice of the effective date of such
termination (the Termination Date). On the Termination Date, the Consultant
will resign as Chief Financial Officer unless other arrangements are made.

Post Employment Compensation

No funds were set aside or accrued by us during Fiscal 2008 to
provide pension, retirement or similar benefits for directors 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, other than employment
agreements with Julie Bolden, our Vice President Corporate Affairs and Wayne
Pickett, our Vice President Exploration. Each of those employment agreements
provides for severance payments consisting of either 24 months notice of
termination or a lump sum payment equal to two times the employees annual
salary, at the employees option. Based on their current salaries, the value of
such compensation would be $200,000 each.

|6.C. | Board Practices
|---- | ---------------

The Board of Directors presently consists of nine directors,
seven of whom were elected at our annual general meeting of shareholders held on
September 10, 2007, one of whom was appointed on October 25, 2007 and one of
whom was appointed on May 27, 2008. The directors have served in their
respective capacities since their election

43

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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 Wallis
    June 19, 2003Jay Sujir
    February 19, 2003David Lee
    February 17, 2004Geir Liland
    June 14, 2005Ian Smith
    September 21, 2006Leo Power
    November 17, 2006Chris Collingwood
    October 25, 2007Derrick Gill
    May 27, 2008


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:

Mandate

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

- Serve as an independent and objective party to
  monitor the Company's financial reporting and internal control system and
  review the Company's financial statements.
- Review and appraise the performance of the
  Company's external auditors.
- Provide an open avenue of communication among the
  Company's auditors, financial and senior management and the Board of
  Directors.

Composition

The Committee shall be comprised of
three directors as determined by the Board of Directors, the majority of whom
shall be free from any relationship that, in the opinion of the Board of
Directors, would interfere with the exercise of his or her independent judgment
as a member of the Committee. At least one member of the Committee shall have
accounting or related financial management expertise. All members of the
Committee that are not financially literate will work towards becoming
financially literate to obtain a working familiarity with basic finance and
accounting practices. For the purposes of the Audit Committee Charter, the
definition of financially literate is the ability to read

44

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and understand a set of financial
statements that present a breadth and level of complexity of accounting issues
that are generally comparable to the breadth and complexity of the issues that
can presumably be expected to be raised by the Company's financial
statements.

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

Meetings

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

Responsibilities and Duties

To fulfill its responsibilities and
duties, the Committee shall:

Documents/Reports Review

| | (a) | Review and update the Charter annually.                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (b) | Review the Company's financial statements, MD&A and
      any annual and interim earnings, press releases before the Company
      publicly discloses this information and any reports or other financial
      information (including quarterly financial statements), which are
      submitted to any governmental body, or to the public, including any
      certification, report, opinion, or review rendered by the external
      auditors.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     | External Auditors                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (a) | Review annually, the performance of the external auditors
      who shall be ultimately accountable to the Board of Directors and the
      Committee as representatives of the shareholders of the Company.                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (b) | Recommend to the Board of Directors the selection and,
      where applicable, the replacement of the external auditors nominated
      annually for shareholder approval.                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (c) | Review with management and the external auditors the
      audit plan for the year-end financial statements and intended template for
      such statements.                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (d) | Review and pre-approve all audit and audit-related
      services and the fees and other compensation related thereto, and any
      non-audit services, provided by the Company's external
  auditors.                                                                                                                                                                                                                                             

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

Financial Reporting
Processes

| | (a) | In consultation with the external auditors, review with
      management the integrity of the Company's financial reporting process,
      both internal and external.                                                                                                               
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                      
| | (b) | Consider the external auditors' judgments about the
      quality and appropriateness of the Company's accounting principles as
      applied in its financial reporting.                                                                                                            
| |     |                                                                                                                                                                                                                                                                                      
| | (c) | Consider and approve, if appropriate, changes to the
      Company's auditing and accounting principles and practices as suggested by
      the external auditors and management.                                                                                                    
| |     |                                                                                                                                                                                                                                                                                      
| | (d) | Following completion of the annual audit, review
      separately with management and the external auditors any significant
      difficulties encountered during the course of the audit, including any
      restrictions on the scope of work or access to required
  information.
| |     |                                                                                                                                                                                                                                                                                      
| | (e) | Review any significant disagreement among management and
      the external auditors in connection with the preparation of the financial
      statements.                                                                                                                           

45

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| | (f) | Review with the external auditors and management the
      extent to which changes and improvements in financial or accounting
      practices have been implemented.      
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                            
| | (g) | Review any complaints or concerns about any questionable
      accounting, internal accounting controls or auditing matters.                                               
| |     |                                                                                                                                                                            
| | (h) | Review certification process.                                                                                                                                              
| |     |                                                                                                                                                                            
| | (i) | Establish a procedure for the confidential, anonymous
      submission by employees of the Company of concerns regarding questionable
      accounting or auditing matters.

Other

Review any related-party
transactions.

Composition of the Audit
Committee

The members of our Audit Committee are Ian Smith, David Lee and
Leo Power, 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.

David Lee has been a professional banker and business
consultant for 30 years, with broad experience in commercial and international
banking. Since 2003, Mr. Lee has been self employed, providing consulting
services in China relating to retail banking, with his largest client being the
Bank of Communications.

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.

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.

46

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External Auditor Service Fees (By
Category)

The aggregate fees billed by our external auditors in each of
the last two fiscal years for audit fees are as follows:

Financial Year Ending
    Audit Fees
    Audit Related Fees
    Tax Fees
    All Other Fees2008/04/30
    $50,000
    $14,250
    $1,750
    $36,7502007/04/30
    $48,600
    $14,250
    $1,750
    $2,000


Compensation Committee

We have established a Compensation Committee, which currently
consists of Stewart Wallis, 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.                                                                                                                                                                                   

AMEX Corporate Governance

Our common shares are listed on AMEX. Section 110 of the AMEX
Company Guide permits AMEX to consider the laws, customs and practices of the
foreign issuers country of domicile in relaxing certain AMEX listing criteria,
and to grant exemptions from 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. A description of
the significant ways in which our governance practices differ from those
followed by domestic companies pursuant to AMEX standards is as follows:

- Shareholder Meeting Quorum Requirement: The AMEX minimum quorum
  requirement for a shareholder meeting is one-third of the outstanding common
  shares. In addition, a corporation listed on AMEX is required to state its
  quorum requirement in its bylaws. Our quorum requirement as set forth in our
  articles is two persons who are, or who represent by proxy, shareholders who,
  in the aggregate, hold at least 5% of the issued shares entitled to be voted
  at the meeting.
- Cancellation and Reissue of Stock Options. The AMEX requires
  shareholder approval of material amendments to outstanding stock options and
  this may include options which are cancelled and reissued with different
  terms, even if a period of more than three months had elapsed between the
  cancellation and reissuance. Such approval is not required by the Toronto
  Stock Exchange and we received a Section 110 waiver from AMEX stating that we
  will not be required to obtain shareholder approval in the case of such
  action.
- Property Acquisition.The AMEX generally requires shareholder
  approval for an issuance of securities that could result in a 20% increase in
  the number of outstanding common shares. Based on the AMEXs method of
  calculating that percentage, our proposed issuance of securities to Universal
  Uranium Ltd. in consideration for its interest in certain mineral claims
  located in the Central Mineral Belt of Labrador (see 8.B. Significant Changes
  below) would exceed that threshold. However, under applicable Toronto Stock
  Exchange rules, the threshold is 25% and accordingly shareholder approval is
  not required for the proposed transaction. We have applied for a Section 110
  waiver from AMEX in this regard. However, as of the date of this annual
  report, we have not yet received it.

47

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|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:

Number of Full Time
    Maximum number ofEmployees at the end
    Temporary WorkersFiscal year ended
    of the fiscal year
    during the fiscal yearApril 30, 2008
    26
    55April 30, 2007
    18
    18April 30, 2006
    11
    Nil


As of April 30, 2008, we had twenty-six full-time employees,
fourteen of whom worked in Vancouver and twelve 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 camp. The steady
increase in the number of employees is reflective of the increase in our
exploration activities from year to year.

|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 July 15,
2008. As of July 15, 2008, we had 84,865,825 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 July 15, 2008.

|                                            |  |               |  |  | Percent of    | 
|------------------------------------------- |  | ------------- |  |  | ------------- | 
|                                            |  | Number of     |  |  | Outstanding   | 
|Name                                        |  | Common Shares |  |  | Common Shares | 
|Mark J. Morabito                            |  | 2,502,069 1   |  |  | 2.95%         | 
|C. Stewart Wallis                           |  | 225,600 2     |  |  | *             | 
|Jay Sujir                                   |  | 175,000 3     |  |  | *             | 
|David Y.T. Lee                              |  | 245,000 4     |  |  | *             | 
|Geir Liland                                 |  | 342,500 5     |  |  | *             | 
|Leo Power                                   |  | 240,700 6     |  |  | *             | 
|Ian Smith                                   |  | 190,000 7     |  |  | *             | 
|Chris Collingwood                           |  | 350,300 8     |  |  | *             | 
|Derrick Gill                                |  | Nil           |  |  | Nil           | 
|Douglas R. Brett                            |  | 65,000        |  |  | *             | 
|Paul Hosford                                |  | 50,000 9      |  |  | *             | 
|Directors and Executive Officers as a group |  | 4,386,169     |  |  | 5.17%         | 

|* | Indicates less than one percent.                                                                       
|- | -------------------------------------------------------------------------------------------------------
|1 | Includes options to purchase 1,700,000 common
      shares exercisable within 60 days of July 15, 2008.
|2 | Includes options to purchase 100,000 common
      shares exercisable within 60 days of July 15, 2008.  
|3 | Includes options to purchase 150,000 common
      shares exercisable within 60 days of July 15, 2008.  
|4 | Includes options to purchase 150,000 common
      shares exercisable within 60 days of July 15, 2008.  
|5 | Includes options to purchase 325,000 common
      shares exercisable within 60 days of July 15, 2008.  
|6 | Includes options to purchase 200,000 common
      shares exercisable within 60 days of July 15, 2008.  
|7 | Includes options to purchase 150,000 common
      shares exercisable within 60 days of July 15, 2008.  
|8 | Includes options to purchase 100,000 common
      shares exercisable within 60 days of July 15, 2008.  
|9 | Includes options to purchase 50,000 common
      shares exercisable within 60 days of July 15, 2008.   

The following table presents the stock options granted to the
aforementioned persons and unexercised as of July 15, 2008. The stock options
are for common shares.

48

---

|                  |  |               |  |  | Number of  |  |  |           |  |   |          |  |  |                 | 
|----------------- |  | ------------- |  |  | ---------- |  |  | --------- |  | - | -------- |  |  | --------------- | 
|                  |  |               |  |  | Underlying |  |  |           |  |   |          |  |  |                 | 
|                  |  |               |  |  | Common     |  |  |           |  |   | Exercise |  |  |                 | 
|Name              |  | Date of Grant |  |  | Shares     |  |  | Vested *  |  |   | Price    |  |  | Expiration Date | 
|Mark J. Morabito  |  | May 1, 2006   |  |  | 1,000,000  |  |  | 1,000,000 |  | $ | 1.32     |  |  | May 1, 2011     | 
|                  |  | Jan. 18, 2006 |  |  | 400,000    |  |  | 400,000   |  |   | 1.00     |  |  | Jan. 18, 2011   | 
|                  |  | Feb. 4, 2005  |  |  | 300,000    |  |  | 300,000   |  |   | 0.45     |  |  | Feb. 4, 2010    | 
|                  |  |               |  |  |            |  |  |           |  |   |          |  |  |                 | 
|C. Stewart Wallis |  | Jan. 18, 2006 |  |  | 100,000    |  |  | 100,000   |  | $ | 1.00     |  |  | Jan. 18, 2011   | 
|                  |  |               |  |  |            |  |  |           |  |   |          |  |  |                 | 
|Jay Sujir         |  | Jan. 18, 2006 |  |  | 100,000    |  |  | 100,000   |  | $ | 1.00     |  |  | Jan. 18, 2011   | 
|                  |  | Feb. 4, 2005  |  |  | 50,000     |  |  | 50,000    |  |   | 0.45     |  |  | Feb. 4, 2010    | 
|                  |  |               |  |  |            |  |  |           |  |   |          |  |  |                 | 
|David Y.T. Lee    |  | Jan. 18, 2006 |  |  | 100,000    |  |  | 100,000   |  | $ | 1.00     |  |  | Jan. 18, 2011   | 
|                  |  | Feb. 4, 2005  |  |  | 50,000     |  |  | 50,000    |  |   | 0.45     |  |  | Feb. 4, 2010    | 
|                  |  |               |  |  |            |  |  |           |  |   |          |  |  |                 | 
|Geir Liland       |  | May 24, 2006  |  |  | 150,000    |  |  | 150,000   |  | $ | 1.32     |  |  | May 24, 2011    | 
|                  |  | Jan. 18, 2006 |  |  | 100,000    |  |  | 100,000   |  |   | 1.00     |  |  | Jan. 18, 2011   | 
|                  |  | Jun. 14, 2005 |  |  | 75,000     |  |  | 75,000    |  |   | 0.45     |  |  | Jun. 14, 2010   | 
|                  |  |               |  |  |            |  |  |           |  |   |          |  |  |                 | 
|Leo Power         |  | May 24, 2006  |  |  | 100,000    |  |  | 100,000   |  | $ | 1.32     |  |  | May 24, 2011    | 
|                  |  | Jan. 5, 2006  |  |  | 100,000    |  |  | 100,000   |  |   | 0.90     |  |  | Jan. 5, 2011    | 
|                  |  |               |  |  |            |  |  |           |  |   |          |  |  |                 | 
|Ian Smith         |  | Aug. 21, 2006 |  |  | 150,000    |  |  | 150,000   |  | $ | 1.43     |  |  | Aug. 21, 2011   | 
|                  |  |               |  |  |            |  |  |           |  |   |          |  |  |                 | 
|Chris Collingwood |  | May 1, 2006   |  |  | 50,000     |  |  | 50,000    |  | $ | 1.32     |  |  | May 1, 2011     | 
|                  |  | Jan. 18, 2006 |  |  | 50,000     |  |  | 50,000    |  |   | 1.00     |  |  | Jan. 18, 2011   | 
|                  |  |               |  |  |            |  |  |           |  |   |          |  |  |                 | 
|Derrick Gill      |  | May 23, 2008  |  |  | 250,000    |  |  | 0         |  | $ | 0.88     |  |  | May 23, 2013    | 
|                  |  |               |  |  |            |  |  |           |  |   |          |  |  |                 | 
|Douglas Brett     |  | N/A           |  |  | N/A        |  |  | N/A       |  |   | N/A      |  |  | N/A             | 
|                  |  |               |  |  |            |  |  |           |  |   |          |  |  |                 | 
|Paul Hosford      |  | Jan. 21, 2008 |  |  | 200,000    |  |  | 50,000    |  | $ | 1.41     |  |  | Jan. 21, 2013   | 

|* | Includes those options that are exercisable
      within 60 days of July 15, 2008.
|- | ----------------------------------------------------------------------------------

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.

|**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.

We have previously reported that, based on an amendment to
Schedule 13G filed with the SEC on February 6, 2007, David W. Tice &
Associates, LLC and Prudent Bear Funds, Inc. owned 4,216,200 common shares as of
December 31, 2006. An amendment to Schedule 13G filed with the SEC on October
30, 2007 indicated that these parties owned 750,000 common shares, which is less
than 1% of our currently outstanding common shares, as of September 30, 2007. A
Form N-CSR filed on June 3, 2008 indicates that Prudent Bear Funds, Inc. owned
250,000 common shares, which is less than 1% of our currently outstanding common
shares, as of March 31, 2008.

49

---

We have previously reported that, based on an amendment to
Schedule 13G filed with the SEC on February 15, 2007, Passport Global Master
Fund SPC, Ltd., Partners Group Alternative Strategies PCC Limited Gold Iota
Cell, Passport Holdings, LLC, Passport Management, LLC, Passport Capital, LLC
and John Burbank owned 3,320,233 common shares as of December 31, 2006. An
amendment to Schedule 13G filed with the SEC on February 14, 2008 indicated that
these parties owned 1,768,733, or approximately 2.08% of our currently
outstanding common shares, as of December 31, 2007. A Form 13F filed on May 15,
2008 indicates that Passport Management, LLC owned 1,628,533 common shares, or
approximately 1.92% of our currently outstanding common shares, as of March 31,
2008.

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 July 15, 2008, we had 84,865,825 common shares issued and
outstanding to approximately 341 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 85 shareholders of record located in the
U.S., who own an aggregate of approximately 4.84% 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,
2008 and the period from May 1, 2008 to the date of this annual report, we have
not entered into any transactions or loans between us and any: (a) enterprises
that directly or indirectly through one or more intermediaries, control or are
controlled by, or are under common control with, us; (b) associates; (c)
individuals owning, directly or indirectly, an interest in the voting power of
us that gives them significant influence over us, and close members of any such
individuals' family; (d) key management personnel and close members of such
individuals' families; or (e) enterprises in which a substantial interest in the
voting power is owned, directly or indirectly, by any person described in (c) or
(d) or over which such a person is able to exercise significant influence.

| | 1. | We engaged the services of Anfield Sujir Kennedy &
      Durno Barristers & Solicitors for legal services relating to
      securities matters. One of our directors, Jay Sujir, is a partner of
      Anfield Sujir Kennedy & Durno. We paid fees directly to Anfield Sujir
      Kennedy & Durno in the amount of $122,477 for the fiscal year ended
      April 30, 2008. Fees of $Nil have been paid to Anfield Sujir Kennedy &
      Durno since May 1, 2008 through the date of this annual report. We
      currently expect to continue to utilize the legal services of Anfield
      Sujir Kennedy & Durno.                                                                                                                                                       
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 2. | On May 2, 2006, we engaged the services of Geir Liland to
      provide services ordinarily provided by a chief financial officer. We paid
      fees of $15,000 to Mr. Liland during the fiscal year ended April 30, 2008.
      Mr. Liland ceased serving as our Chief Financial Officer as of July 31,
      2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | 3. | During the year ended April 30, 2008, we charged
      management fees of $20,000 to Target, of which several of our officers and
      directors serve as officers and directors, as reimbursement for Targets
      proportionate share of expenses incurred by us relating to accounting
      services and rent. Effective September 1, 2007, in lieu of management
      fees, we entered into a cost sharing arrangement with Target whereby we
      are reimbursed for an agreed percentage, currently 30%, of share expenses
      such as rent, office and salaries of certain personnel. Included in
      receivables as at April 30, 2008 is $75,407 owing from Target. As of the
      date of this annual report, the amount of $Nil is owing from
  Target.

50

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| | 4. | On August 1, 2007, we entered into the consulting
      agreement with Mr. Brett and his private consulting company. During the
      fiscal year ended April 30, 2008, we paid fees of $56,250 under the
      consulting agreement. Fees of $18,750 have been paid to Mr. Bretts
      private consulting company since May 1, 2008 through the date of this
      annual report.                                                
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 5. | On February 12, 2007, we entered into an agreement with
      Target for the sale of our Sinbad claims for a cash payment in the amount
      of $31,698. We retained a 2% net smelter royalty.                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 6. | During the fiscal year ended April 30, 2008, we paid
      geological consulting fees of $15,600 to a private company owned by
      Stewart Wallis, one of our directors. These fees are included in mineral
      property costs. Fees of $Nil have been incurred since May 1, 2008 through
      the date of this annual report.                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 7. | During the fiscal year ended April 30, 2008, we entered
      into a three year office lease agreement with a private company controlled
      by Chris Collingwood, who was appointed a director during the year. Under
      the terms of the lease, we rent 6,262 square feet of office space at
      $109,585 per year for our Newfoundland office. Rent of $45,660 was paid
      during the fiscal year ended April 30, 2008.

|7.C. | Interests of Experts and Counsel
|---- | --------------------------------

Not applicable

|**ITEM 8.** | FINANCIAL INFORMATION
|----------- | ---------------------

|8.A. | Consolidated Statements and Other Financial
      Information
|---- | -------------------------------------------------------------

Financial Statements

Our financial statements are stated in Canadian Dollars 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, 2008, April 30, 2007 and April 30, 2006 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

There are no legal or arbitration proceedings, including those
relating to bankruptcy, receivership or similar proceedings and those involving
any third party, which may have, or have had in the recent past, significant
effects on our financial position or profitability, other than a Statement of
Claim made 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.

|8.B. | Significant Changes
|---- | -------------------

Since April 30, 2008, the date of our most recent financial
statements, the following significant changes have occurred:

| | 1. | Our common shares were listed for trading on the Toronto
      Stock Exchange after previously trading on the TSX Venture
  Exchange.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------

51

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| | 2. | We entered into an agreement with Universal Uranium Ltd.
      (Universal) under which we will acquire all of Universals 60% interest
      in its project in the Central Mineral Belt of Labrador, which totals
      approximately 4,737 claims. As consideration for Universals interest in
      its property, we will pay to Universal $500,000 and issue to Universal
      10,000,000 common shares and 7,500,000 share purchase warrants. Each
      warrant will entitle Universal to purchase an additional common share in
      the capital of our company 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 our 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 from closing, to be released in equal
      tranches in three month intervals. Universal will retain a 2% net smelter
      return royalty on its 60% interest in the property, 0.5% of which may be
      purchased by us for $1,000,000. We will also purchase, by way of private
      placement, 2,222,222 units of Universal at a price of $0.45 per unit. Each
      unit will consist of one common share of Universal and one share purchase
      warrant entitling us to purchase an additional common share of Universal
      at a price of $0.65 per share for a period of 24 months. The transactions
      are expected to close by July 31, 2008.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | 3. | We announced a proposal to form a separate company,
      Gemini Metals Corp., to further explore the Golden Promise, South Golden
      Promise and Victoria Lake properties. We also announced that we entered
      into an agreement with Paragon whereby Paragon will contribute its
      interests in the Spin-out Properties to Gemini in exchange for shares of
      Gemini, resulting in Gemini holding a 100% interest in the Spin-out
      Properties. Gemini will be funded by a planned prospectus offering, which
      will be in conjunction with a TSX Venture Exchange listing application and
      subject to the approval of the TSX Venture Exchange. We propose to carry
      out the spin-out, subject to required regulatory, legal and shareholder
      approvals, through a Plan of Arrangement (the Arrangement). Under the
      terms of the proposed Arrangement, holders of our common shares are
      expected to receive approximately one common share of Gemini for every 5.5
      of our common shares held.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

|**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
    
    
    LowJuly 1 - 15, 2008
    $
    0.81
    
    $
    0.53Month ended June 30, 2008
    $
    0.89
    
    $
    0.75Month ended May 31, 2008
    $
    0.99
    
    $
    0.62Month ended April 30, 2008
    $
    0.95
    
    $
    0.64Month ended March 31, 2008
    $
    1.50
    
    $
    0.85Month ended February 29, 2008
    $
    1.68
    
    $
    1.31Month ended January 31, 2008
    $
    2.25
    
    $
    1.28Fiscal 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 quarter ended April 30, 2007
    $
    3.47
    
    $
    2.45Fiscal quarter ended January 31, 2007
    $
    4.20
    
    $
    2.28Fiscal quarter ended October 31, 2006
    $
    2.35
    
    $
    1.43Fiscal quarter ended July 31, 2006
    $
    1.69
    
    $
    1.23


52

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Fiscal 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
    
    $
    0.13Fiscal year ended April 30, 2004
    $
    0.33
    
    $
    0.24


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

Period
    
    High
    
    
    LowJuly 1 - 15, 2008
    $
    0.80
    
    $
    0.51Month ended June 30, 2008
    $
    0.88
    
    $
    0.73Month ended May 31, 2008
    $
    1.02
    
    $
    0.61Month ended April 30, 2008
    $
    0.95
    
    $
    0.63Month ended March 31, 2008
    $
    1.46
    
    $
    0.81Month ended February 29, 2008
    $
    1.71
    
    $
    1.30Month ended January 31, 2008
    $
    2.28
    
    $
    1.25Fiscal 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
    
    $
    1.71*from May 7, 2007 to July 31, 2007


|9.B. | Plan of Distribution
|---- | --------------------

Not applicable

|9.C. | Markets
|---- | -------

Our common shares are listed on the American Stock Exchange
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

53

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|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. | We entered into a consulting agreement dated August 1,
      2007 with Douglas R. Brett, Inc. and Douglas R. Brett whereby we engage
      Mr. Bretts services as our Chief Financial Officer. See Item 6.B.
      Compensation  Compensation of Executive Officers and Directors 
      Employment and Consulting Agreements for a description of this
      agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|2. | We entered into a shareholder rights plan agreement dated
      November 19, 2007, 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 shareholder rights plan is to provide time for
      all parties to adequately consider any takeover bid or similar transaction
      involving our shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|3. | On June 4, 2008, we entered into a purchase and sale
      agreement with Gemini and Paragon. Under the terms of the agreement,
      Paragon will contribute its interests in the Spin-out Properties to Gemini
      in exchange for 16,201,413 shares of Gemini, resulting in 100% ownership
      by Gemini of the Spin-out Properties;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|4. | We entered into an employment agreement with Paul Hosford
      on January 21, 2008 whereby we employ Mr. Hosford as our President and
      Chief Operating Officer. See Item 6.B. Compensation  Compensation of
      Executive Officers and Directors  Employment and Consulting Agreements
      for a description of this agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|5. | 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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|6. | We entered into a Warrant Indenture dated April 4, 2008
      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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

|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.

54

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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
purposes of the Income Tax Act (Canada) (the Canadian Tax Act) and any
relevant treaty, is not resident or deemed to be resident in Canada, but is a
resident of the U.S., and who 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 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 and Other Income

Under the Canadian Tax Act, a non-resident of Canada is
generally subject to Canadian withholding tax at the rate of 25 percent 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 limits the rate to 15 percent if the shareholder is a resident of
the U.S. and the dividends are beneficially owned by and paid to such
shareholder and limits the rate to 5 percent if the shareholder is also a
corporation that beneficially owns at least 10 percent of the voting stock of
the payor corporation.

The amount of a stock dividend (for tax purposes) would
generally be equal to the amount by which the companys stated capital had
increased by reason of the payment of such dividend. We will furnish additional
tax information to our shareholders in the event of such a dividend. Interest
paid or deemed to be paid on our debt securities held by non-Canadian resident
shareholders may also be subject to Canadian withholding tax, depending upon the
terms and provisions of such securities and any applicable tax treaty.

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.

55

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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. The capital gains net of losses are included in income at a rate of
50%. 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 25% or more of the issued shares of any class or series in our
capital stock belonged to one or more persons in a group comprising the
shareholder and persons with whom the shareholder did not deal at arms length
and in certain other circumstances.

The Convention generally relieves U.S. residents 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 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 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.

56

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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 (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

57

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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 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

58

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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 shares will be increased or decreased to reflect the amount
included or deducted as a result of mark-to-market election. A mark-to-market
election will apply to the tax year for which the election is made and to all
later tax years, unless the PFIC stock ceases to be marketable or the IRS
consents to the revocation of the election.

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

59

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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.

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 the application of the
limitations with respect to the foreign tax credit are fact specific, and each
U.S. Holder of our common shares should consult their own financial advisor,
legal counsel or accountant regarding the foreign tax credit rules.

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

60

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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.

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

61

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|       
|-------
|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

It is managements responsibility for establishing and
maintaining adequate internal control over financial reporting for the
company.

In this annual report, we are required to include a report of
our management on its assessment of the effectiveness of our internal control
over financial reporting as of April 30, 2008, as required by Section 404 of the
United States Sarbanes-Oxley Act of 2002. As at the date of this filing,
management has not completed its assessment of the effectiveness of our internal
control over financial reporting as of April 30, 2008 despite devoting
significant time, effort and expense in this area. This is the first year that
we have been subject to the provisions of Section 404 of the United States
Sarbanes-Oxley Act of 2002, and management has experienced delays in completing
its Section 404 assessment process. Management continues to devote significant
time, effort and expense to performing its evaluation of the effectiveness of
our internal control over financial reporting.

Further, as a result, our independent registered public
accounting firm has not yet completed its audit of managements assessment of
the effectiveness of our internal control over financial reporting as of April
30, 2008, and is not able to attest to managements assessment of the
effectiveness of our internal control over financial reporting as of April 30,
2008.

Management expects to complete its assessment of the effectiveness
  of our internal control over financial reporting, and we expect that our independent
  registered public accounting firm will complete its associated

62

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attestation report thereon. Upon completion, we will file an
  amendment to our Form 20-F for the fiscal year ended April 30, 2008 to include
  both managements report and our independent registered public accounting
  firms attestation report of managements assessment of the effectiveness
  of our internal control over financial reporting.

Mark J. Morabito, Chief Executive Officer Douglas R. Brett,
Chief Financial Officer

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial
reporting that occurred during our most recently completed fiscal year ended
April 30, 2008 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 16.**  |                                 
|------------- | --------------------------------
|              |                                 
|**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, 2008. 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.

63

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Audit Fees

The 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 during the fiscal years ended April 30, 2008 and 2007 was
$50,000 and $48,600, respectively.

Audit Related Fees

The 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 during the fiscal years ended April
30, 2008 and 2007 was $14,250 and $14,250, respectively.

Tax Fees

The aggregate fees billed for professional services rendered by
our principal accountant for tax compliance, tax advice and tax planning during
the fiscal years ended April 30, 2008 and 2007 was $1,750 and $1,750,
respectively.

All Other Fees

Other fees billed by our principal accountant during the fiscal
years ended April 30, 2008 and 2007 amounted to $36,750 and $2,000,
respectively, and included general review of certain company documentation, such
as our Form 20-F registration filing and, in 2008, 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
minimisexception 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

64

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|        
|--------
|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 20, 2008                                                       
|-------------------------------------------------------------------------------------------
|Balance Sheet at April 30, 2008 and 2007                                                   
|Statement of Operations and Deficit for the
      years ended April 30, 2008, 2007 and 2006
|Statement of Cash Flows for the years ended April 30, 2008,
      2007 and 2006            
|Notes to the Financial Statements for the
      year ended April 30, 2008                  

65

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CROSSHAIR EXPLORATION & MINING CORP.

FINANCIAL STATEMENTS

APRIL 30, 2008

(Expressed in Canadian Dollars)













|www.crosshairexploration.com                 | Head Office                       | Phone: 604-681-8030      
|-------------------------------------------- | --------------------------------- | -------------------------
|General Email: info@crosshairexploration.com | 1140 W. Pender Street, Suite 1240 | Toll Free: 1-866-683-8030
|Investors: investor@crosshairexploration.com | Vancouver, BC, Canada V6E 4G1     | Facsimile: 604-681-8039  
|                                             |                                   |                          
|CXX: TSX I CXZ: AMEX                         |                                   |                          

---

|DAVIDSON & COMPANY LLP |  | Chartered Accountants | A
      Partnership of Incorporated Professionals
|---------------------- |  | --------------------- | -------------------------------------------------

INDEPENDENT AUDITORS REPORT

To the Shareholders of
  Crosshair Exploration & Mining Corp.

We were engaged to examine the effectiveness of Crosshair Exploration
  & Mining Corp.s internal control over financial reporting as of April
  30, 2008, based on the criteria established in Internal Control  Integrated
  Framework issued by the Committee of Sponsoring Organizations of the Treadway
  Commission. The Companys management is responsible for maintaining effective
  internal control over financial reporting.

As described in Managements Report on Internal Control
  over Financial Reporting, the Company was unable to complete its assessment
  of the effectiveness of the Companys internal control over financial reporting.
  Accordingly we are unable to perform auditing procedures necessary to form an
  opinion on managements assessment.

Since management was unable to complete its assessment of the
  effectiveness of the Companys internal control over financial reporting,
  and we were unable to apply other procedures to satisfy ourselves as to the
  entitys control over financial reporting, the scope of our work was not
  sufficient to enable us to express, and we do not express, an opinion on the
  effectiveness of the entitys internal control over financial reporting.

We have audited, in accordance with the standards of the Public
  Company Accounting Oversight Board (United States), the balance sheets of Crosshair
  Exploration & Mining Corp. as at April 30, 2008 and 2007 and the statements
  of operations, shareholders equity and cash flows for the years ended
  April 30, 2008, 2007 and 2006, and our report dated June 20, 2008 expressed
  an unqualified opinion on those financial statements.

|                  | **"DAVIDSON****& COMPANY
      LLP"**
|----------------- | -------------------------------------
|                  |                                      
|Vancouver, Canada | Chartered Accountants                
|                  |                                      
|June 20, 2008     |                                      

1200 - 609 Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, BC,
  Canada, V7Y 1G6 
  Telephone (604) 687-0947 Fax (604) 687-6172

---

|DAVIDSON & COMPANY LLP |  | Chartered Accountants | A
      Partnership of Incorporated Professionals
|---------------------- |  | --------------------- | -------------------------------------------------

INDEPENDENT AUDITORS REPORT

To the Shareholders of
  Crosshair Exploration & Mining Corp.

We have audited the balance sheets of Crosshair Exploration &
  Mining Corp. as at April 30, 2008 and 2007 and the statements of operations,
  shareholders' equity and cash flows for the years ended April 30, 2008, 2007
  and 2006. These financial statements are the responsibility of the Company's
  management. Our responsibility is to express an opinion on these financial statements
  based on our audits.

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

In our opinion, these financial statements present fairly, in
  all material respects, the financial position of the Company as at April 30,
  2008 and 2007 and the results of its operations and cash flows for the years
  ended April 30, 2008, 2007 and 2006 in accordance with Canadian generally accepted
  accounting principles.

We were engaged to audit, in accordance with the standards of
  the Public Company Accounting Oversight Board (United States), the effectiveness
  of the Companys internal control over financial reporting as of April
  30, 2008, and our report dated June 20, 2008 disclaimed an opinion on managements
  assessment of the effectiveness of the Companys internal control over
  financial reporting because of a scope limitation.



|                  | **"DAVIDSON****& COMPANY
      LLP"**
|----------------- | -------------------------------------
|                  |                                      
|Vancouver, Canada | Chartered Accountants                
|                  |                                      
|June 20, 2008     |                                      

1200 - 609 Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, BC,
  Canada, V7Y 1G6 
  Telephone (604) 687-0947 Fax (604) 687-6172

---

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

|                                                                                        |   | 2008        |   |   | 2007        |  
|--------------------------------------------------------------------------------------- | - | ----------- | - | - | ----------- | -
|                                                                                        |   |             |   |   |             |  
|ASSETS                                                                                  |   |             |   |   |             |  
|                                                                                        |   |             |   |   |             |  
|Current assets                                                                          |   |             |   |   |             |  
|Cash and cash equivalents                                                               | $ | 13,275,874  |   | $ | 14,311,417  |  
|Marketable
      securities at fair value (cost: $2,695,052 & $1,822,976, respectively) |   | 582,351     |   |   | 1,787,387   |  
|Receivables                                                                             |   | 558,345     |   |   | 444,929     |  
|Prepaid expenses                                                                        |   | 273,828     |   |   | 203,438     |  
|                                                                                        |   |             |   |   |             |  
|                                                                                        |   | 14,690,398  |   |   | 16,747,171  |  
|                                                                                        |   |             |   |   |             |  
|Equipment(Note 3)                                                                       |   | 507,883     |   |   | 366,080     |  
|                                                                                        |   |             |   |   |             |  
|Mineral properties(Note
      4)                                                        |   | 27,071,981  |   |   | 14,551,292  |  
|                                                                                        |   |             |   |   |             |  
|                                                                                        | $ | 42,270,262  |   | $ | 31,664,543  |  
|                                                                                        |   |             |   |   |             |  
|LIABILITIES AND SHAREHOLDERS'
      EQUITY                                              |   |             |   |   |             |  
|                                                                                        |   |             |   |   |             |  
|Current liabilities                                                                     |   |             |   |   |             |  
|Payables and accrued liabilities                                                        | $ | 1,192,271   |   | $ | 1,337,226   |  
|Due to related
      parties                                                            |   | 110,295     |   |   | 19,241      |  
|                                                                                        |   |             |   |   |             |  
|                                                                                        |   | 1,302,566   |   |   | 1,356,467   |  
|                                                                                        |   |             |   |   |             |  
|Future reclamation costs(Note
      5)                                                  |   | 172,238     |   |   | -           |  
|                                                                                        |   |             |   |   |             |  
|Shareholders' equity                                                                    |   |             |   |   |             |  
|Capital stock (Note 6)                                                                  |   |             |   |   |             |  
|Authorized                                                                              |   |             |   |   |             |  
|Unlimited number of common shares without par
      value                               |   |             |   |   |             |  
|Issued: 84,595,825 (April 30, 2007  70,912,072) common
      shares                    |   | 60,948,053  |   |   | 44,135,660  |  
|Contributed surplus (Note
      6)                                                      |   | 10,496,726  |   |   | 3,888,533   |  
|Deficit                                                                                 |   | (30,649,321 | ) |   | (17,716,117 | )
|                                                                                        |   |             |   |   |             |  
|                                                                                        |   | 40,795,458  |   |   | 30,308,076  |  
|                                                                                        |   |             |   |   |             |  
|                                                                                        | $ | 42,270,262  |   | $ | 31,664,543  |  
|                                                                                        |   |             |   |   |             |  
|Nature and continuance of operations (Note
      1)                                     |   |             |   |   |             |  
|Basis of presentation (Note 2)                                                          |   |             |   |   |             |  
|Subsequent events (Note 10)                                                             |   |             |   |   |             |  
|Commitments and contingencies (Note 12)                                                 |   |             |   |   |             |  

On behalf of the Board:

|Mark J.
      Morabito | Director | Ian B. Smith | Director
|------------------------ | -------- | -------------- | --------
|Mark J. Morabito         |          | Ian B. Smith   |         

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

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

|                                                      |   | 2008        |   |   | 2007       |   |   | 2006       |  
|----------------------------------------------------- | - | ----------- | - | - | ---------- | - | - | ---------- | -
|                                                      |   |             |   |   |            |   |   |            |  
|EXPENSES                                              |   |             |   |   |            |   |   |            |  
|                                                      |   |             |   |   |            |   |   |            |  
|Accretion                                             | $ | 5,502       |   | $ | -          |   | $ | -          |  
|Amortization                                          |   | 148,138     |   |   | 43,882     |   |   | 7,477      |  
|Audit and accounting                                  |   | 102,944     |   |   | 38,604     |   |   | 143,212    |  
|Consulting                                            |   | 192,359     |   |   | 171,724    |   |   | 244,534    |  
|Directors fees (Note 8)                               |   | 108,500     |   |   | 60,500     |   |   | 63,000     |  
|Insurance                                             |   | 68,426      |   |   | 35,897     |   |   | -          |  
|Investor relations                                    |   | 452,988     |   |   | 308,548    |   |   | 130,364    |  
|Legal (Note 8)                                        |   | 128,045     |   |   | 212,486    |   |   | 100,700    |  
|Management fees (Note 8)                              |   | 71,250      |   |   | 50,000     |   |   | 225,000    |  
|Office and administration                             |   | 623,154     |   |   | 562,642    |   |   | 339,703    |  
|Property Investigations                               |   | -           |   |   | 1,602      |   |   | 93,467     |  
|Rent                                                  |   | 156,358     |   |   | 83,979     |   |   | 67,132     |  
|Stock-based compensation
      (Note 6)               |   | 7,097,948   |   |   | 3,696,601  |   |   | 682,213    |  
|Transfer agent and filing fees                        |   | 330,777     |   |   | 87,017     |   |   | 106,448    |  
|Travel                                                |   | 273,115     |   |   | 306,978    |   |   | 165,538    |  
|Wages and salaries                                    |   | 1,292,464   |   |   | 923,743    |   |   | 41,441     |  
|                                                      |   | (11,051,968 | ) |   | (6,584,203 | ) |   | (2,410,229 | )
|                                                      |   |             |   |   |            |   |   |            |  
|                                                      |   |             |   |   |            |   |   |            |  
|OTHER ITEMS                                           |   |             |   |   |            |   |   |            |  
|Interest income                                       |   | 407,731     |   |   | 345,287    |   |   | 233,065    |  
|Management income (Note 8)                            |   | 20,000      |   |   | 40,000     |   |   | 12,000     |  
|Gain on disposition of
      Sinbad Claims            |   | 15,849      |   |   | -          |   |   | -          |  
|Realized gains  marketable securities                |   | -           |   |   | 701,494    |   |   | -          |  
|Unrealized gains (losses)marketable
      securities |   | (2,077,112  | ) |   | (35,589    | ) |   | -          |  
|Write-off of mineral properties (Note 4)              |   | (247,704    | ) |   | -          |   |   | (1,518,429 | )
|                                                      |   | (1,881,236  | ) |   | 1,051,192  |   |   | (1,273,364 | )
|                                                      |   |             |   |   |            |   |   |            |  
|                                                      |   |             |   |   |            |   |   |            |  
|Loss before income tax                                |   | (12,933,204 | ) |   | (5,533,011 | ) |   | (3,683,593 | )
|                                                      |   |             |   |   |            |   |   |            |  
|Future income tax recovery (Note 9)                   |   | -           |   |   | -          |   |   | 1,508,120  |  
|                                                      |   |             |   |   |            |   |   |            |  
|Loss for the year                                     |   | (12,933,204 | ) |   | (5,533,011 | ) |   | (2,175,473 | )
|                                                      |   |             |   |   |            |   |   |            |  
|Basic and diluted
      loss per common share         | $ | (0.18       | ) | $ | (0.09      | ) | $ | (0.05      | )
|                                                      |   |             |   |   |            |   |   |            |  
|Weighted average number of common shares              |   |             |   |   |            |   |   |            |  
|outstanding                                           |   | 72,997,081  |   |   | 62,434,069 |   |   | 47,264,482 |  

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

---

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

|                                                                   |   | 2008        |   |   | 2007       |   |   | 2006       |  
|------------------------------------------------------------------ | - | ----------- | - | - | ---------- | - | - | ---------- | -
|                                                                   |   |             |   |   |            |   |   |            |  
|CASH FLOWS FROM OPERATING ACTIVITIES                               |   |             |   |   |            |   |   |            |  
|Loss for the year                                                  | $ | (12,933,204 | ) | $ | (5,533,011 | ) | $ | (2,175,743 | )
|Items not affecting cash:                                          |   |             |   |   |            |   |   |            |  
|Amortization                                                       |   | 148,138     |   |   | 43,882     |   |   | 7,477      |  
|Stock-based
      compensation                                     |   | 7,097,948   |   |   | 3,696,601  |   |   | 682,213    |  
|Write-off of
      mineral properties                              |   | 247,704     |   |   | -          |   |   | 1,518,429  |  
|Future
      Income taxes                                          |   | -           |   |   | -          |   |   | (1,508,120 | )
|Unrealized
      lossmarketable securities                        |   | 2,077,112   |   |   | 35,589     |   |   | -          |  
|Realized
      gain-marketable securities                          |   | -           |   |   | (701,494   | ) |   | -          |  
|Gain on Disposition
      of Sinbad Claims                         |   | (15,849     | ) |   | -          |   |   | -          |  
|Accretion                                                          |   | 5,502       |   |   | -          |   |   | -          |  
|                                                                   |   |             |   |   |            |   |   |            |  
|Purchase of marketable
      securities                            |   | -           |   |   | (3,026,015 | ) |   | -          |  
|Proceeds from sales of marketable securities                       |   | (872,076    | ) |   | 1,904,533  |   |   | -          |  
|                                                                   |   |             |   |   |            |   |   |            |  
|Non-cash working capital item changes                              |   |             |   |   |            |   |   |            |  
|Receivables                                                        |   | (113,416    | ) |   | (215,602   | ) |   | (167,761   | )
|Prepaid expenses                                                   |   | (70,390     | ) |   | (64,646    | ) |   | (137,592   | )
|Payables
      and accrued liabilities                             |   | (1,163,602  | ) |   | 52,531     |   |   | (163,312   | )
|Due from related
      parties                                     |   | -           |   |   | 4,167      |   |   | 3,210      |  
|Due
      to related parties                                       |   | 91,054      |   |   | 5,020      |   |   | (9,334     | )
|                                                                   |   |             |   |   |            |   |   |            |  
|Net cash used in operating
      activities                        |   | (5,501,079  | ) |   | (3,798,445 | ) |   | (1,950,263 | )
|                                                                   |   |             |   |   |            |   |   |            |  
|CASH FLOWS FROM INVESTING ACTIVITIES                               |   |             |   |   |            |   |   |            |  
|Proceeds on sale on mineral property                               |   | 31,698      |   |   | -          |   |   | -          |  
|Mineral properties                                                 |   | (10,587,059 | ) |   | (8,480,906 | ) |   | (2,551,070 | )
|Acquisition of equipment                                           |   | (289,941    | ) |   | (283,593   | ) |   | (132,108   | )
|                                                                   |   |             |   |   |            |   |   |            |  
|Net cash used in investing activities                              |   | (10,845,302 | ) |   | (8,764,499 | ) |   | (2,683,178 | )
|                                                                   |   |             |   |   |            |   |   |            |  
|CASH FLOWS FROM FINANCING ACTIVITIES                               |   |             |   |   |            |   |   |            |  
|Issuance of shares for
      cash, net of costs                    |   | 15,310,838  |   |   | 12,926,385 |   |   | 13,834,710 |  
|                                                                   |   |             |   |   |            |   |   |            |  
|Net cash provided by financing
      activities                    |   | 15,310,838  |   |   | 12,926,385 |   |   | 13,834,710 |  
|                                                                   |   |             |   |   |            |   |   |            |  
|Net change in cash during the period                               |   | (1,035,543  | ) |   | 363,411    |   |   | 9,201,269  |  
|                                                                   |   |             |   |   |            |   |   |            |  
|Cash and cash equivalents,                                         |   |             |   |   |            |   |   |            |  
|beginning of period                                                |   | 14,311,417  |   |   | 13,947,976 |   |   | 4,746,707  |  
|                                                                   |   |             |   |   |            |   |   |            |  
|Cash and cash
      equivalents, closing                           | $ | 13,275,874  |   | $ | 14,311,417 |   | $ | 13,947,976 |  
|                                                                   |   |             |   |   |            |   |   |            |  
|Cash and cash equivalents                                          |   |             |   |   |            |   |   |            |  
|Cash                                                               | $ | 4,927,439   |   | $ | 28,402     |   | $ | 3,947,976  |  
|Liquid short term investments                                      |   | 8,348,435   |   |   | 14,283,015 |   |   | 10,000,000 |  
|                                                                   |   |             |   |   |            |   |   |            |  
|                                                                   | $ | 13,275,874  |   | $ | 14,311,417 |   | $ | 13,947,976 |  
|                                                                   |   |             |   |   |            |   |   |            |  
|Supplemental disclosures with respect to cash flows (Note
      7) |   |             |   |   |            |   |   |            |  

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

---

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

Share
        CapitalNumber of
      
      
      
      
      
      ContributedShares
      
      
      Amount
      
      
      Surplus
      
      
      Deficit
      
      
      TotalBalance at April 30, 2005
      
      37,610,540
      
      $
      16,399,309
      
      $
      606,495
      
      $
      (10,007,633
      )
      $
      6,998,171Issued for (Note 6):Private placement
      
      12,977,500
      
      
      11,182,000
      
      
      -
      
      
      -
      
      
      11,182,000Finders fee
      
      402,741
      
      
      322,193
      
      
      -
      
      
      -
      
      
      322,193Less: Share issue costs
      
      -
      
      
      (1,536,806
      )
      
      -
      
      
      -
      
      
      (1,536,806
      )Property acquisition
      
      400,000
      
      
      317,000
      
      
      -
      
      
      -
      
      
      317,000Exercise of agents options and
        stock options
      
      2,363,874
      
      
      1,886,491
      
      
      -
      
      
      -
      
      
      1,886,491Exercise of agents
        warrants
      
      438,418
      
      
      280,688
      
      
      -
      
      
      -
      
      
      280,688Exercise of warrants
      
      4,162,972
      
      
      1,792,299
      
      
      -
      
      
      -
      
      
      1,792,299Stock-based compensation for the year
      
      -
      
      
      -
      
      
      1,335,620
      
      
      -
      
      
      1,335,620Less: fair market value of options and warrantsexercised
      
      -
      
      
      -
      
      
      (754,112
      )
      
      -
      
      
      (754,112
      )Tax benefit renounced on flow-through shares
      
      -
      
      
      (1,508,120
      )
      
      -
      
      
      -
      
      
      (1,508,120
      )Loss for the year
      
      -
      
      
      -
      
      
      -
      
      
      (2,175,473
      )
      
      (2,175,473
      )Balance at April 30, 2006
      
      58,356,045
      
      $
      29,135,054
      
      $
      1,188,003
      
      $
      (12,183,106
      )
      $
      18,139,951Issued for (Note 6):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 (Note 6):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 period
      
      -
      
      
      -
      
      
      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


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

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|1. | NATURE AND CONTINUANCE OF OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Crosshair Exploration & Mining Corp. (the "Company")
        was incorporated under the laws of British Columbia on September 2, 1966.
        Its principal business activities are the 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 resource properties and has not yet determined whether the properties
        contain ore reserves that are economically recoverable. The recoverability
        of the amounts shown for resource properties and related deferred exploration
        costs are dependent upon the existence of economically recoverable reserves,
        the ability of the Company to obtain necessary financing to complete the
        development of those reserves and upon future profitable production.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | These financial statements have been prepared 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|2. | BASIS OF PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | New Canadian Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Goodwill and Intangible Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The CICA has issued the new Handbook Section 3064, Goodwill
        and Intangible Assets, which will replace Section 3062, Goodwill
        and Intangible Assets. The new standard establishes revised standards
        for the recognition, measurement, presentation and disclosure of goodwill
        and intangible assets. The new standard also provides guidance for the
        treatment of preproduction and start-up costs and requires that these
        costs be expensed as incurred. The new standard applies to annual and
        interim financial statements relating to fiscal years beginning on or
        after October 1, 2008. Management is currently assessing the impact of
        these new accounting standards on its financial statements. Adoption of
        this standard will result in the withdrawal of Emerging Issues Committee
        (EIC) 27.                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | 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
        Canada's own GAAP. The date is for interim and annual financial statements
        relating to fiscal years beginning on or after January 1, 2011. The transition
        date of January 1, 2011 will require the restatement for comparative purposes
        of amounts reported by the Company for the year ended April 30, 2011.
        While the Company has begun assessing the adoption of IFRS for 2011, the
        financial reporting impact of the transition to IFRS cannot be reasonably
        estimated at this time.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | 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. This new standard will become effective for the Company
        beginning on May 1, 2008. The Company is reviewing this standard and has
        not yet determined the impact, if any, on its financial statements.                                                                                                                                                                                                                                                                                                      

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|2. | BASIS OF PRESENTATION (contd) 
        Significant accounting policies (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | 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. These new standards will become effective for the Company
        beginning on May 1, 2008. The Company is currently evaluating the impact
        of this standard.                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Going Concern                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | In April 2007, the CICA approved amendments to Handbook
        Section 1400, General Standards of Financial Statement Presentation. These
        amendments 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 new requirements of the standard are applicable
        for interim and annual financial statements relating to fiscal years beginning
        on or after January 1, 2008. They will become effective for the company
        beginning May 1, 2008. The Company is currently evaluating the impact
        of this standard.                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | Significant accounting policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | 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 the new recommendations of the Canadian
        Institute of Chartered Accountants (CICA) under 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 new sections, which apply to
        fiscal years beginning on or after October 1, 2006, 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 measures
        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                                                                                                                                                                                                                                                                                                              

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|2. | BASIS OF PRESENTATION (contd) 
        Significant accounting policies (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Financial Instruments (contd...)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 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
        unless they qualify for normal sale normal purchase exemption and changes
        in fair value are recorded in other comprehensive income.                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | As s result of the adoption of these new standards,
        the Company has classified its cash and cash equivalents and marketable
        securities as held-for-trading. 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 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 refundable by the Government of Newfoundland
  are credited to the capitalized cost of the mineral property. If payments received
  exceed the capitalized cost of the mineral property, the excess is recognized
  as income in the year received.

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|2. | BASIS OF PRESENTATION (contd) 
        Significant accounting policies (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Mineral properties (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Asset retirement obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | 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 estimated, 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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | 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 period by the weighted average number of common shares outstanding
        during the period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | For diluted per share computations, assumptions are
        made regarding potential common shares outstanding during the period.
        The weighted average number of common shares is increased to include the
        number of additional common shares that would be outstanding if, at the
        beginning of the period, or at time of issuance, if later, all options
        and warrants are exercised. Proceeds from exercise are used to purchase
        the Companys common shares at their average market price during
        the period, thereby reducing the weighted average number of common shares
        outstanding. If these computations prove to be anti-dilutive, diluted
        loss per share is the same as basic loss per share.                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company has an employee stock option plan. The Company
        recognizes an expense arising from stock options granted to both employees
        and non-employees using the fair value method. The fair value of option
        grants is generally established at the date of grant using the Black Scholes
        option pricing model and the compensation amount, equal to the options
        fair value, is then recognized over the options vesting periods.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|2. | BASIS OF PRESENTATION (contd) 
        Significant accounting policies (contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | 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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | 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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

2008
      
      
      2007Accumulated
      
      
      Net
      
      
      
      
      
      Accumulated
      
      
      NetDescription
      
      Cost
      
      
      Amortization
      
      
      Book Value
      
      
      Cost
      
      
      Amortization
      
      
      Book
        ValueFurniture & fixtures
      $
      190,014
      
      $
      49,702
      
      $
      140,312
      
      $
      75,112
      
      $
      14,625
      
      $
      60,487Computer & office equipment
      
      109,065
      
      
      42,410
      
      
      66,655
      
      
      67,014
      
      
      13,843
      
      
      53,171Computer software
      
      48,147
      
      
      24,736
      
      
      23,411
      
      
      32,936
      
      
      5,581
      
      
      27,355Exploration equipment
      
      294,953
      
      
      76,667
      
      
      218,286
      
      
      247,162
      
      
      22,095
      
      
      225,067Leasehold improvements
      
      69,986
      
      
      10,767
      
      
      59,219
      
      
      -
      
      
      -
      
      
      -$
      712,165
      
      $
      204,282
      
      $
      507,883
      
      $
      422,224
      
      $
      56,144
      
      $
      366,080


---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|4. | MINERAL PROPERTIES
|-- | ------------------

Uranium
      
      
      Gold
        & VHMSSouthernStormy
      
      
      
      
      
      GoldenOtter &
      
      
      Lake &
      
      
      
      
      
      PromiseMoran
      
      
      Portage
      
      
      Partridge
      
      
      Golden
      
      
      (Victoria
      
      
      SinbadLake
      
      
      Lake
      
      
      River
      
      
      Promise
      
      
      Lake)
      
      
      Claims
      
      
      TotalBalance April 30, 2006
      $
      2,812,617
      
      $
      70,400
      
      $
      -
      
      $
      -
      
      $
      1,024,022
      
      $
      12,722
      
      $
      3,919,761Drilling and trenching
      
      2,474,435
      
      
      94,698
      
      
      -
      
      
      640,629
      
      
      514,059
      
      
      -
      
      
      3,723,821Geology
      
      2,070,123
      
      
      34,741
      
      
      -
      
      
      32,738
      
      
      78,338
      
      
      3,127
      
      
      2,219,067Geophysics
      
      2,278,608
      
      
      62,900
      
      
      -
      
      
      -
      
      
      79,961
      
      
      -
      
      
      2,421,469Administration
      
      343,171
      
      
      7,765
      
      
      -
      
      
      54,301
      
      
      42,743
      
      
      -
      
      
      447,980Technical analysis
      
      432,758
      
      
      8,261
      
      
      -
      
      
      17,336
      
      
      40,189
      
      
      -
      
      
      498,544Acquisition costs
      
      710,000
      
      
      276,750
      
      
      -
      
      
      110,400
      
      
      223,500
      
      
      -
      
      
      1,320,650Total for the year
      
      8,309,095
      
      
      485,115
      
      
      -
      
      
      855,404
      
      
      978,790
      
      
      3,127
      
      
      10,631,531Balance April 30, 2007
      
      11,121,712
      
      
      555,515
      
      
      -
      
      
      855,404
      
      
      2,002,812
      
      
      15,849
      
      
      14,551,292Drilling andtrenching
      
      3,868,218
      
      
      -
      
      
      -
      
      
      489,962
      
      
      5,922
      
      
      -
      
      
      4,364,102Geology
      
      5,121,264
      
      
      22,278
      
      
      25,542
      
      
      71,756
      
      
      50,537
      
      
      -
      
      
      5,291,377Geophysics
      
      352,133
      
      
      68,885
      
      
      56,346
      
      
      -
      
      
      112,145
      
      
      -
      
      
      589,509Administration
      
      585,538
      
      
      22,592
      
      
      19,548
      
      
      33,885
      
      
      614
      
      
      -
      
      
      662,177Technical analysis
      
      649,455
      
      
      2,362
      
      
      1,268
      
      
      -
      
      
      5,575
      
      
      -
      
      
      658,660Future reclamation
      
      163,884
      
      
      -
      
      
      -
      
      
      -
      
      
      2,852
      
      
      -
      
      
      166,736Acquisition costs
      
      695,000
      
      
      279,000
      
      
      145,000
      
      
      87,800
      
      
      67,500
      
      
      -
      
      
      1,274,300Credits received
      
      (150,000
      )
      
      -
      
      
      -
      
      
      -
      
      
      (72,619
      )
      
      -
      
      
      (222,619
      )Write
        offs/sales
      
      -
      
      
      -
      
      
      (247,704
      )
      
      -
      
      
      -
      
      
      (15,849
      )
      
      (263,553
      )Total for the
        year
      
      11,285,492
      
      
      395,117
      
      
      -
      
      
      683,403
      
      
      172,526
      
      
      (15,849
      )
      
      12,520,689Balance
        April 30, 2008
      $
      22,407,204
      
      $
      950,632
      
      $
      -
      
      $
      1,538,807
      
      $
      2,175,338
      
      $
      -
      
      $
      27,071,981Cumulative totals as at April 30, 2008:Drilling and trenching
      $
      6,665,659
      
      $
      94,698
      
      $
      -
      
      $
      1,130,591
      
      $
      570,987
      
      $
      -
      
      $
      8,461,935Geology
      
      9,863,113
      
      
      57,419
      
      
      25,542
      
      
      104,494
      
      
      499,120
      
      
      11,724
      
      
      10,561,411Geophysics
      
      1,626,768
      
      
      131,785
      
      
      56,346
      
      
      -
      
      
      437,513
      
      
      -
      
      
      2,252,413Administration
      
      1,337,223
      
      
      30,357
      
      
      19,548
      
      
      88,186
      
      
      105,014
      
      
      -
      
      
      1,580,328Technical analysis
      
      1,211,858
      
      
      10,623
      
      
      1,268
      
      
      17,336
      
      
      231,620
      
      
      -
      
      
      1,472,705Future reclamation
      
      163,884
      
      
      -
      
      
      -
      
      
      -
      
      
      2,852
      
      
      -
      
      
      166,736Acquisition costs
      
      1,955,000
      
      
      625,750
      
      
      145,000
      
      
      198,200
      
      
      423,000
      
      
      4,125
      
      
      3,351,075Credits received
      
      (416,300
      )
      
      -
      
      
      -
      
      
      -
      
      
      (94,769
      )
      
      -
      
      
      (511,069
      )Write
        offs/sales
      
      -
      
      
      -
      
      
      (247,704
      )
      
      -
      
      
      -
      
      
      (15,849
      )
      
      (263,553
      )Balance
        April 30, 2008
      $
      22,407,204
      
      $
      950,632
      
      $
      -
      
      $
      1,538,807
      
      $
      2,175,338
      
      $
      -
      
      $
      27,071,981


---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|4. | MINERAL PROPERTIES(contd)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | 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 1,350,000 common shares,
        made cash payments totaling $425,000 and spent more than the required
        minimum $3,000,000 on project expenditures. The Company must issue
        another 250,000 common shares and make a cash payment of $150,000,
        both on or before November 10, 2008, and complete a bankable feasibility
        study within 24 months of meeting these obligations in order to fully
        exercise the option.                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | 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 1,600,000 common shares,
        made cash payments totaling $90,000 and spent more than the required
        minimum $600,000 on project expenditures. To complete the exercise
        of the option, the Company must make a cash payment of $50,000 by
        December 2, 2008.                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | 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.                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Golden Promise Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Pursuant to an agreement dated May 2, 2006, as amended
        April 18, 2008, the Company acquired an option to earn a 60% interest
        in the Golden Promise Property, a gold project located in Newfoundland,
        Canada. To date, the Company has issued 40,000 common shares, made cash
        payments totalling $100,000 and spent $1,334,000 on project expenditures.
        To complete the exercise of the option, the Company must issue 20,000
        shares by May 1, 2008 (issued subsequent to April 30, 2008), issue another
        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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | 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.                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Sinbad Claims                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Sinbad claims are located in Emery, Nevada, U.S.A.
        and were acquired in January 2006 at a cost of $4,125. Subsequently,
        the Company incurred geology costs totalling $11,724. During the year
        ended April 30, 2008, the Sinbad claims were sold to Target Exploration
        & Mining Corp., a company with at least one director in common, in
        consideration for cash of $31,698 and a 2% net smelter return royalty.                                                                                                                                                                                                                                                     

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|5. | FUTURE RECLAMATION COSTS
|-- | ------------------------

| |                                                       |   | 2008    |  |   | 2007 |  |   | 2006 | 
| | ----------------------------------------------------- | - | ------- |  | - | ---- |  | - | ---- | 
| |                                                       |   |         |  |   |      |  |   |      | 
| | Asset retirement obligation  beginning
      balance | $ | -       |  | $ | -    |  | $ | -    | 
| | Liability incurred                                    |   | 166,736 |  |   | -    |  |   | -    | 
| | Accretion expense                                     |   | 5,502   |  |   | -    |  |   | -    | 
| |                                                       |   |         |  |   |      |  |   |      | 
| | Asset retirement obligation  ending balance          | $ | 172,238 |  | $ | -    |  | $ | -    | 

|   | The Company has a legal obligation associated
        with its Moran Lake mineral property for cleanup costs when work programs
        are completed.                                                                                                                                                                                                                                            
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The total undiscounted amount of estimated
        cash flows required to settle the obligations is $175,400, which was adjusted
        for inflation at the rate of 2% and then discounted at 8%. 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.
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|6. | CAPITAL STOCK AND CONTRIBUTED SURPLUS                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Share issuances                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|   | During the year ended April 30, 2008, shares
        were issued as follows:                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|   | •                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|   | •                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|   | •                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|   | •                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|   | •                                                                                                                                                                                                                                                                                                                                                                                                 

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|6. | CAPITAL STOCK AND CONTRIBUTED SURPLUS(contd)
        Share issuances(contd)
|-- | -------------------------------------------------------------------------------
|   |                                                                                
|   | During the year ended April 30, 2007, shares
        were issued as follows:   
|   |                                                                                
|   | •                                                                              
|   |                                                                                
|   | •                                                                              
|   |                                                                                
|   | •                                                                              
|   |                                                                                
|   | •                                                                              
|   |                                                                                
|   | During the year ended April 30, 2006, shares
        were issued as follows:   
|   |                                                                                
|   | •                                                                              
|   |                                                                                
|   | •                                                                              
|   |                                                                                
|   | •                                                                              

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|6. | CAPITAL STOCK AND CONTRIBUTED SURPLUS(contd)
        Share issuances(contd)                                                                                                                                                                    
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                    
|   | •                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                    
|   | •                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                    
|   | Escrow shares                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                    
|   | During the year ended April 30, 2008, 140,625
        shares were released from escrow; leaving nil shares held in escrow. No
        expense was recognized for the release of these shares as the release
        is not considered compensatory.
|   |                                                                                                                                                                                                                                                    
|   | Warrants                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                    
|   | The following is a summary of warrants outstanding
        at April 30, 2008, 2007 and 2006 and changes during the years then ended.                                                                                                               

April
        30, 2008
      
      
      April
        30, 2007
      
      
      April
        30, 2006Weighted
      
      
      
      
      
      Weighted
      
      
      
      
      
      WeightedNumber
      
      
      Average
      
      
      Number
      
      
      Average
      
      
      Number
      
      
      Averageof Warrants
      
      
      Exercise Price
      
      
      of Warrants
      
      
      Exercise Price
      
      
      of Warrants
      
      
      Exercise PriceOutstanding, beginning of the year
      
      399,883
      
      $
      1.25
      
      
      9,240,951
      
      $
      1.22
      
      
      7,152,221
      
      $
      0.55Private placement/Issuance
      
      8,694,500
      
      
      1.76
      
      
      106,820
      
      
      0.75
      
      
      6,690,120
      
      
      1.38Exercised
      
      (399,883
      )
      
      1.25
      
      
      (8,947,888
      )
      
      1.14
      
      
      (4,601,390
      )
      
      0.45Outstanding, end
        of the year
      
      8,694,500
      
      
      1.76
      
      
      399,883
      
      
      1.25
      
      
      9,240,951
      
      
      1.22


Stock options

The Company has a stock option plan whereby
  it may grant options to directors, employees, consultants and certain other
  service providers. Options are subject to the minimum vesting requirement, with
  25% of the total number of the options granted to be released every 6 months
  from the date of grant. The options can be granted for a maximum term of 5 years.

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|6. | CAPITAL STOCK AND CONTRIBUTED SURPLUS(contd)
        Stock options(contd)                                                            
|-- | -----------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                          
|   | The following is a summary of stock options outstanding
        at April 30, 2008, 2007 and 2006 and changes during the years then ended.

April
        30, 2008
      
      
      April
        30, 2007
      
      
      April
        30, 2006Weighted
      
      
      
      
      
      Weighted
      
      
      
      
      
      WeightedAverage
      
      
      
      
      
      Average
      
      
      
      
      
      AverageNumber
      
      
      Exercise
      
      
      Number
      
      
      Exercise
      
      
      Number
      
      
      Exerciseof options
      
      
      Price
      
      
      of options
      
      
      Price
      
      
      of options
      
      
      PriceOutstanding, beginning of year
      
      8,981,984
      
      $
      1.62
      
      
      6,364,748
      
      $
      0.68
      
      
      4,774,622
      
      $
      0.34Exercised
      
      (1,288,984
      )
      
      0.59
      
      
      (2,672,764
      )
      
      0.53
      
      
      (2,363,874
      )
      
      0.48Cancelled or expired
      
      (1,100,000
      )
      
      2.23
      
      
      (700,000
      )
      
      0.84
      
      
      (393,750
      )
      
      0.33Granted
      
      3,000,000
      
      
      1.76
      
      
      5,990,000
      
      
      2.04
      
      
      4,347,750
      
      
      0.91Outstanding, end
        of year
      
      9,593,000
      
      $
      1.71
      
      
      8,981,984
      
      $
      1.62
      
      
      6,364,748
      
      $
      0.68Currently exercisable
      
      5,579,250
      
      $
      1.53


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, 2008 totaled
  $7,097,948. The weighted average fair value of options granted in the year was
  $1.76 (April 30, 2007 - $2.04), (April 30, 2006 - $0.91)

The following weighted average assumptions
  were used for the Black-Scholes method of valuation of stock options granted
  during the year:

| |                          | April 30, 2008 | April 30, 2007 | April 30,2006
| | ------------------------ | -------------- | -------------- | -------------
| |                          |                |                |              
| |                          |                |                |              
| | Risk-free interest rate  | 3.06%          | 3.79%          | 3.70%        
| | Expected life of options | 5 years        | 5 years        | 5 years      
| | Annualized volatility    | 154%           | 239%           | 140%         
| | Dividend rate            | 0%             | 0%             | 0%           
| |                          |                |                |              

|7. | SUPPLEMENTAL DISCLOSURES WITH RESPECT TO
        CASH FLOWS                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                           
|   | The following were significant non-cash investing
        and financing transactions during the year ended April 30, 2008:
|   |                                                                                                                           
|   | (a)                                                                                                                       
|   |                                                                                                                           
|   | (b)                                                                                                                       
|   |                                                                                                                           
|   | (c)                                                                                                                       
|   |                                                                                                                           
|   | (d)                                                                                                                       

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|7. | SUPPLEMENTAL DISCLOSURES WITH RESPECT TO
        CASH FLOWS(contd...)                                                    
|-- | --------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                           
|   | The following were significant non-cash investing
        and financing transactions during the year ended April 30, 2007:
|   |                                                                                                                           
|   | (a)                                                                                                                       
|   |                                                                                                                           
|   | (b)                                                                                                                       
|   |                                                                                                                           
|   | (c)                                                                                                                       
|   |                                                                                                                           
|   | The following were significant non-cash investing
        and financing transactions during the year ended April 30, 2006:
|   |                                                                                                                           
|   | (a)                                                                                                                       
|   |                                                                                                                           
|   | (b)                                                                                                                       
|   |                                                                                                                           
|   | (c)                                                                                                                       
|   |                                                                                                                           
|   | (d)                                                                                                                       

|8. | RELATED PARTY TRANSACTIONS                                                    
|-- | ------------------------------------------------------------------------------
|   |                                                                               
|   | The Company entered into transactions with
        related parties as follows:
|   |                                                                               
|   | •                                                                             
|   |                                                                               
|   | •                                                                             
|   |                                                                               
|   | •                                                                             
|   |                                                                               
|   | •                                                                             
|   |                                                                               
|   | •                                                                             
|   |                                                                               
|   | •                                                                             

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|8. | RELATED PARTY TRANSACTIONS(contd...)                                                                                                                                             
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                   
|   | •                                                                                                                                                                                 
|   |                                                                                                                                                                                   
|   | •                                                                                                                                                                                 
|   |                                                                                                                                                                                   
|   | These transactions were incurred in the normal
        course of operations and were undertaken with the same terms and conditions
        as transactions with unrelated parties.
|   |                                                                                                                                                                                   
|9. | INCOME TAXES                                                                                                                                                                      
|   |                                                                                                                                                                                   
|   | A reconciliation of income taxes at statutory
        rates with the reported taxes is as follows:                                                                                

| |                                                    |   | 2008        |   |   | 2007       |   |   | 2006       |  
| | -------------------------------------------------- | - | ----------- | - | - | ---------- | - | - | ---------- | -
| |                                                    |   |             |   |   |            |   |   |            |  
| | Loss before income tax recovery                    |   | (12,933,204 | ) | $ | (5,533,011 | ) | $ | (3,683,593 | )
| |                                                    |   |             |   |   |            |   |   |            |  
| | Expected income tax recovery at statutory rates    | $ | (4,299,902  | ) | $ | (1,961,735 | ) | $ | (1,388,715 | )
| | Non-taxable items                                  |   | 3,942,847   |   |   | 1,965,026  |   |   | 1,095,317  |  
| | Non-capital loss and resource expenditure benefits |   | 357,055     |   |   | (3,291     | ) |   | (1,214,722 | )
| | unrecognized (recognized)                          |   |             |   |   |            |   |   |            |  
| |                                                    |   |             |   |   |            |   |   |            |  
| | Total income taxes
      (recovery)                | $ | -           |   | $ | -          |   | $ | (1,508,120 | )

The significant components of the Company's
  future tax assets are as follows:

| |                                                             |   | 2008       |   |   | 2007       |   |   | 2006       |  
| | ----------------------------------------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
| |                                                             |   |            |   |   |            |   |   |            |  
| | Future tax assets:                                          |   |            |   |   |            |   |   |            |  
| | Loss carry forwards                                         | $ | 822,869    |   | $ | 606,851    |   | $ | 1,049,668  |  
| | Marketable Securities                                       |   | 334,969    |   |   | 11,033     |   |   | -          |  
| | Equipment                                                   |   | 55,156     |   |   | 17,405     |   |   | 4,622      |  
| | Share Issuance Costs                                        |   | 373,537    |   |   | 243,054    |   |   | 419,880    |  
| | Mineral property and related exploration
      expenditures |   | 1,425,338  |   |   | 917,927    |   |   | (197,576   | )
| |                                                             |   |            |   |   |            |   |   |            |  
| |                                                             |   | 3,011,869  |   |   | 1,796,270  |   |   | 1,276,594  |  
| |                                                             |   |            |   |   |            |   |   |            |  
| | Less: valuation allowances                                  |   | (3,011,869 | ) |   | (1,796,270 | ) |   | (1,276,594 | )
| |                                                             |   |            |   |   |            |   |   |            |  
| | Net future tax assets                                       | $ | -          |   | $ | -          |   | $ | -          |  

During the year ended April 30, 2006,
  the Company issued 4,000,000 common shares on a flow-through basis for gross
  proceeds of $4,000,000. The flow-through agreement requires the Company to renounce
  certain deductions for Canadian exploration expenditures incurred on the Companys
  resource properties. Future income taxes of $1,508,120 on the exploration expenditures
  to be renounced to shareholders were applied against capital stock.

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|10. | SUBSEQUENT EVENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | Subsequent to April 30, 2008, the Company:                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | •                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|11. | FINANCIAL INSTRUMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Companys financial instruments consist
        of cash and cash equivalents, marketable securities, receivables, and
        payables, accrued liabilities and related parties. Unless otherwise noted,
        it is managements opinion that the Company is not exposed to significant
        interest, currency or credit risks arising from these financial instruments.
        The fair value of these financial instruments approximates their carrying
        values, unless otherwise noted.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|12. | COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company has entered into operating lease
        agreements for its office premises in Vancouver and St. Johns. The
        annual commitments under these leases are: fiscal 2009 - $284,280; 2010
        - $284,280 and 2011- $194,946.                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|13. | SEGMENTED INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company operates in one reportable operating
        segment, being the acquisition, exploration and development of mineral
        properties in North America. All of the Companys mineral properties
        and equipment are in Canada.                                                                                                                                                                                                                                                            

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|14. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                          
|    | These financial statements have been prepared in accordance
        with Canadian GAAP. Material variations in the accounting principles,
        practices and methods used in preparing these financial statements from
        principles, practices and methods accepted in the United States ("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:                                                                                                                                                                                                                            

2008
      
      
      2007Balance,
      
      
      Adjustments
      
      
      Balance,
      
      
      Balance,
      
      
      Adjustments
      
      
      Balance,Canadian
      
      
      
      
      
      US
      
      
      Canadian
      
      
      
      
      
      USGAAP
      
      
      
      
      
      GAAP
      
      
      GAAP
      
      
      
      
      
      GAAPAssets:Current assets
      $
      14,690,398
      
      $
      -
      
      $
      14,690,398
      
      $
      16,747,171
      
      $
      -
      
      $
      16,747,171Equipment
      
      507,883
      
      
      -
      
      
      507,883
      
      
      366,080
      
      
      -
      
      
      366,080Mineral properties
      
      27,071,981
      
      
      23,870,031
      
      
      3,201,950
      
      
      14,551,292
      
      
      (12,474,517
      )
      
      2,076,775Total assets
      $
      42,270,262
      
      $
      23,870,031
      
      $
      18,400,231
      
      $
      31,664,543
      
      $
      (12,474,517
      )
      $
      19,190,026LiabilitiesCurrent
        liabilities
      $
      1,302,566
      
      $
      -
      
      $
      1,302,566
      
      $
      1,356,467
      
      $
      -
      
      $
      1,356,467Future reclamation costs
      
      172,238
      
      
      -
      
      
      172,238
      
      
      -
      
      
      -
      
      
      -Flow-through
        shareliability
      
      -
      
      
      536,250
      
      
      536,250
      
      
      -
      
      
      -
      
      
      -Shareholders equityCapital stock
      
      60,948,053
      
      
      (536,250
      )
      
      60,411,803
      
      
      44,135,660
      
      
      -
      
      
      44,135,660Contributed surplus
      
      10,496,726
      
      
      -
      
      
      10,496,726
      
      
      3,888,533
      
      
      -
      
      
      3,888,533Deficit
      
      (30,649,321
      )
      
      (23,870,031
      )
      
      (54,519,352
      )
      
      (17,716,117
      )
      
      (12,474,517
      )
      
      (30,190,634
      )Total liabilities andshareholders equity
      $
      42,270,262
      
      $
      (23,870,031
      )
      $
      18,400,231
      
      $
      31,664,543
      
      $
      (12,474,517
      )
      $
      19,190,026


---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|14. | 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:

| |                                                         |   | 2008        |   |   | 2007        |   |   | 2006       |  
| | ------------------------------------------------------- | - | ----------- | - | - | ----------- | - | - | ---------- | -
| |                                                         |   |             |   |   |             |   |   |            |  
| | Loss for the year under Canadian GAAP                   | $ | (12,933,204 | ) | $ | (5,533,011  | ) | $ | (2,175,473 | )
| | Adjustments:                                            |   |             |   |   |             |   |   |            |  
| | Mineral property
      expenditures incurred during the |   |             |   |   | (9,310,881  | ) |   | (2,508,260 | )
| | year                                                    |   | (11,262,238 | ) |   |             |   |   |            |  
| | Mineral properties
      written off during the year    |   | -           |   |   | -           |   |   | 1,325,707  |  
| | Flow-through share premium (discount)
      paid in     |   |             |   |   |             |   |   |            |  
| | excess of
      (below) market value                    |   | -           |   |   | -           |   |   | 491,714    |  
| | Future income tax recovery                              |   | -           |   |   | -           |   |   | (1,508,120 | )
| | Loss under US GAAP                                      | $ | (24,195,442 | ) | $ | (14,843,892 | ) | $ | (4,374,432 | )
| |                                                         |   |             |   |   |             |   |   |            |  
| | Weighted average number of common shares                |   |             |   |   |             |   |   |            |  
| | outstanding under US GAAP                               |   | 72,997,081  |   |   | 62,293,444  |   |   | 46,983,232 |  
| |                                                         |   |             |   |   |             |   |   |            |  
| | Loss per share under
      US GAAP                      | $ | (0.33       | ) | $ | (0.24       | ) | $ | (0.09      | )

Statements of cash flows

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

| |                                                                 |   | 2007        |   |   | 2007        |   |   | 2006       |  
| | --------------------------------------------------------------- | - | ----------- | - | - | ----------- | - | - | ---------- | -
| |                                                                 |   |             |   |   |             |   |   |            |  
| | Net cash flows from operating activities                        |   |             |   |   |             |   |   |            |  
| | Under Canadian GAAP                                             | $ | (5,501,079  | ) | $ | (3,798,445  | ) | $ | (1,950,263 | )
| | Mineral properties                                              |   | (10,076,855 | ) |   | (8,238,406  | ) |   | (2,421,945 | )
| | Net cash used in operating
      activities under US GAAP       |   | (15,577,934 | ) |   | (12,036,851 | ) |   | (4,372,208 | )
| |                                                                 |   |             |   |   |             |   |   |            |  
| | Net cash flows from financing activities                        |   |             |   |   |             |   |   |            |  
| | Under Canadian
      GAAP and US GAAP                           |   | 15,310,838  |   |   | 12,926,385  |   |   | 13,834,710 |  
| |                                                                 |   |             |   |   |             |   |   |            |  
| | Net cash flows used in investing activities                     |   |             |   |   |             |   |   |            |  
| | Under Canadian GAAP                                             |   | (10,845,302 | ) |   | (8,764,499  | ) |   | (2,683,178 | )
| | Mineral properties                                              |   | 10,076,855  |   |   | 8,238,406   |   |   | 2,421,945  |  
| |                                                                 |   |             |   |   |             |   |   |            |  
| | Net cash used in
      investing activities under US GAAP       |   | (768,447    | ) |   | (526,093    | ) |   | (261,233   | )
| |                                                                 |   |             |   |   |             |   |   |            |  
| | Net increase in cash and cash equivalents during
      the year |   | (1,035,543  | ) |   | 363,441     |   |   | 9,201,269  |  
| |                                                                 |   |             |   |   |             |   |   |            |  
| | Cash and cash equivalents, beginning the year                   |   | 14,311,417  |   |   | 13,947,976  |   |   | 4,746,707  |  
| |                                                                 |   |             |   |   |             |   |   |            |  
| | Cash and cash equivalents, end of year                          | $ | 13,275,874  |   | $ | 14,311,417  |   | $ | 13,947,976 |  

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|14. | 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 USGAAP, 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. During the year ended April 30, 2006, the
        Company issued 4,000,000 flow-through shares for total proceeds of $4,000,000.
        As the market price of the Companys stock was less than the fair
        value of the flow-through shares issued, a premium of $398,454 has
        been recorded for the expended cash on qualifying expenditures and a flow-through
        share liability of $401,546 was recorded for the unexpended amount
        as of April 30, 2006.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | 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, 2008, 2007 and 2006 were 72,997,081, 62,293,444, and 46,983,232,
        respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|14. | 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 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. 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

---

|CROSSHAIR EXPLORATION & MINING CORP.
|------------------------------------
|NOTES TO THE FINANCIAL STATEMENTS   
|April 30, 2008                      
|(Expressed in Canadian Dollars)     
|                                    

|14. | 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.

---

|**ITEM 18.** | FINANCIAL STATEMENTS
|------------ | --------------------

See Item 17  Financial Statements.

|**ITEM 19.** | EXHIBITS
|------------ | --------

|1.1(1)  | Certificate of Incorporation dated September 2, 1966.                                                                                                                                         
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.2(1)  | Memorandum dated August 31, 1966.                                                                                                                                                             
|1.3(1)  | Certificate of Conversion to Public Company dated
      February 20, 1967                                                                                                                     
|1.4(1)  | Certificate of Name Change from Shasta Mines & Oil
      Ltd. (NPL) to International Shasta Resources Ltd dated February 4, 1975.                                                             
|1.5(1)  | Certificate of Name Change from International Shasta
      Resources Ltd. to Consolidated Shasta Resources Inc dated May 20, 1994.                                                            
|1.6(1)  | Certificate of Name Change from Consolidated Shasta
      Resources Inc. to Lima Gold Corporation dated November 23, 1994.                                                                    
|1.7(1)  | Certificate of Name Change from Lima Gold Corporation to
      International Lima Resources Corp. dated September 21, 1999.                                                                   
|1.8(1)  | Certificate of Name Change from International Lima
      Resources Corp. to Crosshair Exploration & Mining Corp. dated March 1,
      2004.                                                   
|1.9(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, 2004.
|1.10(1) | Notice of Alteration removing the Pre-Existing Company
      Provisions filed September 30, 2004.                                                                                             
|1.11(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, 2005.                         

66

---

|1.12(1) | New Articles
        - 2004                                                                                                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2.1(1)  | Specimen Common Share certificate.                                                                                                                                                                                              
|2.2(1)  | Sample of Warrant
        Terms and Conditions.                                                                                                                                                                                 
|4.1(1)  | Victoria Lake Property Agreement
        between Rubicon Minerals Corp. and Crosshair Exploration and Mining Corp.
        dated February 14, 2003. (This agreement is in relation to the South Golden
        Promise Property)
|4.2(1)  | 1stAmended
        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)  | 2ndAmended 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 and
        Mining Corp., dated May 1, 2006.                                                                                          
|4.5(1)  | Amended and Restated Moran Lake
        Agreement between Lewis Murphy and Crosshair Exploration & Mining
        Corp. dated March 1, 2005.                                                                                    
|4.6(5)  | Stock Option
        Plan dated July 9, 2007.                                                                                                                                                                                   
|4.7(3)  | Sample Stock Option Grant Agreement.                                                                                                                                                                                            
|4.8(3)  | Agreement with
        Triassic Properties Limited regarding Otter and Portage Lake, dated December
        2, 2005.                                                                                                            
|4.9(5)  | Independent Consulting Services
        Agreement with Douglas R. Brett, Inc. and Douglas R. Brett dated August
        1, 2007.                                                                                                
|4.10(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,
        2008.                                 
|4.11    | Purchase
        and Sale Agreement dated June 4, 2008 with Gemini and Paragon;                                                                                                                                                 
|4.12    | Employment
        Agreement with Paul Hosford dated January 21, 2008;                                                                                                                                                          
|4.13    | Underwriting
        Agreement with Canaccord Capital Corporation and Thomas Weisel Partners
        Canada Inc. dated March 26, 2008.                                                                                          
|4.14    | Warrant
        Indenture dated April 4, 2008 with Computershare Trust Company of Canada.                                                                                                                                       
|11.1(4) | Code of Ethics                                                                                                                                                                                                                  
|12.1    | Section
        302 CEO Certification                                                                                                                                                                                           
|12.2    | Section
        302 CFO Certification                                                                                                                                                                                           
|13.1    | Section
        906 CEO Certification                                                                                                                                                                                           
|13.2    | Section
        906 CFO Certification                                                                                                                                                                                           

|(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. 

67

---

|(3) | Filed as an exhibit to our Annual Report on Form 20-F
      filed October 31, 2006.
|--- | -----------------------------------------------------------------------------------
|(4) | Filed as an exhibit to our Report on Form 6-K filed
      February 1, 2007.        
|(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.                     

68

---

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, that are predominantly igneous in composition.

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.

Conglomeratemeans a 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.

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.

Geophysicsmeans the study of the earth by quantitative
physical methods.

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

Granitemeans plutonic 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.

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.

Mudstonemeans a detrital sedimentary rock composed of
clay-sized particles.

Net Smelter Return and NSRmeans the 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.

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

Pyritemeans a 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.

Shalemeans a 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.

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

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 bearing quartz.

Volcanicmeans a description of rocks originating from
volcanic activity.

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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. Morabito                      
| |                                           
| | By:                                       
| |                                           

Date: July 25, 2008

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