UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549



FORM 20-F



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



OR

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

For the fiscal year ended April 30, 2007



OR

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

For the transition period from ____________ to __________



OR

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

Date of event requiring this shell company report____________



Commission file number: 0-51695



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)



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



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



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



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



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



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

Yes ___  No _X_





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

Yes ___   No _X_



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

Yes _X_   No ___



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



Large accelerated filer ___

Accelerated filer ___

Non-accelerated filer _X__



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

Item 17 _X_   Item 18 ___



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

Yes ___   No _X_



Index to Exhibits on Page 65



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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                                                   | 14  
|Item 4A.  | Unresolved Staff Comments                                                    | 33  
|Item 5.   | Operating and Financial Review and Prospects                                 | 34  
|Item 6.   | Directors, Senior Management and Employees                                   | 41  
|Item 7.   | Major Shareholders and Related Party Transactions                            | 50  
|Item 8.   | Financial Information                                                        | 51  
|Item 9.   | The Offer and Listing                                                        | 53  
|Item 10.  | Additional Information                                                       | 54  
|Item 11.  | Quantitative and Qualitative Disclosures About Market Risk                   | 62  
|Item 12.  | Description of Securities Other Than Equity Securities                       | 63  
|Part II   |                                                                              |     
|Item 13.  | Defaults, Dividend Arrearages and Delinquencies                              | 64  
|Item 14.  | Material Modifications to the Rights of Security Holders and Use of Proceeds | 64  
|Item 15.  | Controls and Procedures                                                      | 64  
|Item 16.  | Reserved                                                                     | 64  
|Item 16A. | Audit Committee Financial Expert                                             | 64  
|Item 16B. | Code of Ethics                                                               | 64  
|Item 16C. | Principal Accountant Fees and Services                                       | 65  
|Item 16D. | Exemptions from the Listing Standards for Audit Committees                   | 65  
|Item 16E. | Purchases of Equity Securities by the Issuer and Affiliated Purchasers       | 65  
|Part III  |                                                                              |     
|Item 17.  | Financial Statements                                                         | 66  
|Item 18.  | Financial Statements                                                         | 66  
|Item 19.  | Exhibits                                                                     | 66  
|          | Glossary of Geological Terms                                                 | 69  





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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 new share for ten old shares and increased our authorized share capital from 3,000,000 common shares to 20,000,000 common shares.  On November 23, 1994 we changed our name to Lima Gold Corporation and on September 21, 1999 we changed our name to International Lima Resources Corp. and consolidated our share capital on the basis of one new share for three old shares and increased our authorized share capital from 6,666,667 common shares to 20,000,000 common shares.  On November 5, 2003 we increased our authorized share capital from 20,000,000 common shares to 100,000,000 common shares.  On March 1, 2004 we changed our name to Crosshair Exploration & Mining Corp.  On June 1, 2004 we replaced our Memorandum with a Notice of Articles as is required by the Business Corporations Act(British Columbia). On March 11, 2005 we changed our authorized capital to an unlimited number of common shares.



BUSINESS OF CROSSHAIR EXPLORATION & MINING CORP.



We are a gold and uranium exploration company principally engaged in the acquisition and exploration of mineral properties.



There are no known proven reserves of minerals on our properties.   We do not have any commercially producing mines or sites, nor are we in the process of developing any commercial mines or sites.  We have not reported any revenue from operations since incorporation.  As such, we are defined as an exploration-stage company.



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$).







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FORWARD-LOOKING STATEMENTS



Certain statements in this document constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act) and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act).  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;



·

fluctuations in metal prices;



·

title matters;



·

environmental liability claims and insurance;



·

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; and



·

tax consequences to U.S. Shareholders.



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.





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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 Fiscal 2007, 2006, 2005 and 2004 ended April 30th was derived from our financial statements that have been audited by Davidson and Company LLP, independent Chartered Accountants, as indicated in their audit reports.  Our selected financial data for Fiscal 2003 ended April 30th was derived from our financial statements that have been audited by Dale Matheson Carr-Hilton Labonte, independent Chartered Accountants, as indicated in their audit reports.  Both Davidson and Company LLP and Dale Matheson Carr-Hilton Labonte are members of the Canadian Institute of Chartered Accountants.  Effective January 1, 2004, LaBonte & Co. merged with Dale Matheson Carr-Hilton pursuant to which the name of our former principal independent accountant changed to Dale Matheson Carr-Hilton LaBonte.



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, the Company has not generated sufficient cash flow from operations to fund ongoing operational requirements and cash commitments.  The Company has financed its operations principally through the sale of its equity securities.  While the Company believes it has sufficient capital and liquidity to finance current operations, nevertheless, its ability to continue operations is dependent on the ability of the Company 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.





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|                              |                              |                |  |              |  |              |  |              |  |           
|----------------------------- | ---------------------------- | -------------- |  | ------------ |  | ------------ |  | ------------ |  | ----------
|                              | For the Year Ended April 30,
|                              |                              | 2007           |  | 2006         |  | 2005         |  | 2004         |  | 2003      
|CANADIAN GAAP                 |                              |                |  |              |  |              |  |              |  |           
|Revenue                       |                              | --             |  | --           |  | --           |  | --           |  | --        
|Income (Loss) for the Period  |                              | $
(5,533,011)  |  | $(2,175,473) |  | $(645,386)   |  | $(951,291)   |  | $(88,896) 
|Basic Income (Loss) Per Share |                              | $
(0.09)       |  | $(0.05)      |  | $(0.03)      |  | $(0.09)      |  | $(0.02)   
|Dividends Per Share           |                              | --             |  | --           |  | --           |  | --           |  | --        
|Weighted Average Shares (#)   |                              | 62,434,069     |  | 47,264,482   |  | 24,677,131   |  | 10,447,188   |  | 5,394,639 
|Period-end Shares (#)         |                              | 70,912,072     |  | 58,356,045   |  | 37,610,540   |  | 16,899,203   |  | 7,075,522 
|                              |                              |                |  |              |  |              |  |              |  |           
|Working Capital               |                              | $
15,390,704   |  | $14,093,821  |  | $4,512,628   |  | $436,878     |  | $14,699   
|Mineral Properties            |                              | 14,551,292     |  | $3,919,761   |  | $2,483,805   |  | $917,459     |  | --        
|Long-Term Debt                |                              | --             |  | --           |  | --           |  | --           |  | --        
|Capital Stock                 |                              | $
44,135,660   |  | $29,135,054  |  | $16,399,309  |  | $10,318,467  |  | $8,414,202
|Shareholders Equity          |                              | $
30,308,076   |  | $18,139,951  |  | $6,998,171   |  | $1,356,820   |  | $18,246   
|Total Assets                  |                              | $
31,664,543   |  | $18,366,392  |  | $7,310,943   |  | $1,511,804   |  | $85,275   
|                              |                              |                |  |              |  |              |  |              |  |           
|US GAAP(1)(2)(3)(4)(5)        |                              |                |  |              |  |              |  |              |  |           
|Net Loss                      |                              | $
(14,843,892) |  | $(4,374,432) |  | $(2,472,312) |  | $(2,068,750) |  | $(88,896) 
|Loss Per Share                |                              | $
(0.24)       |  | $(0.09)      |  | $(0.10)      |  | $(0.20)      |  | $(0.02)   
|Mineral Properties            |                              | 2,076,775      |  | $756,125     |  | $609,824     |  | --           |  | --        
|Shareholders Equity          |                              | 17,833,559     |  | $14,574,769  |  | $5,030,930   |  | $439,361     |  | $18,246   
|Total Assets                  |                              | 19,190,026     |  | $15,202,756  |  | $5,436,962   |  | $594,345     |  | $85,275   
|                              |                              |                |  |              |  |              |  |              |  |           

(1)

Cumulative Net Loss since May 1, 2002 through April 30, 2007 under US GAAP was $23.8 million.

(2)

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

(3)

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

(4)

Under Canadian income tax legislation, the Company is permitted to issue shares whereby the Company agrees to incur qualifying expenditures (as defined under the Income Tax Act of Canada) on its mineral properties and renounce the related income tax deductions to the investors.  Under Canadian GAAP, flow-through shares are accounted for as part of the issuance of capital stock at the price paid for the shares, net of any future income tax liability.  Under United States GAAP, any difference between the market price of the Company's stock and the fair value of the flow-through shares must be recorded as a liability if a premium is paid by investors or as an asset if investors are purchasing the shares at a discount.  The asset or liability is charged to income as the flow-through share proceeds are expended on qualifying expenditures.

(5)

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



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.



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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   | Low   
|September 2007                   |         | 1.0546 | 0.9959
|August 2007                      |         | 1.0754 | 1.0497
|July 2007                        |         | 1.0689 | 1.0372
|June 2007                        |         | 1.0727 | 1.0586
|May 2007                         |         | 1.1136 | 1.0701
|April 2007                       |         | 1.1583 | 1.1068
|                                 |         |        |       
|                                 |         |        |       
|                                 | Average |        |       
|Fiscal year ended April 30, 2007 | 1.14    |        |       
|Fiscal year ended April 30, 2006 | 1.18    |        |       
|Fiscal year ended April 30, 2005 | 1.27    |        |       
|Fiscal year ended April 30, 2004 | 1.35    |        |       
|Fiscal year ended April 30, 2003 | 1.54    |        |       



The exchange rate was $0.9929 on October 1, 2007.



3.B.

Capitalization and Indebtedness



Not applicable



3.C.

Reasons for the Offer and Use of Proceeds



Not applicable



3.D.

Risk Factors



The Company is subject to a number of risks due to the nature of its business, including its present exploration state.  The following describes the material risks that could affect the Company.



No known Reserves or Resources



The Companys properties are in the exploration stage and are without a known body of commercial mineral deposits.



The Company has no mineral producing properties at this time. Only those mineral deposits that the Company can economically and legally extract or produce, based on a comprehensive evaluation of cost, grade, recovery and other factors, are considered resources or reserves. The Company has not defined or delineated any proven or probable reserves or resources on any of its properties. Although the mineralized material and mineralized deposit estimates included herein have been carefully prepared by the Company, 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.





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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



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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.



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.



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 its 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.



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



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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 there under, 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 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



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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  the control  of the Company 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 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.





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In addition to adversely affecting our reserve estimates of 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.



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.





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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 President, 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, 2007, according to U.S. GAAP, is $23.8 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 stockholders.



As of September 30, 2007 we had 8,571,750 share purchase options outstanding and 344,261 share purchase warrants outstanding.  If all of the share purchase warrants and share purchase options were exercised, the number of common shares issued and outstanding would increase from 71,740,789 (as of September 30, 2007) to 80,656,800.  This represents an increase of 12.4% in the number of shares issued and outstanding and would result in significant dilution to current shareholders.



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



Because our success is highly dependent upon our employees, we have granted to some or all of our key employees, directors and consultants options to purchase common shares as non-cash incentives.  To the extent that significant numbers of such options may be granted and exercised, the interests of our other stockholders may be diluted. As of September 30, 2007, there were 8,571,750 share purchase options outstanding, which, if exercised, would result in an additional 8,571,750 common shares being issued.





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The risks associated with penny stock classification could affect the marketability of our equity securities and shareholders could find it difficult to sell their stock



Our stock is subject to penny stock rules as defined in Exchange Act Rule 3a51-1.  The Commission 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 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 affect 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;



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



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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 Securities 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.  The exemption from Section 16 rules regarding sales of common shares by insiders also may result in shareholders having less data.





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ITEM 4.  INFORMATION ON THE COMPANY



4.A.

History and Development of the Company



Introduction



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



Our executive office is located at:



Suite 1240 - 1140 West Pender Street

Vancouver, British Columbia, Canada  V6E 4G1

Telephone: (604) 681-8030

Facsimile: (604) 681-8039

Website: www.crosshairexploration.com

Email: mark@crosshairexploration.com



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



Our fiscal year ends April 30th.



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



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



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

Property Acquisitions

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

Newfoundland

On May 1, 2006, we entered into an option agreement with Rubicon Minerals Corporation (Rubicon Minerals) to earn a 60% interest in the Golden Promise project. On December 8, 2006, Rubicon Minerals spun-off its Newfoundland mineral properties under a plan of arrangement to Paragon Minerals Corporation (Paragon



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Minerals).  All references to Paragon Minerals in this report also include its predecessor, Rubicon Minerals, where the context requires.  The Golden Promise claims are contiguous with those of our South Golden Promise Property. In order to earn our interest, we must spend $4.0 million over four years (including $750,000 in the first year), issue shares totaling 80,000 (including 20,000 shares in the first year) and make underlying property payments. The budget for the first year after vesting will be capped at $3.0 million unless increased by mutual consent.

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

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

Labrador

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



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

Property Terminations

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

Capital Expenditures

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



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

(1)

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





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



(2)

These funds were spent as outlined below:



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



(3)

These funds were spent as outlined below:



|                       |                      |                         |                              |                               |              
|---------------------- | -------------------- | ----------------------- | ---------------------------- | ----------------------------- | -------------
|Expense ($)            | South Golden Promise | Golden Promise Property | Central Mineral Belt Project | Otter/Portage Lake Properties | Sinbad 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       | --                   | --                      | --                           | --                            | --           



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





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4.B.

Business Overview



Historical Corporate Development

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

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

·

South Golden Promise, Victoria Lake and Golden Promise properties located in Newfoundland, Canada, acquired through option agreements with Paragon Minerals in February 2003 and May 2006.



·

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



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

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

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



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[f20f001.jpg]



Material Effects of Government Regulations



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



Seasonality



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



Dependency upon Patents/Licenses/Contracts/Processes



Not applicable





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Sources/Availability of Raw Materials



Not applicable



4.C.

Organization Structure



We have no subsidiaries.



4.D.

Property, Plants and Equipment



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



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



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



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



Newfoundland



Golden Promise Property and Agreements



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



On May 1, 2006 we entered into an option agreement with Paragon Minerals whereby we acquired an option to purchase and earn a 60% interest in the Golden Promise property.  In order to earn the 60% interest, we agreed to pay $4 million in exploration expenditures on the property and issue 80,000 common shares to Paragon Minerals, over a four year period. The schedule of work and share issuance is as follows:





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Expenditure Schedule



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



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



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



Summary of Licenses under Option



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



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



Property Location



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



Accessibility



The properties are accessible from Badger on the Trans Canada Highway via Route 370 to Buchans Junction about 43 km to the southwest. The Buchans Highway (Route 370) is the principal access road to the various blocks in the west and southwest portions of the property where most of the exploration activity has been focused.  Access to the eastern and southern portions of the property is gained via logging roads trending south and west of the town of



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Grand Falls-Windsor, a major industrial hub for central Newfoundland.   The Exploits River, the largest river system on the Island of Newfoundland, crosses the north-western part of the property.  Secondary access to most of the property is provided by logging roads and snowmobile and ATV trails leading from Route 370 as well as the logging roads south and southwest of Grand Falls-Windsor.



History and Previous Work



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



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



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



Geological Setting



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



Regional Geology and Mineralization



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



Property Geology and Mineralization



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



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%).





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

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

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

Exploration and Development



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



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



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



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





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South Golden Promise Property



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



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



Expenditure Schedule



|                             |                   |                                  
|---------------------------- | ----------------- | ---------------------------------
|Year                         | Work Expenditures | Shares Issued to Rubicon Minerals
|on Approval Date             | --                | 100,000                          
|on or before 1st anniversary | $ 250,000         | 100,000                          
|on or before 2nd anniversary | $ 300,000         | 100,000                          
|on or before 3rd anniversary | $ 500,000         | 100,000                          
|on or before 4th anniversary | $ 700,000         | --                               



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



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





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Summary of Licenses under Option



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



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



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



Property Location



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



Accessibility



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



History



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



The bulk of exploration activity in the region focused on the highly prospective volcanic rocks to the southwest which are known to host numerous copper and zinc prospects in the region.  The sedimentary sequences that host the Jaclyn



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gold mineralization were completely ignored by previous explorers.  The volcanic sequences, most common on the south side of the Exploits River and occurring in the south central portion of the South Golden Promise property, received moderate amounts of exploration in the search for base metals (copper, lead and zinc).  Noranda was most active and carried out ground surveys including, line cutting, geological mapping, soil sampling and geophysics.  Several widely spaced drill holes did not intersect any mineralization.  Immediately east of the property Aur Resources (subsequently taken over by Teck/Cominco) commenced commercial production in January 2007 at the Duck Pond deposit and will produce concentrate containing copper, zinc, lead, gold and silver over the projected 10 year life of the mine.



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



Property Geology

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

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

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

Exploration and Development

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

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

At Victoria Lake, an 11 hole (2,197 meters) diamond drilling program was completed in 2006.  The program tested several coincidental geological, rock and soil geochemical anomalies as well as geophysical (gravity) anomalies identified by Crosshair.  Favorably altered, sulphide-bearing felsic volcanic units were encountered in several of the



25



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holes.  The drilling program was managed by Paragon Minerals personnel who have extensive experience in the region and who received 8% of the program costs as a management fee.  Further work including diamond drilling has been recommended.

LabradorCentral Mineral Belt



The Moran Lake Property



On October 14, 2004, we entered into an agreement with a private individual, 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.  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.





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



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



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, referred to as the Partridge River block, is situated approximately 95 km west of the property.  Under the terms of the agreement, we may earn a 75% interest in the claims by carrying out $800,000 in exploration expenditures and issuing 175,000 common shares to the vendors over a three year period.



Property Description and Location



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



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Summary of Licences under Option



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







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[f20f002.jpg]





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Accessibility



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



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



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



History



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



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



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



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



30



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



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



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



Property Geology



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



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



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



Exploration

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

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



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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.

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

Drilling

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

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

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

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

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

Otter and Portage Lake Properties



On December 2, 2005, we entered into an agreement with a private company for an option to acquire a 100% interest (subject to a 1.5% NSR) in the Otter and Portage Lake properties totaling 56 claims.  The new claims are located in the southern portion of the property, considered by our geological team as being highly prospective for Michelin or shear zone type uranium deposits.  (Michelin is an advanced uranium project located 60 kilometers



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east-northeast of the Moran Lake property with inferred reserves of 32 million pounds of U3O8.) The Otter and Portage Lake properties host previously known uranium occurrences discovered in the 1950s, but which have not been thoroughly explored. Surface sampling has returned up to 2% U3O8 from grab sampling along a four kilometer 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





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ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS



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



Overview



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 Minerals in February 2003 and May 2006.



·

Central Mineral Belt Project (including Moran Lake) located in Labrador, Newfoundland and Labrador, Canada acquired through 2 separate option agreements in November 2004 and May 2007.



Critical Accounting Policies



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



Use of Estimates



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



Mineral Properties



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



Stock-Based Compensation



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





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Recent Accounting Pronouncements



Costs associated with exit or disposal activities



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



Guarantees



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



Variable interest entities



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



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



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



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exploration costs are expensed until it can be proven that economically viable reserves are present on the property and a company has the ability and intention to pursue exploitation of these reserves.



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



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



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



5.A.

Operating Results



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



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



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



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



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



In fiscal 2006 compared to fiscal 2005, we increased our exploration, corporate and financing activities such as exploring new properties such as the Moran Lake Property, hiring and appointing new officers, directors and contractors. The additional administration, accounting and management time was required as we became more active. As a result, our operating expenses increased by $1,166,308 in fiscal 2006 compared to fiscal 2005. The major expense categories were stock-based compensation of $682,213 in fiscal 2006 compared to $316,521 in fiscal 2005; consulting fees of $244,534 in fiscal 2006 compared to $182,227 in fiscal 2005; directors fees of $63,000 in fiscal 2006 compared to $5,000 in fiscal 2005; management fees of $225,000 in fiscal 2006 compared to $158,931 in fiscal 2005; legal fees of $100,700 in fiscal 2006 compared to $79,300 in fiscal 2005; property investigations of $93,467 in fiscal 2006 compared to $28,776 in fiscal 2005; travel expenses of $165,538 in fiscal



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2006 compared to $60,623 in fiscal 2005; and office and miscellaneous expenses of $339,703 in fiscal 2006 compared to $120,993 in fiscal 2005.



Exploration Expenditures



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



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



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



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



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





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5.B.

Liquidity and Capital Resources



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



We had cash on hand of $14,311,417, $13,947,976 and $4,746,707 as of April 30, 2007, 2006 and 2005, respectively.   Our working capital was $15,390,704, $14,093,821 and $4,512,628 as of April 30, 2007, 2006 and 2005, respectively.



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



Financings  Fiscal 2007



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



Financings  Fiscal 2006

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

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

Financings  Fiscal 2005



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



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



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



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associated with this private placement were exercised.  Share issue costs of $1,410 were incurred in relation to this private placement.



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



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



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



Capital Resources

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

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

During the year ended April 30, 2007, 2,672,764 stock options were exercised, 700,000 stock options were cancelled or expired and 5,990,000 stock options were granted.  As at April 30, 2007 the Company had 8,981,984 (of which 2,753,484 were exercisable) stock options outstanding at exercise prices ranging from $0.25 per share to $3.10 per share with expiry dates ranging from November 2, 2007 to April 23, 2012. Subsequent to April 30, 2007, 925,000 stock options were granted, 587,500 stock options were cancelled, 630,750 stock options and 190,584



39



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agents options were exercised for total proceeds of $603,731. If exercised, the remaining 8,498,150 stock options would increase our available cash by $14,688,860.



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



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

5.C.

Research and Development, Patents and Licenses, etc.



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



5.D.

Trend Information



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



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



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



5.E.

Off-Balance Sheet Arrangements



Not applicable



5.F.

Tabular Disclosure of Contractual Obligations



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



|                                    |  |                        |  |                  |  |           |  |           |  |                  
|----------------------------------- |  | ---------------------- |  | ---------------- |  | --------- |  | --------- |  | -----------------
|                                    |  | Payments due by period
|Contractual Obligations             |  | Total                  |  | Less than 1 year |  | 1-3 years |  | 3-5 years |  | More than 5 years
|Capital (Finance) Lease Obligations |  | $
--                   |  | $
--             |  | $
--      |  | $
--      |  | $
--             
|Operating Lease Obligations         |  | 208,835                |  | 76,804           |  | 173,344   |  | 83,445    |  | --               
|Total                               |  | $
208,835              |  | $
76,804         |  | $
173,344 |  | $
83,445  |  | $
--             





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ITEM 6.  DIRECTORS, SENIOR MANAGEMENT, AND EMPLOYEES



6.A.

Directors and Senior Management



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

(1)

Member of Audit Committee

(2)

Member of Compensation Committee



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



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



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



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





41



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



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



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



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



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



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



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



42



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



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



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



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



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



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



No Director and/or senior management had been the subject of any order, judgment, or decree of any governmental agency or administrator or of any court or competent jurisdiction, revoking or suspending for cause any license, permit or other authority of such person or of any corporation of which he is a Director and/or senior management, to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining or enjoining any such person or any corporation of which he is an officer or director from engaging in or continuing any conduct/practice/employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security or any aspect of the securities business or of theft or of any felony.



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



43



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6.B.

Compensation



Compensation of Executive Officers and Directors



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



|                                                     |                     |                        |              |                                  |                                           |                                                    |                     |                               
|---------------------------------------------------- | ------------------- | ---------------------- | ------------ | -------------------------------- | ----------------------------------------- | -------------------------------------------------- | ------------------- | ------------------------------
|                                                     | Annual Compensation | Long Term Compensation
|                                                     |                     |                        |              |                                  | Awards                                    | Payouts                                           
|Name and
Principal Position                          | Year                | Salary
(CDN$)          | Bonus
(CDN$) | Other
Annual Compensation
(CDN$) | Securities
Under Options/SARs
Granted (#) | Restricted Shares
Or
Restricted
Share Units
(CDN$) | LTIP
Payouts
(CDN$) | All other Compen-sation
(CDN$)
|Mark J. Morabito
President, CEO
and Director         | 2007                | $200,000               | $200,000     | $10,125                          | 1,500,000                                 | --                                                 | --                  | --                            
|                                                     |                     |                        |              |                                  |                                           |                                                    |                     |                               
|Gier Liland (1)
Chief Financial Officer and Director | 2007                | --                     | --           | 50,000                           | 300,000                                   | --                                                 | --                  | --                            
|                                                     |                     |                        |              |                                  |                                           |                                                    |                     |                               
|Timothy D.L. Froude (2)
Senior VP, Exploration       | 2007                | 100,000                | 25,000       | --                               | 200,000                                   | --                                                 | --                  | --                            
|                                                     |                     |                        |              |                                  |                                           |                                                    |                     |                               
|Stewart Wallis,
Director                             | 2007                | --                     | --           | 54,390 (4)                       | 100,000                                   | --                                                 | --                  | --                            
|                                                     |                     |                        |              |                                  |                                           |                                                    |                     |                               
|Jay Sujir
Director                                   | 2007                | --                     | --           | 13,500 (5)                       | 100,000                                   | --                                                 | --                  | --                            
|                                                     |                     |                        |              |                                  |                                           |                                                    |                     |                               
|David Y.T. Lee
Director                              | 2007                | --                     | --           | 13,500(3)                        | 100,000                                   | --                                                 | --                  | --                            
|                                                     |                     |                        |              |                                  |                                           |                                                    |                     |                               
|Leo Power
Director                                   | 2007                | --                     | --           | 6,500 (3)                        | 300,000                                   | --                                                 | --                  | --                            
|                                                     |                     |                        |              |                                  |                                           |                                                    |                     |                               
|Ian Smith
Director                                   | 2007                | --                     | --           | 8,500 (3)                        | 300,000                                   | --                                                 | --                  | --                            

(1)

Mr. Liland ceased serving as our Chief Financial Officer as of July 31, 2007.

(2)

Mr. Froudes employment with the Company ceased on August 13, 2007.

(3)

Directors fees paid to non-executive directors.

(4)

Includes directors fees in the amount of $13,500 and geological consulting fees in the amount of $40,890 paid to Sundance Geological Ltd. a private entity owned and controlled by Mr. Wallis.  Excludes $33,075 of geological consulting fees to Roscoe Postle Associates Inc., a company for which Stewart Wallis was an employee until Oct 2006.

(5)

Excludes $25,882 of legal fees paid to Anfield Sujir Kennedy & Durno Barristers & Solicitors, a limited liability partnership of which Jay Sujir is a partner.



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





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



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



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



Aggregated Stock Options Exercises in Fiscal 2007

Fiscal Yearend Unexercised Stock Options

Fiscal Yearend Stock Option Values

Executive Officers/Directors



|                   |  |                                       |  |                          |  |                                                                            |  |                                                                                            
|------------------ |  | ------------------------------------- |  | ------------------------ |  | -------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------
|Name               |  | Number of Shares Acquired on Exercise |  | Aggregate Value Realized |  | Number of Unexercised Options at Fiscal Year-End Exercisable/Unexercisable |  | Value of Unexercised In-the-Money Options at Fiscal Year-End (1) Exercisable/ Unexercisable
|Mark Morabito      |  | 300,000                               |  | $861,000                 |  | 750,000/1,450,000                                                          |  | $1,315,000/1,388,000                                                                       
|Stewart Wallis     |  | 70,000                                |  | 115,900                  |  | 230,000/150,000                                                            |  | $
492,200/96,000                                                                           
|Jay Sujir          |  | 100,000                               |  | 289,000                  |  | 100,000/150,000                                                            |  | $
191,500/96,000                                                                           
|David Ying Tat Lee |  | 20,000                                |  | 68,000                   |  | 180,000/150,000                                                            |  | $
372,700/96,000                                                                           
|Geir Liland        |  | --                                    |  | --                       |  | 162,500/337,500                                                            |  | $
295,750/306,250                                                                          
|Timothy Froude     |  | 97,500                                |  | 235,575                  |  | 215,000/225,000                                                            |  | $
421,600/181,000                                                                          
|Ian Smith          |  | --                                    |  | --                       |  | 37,500/262,500                                                             |  | $
45,375/150,125                                                                           
|Leo Power          |  | --                                    |  | --                       |  | 75,000/325,000                                                             |  | $
120,000/238,000                                                                          

(1)

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





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Director Compensation



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



Stock Option Plan



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



Employment and Consulting Agreements



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



The agreements with Messrs. Morabito and Pickett and Ms. Bolden provide that they shall be provided with employee benefits comparable to those provided by the Company from time to time to other senior executives of the Company generally.  The agreements with Messrs. Morabito, Pickett and McIntyre and Ms. Bolden provide for a grant of options to purchase 1,000,000, 50,000, 200,000 and 200,000 Common Shares, respectively, upon execution of the agreement and options to purchase 500,000, 100,000, 100,000 and 100,000Common Shares, respectively, on the first anniversary of the date of the initial grant and each anniversary thereafter.  The initial options have an exercise price of $1.32, $1.56, $2.07 and $1.32 per Common Share, respectively, and the annual options shall have an exercise price at the market price on the date they are granted.  Mr. Morabitos right to receive annual option grants is subject to the requirement that the aggregate number of incentive stock options held by Mr. Morabito at any given time not exceed 5% of the number of issued and outstanding Common Shares of the Company at such time.  Mr. Pickett was also awarded a cash bonus of $20,000 and options to purchase 100,000 Common Shares upon his promotion to Vice President, Exploration, on August 14, 2007.  Mr. Picketts options have an exercise price of $1.54 per Common Share and are subject to vesting over a two year period and will expire on August 14, 2012.



The employment agreements require the Company to pay severance to Messrs. Morabito and Froude and Ms. Bolden if it terminates their respective employment other than for just cause (as defined in the agreements) or if the respective employee resigns for good reason (as defined in the agreements).  The severance payments will consist of either 24 months notice of termination or a lump sum payment equal to two times the employees annual salary, at the employees option, and continued participation in the annual option grants and benefit plans until the



46



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earliest of the expiration of the 24 month notice period and the death of the employee.  Mr. McIntyre, upon termination without cause, would be entitled to six months notice or pay in lieu of notice equal to six months of base salary, or any combination thereof.

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

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

Post Employment Compensation



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



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



6.C.

Board Practices



The Board of Directors presently consists of seven directors, all of whom were elected at the annual general meeting of the shareholders of the Company, held on September 10, 2007.  The directors have served in their respective capacities since their election and/or appointment and will serve until the next annual general meeting or until a successor is duly elected, unless the office is vacated in accordance with our Articles. The Board of Directors appoints senior management who serve at the discretion of the Board of Directors.  Mr. Morabito has served as a director of the Company since November 1998; Mr. Wallis has served as a director of the Company



47



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since June 2003; Mr. Sujir has served as a director of the Company since February 2003; Mr. Lee has served as a director of the Company since February 2004; Mr. Liland has served as a director of the Company since June 2005; Mr. Smith has served as a director of the Company since September 2006; and Mr. Power has served as a director of the Company since November 2006.



Board of Director Committees



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



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



1.

considering appropriate levels of compensation for the directors and officers and making recommendations to the Board as to the remuneration and other compensation to be provided to the directors, the president and the other officers of the Company;



2.

reviewing personnel policies and benefit plans available to employees and making recommendations to the Board of Directors; and



3.

carrying out periodic performance assessments of the President.



6.D.

Employees



As of April 30, 2007, we had 36 full-time employees.





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6.E.

Share Ownership



The following table presents the number Common Shares and percent of the Common Shares outstanding held by those persons listed in Item 6.B Compensation above as of September 30, 2007.  The Common Shares possess identical voting rights.



|                  |  |                          |  |                                      | 
|----------------- |  | ------------------------ |  | ------------------------------------ | 
|Name              |  | Number of 
Common Shares |  | Percent of Outstanding Common Shares
|Mark J. Morabito  |  | 1,071,269                |  | 1.5%                                
|C. Stewart Wallis |  | 45,400                   |  | (1)                                 
|Jay Sujir         |  | 25,000                   |  | (1)                                 
|David Y.T. Lee    |  | 20,000                   |  | (1)                                 
|Geir Liland       |  | --                       |  | --                                  
|Leo Power         |  | 7,700                    |  | (1)                                 
|Ian Smith         |  | 20,000                   |  | (1)                                 
|                  |  |                          |  |                                      | 

(1)Less than one percent.



The following table presents the stock options granted to the aforementioned persons and unexercised as of September 30, 2007.  The stock options are for Common Shares.



|                  |  |               |  |                                    |  |                |  |                
|----------------- |  | ------------- |  | ---------------------------------- |  | -------------- |  | ---------------
|Name              |  | Date of Grant |  | Number of Underlying Common Shares |  | Exercise Price |  | Expiration Date
|Mark J. Morabito  |  | Mar. 6, 2007  |  | 500,000                            |  | $2.50          |  | Mar. 6, 2012   
|                  |  | May 1, 2006   |  | 1,000,000                          |  | 1.32           |  | May 1, 2011    
|                  |  | Jan. 18, 2006 |  | 400,000                            |  | 1.00           |  | Jan. 18, 2011  
|                  |  | Feb. 18, 2003 |  | 300,000                            |  | 0.25           |  | Feb. 18, 2008  
|                  |  |               |  |                                    |  |                |  |                
|C. Stewart Wallis |  | Mar. 6, 2007  |  | 100,000                            |  | 2.50           |  | Mar. 6, 2012   
|                  |  | Jun. 19, 2003 |  | 5,000                              |  | 0.25           |  | Jun. 19, 2008  
|                  |  | Jan. 21, 2004 |  | 75,000                             |  | 0.25           |  | Jan. 21, 2009  
|                  |  | Feb. 4, 2005  |  | 100,000                            |  | 0.45           |  | Feb. 4, 2010   
|                  |  | Jan. 18, 2006 |  | 100,000                            |  | 1.00           |  | Jan. 18, 2011  
|                  |  |               |  |                                    |  |                |  |                
|Jay Sujir         |  | Mar. 6, 2007  |  | 100,000                            |  | 2.50           |  | Mar. 6, 2012   
|                  |  | Feb. 4, 2005  |  | 50,000                             |  | 0.45           |  | Feb. 4, 2010   
|                  |  | Jan. 18, 2006 |  | 100,000                            |  | 1.00           |  | Jan. 18, 2011  
|                  |  |               |  |                                    |  |                |  |                
|David Y.T Lee     |  | Mar. 6, 2007  |  | 100,000                            |  | 2.50           |  | Mar. 6, 2012   
|                  |  | Feb. 17, 2004 |  | 30,000                             |  | 0.25           |  | Feb. 17, 2009  
|                  |  | Feb. 4, 2005  |  | 100,000                            |  | 0.45           |  | Feb. 4, 2010   
|                  |  | Jan. 18, 2006 |  | 100,000                            |  | 1.00           |  | Jan. 18, 2011  
|                  |  |               |  |                                    |  |                |  |                
|Geir Liland       |  | Mar. 6, 2007  |  | 150,000                            |  | 2.50           |  | Mar. 6, 2012   
|                  |  | Jun. 14, 2005 |  | 100,000                            |  | 0.45           |  | Jun. 14, 2010  
|                  |  | Jan. 18, 2006 |  | 100,000                            |  | 1.00           |  | Jan. 18, 2011  
|                  |  | May 24, 2006  |  | 150,000                            |  | 1.32           |  | May 24, 2011   



We do not have any arrangements for involving the employees in the capital of the Company.  We do not have a share purchase plan, dividend reinvestment plan for our directors, officers and employees.  However, we will, from



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time to time, grant individual stock options to our directors, officers or employees as an incentive pursuant to our amended stock option plan.



ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS



7.A.

Major Shareholders



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



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

(1)

Based on 71,740,789 Common Shares outstanding as of September 30, 2007.

(2)

This information is based on an amendment to Schedule 13G filed with the Securities and Exchange Commission on February 6, 2007, by David W. Tice & Associates, LLC and Prudent Bear Funds, Inc.

(3)

This information is based on an amendment to Schedule 13G filed with the Securities and Exchange Commission on February 15, 2007 by Passport Global Master Fund SPC, Ltd,. Partners Group Alternative Strategies PCC Limited Gold Iota Cell, Passport Holdings, LLC, Passport Management, LLC, Passport Capital, LLC and John Burbank.



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



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



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



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



7.B.

Related Party Transactions



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



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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 $25,882 for Fiscal 2007. Fees of $21,536 have been paid to Anfield Sujir Kennedy & Durno since April 30, 2007 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 $50,000 to Mr. Liland during the fiscal year ended April 30, 2007.  Mr. Liland ceased serving as our Chief Financial Officer as of July 31, 2007.

3.

Until May 1, 2006, we paid Yvonne Coles private consulting company management fees of $4,583 per month.  As of May 1, 2006, we hired Ms. Cole as our Corporate Secretary.  Ms. Coles employment with the Company terminated on August 24, 2006, and she was paid a severance payment of $4,583.

4.

From May 1, 2007 to the date of this annual report we received $20,000, and during the year ended April 30, 2007, we received $40,000 from 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 the Company relating to accounting services and rent.  As of the date of this annual report, no amount is owed from this party.

5.

On August 1, 2007, we entered into the Consulting Agreement with Mr. Brett and his private consulting company, and agreed to pay $6,250 per month.

6.

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.



7.C.

Interests of Experts and Counsel



Not applicable



ITEM 8.  FINANCIAL INFORMATION



8.A.

Consolidated Statements and Other Financial Information



Financial Statements



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



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



Dividend Policy



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





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Legal/Arbitration Proceedings



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



8.B.

Significant Changes



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



1.

On May 1, 2007, we entered into an option agreement with Belmont Resources Inc. and International Montoro Resources Inc. to acquire a 75% interest in four mineral licenses totaling 139 claims located in the Central Mineral Belt of Labrador, by carrying out $800,000 in exploration expenditures and issuing 175,000 Common Shares in the capital of the Company over a three year period.









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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 on the TSX Venture Exchange for the last six months, fiscal quarters for the last two completed fiscal years, and the last five fiscal year ends.



|                                      |  |       |  |      
|------------------------------------- |  | ----- |  | -----
|Period                                |  | High  |  | Low  
|Month ended September 30, 2007        |  | $2.06 |  | $1.20
|Month ended August 31, 2007           |  | $2.07 |  | $1.15
|Month ended July 31, 2007             |  | $2.94 |  | $1.84
|Month ended June 30, 2007             |  | $3.17 |  | $2.71
|Month ended May 31, 2007              |  | $3.18 |  | $2.55
|Month ended April 30, 2007            |  | $3.26 |  | $2.57
|                                      |  |       |  |      
|Fiscal quarter ended April 30, 2007   |  | $3.47 |  | $2.45
|Fiscal quarter ended January 31, 2007 |  | $4.20 |  | $2.28
|Fiscal quarter ended October 31, 2006 |  | $2.35 |  | $1.43
|Fiscal quarter ended July 31, 2006    |  | $1.69 |  | $1.23
|Fiscal quarter ended April 30, 2006   |  | $1.80 |  | $1.05
|Fiscal quarter ended January 31, 2006 |  | $1.40 |  | $0.70
|Fiscal quarter ended October 31, 2005 |  | $0.96 |  | $0.32
|Fiscal quarter ended July 31, 2005    |  | $0.59 |  | $0.31
|                                      |  |       |  |      
|Fiscal year ended April 30, 2007      |  | $4.20 |  | $1.23
|Fiscal year ended April 30, 2006      |  | $1.80 |  | $0.31
|Fiscal year ended April 30, 2005      |  | $0.92 |  | $0.13
|Fiscal year ended April 30, 2004      |  | $0.33 |  | $0.24
|Fiscal year ended April 30, 2003      |  | $0.15 |  | $0.09



The following table lists the high and low prices for our Common Shares on the American Stock Exchange for the last four months:



|                                                                                                        |  |         |  |        
|------------------------------------------------------------------------------------------------------- |  | ------- |  | -------
|Month ended September 30, 2007                                                                          |  | US$2.08 |  | US$1.15
|Month ended August 31, 2007                                                                             |  | 1.98    |  | 1.06   
|Month ended July 31, 2007                                                                               |  | 2.89    |  | 1.71   
|Month ended June 30, 2007                                                                               |  | 2.97    |  | 2.46   
|Month ended May 31, 2007 (commencing May 7, 2007, the date our Common Shares began trading on the AMEX) |  | 3.15    |  | 2.37   



9.B.

Plan of Distribution



Not applicable





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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 TSX Venture Exchange under the trading symbol CXX.  There are currently no restrictions on the transferability of these shares under Canadian securities laws.



9.D.

Selling Shareholders



Not applicable



9.E.

Dilution



Not applicable



9.F.

Expenses of the Issue



Not applicable



ITEM 10.  ADDITIONAL INFORMATION



10.A.

Share Capital



Not applicable



10.B.

Memorandum and Articles of Association



This information is incorporated by reference to the Companys Form 20-F Registration Statement, Item 10.  Additional InformationMemorandum and Articles of Association as filed on August 28, 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.

Agency Agreement dated November 3, 2005 with Pacific International (included in this Form 20-F as Exhibit 4.12), pursuant to which Pacific International agreed to act as our agent to solicit offers to purchase up to 4,000,000 flow-through units (FT Units) at a price of $1.00 per FT Unit and up to 7,500,000 non-flow-through units (Common Share Units) at a price of $0.80 per Common Share Unit and an over-allotment option allowing Pacific International to offer for sale an additional 3,750,000 Common Share Units.  As consideration for acting as our agent, we agreed to pay Pacific a fee equal to 7% of the proceeds from the sales of the FT Unit and Common Share Units.



2.

Oral Agreement with MJM Consulting pursuant to which we obtained the services of Mark Morabito.  Mr. Morabito performed the services ordinarily provided by a president and chief executive officer.  All fees paid for Mr. Morabitos services were paid directly to MJM Consulting, which is owned by Mr. Morabito.  We paid fees of $225,000 to MJM Consulting during Fiscal 2006.  As of May 1, 2006, we terminated our arrangement with MJM Consulting and hired Mr. Morabito as our President and Chief Executive Officer.



3.

Oral Arrangement with Anfield Sujir Kennedy & Durno Barristers & Solicitors pursuant to which we receive legal services relating to securities matters.  Our director, Jay Sujir, is a partner in Anfield Sujir Kennedy & Durno.  The arrangement can be terminated at any time by either party without notice.We paid fees of $25,882 to Anfield Sujir Kennedy & Durno during Fiscal 2007.





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4.

Employment Agreements with Messrs. Morabito, Pickett and McIntyre and Ms. Bolden, and a consulting agreement with Mr. Brett.  See Item 6. Directors, Senior Management, and Employees  Employment and Consulting Agreements for a description of the terms of these agreements.



5.

Golden Promise Property Agreement with Rubicon Minerals Corp., dated May 1, 2006 (included in this Form 20-F as Exhibit 4.4), pursuant to which we acquired an option to earn a 60% interest in certain mineral licenses located in Newfoundland.



6.

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.



7.

On May 1, 2007, we entered into an agreement to acquire the option to earn a 75% interest in 139 claims comprising four licenses in the Central Mineral Belt of Labrador from Belmont Resources, Inc. and International Montoro Resources Inc.



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 the Issuers securities, except as discussed in 10.E. Taxation below.



There are no limitations under the laws of Canada or in the organizing documents of the Company on the right of foreigners to hold or vote securities of the Company, except that the Investment Canada Act may require review and approval by the Minister of Industry (Canada) of certain acquisitions of "control" of the Company by a "non-Canadian". The threshold for acquisitions of control is generally defined as being one-third or more of the voting shares of the 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 of ours who is not a resident of 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 Income Tax Act (Canada) (the Canadian Tax Act).  This summary does not apply to a shareholder who carries on business in Canada through a permanent establishment situated in Canada or performs independent personal services in Canada through a fixed base in Canada if the shareholders holding in Crosshair Exploration & Mining Corp. is effectively connected with such permanent establishment or fixed base.  This summary is based on the provisions of the Canadian Tax Act and the regulations thereunder and on an understanding of the administrative practices of Canada Customs & Revenue Agency, and takes into account all specific proposals to amend the Canadian Tax Act or regulations made by the Minister of Finance of Canada as of the date hereof.  It has been assumed that there will be no other relevant amendment of any governing law although no assurance can be given in this respect.  This discussion is general only and is not, nor is it intended to provide a detailed analysis of the income tax implications of any particular shareholders interest.  Investors are advised to obtain independent advice from a shareholders own Canadian and U.S. tax advisors with respect to income tax implications pertinent to their particular circumstances.





55



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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 of 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 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 paid up or our 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 residents 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.



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 stock 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 included in income are as follows.  For gains net of losses realized before February 28, 2000, as to 75%.  For gains net of losses realized after February 27, 2000 and before October 18, 2000, as to 66 2/3%. For gains net of losses realized after October 17, 2000, as to 50%.  There are special transitional rules to apply capital losses against capital gains that arose in different periods.  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 and persons with whom the shareholder did not deal at arms length and in certain other circumstances.



The Convention 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 in Canada, including the right to explore for or exploit natural resources and rights to amounts computed by reference to production;





56



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(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.



U.S. 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. (see Taxation  Canadian Federal Income Tax Consequences above).  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 Internal Revenue Code of 1986, as amended (the Code), Treasury Regulations, published Internal Revenue Service (IRS) rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time and which are subject to differing interpretations. This discussion does not consider the potential effects, both adverse and beneficial, of any proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time.



U.S. Holders



As used in this annual report, a U.S. Holder means a holder of our common shares who is a citizen or individual resident of the United States, a corporation or partnership created or organized in or under the laws of the United States or of any political subdivision thereof, 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 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.





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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, 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, without reduction for any Canadian income tax withheld from such distributions.  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, they should constitute qualified dividend income for U.S. federal income tax purposes and that U.S.  Holders who are individuals should be entitled to the reduced rates of tax, as applicable.



In the case of foreign currency received as a dividend that is not converted by the recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt.  Generally any gain or loss recognized upon a subsequent sale or other disposition of the foreign currency, including the exchange for U.S. dollars, will be ordinary income or loss and will not be eligible for the special tax rate applicable to qualified dividend income.   However, an individual whose realized gain does not exceed $200 will not recognize that gain, provided that there are no expenses associated with the transaction that meet the requirements for deductibility as a trade or business expense (other than travel expenses in connection with a business trip) or as an expense for the production of 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.



Under current Treasury Regulations, dividends paid on our common shares, if any, generally will not be subject to information reporting and generally will not be subject to U.S. backup withholding tax.  However, for dividends and the proceeds from a sale of our common shares paid in the U.S. through a U.S. or a U.S. related paying agent (including a broker) a U.S. Holder will be subject to U.S. information reporting requirements and may also be subject to the 28% (tax years beginning in 2006 and 2007) U.S. backup withholding tax, unless the paying agent is furnished with a duly completed and signed Form W-9.  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.





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Foreign Tax Credit



A U.S. Holder who pays (or has withheld from distributions) Canadian 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 such foreign tax paid or withheld.  Generally, it will be more advantageous to claim a credit because a credit reduces U.S. federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayers income subject to tax. This election is made on a year-by-year basis and generally applies to all foreign taxes paid by (or withheld from) the U.S. Holder during that year.  There are significant and complex limitations which apply to the 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 the determination of the application of this limitation, various items of income and deduction must be classified into foreign and domestic sources.  Complex rules govern this classification process.  In addition, this limitation is calculated separately with respect to specific categories of income. For tax years beginning after December 31, 2006, the foreign tax credit is limited separately with respect to passive category income and general category income.   Dividends distributed by us will generally constitute passive income or, in the case of certain U.S. Holders, financial services income, which for tax years beginning after December 31, 2006, is in certain cases treated as general category income. Additionally, the rules regarding U.S. foreign tax credits include limitations that apply to individuals receiving dividends eligible for the 15% maximum tax rate on dividends described above.  For tax years beginning after December 31, 2004, U.S. Holders can reduce their alternative minimum tax (AMT) liability by an AMT foreign tax credit without the limitation.  Under the pre-2006 Act Law, the AMT foreign tax credit was limited to 90% of AMT.  The availability of the foreign tax credit and the application of the limitations on the credit are fact specific, and U.S. Holders of our common shares should consult their own tax advisors regarding their individual circumstances.



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.



Other Considerations



Set forth below are certain material exceptions to the above-described general rules describing the U.S. federal income tax consequences resulting from the holding and disposition of common shares:



Foreign Personal Holding Company



The Foreign Personnel Holding Company (FPHC) rules have been repealed for tax years of foreign corporations beginning after December 31, 2004, and tax years of U.S. Holders whose tax year ends with or with in the FPHCs tax year.  Prior to repeal, if at any time during a taxable year more than 50% of the total combined voting power or the total value of our outstanding shares was owned, directly or indirectly (pursuant to applicable rules of constructive ownership), by five or fewer individuals who were citizens or residents of the U.S. and 60% or more of our gross income for such year was derived from certain passive sources (e.g., from certain interest and dividends), we may have been a FPHC. In that event, U.S. Holders that hold common shares would have been required to include in gross income as a dividend for such year their allocable portions of such passive income to the extent we



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did not actually distribute such income.   Each U.S. Holder should consult his own tax advisor about this change of law.



Foreign Investment Company



The rule relating to foreign investment companies have been repealed for tax years of foreign corporations beginning after December 31, 2004, and tax years of U.S. Holders whose tax year end with or within the corporations tax year.  Prior to repeal, if 50% or more of the combined voting power or total value of our outstanding shares was held, directly or indirectly, by citizens or residents of the U.S., U.S. domestic partnerships or corporations, or estates or trusts other than foreign estates or trusts (as defined by Code Section 7701(a)(31)), and we were found to be engaged primarily in the business of investing, reinvesting, or trading in securities, commodities, or any interests therein, it is possible that we were a foreign investment company as defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S. Holder selling or exchanging common shares to be treated as ordinary income rather than capital gain.   Each U.S. Holder should consult his own tax advisor about this change of law.



Passive Foreign Investment Company



U.S. income tax law contains rules governing passive foreign investment companies (PFIC) which can have significant tax effects on U.S. Holders of foreign corporations.  These rules do not apply to non-U.S. Holders. 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.  We do not believe that we are currently a PFIC and we do not expect to be a PFIC for the fiscal year ended April 30, 2006.  The Company may or may not qualify as a PFIC in subsequent years due to changes in its assets and business operations. Each U.S. Holder of the Company is asked to consult a tax advisor with respect how the PFIC rules affect their tax situation.



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.  A U.S. Holder of a QEF can, however, elect to defer the payment of United States Federal income tax on such income inclusions.  Special rules apply to U.S. Holders who own their interests in a PFIC through intermediate entities or persons.



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



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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 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.



10.F.

Dividends and Paying Agents



Not applicable





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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.



The Company is a reporting company under the Exchange Act and is 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 the Companys filings with the Securities and Exchange Commission, including exhibits and schedules filed with it, at the public reference facilities maintained by the Securities and Exchange Commission at 100 F Street N.E., Washington, D.C. 20549.  Copies of such material may also be obtained from the Public Reference Section of the Securities and Exchange Commission at 100 F Street, NE, Washington, D.C. 20549, at prescribed rates. Information may be obtained regarding the Washington D.C. Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330 or by contacting the Securities and Exchange Commission over the Internet at its website at http://www.sec.gov.



ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Currency Exchange Rate Sensitivity

The results of our operations are subject to currency translation risk and currency transaction risk. Regarding currency translation risk, the operating results and financial position of the Company are reported in Canadian dollars in the Companys 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 the profitability of the Company and may also affect the value of the Companys assets and the amount of shareholders equity.

In regards to transaction risk, the Companys functional currency is the Canadian dollar and its activities are predominantly executed using the Canadian dollar. The Company incurs a relatively small portion of its expenses in U.S. dollars. To-date, the Company has completed all of its equity financing in Canadian dollars. The Company has 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

The future revenue and profitability of the Company 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 the control of the Company. The Companys mineral properties are in the exploration phase and accordingly the Company is not generating any operating revenues and is therefore not subject to any short term volatility in the prices of metals. As the Company is in the exploration phase, the above factors have had no material impact on operations or income. No futures or forward contracts have been entered into by the Company.



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ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES



Not applicable







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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



As of the end of the period covered by this report, we carried out an evaluation, under the supervision of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15.  Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms.



Changes in Internal Control over Financial Reporting



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



ITEM 16.





ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT



The 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.



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 Crosshair files with, or submits to, the Securities and Exchange Commission and in other public communications made by Crosshair;



·

compliance with applicable governmental laws, rules and regulations;



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·

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



·

responsible use of and control over assets and resources; and



·

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



ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Companys board of directors appointed Davidson & Company as independent auditors to audit our financial statements for the fiscal year ended April 30, 2007. The aggregate fees billed for professional services rendered by the aforementioned independent auditor in their capacity as the Companys principal accountant during the last fiscal year is set forth below. The Companys Audit Committee pre-approved all of the following amounts billed to the Company prior to incurring the expenses associated therewith.

Audit Fees

The aggregate fees billed for professional services rendered by our principal accountants for the audit of the Companys 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, 2007 and 2006 was $48,600 and $38,600, 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, 2007 and 2006 was $16,250 and $17,375, 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, 2007 and 2006 was $1,750 and $1,750, respectively.

All Other Fees

Other fees billed by our principal accountant during the fiscal years ended April 30, 2007 and 2006 amounted to $2,200 and $0, respectively, and included general review of certain company documentation, such as our Form 20-F registration filing, unrelated to auditing activities.

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





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



Auditors Report dated June 1, 2007



Balance Sheet at April 30, 2007, 2006 and 2005



Statement of Operations and Deficit for the years ended

April 30, 2007, 2006 and 2005



Statement of Cash Flows for the years ended

April 30, 2007, 2006 and 2005



Notes to the Financial Statements for the years ended

April 30, 2007, 2006 and 2005



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.



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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.



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)

1st Amended Agreement with Rubicon Minerals Corp. regarding Victoria Lake Property dated April 29, 2004. (This agreement relates to the South Golden Promise Property)



4.3(1)

2nd Amended Agreement with Rubicon Minerals Corp. regarding Victoria Lake Property dated November 16, 2004. (This agreement relates to the South Golden Promise Property)



4.4(2)

Golden Promise Agreement between Rubicon Minerals Corp. and Crosshair Exploration 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(1)

Amended and Restated Cooperative Joint Venture Contract for Mining Exploration between Liaoning Non-Ferrous Geological Bureau Exploration Institute and Crosshair Exploration and Mining Corp. dated May 25, 2005.



4.7

Stock Option Plan dated July 9, 2007.



4.8(3)

Sample Stock Option Grant Agreement.



4.9(3)

Agreement with Triassic Properties Limited regarding Otter and Portage Lake, dated December 2, 2005.



4.10(1)

Agency Agreement between Dundee Securities Corporation and Crosshair Exploration & Mining Corp. with respect to a private placement of 4,000,000 flow-through common shares at a price of $0.25 per flow-through share dated May 18, 2004.



4.11(1)

Agency Agreement between Pacific International Securities Inc. and Crosshair Exploration & Mining Corp. with respect to a private placement of 5,444,444 units at a price of $0.45 per unit, each unit consisting of one common share and one-half of one share purchase warrant, dated March 15, 2005.



4.12(1)

Agency Agreement between Pacific International Securities Inc. and Crosshair Exploration & Mining Corp. with respect to a private placement of to 4,000,000 flow-through units (FT Units) at a price of $1.00 per FT Unit and up to 7,500,000 non-flow-through units (Common Share Units) at a price of $0.80 per Common Share Unit, dated November 3, 2005.



4.13(1)

Subscription Agreement (CDN and Non-US subscribers) Sample.



4.14(1)

Subscription Agreement (Flow-through) Sample.



4.15(1)

Subscription Agreement (US) Sample.



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4.16(1)

Consulting Agreement (Long Form) Sample.



4.17(1)

Consulting Agreement (Short Form) Sample.



4.18(2)

Employment Agreement with Mark J. Morabito dated May 1, 2006.



4.19(2)

Employment Agreement with J. Wayne Pickett dated October 1, 2006.



4.20

Letter Agreement, dated August 14, 2007, amending Employment Agreement with J. Wayne Pickett.



4.21

Independent Consulting Services Agreement with Douglas R. Brett, Inc. and Douglas R. Brett dated August 1, 2007.



4.22(2)

Employment Agreement with Daniel McIntyre dated November 3, 2006.



4.23(3)

Employment Agreement with Julie L. Bolden dated July 1, 2006.



4.24

Agreement with Belmont Resources Inc. and International Montoro Resources Inc. regarding Stormy Lake and Partridge River, dated May 1, 2007.



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 the Companys Registration Statement on Form 20-F filed April 25, 2006.

(2)

Filed as an exhibit to the Companys Registration Statement on Form 20-F filed July 21, 2006.

(3)

Filed as an exhibit to the Companys Annual Report on Form 20-F filed October 31, 2006.

(4)

Filed as an exhibit to the Companys Report on Form 6-K filed February 1, 2007.











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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.



Argillitemeansrock that is made up of clay or silt particles, especially a hardened mudstone.



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.



Carbonaceous means relating to or consisting of or yielding carbon.



Chertmeans variety of silica containing microcrystalline quartz.



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



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



Conglomeratemeansa composite rock made up of particles of varying size.



Contiguousmeans adjacent.



Devonian means of or belonging to the geologic time, system of rocks, or sedimentary deposits of the fourth period of the Paleozoic Era.



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.



Dolomitemeansa magnesia-rich sedimentary rock resembling limestone.



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.



69



---

Foliationmeans the layered structure common to metamorphic rocks.



Fracturemeans breaks in rocks due to intensive folding or faulting.



Gabbromeans a usually coarse-grained igneous rock composed chiefly of calcic plagioclase and pyroxene.



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.



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



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



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



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



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



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



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



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



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



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



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



Mudstonemeansa detrital sedimentary rock composed of clay-sized particles.



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





70



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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.



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



Quartzmeans a mineral composed of silicon dioxide.



Reverse Circulationmeans drilling that produces rock chips rather than core; the chips are forced by air to the surface and are collected for examination and analysis. Faster and cheaper than diamond drilling.



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



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



Siliceous means of or containing silica, a hard mineral substance found in various natural deposits.



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



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



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



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.



Tholeiitic Basalt meansbasalt that is relatively rich in silica and poor in sodium.



Tuffmeans hard volcanic rock composed of compacted volcanic ash.



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



Volcanicmeans a description of rocks originating from volcanic activity.





71



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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:
Mark J. Morabito
| | President and CEO   



Date: October 22, 2007



72



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[f20f004.gif]

























CROSSHAIR EXPLORATION & MINING CORP.







FINANCIAL STATEMENTS



(Expressed in Canadian Dollars)





APRIL 30, 2007









F1



---



DAVIDSON &COMPANY LLPChartered 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, 2007 and 2006 and the statements of operations, shareholders' equity and cash flows for the years ended April 30, 2007, 2006 and 2005.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audits.



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



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







"DAVIDSON & COMPANY LLP"





|                  |                      
|----------------- | ---------------------
|Vancouver, Canada | Chartered Accountants
|                  |                      
|June 1, 2007      |                      



A Member ofSC INTERNATIONAL



1200 - 609 Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, BC, Canada, V7Y 1G6

Telephone (604) 687-0947  Fax (604) 687-6172





F2



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CROSSHAIR EXPLORATION & MINING CORP.

BALANCE SHEETS

AS AT APRIL 30

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

Nature and continuance of operations (Note 1)

Subsequent events (Note 13)

Commitments and contingencies (Note 12)





|                        |          |               |         
|----------------------- | -------- | ------------- | --------
|On behalf of the Board: |          |               |         
|                        |          |               |         
|Mark J. Morabito      | Director | Geir Liland | Director
|                        |          |               |         
|                        |          |               |         



The accompanying notes are an integral part of these financial statements



F3



---





CROSSHAIR EXPLORATION & MINING CORP.

STATEMENTS OF OPERATIONS

YEARS ENDED APRIL 30

|                                                     |             |             |             |      |  |  |  | 
|---------------------------------------------------- | ----------- | ----------- | ----------- | ---- |  |  |  | 
|                                                     |             | 2007        | 2006        | 2005
|                                                     |             |             |            
|                                                     |             |             |            
|EXPENSES                                             |             |             |            
|Advertising                                          | $
65,327    | $
-         | $
-        
|Amortization                                         | 43,882      | 7,477       | 745        
|Audit and accounting (Note 8)                        | 38,604      | 143,212     | 83,536     
|Conference and exhibitions                           | 99,448      | -           | -          
|Consulting                                           | 171,724     | 244,534     | 182,227    
|Directors fees (Note 8)                              | 60,500      | 63,000      | 5,000      
|Insurance                                            | 35,897      | -           | -          
|Investor relations                                   | 143,773     | 130,364     | 120,880    
|Legal (Note 8)                                       | 212,486     | 100,700     | 79,300     
|Management fees (Note 8)                             | 50,000      | 225,000     | 158,931    
|Office and administration                            | 562,642     | 339,703     | 122,603    
|Property investigations                              | 1,602       | 93,467      | 28,776     
|Rent                                                 | 83,979      | 67,132      | 26,487     
|Stock-based compensation (Note 6)                    | 3,696,601   | 682,213     | 316,521    
|Transfer agent and filing fees                       | 87,017      | 106,448     | 58,292     
|Travel                                               | 306,978     | 165,538     | 60,623     
|Wages and salaries                                   | 923,743     | 41,441      | -          
|                                                     | (6,584,203) | (2,410,229) | (1,243,921)
|                                                     |             |             |            
|OTHER ITEMS                                          |             |             |            
|Interest income                                      | 45,287      | 233,065     | 20,803     
|Management income (Note 8)                           | 40,000      | 12,000      | 12,000     
|Realized gain - marketable securities                | 701,494     | -           | -          
|Unrealized loss  marketable securities              | (35,589)    | -           | -          
|Write-off of mineral properties (Note 5)             | -           | (1,518,429) | (188,988)  
|                                                     | 1,051,192   | (1,273,364) | (156,185)  
|                                                     |             |             |            
|Loss before income tax                               | (5,533,011) | (3,683,593) | (1,400,106)
|                                                     |             |             |            
|Future income tax recovery (Note 9)                  | -           | 1,508,120   | 754,720    
|                                                     |             |             |            
|Loss and comprehensive loss for the year             | (5,533,011) | (2,175,473) | (645,386)  
|                                                     |             |             |            
|                                                     |             |             |            
|Basic and diluted loss per common share              | $
(0.09)    | $
(0.05)    | $
(0.03)   
|                                                     |             |             |            
|                                                     |             |             |            
|Weighted average number of common shares outstanding | 62,434,069  | 47,264,482  | 24,677,131 









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





F4



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CROSSHAIR EXPLORATION & MINING CORP.

STATEMENTS OF CASH FLOWS

YEARS ENDED APRIL 30

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



Supplemental disclosures with respect to cash flows (Note 7)

The accompanying notes are an integral part of these financial statements



F5



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CROSSHAIR EXPLORATION & MINING CORP.

STATEMENT OF SHAREHOLDERS EQUITY



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





F6



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CROSSHAIR EXPLORATION & MINING CORP.

STATEMENT OF SHAREHOLDERS EQUITY



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





F7



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CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007

1.

NATURE AND CONTINUANCE OF OPERATIONS



Crosshair Exploration & Mining Corp. (the "Company") was incorporated under the laws of British Columbia on September 2, 1966.  Its principal business activities are the exploration and development of resource properties. All of the Companys resource properties are located in North America.



The Company is in the process of acquiring, exploring and developing its resource properties and has not yet determined whether the properties contain ore reserves that are economically recoverable.  The recoverability of the amounts shown for resource properties and related deferred exploration costs are dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain necessary financing to complete the development of those reserves and upon future profitable production.



These financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities during the normal course of business as they come due.



At April 30, 2007, the company has working capital of $15,390,704 and has remaining commitments to spend approximately $1,036,000 on its mineral properties before April 30, 2008. The funds required to continue   operations and exploration activities during this period have been financed primarily from the issue of equity.  Management believes that the successful financings over the last three years have mitigated the adverse conditions which raised substantial doubt on the Company's going concern.



Management estimates that these funds will be sufficient to meet the company's obligations and capital expenditure plans for the coming year. The company's ability to continue as a going concern, and the recoverability of its   mineral properties and equipment, is dependent on its ability to fund its exploration programs and reach profitable operations. These financial statements do not reflect the adjustments to carrying values of assets and liabilities and the reported expenses and balance sheet classifications that would be necessary should the going concern   assumption be inappropriate, and these adjustments could be material.



All amounts are in Canadian dollars unless otherwise stated.





2.

SIGNIFICANT ACCOUNTING POLICIES



Financial Instruments - Changes in Accounting Policies



Effective May 1, 2006, the Company decided to early adopt  the following new accounting standards issued by the Canadian Institute of Chartered Accountants (CICA) relating to financial instruments. These new standards have been adopted on a prospective basis with no restatement to prior period financial statements.



Financial Instruments-Recognition and Measurement (Section 3855)



These standards set out criteria for the recognition and measurement of financial instruments for fiscal years beginning on or after October 1, 2006. This standard requires all financial instruments within its scope, including derivatives, to be included on a Companys balance sheet and measured either at fair value or, in certain circumstances when fair value may not be considered most relevant, at cost or amortized cost. Changes in fair value are to be recognized in the statements of operations and comprehensive income.



All financial assets and liabilities are recognized when the entity becomes a party to the contract creating the item.  As such, any of the Companys outstanding financial assets and liabilities at the effective date of adoption are recognized and measured in accordance with the new requirements as if these requirements had always been in effect. Any changes to the fair values of assets and liabilities prior to February 1, 2007, are recognized by adjusting opening deficit or opening accumulated other comprehensive income.



F8



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CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007



2.

SIGNIFICANT ACCOUNTING POLICIES (contd)



All financial instruments are classified into one of the following five categories: held for trading, held-to-maturity, loans and receivables, available-for-sale financial assets, or other financial liabilities. Initial and subsequent measurement and recognition of changes in the value of financial instruments depend on their initial classification:



 Held for trading financial instruments are measured at fair value. All gains and losses are included in net earnings in the period in which they arise.

 Held-to-maturity investments, loans and receivables, and other financial liabilities are initially measured at fair value and subsequently measured at amortized cost. Amortization of premiums or discounts and losses due to impairment are included in current period net earnings.

 Available-for-sale financial assets are measured at fair value. Revaluation gains and losses are included in other comprehensive income until the asset is removed from the balance sheet.

 All derivative financial instruments are classified as held for trading financial instruments and are measured at fair value, even when they are part of a hedging relationship. All gains and losses are included in net earnings in the period in which they arise.



In accordance with this new standard, the Company has classified its financial instruments as follows:



Cash and cash equivalents, and marketable securities are classified as held-for-trading; receivables are classified as loans and accounts payable are classified as other financial liabilities. All are measured at fair value and gains and losses are included in net earnings in the period in which they arise. Cash and cash equivalents are exposed to credit risk and these amounts are placed with major Canadian banks. The Company is not exposed to interest rate risk due to the short term maturity of the financial instruments.



Hedging (Section 3865)



This new standard specifies the circumstances under which hedge accounting is permissible and how hedge accounting may be performed. The Company currently does not have any hedges.



Comprehensive Income (Section 1530)



Comprehensive income is the change in shareholders equity during a period from transactions and other events from non-owner sources. This standard requires certain gains and losses that would otherwise be recorded as part of net earnings to be presented in other comprehensive income until it is considered appropriate to recognize into net earnings. This standard requires the presentation of comprehensive income, and its components in a separate financial statement that is displayed with the same prominence as the other financial statements.



There was no effect on opening equity as of May 1, 2006, as a result of applying these new standards.



Accounting Changes (Section 1506)



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



Any impact that the adoption of Section 1506 will have on the Companys results of operations and financial condition will depend on the nature of future accounting changes. Its adoption has had no impact on these financial statements.



F9



---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007



2.

SIGNIFICANT ACCOUNTING POLICIES (contd)



Use of estimates



The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the period.  Actual results could differ from these estimates.



Cash and cash equivalents



The Company considers cash and cash equivalents to include cash on deposit and highly liquid short-term interest bearing variable rate investments.  Interest earned is recognized immediately in operations.



Marketable securities



The Company accounts for its marketable securities at fair market value with gains and losses included in the statement of operations.



Receivables



Receivables are reported at face value less any provisions for uncollectible accounts considered necessary.



Equipment



Equipment is recorded at cost.  The equipment noted below is amortized over its useful lives using the following annual rates and methods:



|                       |     |                  
|---------------------- | --- | -----------------
|Computer hardware      | 30% | Declining balance
|Computer software      | 45% | Declining balance
|Exploration equipment  | 20% | Declining balance
|Furniture and fixtures | 20% | Declining balance
|Office equipment       | 30% | Declining balance





Mineral properties



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



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



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



F10



---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007





2.

SIGNIFICANT ACCOUNTING POLICIES (contd)



Asset retirement obligations



The Company recognizes the fair value of a liability for an asset retirement obligation in the year in which it is incurred when a reasonable estimate of fair value can be made.  The carrying amount of the related long-lived asset is increased by the same amount as the liability.  The Company does not have any significant asset retirement obligations.



Flow-through shares



Canadian tax legislation permits a company to issue flow-through shares whereby the deduction for tax purposes relating to qualified resource expenditures is claimed by the investors rather than the Company. Recording these expenditures for accounting purposes gives rise to taxable temporary differences.



Effective March 19, 2004, the Emerging Issues Committee of the Canadian Institute of Chartered Accountants requires, where it is more likely than not, that when flow-through expenditures are renounced, a portion of the future income tax assets that were not recognized in previous years, due to the recording of a valuation allowance, be recognized as recovery of income taxes in the statement of operations.



Loss per share



Basic loss per share is computed by dividing the loss for the period by the weighted average number of common shares outstanding during the period.



For diluted per share computations, assumptions are made regarding potential common shares outstanding during the period.  The weighted average number of common shares is increased to include the number of additional common shares that would be outstanding if, at the beginning of the period, or at time of issuance, if later, all options and warrants are exercised.  Proceeds from exercise are used to purchase the Companys common shares at their average market price during the period, thereby reducing the weighted average number of common shares outstanding.  If these computations prove to be anti-dilutive, diluted loss per share is the same as basic loss per share.



Stock-based compensation



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



Income taxes



Income taxes are accounted for using the asset and liability method. Under this method of tax allocation, future tax assets and liabilities are determined based on differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases (temporary differences) and losses carried forward. Future income tax assets and liabilities are measured using the enacted tax rates expected to be in effect when the temporary differences are likely to reverse.  The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the date of enactment or substantive enactment. The amount of future income tax assets recognized is limited to the amount that is more likely than not to be realized.



F11



---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007





3.

MARKETABLE SECURITIES



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





4.

PROPERTY, PLANT AND EQUIPMENT





|                                     |                |                          |                |           |                          |               
|------------------------------------ | -------------- | ------------------------ | -------------- | --------- | ------------------------ | --------------
|                                     | April 30, 2007 | April 30, 2006          
|                                     | Cost           | Accumulated
Amortization | Net
Book Value | Cost      | Accumulated
Amortization | Net
Book Value
|                                     |                |                          |                |           |                          |               
|Furniture and fixtures               | $
75,112       | $
14,625                 | $
60,487       | $
60,514  | $
1,990                  | $
58,524      
|Computer hardware / office equipment | 67,014         | 13,843                   | 53,171         | 16,202    | 5,688                    | 10,514        
|Computer software                    | 32,936         | 5,581                    | 27,355         | -         | -                        | -             
|Exploration equipment                | 247,162        | 22,095                   | 225,067        | 61,915    | 4,584                    | 57,331        
|                                     |                |                          |                |           |                          |               
|                                     | $
422,224      | $
56,144                 | $
366,080      | $
138,631 | $
12,262                 | $
126,369     







F12



---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007





5.

MINERAL PROPERTIES



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





F13



---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007





5.

MINERAL PROPERTIES(contd)





Cumulative totals as at April 30, 2007:



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









F14



---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007



5.

MINERAL PROPERTIES(contd)



a)

GOLDEN PROMISE PROJECT



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



i)

Issuing common shares:



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



ii)

Incurring a total of $4,000,000 in exploration expenditures:



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



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



iii)

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



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



1.

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



b)

MORAN LAKE PROPERTY (PART OF CENTRAL MINERAL BELT PROJECT)



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





F15





---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007





5.

MINERAL PROPERTIES(contd)



The amended and restated agreement calls for:



i)

Making cash payments:



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



ii)

Issuing common shares:



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



iii)

Incurring a total of $3,000,000 in exploration expenditures:



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



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



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





F16





---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007





5.

MINERAL PROPERTIES(contd)



c)

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



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



i)

Making cash payments:



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



ii)

Issuing common shares:



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



iii)

Incurring a total of $600,000 in exploration expenditures:



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



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



d)

SINBAD CLAIMS



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







F17





---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007





5.

MINERAL PROPERTIES(contd)



e)

SOUTHERN GOLDEN PROMISE (VICTORIA LAKE), WINGS POINT  TITAN, GLENWOOD BREAK PROPERTIES



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



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



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



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



f)

BEIGOU GOLD PROPERTY



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



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



g)

OTHER PROPERTIES WRITTEN-OFF



NORTH PAULS POND GOLD PROPERTY



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



F18





---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007





5.

MINERAL PROPERTIES(contd)



NORTH PAULS POND GOLD PROPERTY(contd.)



$33,899 was received for the North Pauls Pond property in the third quarter of 2006. This was from the Newfoundland Government in regards to the mineral incentive program. As a result the amount of $173,653 originally written off was decreased to $139,754.



DJ Gold Property



During January 2004, the Company entered into an agreement to acquire up to 100% of the DJ Gold Property in the Shaanxi Province of China from Dinjialing Gold Corporation Limited. During the year ended April 30, 2005, the Company elected to terminate this option along with its obligations and related mineral property costs of $79,110 were written-off.



6.

CAPITAL STOCK AND CONTRIBUTED SURPLUS



Share issuances



The authorized share capital of the Company is an unlimited number of common shares without par value.



(a)

On May 31, 2004, the Company completed a private placement of 4,080,000 flow-through shares at a price of $0.25 per share for proceeds of $1,020,000.  The agent received an 8% commission of the gross proceeds along with 326,400 brokers warrants exercisable into common shares of the Company at $0.25 per share for a period of 12 months ($23,113 representing the fair value of these warrants was added to contributed surplus). The agents warrants were fully exercised during the year ended April 30, 2005.  Share issue costs of $138,896 were incurred in relation to this private placement.



(b)

On November 27, 2004, the Company completed a private placement of 1,525,000 units at a price of $0.25 per unit for aggregate gross proceeds of $381,250. Each unit is comprised of one common share and one non-transferable share purchase warrant. The warrant entitles the holder to acquire one common share of the Company at a price of $0.30 per share until November 27, 2005. The warrants contain a forced exercise provision.  In the event that the closing price of the Companys listed shares exceeds $0.60 per common share for 10 consecutive trading days after the four month hold period, the exercise period of the warrants could be shortened to a period of 30 days from the date that the Company provides written notice to the holders of the warrants of such an early expiry. During the year ended April 30, 2006, all the warrants associated with this private placement were exercised (Notes 5 (k & o)).  Share issue costs of $1,410 were incurred in relation to this private placement.



(c)

On December 14, 2004, the Company completed a non-brokered private placement of 2,750,000 units at a price of $0.40 per unit for aggregate gross proceed of $1,100,000. Each unit is comprised of one flow-through common share of the Company and one half of one non-transferable share purchase warrant. Each whole warrant entitles the holder to purchase one common share of the Company at a price of $0.50 per share until December 14, 2005. The Company paid a finders fee equal to 7% of the aggregate gross proceeds raised from the private placement totaling 192,500 units. Each finders fee unit includes one common share and one share purchase warrant. Share issue costs of $81,385 were incurred in relation to this private placement.  During the year ended April 30, 2006, all the warrants associated with this private placement were exercised (Notes 6 (n & o)).





F19





---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007





6.

CAPITAL STOCK AND CONTRIBUTED SURPLUS



Share issuances (contd)



(d)

On January 11, 2005, the Company completed a private placement of 1,000,000 units at a price of $0.30 per unit for aggregate gross proceeds of $300,000. Each unit is comprised of one common share and one non-transferable share purchase warrant. The warrant entitles the holder to acquire one common share of the Company at a price of $0.40 per share until January 11, 2006. The warrants contain a forced exercise provision.  In the event that the closing price of the Companys listed shares exceeds $0.60 per common share for 10 consecutive trading days after the four month hold period, the exercise period of the warrants will be shortened to a period of 30 days from the date that the Company provides written notice to the holders of the warrants of such an early expiry.  Share issue costs of $2,240 were incurred in relation to this private placement. During the year ended April 30, 2006, all the warrants associated with this private placement were exercised (Note 6 (o)).



(e)

On March 15, 2005, the Company completed a private placement of 5,622,220 units at a price of $0.45 per unit for aggregate gross proceed of $2,529,999. Each unit is comprised of one common share and one half of one transferable share purchase warrant.  The Agent was also issued 562,222 compensation options equal to 10% of the number of units sold.  Each whole warrant entitles the holder to acquire one common share of the Company at a price of $0.75 per share until March 15, 2007. The Company paid a commission equal to 7% of the aggregate gross proceeds raised from the private placement totaling $177,100, of which $91,210 was taken in cash and the remainder of $85,890 in 190,867 units with the same terms. Each compensation option entitles the agent to acquire one unit of the Company at a price of $0.50 per unit for a period of two years.  Share issue costs of $273,561 were incurred in relation to this private placement.  As of April 30, 2007, all of the warrants associated with this private placement were exercised (Note 6 (n & o)).



(f)

On November 3, 2005, the Company completed a brokered private placement, 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 was comprised of one flow-through common share and one-half of one transferable non-flow through share purchase warrant. Each whole warrant entitles the holder to purchase one common share of the Company at a price of $1.75 per share until November 3, 2007.  Each Common Share Unit is composed of one-non flow-through common share and one half of one transferable non-flow through share purchase warrant.  Each whole warrant entitles the holder to purchase one common share of the Company at a price of $1.25 per share until November 3, 2007.  The Agent was paid 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 (valued at $653,407) equal to 10% of the number of units sold.  Each compensation option entitles the Agent to acquire one Common Share Unit of the Company at an exercise price of $0.85 for a period of two years.  All securities issued pursuant to this offering are subject to a four-month hold period commencing November 3, 2005.  Share issue costs of $1,536,806 were incurred in relation to this private placement.  As of April 30, 2007, 6,126,250 of the regular warrants, 163,987 of the agents warrants and 1,105,766 agents options were exercised (Note 6 (o)).



(g)

During the year ended April 30, 2005, 40,000 common shares valued at $0.25 per share were issued for acquisition costs associated with the North Pauls Pond property; 300,000 common shares valued at $0.25 per share were issued for acquisition costs associated with the Companys Glenwood Break property; and 500,000 common shares valued at $0.20 per share and 100,000 common shares valued at $0.60 per share were issued for acquisition costs associated with the Moran Lake property.



(h)

During the year ended April 30, 2005, 148,850 agents options and 198,750 stock options granted to directors and consultants of the Company at a price of $0.25 per share, and 50,000 stock options granted to a consultant of the Company at a price of $0.15 per share were exercised into common shares of the Company for gross proceeds of $94,400 ($79,635, representing the fair market value of the options exercised was allocated to capital stock).



F20





---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007



6.

CAPITAL STOCK AND CONTRIBUTED SURPLUS



Share issuances(contd)



(i)

During the year ended April 30, 2005, 760,000 brokers warrants were exercised at $0.35 per share, 46,750 brokers warrants were exercised at $0.30 per share, and 326,400 brokers warrants were exercised at $0.25 per share for total gross proceeds of $361,625 ($54,104, representing the fair market value of the broker warrants exercised was allocated to capital stock).



(j)

On July 31, 2004, 154,000 common shares issued at a price of $0.25 per share to a consultant in fiscal 2004 were cancelled and returned to the treasury as a result of the termination of the agreement with the consultant.



(k)

During the year ended April 30, 2005, 2,954,000 warrants were exercised at $0.35 per share and 20,000 warrants were exercised at $0.30 per share for total gross proceeds of $1,039,900.



(l)

On February 10, 2005, the Company settled debt of $10,200 by the issuance of 60,000 common shares at a price of $0.17 per share to an officer of the Company.



(m)

During the year ended April 30, 2006, 151,150 agents options and 1,027,500 stock options at a price of $0.25 per share, 50,000 stock options at a price of $0.28 per share, 346,356 agents options at a price of $0.50,  738,868 agents options at a price of $0.85, and 50,000 stock options at a price of $0.45 were all exercised for total gross proceeds of $1,132,379 ($754,112 representing the fair market value of the stock options, agents options, and brokers warrants exercised was allocated to capital stock).



(n)

During the year ended April 30, 2006, 245,918 agents warrants at a price of $0.75 were exercised into common shares of the Company for gross proceeds of $184,439 and 192,500 agents warrants at a price of $0.50 per share were exercised into common shares of the Company for gross proceeds of $96,250.



(o)

During the year ended April 30, 2006, 1,505,000 warrants at $0.30 per share, 1,000,000 warrants at $0.40 per share,  1,375,000 warrants at a price of $0.50 per share, 200,833 warrants at a price of $0.75 per share, and 82,139 warrants at a price of $1.25 per share  were exercised for total gross proceeds of $1,792,299.



(p)

During the year ended April 30, 2006, 100,000 common shares valued at $0.82 per share were issued for acquisition costs associated with the Southern Golden Promise property, 250,000 common shares valued at $0.76 per share were issued for acquisition costs associated with the Moran Lake property and 50,000 common shares valued at $0.90 per share were issued for acquisition costs associated with the Otter and Portage Lake properties.



(q)

During the year ended April 30, 2007, the following options were exercised for total gross proceeds of $1,404,075 ($996,071 representing the fair market value of the stock options and agents options exercised was allocated to capital stock):

|              |          |                 |         |         
|------------- | -------- | --------------- | ------- | --------
|Stock Options |          | Agents Options
|200,000       | $   0.23 |                 | 215,866 | $   0.50
|780,000       | $   0.25 |                 | 366,898 | $   0.85
|175,000       | $   0.28 |                 |         |         
|410,000       | $   0.45 |                 | 582,764 |         
|75,000        | $   0.58 |                 |         |         
|84,000        | $   0.64 |                 |         |         
|35,000        | $   0.65 |                 |         |         
|75,000        | $   0.90 |                 |         |         
|50,000        | $   1.00 |                 |         |         
|206,000       | $   1.32 |                 |         |         
|              |          |                 |         |         
|2,090,000     |          |                 |         |         



F21





---







CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007





6.

CAPITAL STOCK AND CONTRIBUTED SURPLUS



Share issuances(contd)



(r)  During the year ended April 30, 2007, 2,610,275 warrants at $0.75 per share, 4,044,111 warrants at $1.25 per share, 2,000,000 shares at a price of $1.75 per share, 129,515 agents warrants at $0.75 per share, and 144,348 agents warrants at $1.25 were exercised for total gross proceeds of $10,814,966.



(s)

During the year ended April 30, 2007, the Company issued 490,375 common shares, under a warrant incentive program, for gross proceeds of $707,343.  Under the terms of the program, holders of warrants expiring on November 3, 2007 were, for the two week period between February 13, 2007 and February 26, 2007, entitled to subscribe for an additional common share of the Company for every 10 warrants exercised, at the original exercise price.



(t)

During the year ended April 30, 2007, 20,000 common shares valued at $1.27 per share were issued for acquisition costs associated with the Golden Promise property, 100,000 common shares valued at $1.96 per share, were issued for acquisition costs associated with the Southern Golden Promise property, 250,000 common shares valued at $2.44 per share, were issued for acquisition costs associated with the Moran Lake property and 75,000 common shares valued at $3.29 per share, were issued for acquisition costs associated with the Otter/Portage Lake property.



Share purchase warrants



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



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



(1)

These warrants were granted in connection with the private placement on November 3, 2005 (Note 6(f)).

(2)

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



Stock options



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





F22





---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007





6.

CAPITAL STOCK AND CONTRIBUTED SURPLUS(contd)



Stock options(contd)



The following is a summary of stock options outstanding at April 30, 2007, April 30, 2006 and April 30, 2005 and changes during the years then ended.





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





F23





---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007



6.

CAPITAL STOCK AND CONTRIBUTED SURPLUS(contd)



Stock options(contd)



At April 30, 2007, the following stock options were outstanding to directors, officers and employees:



|          |  |                    |  |                   
|--------- |  | ------------------ |  | ------------------
|Number    |  | Exercise Price ($) |  | Expiry Date       
|191,984   |  | 0.85               |  | November 2, 2007* 
|5,000     |  | 0.25               |  | June 19, 2008     
|75,000    |  | 0.25               |  | January 21, 2009  
|30,000    |  | 0.25               |  | February 17, 2009 
|50,000    |  | 0.25               |  | June 17, 2009     
|25,000    |  | 0.28               |  | January 1, 2010   
|715,000   |  | 0.45               |  | February 4, 2010  
|100,000   |  | 0.45               |  | June 14, 2010     
|100,000   |  | 0.45               |  | September 14, 2010
|115,000   |  | 0.68               |  | September 26, 2010
|116,000   |  | 0.64               |  | November 14, 2010 
|150,000   |  | 0.90               |  | January 5, 2011   
|1,100,000 |  | 1.00               |  | January 18, 2011  
|75,000    |  | 1.32               |  | April 18, 2011    
|389,000   |  | 1.32               |  | April 24, 2011    
|1,325,000 |  | 1.32               |  | May 1, 2011       
|450,000   |  | 1.32               |  | May 24, 2011      
|180,000   |  | 1.32               |  | July 1, 2011      
|300,000   |  | 1.43               |  | August 21, 2011   
|100,000   |  | 1.43               |  | September 21, 2011
|50,000    |  | 1.56               |  | October 1, 2011   
|275,000   |  | 2.07               |  | November 4, 2011  
|100,000   |  | 2.26               |  | November 17, 2011 
|150,000   |  | 3.10               |  | December 11, 2011 
|100,000   |  | 2.66               |  | January 12, 2012  
|350,000   |  | 2.50               |  | February 1, 2012  
|1,600,000 |  | 2.50               |  | March 6, 2012     
|40,000    |  | 2.58               |  | March 13, 2012    
|475,000   |  | 3.00               |  | March 23, 2012    
|100,000   |  | 3.00               |  | April 15, 2012    
|150,000   |  | 3.00               |  | April 23, 2012    
|          |  |                    |  |                   
|8,981,984 |  |                    |  |                   



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





F24





---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007



6.

CAPITAL STOCK AND CONTRIBUTED SURPLUS(contd)





Stock-based compensation



The Company recognizes compensation expense for all stock options granted using the fair value based method of accounting.  The fair value of the options vested in the year ended April 30, 2007 totaled $3,696,601. The weighted average fair value of options granted in the year was $2.16 (April 30, 2006 - $0.91, April 30, 2005 - $0.39).



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



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



Escrow shares



At April 30, 2007, a total of 140,625 (April 30, 2006  281,250; April 30, 2005  562,500) shares were held in escrow.  No expense was recognized for the release of these shares as the release is not considered compensatory.



These shares were originally placed in escrow as an incentive for management to reorganize the Company. The release of these shares from escrow is subject to certain performance conditions and to the direction and determination of the TSX Venture Exchange.  The performance conditions state that the shares may be released from escrow on the basis of 15% of the original number for every $100,000 expended on exploration and development of a resource property calculated proportionately after the first $100,000 expenditure.  If the performance conditions are not met by February 14, 2010, the shares will be returned and cancelled.



7.

SUPPLEMENTAL DISCLOSURES WITH RESPECT TO CASH FLOWS



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



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



(a)

The Company recognized fair market value of $996,071 in respect of stock options and agents options exercised (Note 6(q)).



(b)

The Company issued a total of 445,000 common shares at a value of $1,078,150 for property acquisitions (Note 6(t)).



(c)

Included in accounts payable was $810,505 related to mineral property costs.



(d)

All amounts owed to Paragon are for mineral property costs.



F25





---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007



7.

SUPPLEMENTAL DISCLOSURES WITH RESPECT TO CASH FLOWS(contd)





The following were significant non-cash investing and financing transactions during the year ended April 30, 2006:



(a)

The Company recognized fair market value of $754,112 in respect of stock options and agents options exercised (Note 6 (m)).



(b)

The Company issued a total of 400,000 common shares at a value of $317,000 for property acquisitions (Note 6 (p)).



(c)

The Company issued a total of 402,741 common shares at a value of $322,193 for finders fees in conjunction with a private placement (Note 6 (f)).



(d)

Included in mineral property costs at April 30, 2006 is $86,315 incurred through accounts payable and accrued liabilities.



(e)

The Company recognized compensation expenses of $1,335,620 for all stock options and agents warrants granted using the fair value based method of accounting.



(f)

562,222 compensation options at $0.50 per share were issued to the broker in connection with the completion of the private placement on March 15, 2005 and 1,297,750 compensation options at $0.85 per share were issued to the broker in connection with the completion of the private placement on November 3, 2005



The following were significant non-cash investing and financing transactions during the year ended April 30, 2005:



(a)

The Company issued a total of 940,000 common shares at a value of $245,000 for property acquisition (Note 6 (g)).

(b)

The Company cancelled 154,000 common shares at a value of $38,500 as a result of the termination of an agreement with a consultant to perform work in the current fiscal period (Note 6 (j)).

(c)

The Company recognized fair market value of $133,739 in respect of stock options, agents options and brokers warrants exercised (Notes 6 (h) and (i)).

(d)

The Company issued a total of 383,367 common shares at a value of $162,890 for finders fees in conjunction with private placements (Notes 6 (l) and (e)).

(e)

The Company issued 60,000 common shares to settle debt of $10,200 with an officer of the Company (Note 6 (l)).

(f)

The Company recognized compensation expenses of $23,113 for Agent Warrants granted in connection with the private placement (Note 6 (q))



F26





---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007



8.

RELATED PARTY TRANSACTIONS



The Company entered into transactions with related parties as follows:



During the year ended April 30, 2007, the Company recorded management fees of $40,000 (2006 - $12,000, 2005 - $12,000) from a public Company with directors in common.  At April 30, 2007, $Nil (April 30, 2006 - $Nil) was owed from this party.



During the year ended April 30, 2007, the Company incurred management fees of $50,000 (2006  $225,000, 2005 - $150,000) to a director.  At April 30, 2007, $Nil (April 30, 2006 - $Nil) was owed.



During the year ended April 30, 2007, the Company incurred directors fees of $60,500 (2006 - $63,000, 2005 - $5,000), to non-executive directors.  At April 30, 2007, $Nil (April 30, 2006 - $Nil) was owed to these directors.



During the year ended April 30, 2007, the Company incurred accounting fees of $Nil (2006 - $58,529, 2005 - $58,414) to a private company controlled by a former director.  At April 30, 2007, $Nil (April 30, 2006 - $2,536) was owed.



During the year ended April 30, 2007, the Company incurred legal fees of $25,882 (2006  $70,907, 2005 - $91,322) to a company that a director is a partner of.  At April 30, 2007, $Nil (April 30, 2006 - $Nil) was owed to this party.



During the year ended April 30, 2007, the Company incurred geological consulting fees of $33,075 (2006 - $40,701, 2005 - $10,000) to a private company owned by a director.  At April 30, 2007, $5,830 (April 30, 2006 - $Nil) was owed to this party.



At April 30, 2007, $13,411 (April 30, 2006 - $11,685, April 30, 2005 - $6,435) was owed to directors and/or officers for expenses paid on behalf of the Company.



As at April 30, 2007, $Nil (April 30, 2006 - $4,167) was owed from a director for overpayment of management fees.



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



9.

INCOME TAXES



A reconciliation of income taxes at statutory rates with the reported taxes is as follows:



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





F27





---





CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007

9.

INCOME TAXES(contd)



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

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



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



The Company has available for deduction against future taxable income non-capital losses of approximately $2,784,000.  These losses, if not utilized, will expire commencing in 2016.  Subject to certain restrictions, the Company also has resource expenditures available to reduce taxable income in future years.  Future tax benefits which may arise as a result of these non-capital losses and resource deductions have not been recognized in these financial statements and have been offset by a valuation allowance.



10.

SEGMENTED INFORMATION



The Company operates in one reportable operating segment, being the exploration and development of mineral properties.  Geographical information is as follows:



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





F28





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CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007



11.

FINANCIAL INSTRUMENTS



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



12.

COMMITMENTS AND CONTINGENCIES



a)

The Company has entered into an operating lease agreement for its office premises in Newfoundland and Vancouver.  The annual lease commitments under these leases are as follows:



2008

$

76,804

2009

48,586

2010

47,954

2011

35,491



13.

SUBSEQUENT EVENTS



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





14.

DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES



These financial statements have been prepared in accordance with Canadian GAAP.  Material variations in the accounting principles, practices and methods used in preparing these financial statements from principles, practices and methods accepted in the United States ("United States GAAP") are described and quantified below.



F29





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CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007



14.

DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES(contd.)



Balance sheets

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



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



Statements of operations



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



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



F30





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CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007



14.

DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES(contd.)



Statements of cash flows



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



|                                                          |               |               |            
|--------------------------------------------------------- | ------------- | ------------- | -----------
|                                                          | 2007          | 2006          | 2005       
|Net cash flows from operating activities                  |               |               |            
|Under Canadian GAAP                                       | $
(2,676,963) | $
(1,950,263) | $
(756,660)
|Mineral properties                                        | (8,238,406)   | (2,421,945)   | (1,279,032)
|Net cash used in operating activities under US GAAP       | (10,915,369)  | (4,372,208)   | (2,035,692)
|                                                          |               |               |            
|Net cash flows from financing activities                  |               |               |            
|Under Canadian GAAP and US GAAP                           | 12,926,385    | 13,834,710    | 6,499,685  
|Net cash flows used in investing activities               |               |               |            
|Under Canadian GAAP                                       | (9,885,981)   | (2,683,178)   | (1,510,334)
|Mineral properties                                        | 8,238,406     | 2,421,945     | 1,279,032  
|Net cash used in investing activities under US GAAP       | (1,647,575)   | (261,233)     | (231,302)  
|                                                          |               |               |            
|Net increase in cash and cash equivalents during the year | 363,441       | 9,201,269     | 4,232,691  
|Cash and cash equivalents, beginning the year             | 13,947,976    | 4,746,707     | 514,016    
|Cash and cash equivalents, end of year                    | $
14,311,417  | $
13,947,976  | $
4,746,707





Mineral property interests and deferred exploration costs



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



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





F31





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CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007



14.

DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES(contd.)



Flow-through shares



Under Canadian income tax legislation, the Company is permitted to issue shares whereby the Company agrees to incur qualifying expenditures (as defined under the Income Tax Act of Canada) and renounce the related income tax deductions to the investors.  Under Canadian GAAP, flow-through shares are accounted for as part of the issuance of capital stock at the price paid for the shares, net of any future income tax liability.  Under United States GAAP, any difference between the market price of the Company's stock and the fair value of the flow-through shares must be recorded as a liability if a premium is paid by investors or as an asset if investors are purchasing the shares at a discount.  The asset or liability is charged to income as the flow-through share proceeds are expended on qualifying expenditures.



During the year the Company did not issue any flow-through shares and accordingly there was no difference between Canadian and United States GAAP.



During the year ended April 30, 2006, the Company issued 4,000,000 flow-through shares for total proceeds of $4,000,000.  As the market price of the Companys stock was less than the fair value of the flow-through shares issued, a premium of $398,454 has been recorded for the expended cash on qualifying expenditures and a flow-through share liability of $401,546 was recorded for the unexpended amount as of April 30, 2006.  During the year ended April 30, 2005, the Company issued 6,830,000 flow-through shares for total proceeds of $2,120,000.  As the market price of the Companys stock was less than the fair value of the flow-through shares issued, a premium of $124,940 was recorded for the expended cash on qualifying transactions and a flow-through share liability of $93,260 for the unexpended amount as of April 30, 2005.



Loss per share



Under both Canadian and United States generally accepted accounting principles basic loss per share is calculated using the weighted average number of common shares outstanding during the year.



Under United States generally accepted accounting principles, the weighted average number of common shares outstanding excludes any shares held in escrow for which the release is subject to certain performance conditions. The weighted average number of shares outstanding under United States generally accepted accounting principles for the years ended April 30, 2007, 2006 and 2005 were 62,293,444, 46,983,232, and 24,114,631 respectively.



F32





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CROSSHAIR EXPLORATION & MINING CORP.

NOTES TO THE FINANCIAL STATEMENTS

April 30, 2007



14.

DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES(contd.)



New accounting pronouncements



In July 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48). FIN 48 clarifies the accounting and reporting for uncertainties in income tax law. FIN 48 prescribes a comprehensive model for the financial statement recognition, measurement, presentation, and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. FIN 48 is effective for fiscal years beginning after December 15, 2006. The adoption of FIN 48 is not anticipated to have an impact on the Companys financial position or results of operations.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 establishes a framework for measuring the fair value of assets and liabilities. This framework is intended to provide increased consistency in how fair value determinations are made under various existing accounting standards which permit, or in some cases require, estimates of fair market value. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. Earlier application is encouraged, provided that the reporting entity has not yet issued financial statements for that fiscal year, including any financial statements for an interim period within that fiscal year. The Company is currently assessing the impact of SFAS No. 157 the Companys financial position and results of operations, but does not anticipate a material impact.

In February, 2007, the FASB issued SFAS No. 159 The Fair Value Option for Financial Assets and Financial Liabilities. SFAS No. 159 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. The Company is currently assessing the impact of SFAS No. 159 on our financial position and results of operations, but are does not anticipate a material impact.







F33