---

UNITED STATESSECURITIES
AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

FORM 20-F

[    ]   REGISTRATION STATEMENT
PURSUANT TO SECTION 12(b) or 12(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 July 31, 2013

OR

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

OR

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

Commission file number 0-15490

QUARTZ MOUNTAIN RESOURCES LTD.


(Exact name of Registrant as specified in its charter)

BRITISH COLUMBIA, CANADA


(Jurisdiction of
incorporation or organization)



15th Floor, 1040 West Georgia Street Vancouver, British
Columbia, Canada, V6E 4H1


(Address of principal executive offices)



Trevor Thomas, Corporate Secretary Facsimile No.:
604-681-2741 15th Floor, 1040 West Georgia Street Vancouver, British
Columbia, Canada, V6E 4H1


(Name, Telephone, E-mail and/or Facsimile
number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section
12(b) of the Act.

|Title of Each Class: | Name of each exchange on which registered
|-------------------- | -----------------------------------------
|Not applicable       | Not applicable                           

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

Common shares, no par value

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:

27,299,513 common shares as of July 31, 2013

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

Yes [  
]                                                     No
[ X ]

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

Yes [  
]                                                  
 No [ X ]

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

Yes [   
]                                        
 No [    ]

Indicate by check mark whether the Registrant is a large
accelerated filer, an accelerated filer or non-accelerated filer. See definition
of "accelerated filer" and "large accelerated filer" in Rule 126-2 of the
Exchange Act.

|Large Accelerated Filer [    ] | Accelerated Filer [   
      ] | Non-Accelerated Filer [ X ]
|------------------------------ | ------------------------------ | ---------------------------

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

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

If "Other" has been checked in response to the previous
question, indicate by check mark which financial statement item the registrant
has elected to follow.

Item 17 [   
]                                           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 ]



---

|GENERAL                                  |                                                               | 5 
|---------------------------------------- | ------------------------------------------------------------- | --
|CURRENCY
      AND MEASUREMENT           | 7                                                            
|NOTE
      ON FORWARD LOOKING STATEMENTS | 7                                                            
|ITEM
      1                             | IDENTITY
      OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS   | 8 
|A.                                       | DIRECTORS
      AND SENIOR MANAGEMENT                         | 8 
|B.                                       | ADVISORS                                                      | 8 
|C.                                       | AUDITORS                                                      | 8 
|ITEM
      2                             | OFFER
      STATISTICS AND EXPECTED TIMETABLE                 | 8 
|ITEM
      3                             | KEY
      INFORMATION                                         | 8 
|A.                                       | SELECTED
      FINANCIAL DATA                                 | 8 
|B.                                       | CAPITALIZATION
      AND INDEBTEDNESS                         | 9 
|C.                                       | REASONS
      FOR THE OFFER AND USE OF PROCEEDS               | 9 
|D.                                       | RISK
      FACTORS                                            | 9 
|ITEM
      4                             | INFORMATION
      ON THE COMPANY                              | 13
|A.                                       | HISTORY
      AND DEVELOPMENT OF THE COMPANY                  | 13
|B.                                       | BUSINESS
      OVERVIEW                                       | 14
|C.                                       | MINERAL
      PROPERTIES AND EXPLORATION ACTIVITIES AND PLANS | 16
|D.                                       | ORGANIZATIONAL
      STRUCTURE                                | 22
|E.                                       | PROPERTY,
      PLANT AND EQUIPMENT                           | 22
|F.                                       | CURRENCY                                                      | 22
|ITEM
      4A                            | UNRESOLVED
      STAFF COMMENTS                               | 22
|ITEM
      5                             | OPERATING
      AND FINANCIAL REVIEW AND PROSPECTS            | 22
|OVERVIEW                                 | 22                                                           
|A.                                       | OPERATING
      RESULTS                                       | 23
|B.                                       | LIQUIDITY
      AND CAPITAL RESOURCES                         | 25
|C.                                       | RESEARCH
      EXPENDITURES                                   | 26
|D.                                       | TREND
      INFORMATION                                       | 26
|E.                                       | OFF
       BALANCE SHEET ARRANGEMENTS                        | 27
|F.                                       | TABULAR
      DISCLOSURE OF CONTRACTUAL OBLIGATIONS           | 27
|G.                                       | SAFE
      HARBOR                                             | 28
|ITEM
      6                             | DIRECTORS,
      SENIOR MANAGEMENT AND EMPLOYEES              | 28
|A.                                       | DIRECTORS
      AND SENIOR MANAGEMENT                         | 28
|B.                                       | COMPENSATION                                                  | 32
|C.                                       | BOARD
      PRACTICES                                         | 33
|D.                                       | EMPLOYEES                                                     | 37
|E.                                       | SHARE
      OWNERSHIP                                         | 37
|ITEM
      7                             | MAJOR
      SHAREHOLDERS AND RELATED PARTY TRANSACTIONS       | 38
|A.                                       | MAJOR
      SHAREHOLDERS                                      | 38
|B.                                       | RELATED
      PARTY TRANSACTIONS                              | 39
|C.                                       | INTERESTS
      OF EXPERTS AND COUNSEL                        | 40
|ITEM
      8                             | FINANCIAL
      INFORMATION                                   | 40
|A.                                       | CONSOLIDATED
      STATEMENTS AND OTHER FINANCIAL INFORMATION | 40
|B.                                       | SIGNIFICANT
      CHANGES                                     | 40
|ITEM
      9                             | THE
      OFFER AND LISTING                                   | 40
|A.                                       | OFFER
      AND LISTING DETAILS                               | 40
|B.                                       | PLAN
      OF DISTRIBUTION                                    | 41
|C.                                       | MARKETS                                                       | 41
|D.                                       | SELLING
      SHAREHOLDERS                                    | 42

---

|E.                                                         | DILUTION                                                                           | 42
|---------------------------------------------------------- | ---------------------------------------------------------------------------------- | --
|F.                                                         | EXPENSES
      OF THE ISSUE                                                        | 42
|ITEM
      10                                              | ADDITIONAL
      INFORMATION                                                       | 42
|A.                                                         | SHARE
      CAPITAL                                                                | 42
|B.                                                         | MEMORANDUM
      AND ARTICLES OF ASSOCIATION                                       | 42
|C.                                                         | MATERIAL
      CONTRACTS                                                           | 44
|D.                                                         | EXCHANGE
      CONTROLS                                                            | 44
|E.                                                         | TAXATION                                                                           | 44
|F.                                                         | DIVIDENDS
      AND PAYING AGENTS                                                  | 51
|G.                                                         | STATEMENT
      BY EXPERTS                                                         | 51
|H.                                                         | DOCUMENTS
      ON DISPLAY                                                         | 51
|I.                                                         | SUBSIDIARY
      INFORMATION                                                       | 51
|ITEM
      11                                              | QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   | 51
|A.                                                         | TRANSACTION
      RISK AND CURRENCY RISK MANAGEMENT                                | 51
|B.                                                         | EXCHANGE
      RATE SENSITIVITY                                                    | 51
|C.                                                         | INTEREST
      RATE RISK AND EQUITY PRICE RISK                                     | 51
|D.                                                         | COMMODITY
      PRICE RISK                                                         | 51
|ITEM
      12                                              | DESCRIPTION
      OF SECURITIES OTHER THAN EQUITY SECURITIES                       | 51
|ITEM
      13                                              | DEFAULTS,
      DIVIDEND ARREARAGES AND DELINQUENCIES                              | 52
|ITEM
      14                                              | MATERIAL
      MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 52
|ITEM
      15                                              | CONTROLS
      AND PROCEDURES                                                      | 52
|A.                                                         | DISCLOSURE
      CONTROLS AND PROCEDURES                                           | 52
|B.                                                         | MANAGEMENT'S
      ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING      | 52
|CHANGES
      IN INTERNAL CONTROL OVER FINANCIAL REPORTING | 52                                                                                
|LIMITATIONS
      OF CONTROLS AND PROCEDURES               | 52                                                                                
|ITEM
      16                                              | [RESERVED]                                                                         | 53
|ITEM
      16A                                             | AUDIT
      COMMITTEE FINANCIAL EXPERT                                             | 53
|ITEM
      16B                                             | CODE
      OF ETHICS                                                               | 53
|ITEM
      16C                                             | PRINCIPAL
      ACCOUNTANT FEES AND SERVICES                                       | 54
|ITEM
      16D                                             | EXEMPTIONS
      FROM LISTING STANDARDS FOR AUDIT COMMITTEES                       | 54
|ITEM
      16E                                             | PURCHASES
      OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS       | 54
|ITEM
      16F                                             | CHANGE
      IN REGISTRANT'S CERTIFYING ACCOUNTANT                                 | 54
|ITEM
      16G                                             | CORPORATE
      GOVERNANCE                                                         | 54
|ITEM
      17                                              | FINANCIAL
      STATEMENTS                                                         | 55
|ITEM
      18                                              | FINANCIAL
      STATEMENTS                                                         | 55
|ITEM
      19                                              | EXHIBITS                                                                           | 55

---

GENERAL

In this Annual Report on Form 20-F, all references to "we", the
"Company" or "Quartz Mountain" refer to Quartz Mountain Resources Ltd. and its
consolidated subsidiary.

The Company uses the Canadian dollar as its reporting currency.
All references in this document to "dollars" or "$" are expressed in Canadian
dollars, unless otherwise indicated. See also Item 3 
"Key Information" for more detailed currency and conversion
information.

Except as noted, the information set forth in this Annual
Report is as of November 22, 2013, and all information included in this document
should only be considered correct as of such date.

Certain terms used herein are defined as follows:

ICP
    Inductively coupled plasma (ICP) mass spectrometry is a
      type of mass spectrometry which is capable of detecting metals and several
      non-metals at concentrations as low as one part per trillion.ICP-AES
    Inductively coupled plasma atomic emission spectroscopy
      is an analytical technique used for the detection of trace metals. It is a
      type of emission spectroscopy that uses the inductively coupled plasma to
      produce excited atoms and ions that emit electromagnetic radiation at
      wavelengths characteristic of a particular element. The intensity of this
      emission is indicative of the concentration of the element within the
      sample.Induced Polarization (IP) Survey
    A geophysical survey used to identify a feature that
      appears to be different from the typical or background survey results when
      tested for levels of electro- conductivity; IP detects both chargeable,
      pyrite-bearing rock and non-conductive rock that has a high content of
      quartz.Epithermal Deposit
    Gold, gold-silver or silver deposits, some also
      include important base metals; occurring as narrow vein to large low grade
      disseminated deposits.Mineral Reserve
    Securities and Exchange Commission Industry Guide 7
      Description of Property by Issuers Engaged or to be Engaged in Significant
      Mining Operations (under the United States Securities Exchange Act of
      1934, as amended) defines a 'reserve' as that part of a mineral deposit
      which could be economically and legally extracted or produced at the time
      of the reserve determination. Reserves consist of:(1) Proven (Measured) Reserves. Reserves for which: (a)
      quantity is computed from dimensions revealed in outcrops, trenches,
      workings or drill holes; grade and/or quality are computed from the
      results of detailed sampling; and (b) the sites for inspection, sampling
      and measurement are spaced so closely and the geologic character is so
      well defined that size, shape, depth and mineral content of reserves are
      well-established.(2) Probable (Indicated) Reserves. Reserves for which
      quantity and grade and/or quality are computed from information similar to
      that used for proven (measured) reserves, but the sites for inspection,
      sampling and measurement are farther apart or are otherwise less
      adequately spaced. The degree of assurance, although lower than that for
      proven (measured) reserves, is high enough to assume continuity between
      points of observation.As a reporting issuer under the Securities Acts of
      British Columbia and Alberta, the Company is subject to National
      Instrument 43-101 Standards of Disclosure for Mineral Projects of the
      Canadian Securities Administrators. Securities and Exchange Commission
      Industry Guide 7, as interpreted by Securities and Exchange Commission
      Staff, applies standards that are different from those prescribed by
      National Instrument 43-101 in order to classify mineralization as a
      reserve. Under the standards of the Securities and Exchange Commission,
      mineralization may not be classified as a "reserve" unless the
      determination has been made that the mineralization could be economically
      and legally produced or extracted at the time the reserve determination is
      made. Among other things, all necessary permits would be required to be in
      hand or issued imminently in order to classify mineralized material as
      reserves under Securities and Exchange Commission Industry Guide 7.
      Accordingly, mineral reserve estimates established in accordance with
      National Instrument 43-101 may not qualify as "reserves" under SEC
      standards. The Company does not currently have any mineral deposits that
      have been classified as reserves.Mineral Resource
    National Instrument 43-101 Standards of Disclosure for
      Mineral Projects of the Canadian Securities Administrators defines a
      "Mineral Resource" as 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.


5

---

Mineral Resources are sub-divided, in order of increasing
      geological confidence, into Inferred, Indicated and Measured categories.
      An Inferred Mineral Resource has a lower level of confidence than that
      applied to an Indicated Mineral Resource. An Indicated Mineral Resource
      has a higher level of confidence than an Inferred Mineral Resource but has
      a lower level of confidence than a Measured Mineral Resource. It cannot be
      assumed that all or any part of Measured Mineral Resources, Indicated
      Mineral Resources, or Inferred Mineral Resources will ever be upgraded to
      a higher category. It also cannot be assumed that any part of any reported
      Measured Mineral Resources, Indicated Mineral resources, or Inferred
      Mineral Resources is economically or legally mineable. Further, in
      accordance with Canadian rules, estimates of Inferred Mineral Resources
      cannot form the basis of feasibility or other economic studies.(1) Inferred Mineral Resource. An 'Inferred Mineral
      Resource' is that part of a Mineral Resource for which quantity and grade
      or quality can be estimated on the basis of geological evidence and
      limited sampling and reasonably assumed, but not verified, geological and
      grade continuity. The estimate is based on limited information and
      sampling gathered through appropriate techniques from locations such as
      outcrops, trenches, pits, workings and drill holes.(2) Indicated Mineral Resource. An 'Indicated Mineral
      Resource' is that part of a Mineral Resource for which quantity, grade or
      quality, densities, shape and physical characteristics can be estimated
      with a level of confidence sufficient to allow the appropriate application
      of technical and economic parameters, to support mine planning and
      evaluation of the economic viability of the deposit. The estimate is based
      on detailed and reliable exploration and testing information gathered
      through appropriate techniques from locations such as outcrops, trenches,
      pits, workings and drill holes that are spaced closely enough for
      geological and grade continuity to be reasonably assumed.(3) Measured Mineral Resource. A 'Measured Mineral
      Resource' is that part of a Mineral Resource for which quantity, grade or
      quality, densities, shape, physical characteristics are so well
      established that they can be estimated with confidence sufficient to allow
      the appropriate application of technical and economic parameters, to
      support production planning and evaluation of the economic viability of
      the deposit. The estimate is based on detailed and reliable exploration,
      sampling and testing information gathered through appropriate techniques
      from locations such as outcrops, trenches, pits, workings and drill holes
      that are spaced closely enough to confirm both geological and grade
      continuity.Industry Guide 7  "Description of Property by Issuers
      Engaged or to be Engaged in Significant Mining Operations" of the
      Securities and Exchange Commission does not define or recognize resources.
      In addition, disclosure of resources using "contained ounces" is permitted
      under Canadian regulations; however, the Securities and Exchange
      Commission only permits issuers to report mineralization that does not
      qualify as a reserve as in place tonnage and grade without reference to
      unit measures. As used in this Form 20-F, "resources" are as defined in
      National Instrument 43-101.For the above reasons, information in the Company's
      publicly-available documents containing descriptions of the Company's
      mineral deposits may not be comparable to similar information made public
      by U.S. companies subject to the reporting and disclosure requirements
      under the United States federal securities laws and the rules and
      regulations thereunder.Mineral Symbols
    As  arsenic; Au  gold; Ag  silver; Cu  copper; Fe 
      iron; Hg  mercury; Mo  molybdenum; Na  sodium; Ni  nickel; O  oxygen;
      Pd - palladium; Pt  platinum; Pb  lead; S  sulphur; Sb  antimony; Zn 
      zinc.Net Smelter Return (NSR)
    Monies received for concentrate delivered to a smelter
      net of metallurgical recovery losses, transportation costs, smelter
      treatment-refining charges and penalty charges.Porphyry Deposit
    Mineral deposit characterized by widespread disseminated
      or veinlet-hosted sulphide mineralization, characterized by large tonnage
      and moderate to low grade.Skarn Deposit
    Sulphide-bearing deposits formed at the contact zone
      between granitic intrusions and carbonate sedimentary rocks.Sulphide
    A compound of sulphur with another element, typically a
      metallic element or compound.


6

---

Vein
    A tabular or sheet-like mineral deposit with identifiable
      walls, often filling a fracture or fissure.


CURRENCY AND MEASUREMENT

All currency amounts in this Annual Report are stated in
Canadian dollars unless otherwise indicated Conversion of metric units into
imperial equivalents is as follows:

Metric Units
    Multiply by
    Imperial Unitshectares
    2.471
    = acresmeters
    3.281
    = feetkilometers
    0.621
    = miles (5,280 feet)grams
    0.032
    = troy ouncestonnes
    1.102
    = short tons (2,000 lbs)grams per tonne
    0.029
  = troy ounces per ton


NOTE ON FORWARD LOOKING STATEMENTS

This Annual Report on Form 20-F contains statements that
constitute "forward-looking statements". Any statements that are not statements
of historical facts may be deemed to be forward-looking statements. These
statements appear in a number of different places in this Annual Report and, in
some cases, can be identified by words such as "anticipates", "estimates",
"projects", "expects", "intends", "believes", "plans", or their negatives or
other comparable words. The forward-looking statements, including the statements
contained in Item 3D "Risk Factors", Item 4B "Business Overview",Item 5 "Operating and Financial Review and Prospects" and Item 11 "Quantitative and
Qualitative Disclosures About Market Risk", involve known and unknown
risks, uncertainties and other factors which may cause the Company's actual
results, performance or achievements to be materially different from any future
results, performance or achievements that may be expressed or implied by such
statements. Forward-looking statements include statements regarding the outlook
for the Company's future operations, plans and timing for the Company's
exploration programs, statements about future market conditions, supply and
demand conditions, forecasts of future costs and expenditures, the outcome of
legal proceedings, and other expectations, intentions and plans that are not
historical facts.

You are cautioned that forward-looking statements are not
guarantees. The risks and uncertainties that could cause the Company's actual
results to differ materially from those expressed or implied by the
forward-looking statements include:

- changes in general economic and business conditions, including commodity
  prices, costs associated with mineral exploration and development, changes in
  interest rates and the availability of financing on reasonable terms;
- natural phenomena, including geological and meteorological phenomena;
- actions by government authorities, including changes in government
  regulation and permitting requirements;
- uncertainties associated with legal proceedings;
- future decisions by management in response to changing conditions;
- the Company's ability to execute prospective business plans; and
- misjudgments in the course of preparing forward-looking statements.

The Company advises you that these cautionary remarks expressly
qualify, in their entirety, all forward-looking statements attributable to
Quartz Mountain or persons acting on the Company's behalf. The Company assumes
no obligation to update the Company's forward-looking statements to reflect
actual results, changes in assumptions or changes in other factors affecting
such statements. You should carefully review the cautionary statements and risk
factors contained in this and other documents that the Company files from time
to time with the Securities and Exchange Commission.

7

---

|ITEM 1 | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
      ADVISERS
|------ | -----------------------------------------------------------

|A. | DIRECTORS AND SENIOR
MANAGEMENT
|-- | -------------------------------

Not applicable.

|B. | ADVISORS
|-- | --------

Not applicable.

|C. | AUDITORS
|-- | --------

Not applicable.

|ITEM 2 | OFFER STATISTICS AND EXPECTED TIMETABLE
|------ | ---------------------------------------

Not applicable.

|ITEM 3 | KEY INFORMATION
|------ | ---------------

|A. | SELECTED FINANCIAL DATA
|-- | -----------------------

The following tables summarize selected financial data for the
Company (stated in Canadian dollars) prepared, in respect of the years ended
July 31, 2013 and July 31, 2012, in accordance with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards
Board (IASB) (IFRS-IASB). The Companys consolidated financial statements
have been prepared in accordance with IFRS-IASB for the first time for the
fiscal year ended July 31, 2013, together with comparative consolidated
financial statements for the prior fiscal year also in accordance with
IFRS-IASB. Pursuant to SEC Release 33-8567 this information is presented solely
for these three years, and information based on US GAAP is not provided. The
information in the table was extracted from the more detailed consolidated
financial statements and related notes included herein and should be read in
conjunction with these consolidated financial statements and with the
information appearing under the heading Item 5  Operating And Financial Review
And Prospects. Results for the period ended July 31, 2013 are not necessarily
indicative of results for future periods.

The selected financial data of the Company for the fiscal years
2013, 2012 and 2011 was derived from the consolidated financial statements of
the Company that have been audited by Davidson & Company LLP, independent
Chartered Accountants, as indicated in their audit report which is included
elsewhere in this Annual Report.

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

Year ended July 31, 2013
    
    
    Year ended July 31, 2012
    
    
    Year ended July 31, 2011Sales revenue
    $
    
    
    $
    
    
    $
    Loss from operations
    $
    3,458,827
    
    $
    3,587,805
    
    $
    174,867Loss and comprehensive loss
    $
    3,458,827
    
    $
    3,587,805
    
    $
    183,483Basic and diluted loss per common share
    $
    0.13
    
    $
    0.20
    
    $
    0.01Dividends per share
    
    
    
    
    
    
    
    Working capital
    $
    (1,743,116
    )
    $
    911,035
    
    $
    57,066Total assets
    $
    2,469,814
    
    $
    2,821,289
    
    $
    99,230


8

---

Year ended
      July 31, 2013
    
    
    Year ended
      July 31, 2012
    
    
    Year ended
      July 31, 2011Shareholders equity
    $
    (723,182
    )
    $
    989,036
    
    $
    57,067Shares outstanding
    
    27,299,513
    
    
    22,032,793
    
    
    13,399,422


Currency and Exchange Rates

On November 22, 2013 the rate of exchange of the Canadian
dollar, based on the daily noon rate in Canada as published by the Bank of
Canada, was US$1 = Canadian $1.0535. Exchange rates published by the Bank of
Canada are, available on its website www.bankofcanada.ca, nominal quotations  not buying or
selling rates  and are intended for statistical or analytical purposes.

The following tables set out the exchange rates, based on the
daily noon rates in Canada as published by the Bank of Canada for the conversion
of Canadian dollars per U.S. dollars.

For year ended July
      31(Canadian Dollar per U.S. Dollar)2013
    
    
    2012
    
    
    2011
    
    
    2010
    
    
    2009End of Period
    $
    1.0287
    
    $
    1.0014
    
    $
    0.9538
    
    $
    1.0290
    
    $
    1.0790Average for the Period (1)
    $
    1.0070
    
    $
    1.0084
    
    $
    0.9930
    
    $
    1.0486
    
    $
    1.1758High for the Period
    $
    1.0576
    
    $
    1.0604
    
    $
    1.0642
    
    $
    1.1079
    
    $
    1.3000Low for the Period
    $
    0.9710
    
    $
    0.9980
    
    $
    0.9449
    
    $
    0.9961
    
    $
    1.0253


(1)The average rate for each period is the average of the
daily noon rates on the last day of each month during the period.

Monthly High and Low Exchange Rate (Canadian Dollar per U.S.
      Dollar)Month
    
    High
    
    
    LowJuly 2013
    $
    1.0576
    
    $
    1.0261June 2013
    $
    1.0532
    
    $
    1.0170May 2013
    $
    1.0371
    
    $
    1.0023April 2013
    $
    1.0270
    
    $
    1.0072March 2013
    $
    1.0314
    
    $
    1.0156


|B. | CAPITALIZATION AND
INDEBTEDNESS
|-- | -------------------------------

Not applicable.

|C. | REASONS FOR THE OFFER AND USE OF
  PROCEEDS
|-- | -------------------------------------------

Not applicable.

|D. | RISK FACTORS
|-- | ------------

Due to the nature of the Company's business and the present
stage of exploration and development of its projects in British Columbia, an
investment in the securities of Quartz Mountain is highly speculative and
subject to a number of risks. Briefly, these include the highly speculative
nature of the resources industry, characterized by the requirement for large
capital investments from an early stage and a very small probability of finding
economic mineral deposits. In addition to the general risks of mining, there are
country-specific risks, including currency, political, social, permitting and
legal risk. An investor should carefully consider the risks described below and
the other information that Quartz Mountain furnishes to, or files with, the
Securities and Exchange Commission and with Canadian securities regulators
before investing in Quartz Mountain's common shares, and should not consider an
investment in Quartz Mountain unless the investor is capable of sustaining an
economic loss of the entire
investment. The Company's actual exploration and operating results may be very different from those expected as at the date of this Annual Report.

9

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Exploration, Development and Mining Risks

Resource exploration, development, and operations are highly speculative, characterized by a number of significant risks, which even a combination of careful evaluation, experience and knowledge may not reduce, including among other things,
unsuccessful efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. Few properties that are
explored are ultimately developed into producing mines. Unusual or unexpected formations, formation pressures, fires, power outages, labour disruptions, flooding, explosions, cave-ins, landslides and the inability to obtain suitable or adequate
machinery, equipment or labour are other risks involved in the operation of mines and the conduct of exploration programs. The Company will rely upon consultants and others for exploration, development, construction and operating expertise.
Substantial expenditures are required to establish mineral resources and mineral reserves through drilling, to develop metallurgical processes to extract the metal from mineral resources, and in the case of new properties, to develop the mining and
processing facilities and infrastructure at any site chosen for mining.

No assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis.  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 size, grade and proximity to infrastructure; metal 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 accurately be predicted, but the combination of these factors may result in the Company not
receiving an adequate return on invested capital.

The Company will carefully evaluate the political and economic environment in considering any properties for acquisition.

Future Profits/Losses and Production Revenues/Expenses

The Company has no history of operations or earnings, and expects that its losses and negative cash flow will continue for the foreseeable future. The Company currently has a limited number of mineral properties and there can be no assurance that
the Company will, if needed, be able to acquire additional properties of sufficient technical merit to represent a compelling investment opportunity. If the Company is unable to acquire additional properties, its entire prospects will rest solely
with its current projects and accordingly, the risk of being unable to identify a mineral deposit will be higher than if the Company had additional properties to explore. There can be no assurance that the Company will ever be profitable in the
future. The Company's operating expenses and capital expenditures may increase in subsequent years as needed consultants, personnel and equipment associated with advancing exploration, development and commercial production of its current properties
and any other properties that the Company may acquire are added. The amounts and timing of expenditures will depend on the progress of on-going exploration and development, the results of consultants' analyses and recommendations, the rate at which
operating losses are incurred, the execution of any joint venture agreements with strategic partners, and the Company's acquisition of additional properties and other factors, many of which are beyond the Company's control. The Company does not
expect to receive revenues from operations in the foreseeable future, and expects to incur losses unless and until such time as its current properties, or any other properties the Company may acquire commence commercial production and generate
sufficient revenues to fund its continuing operations. The development of the Company’s current properties and any other properties the Company may acquire will require the commitment of substantial resources to conduct the time-consuming
exploration and development of properties. The Company anticipates that it will retain any cash resources and potential future earnings for the future operation and development of the Company's business.

The Company has not paid dividends since incorporation and the Company does not anticipate paying dividends in the foreseeable future.  There can be no assurance that the Company will generate any revenues or achieve profitability.

There can be no assurance that the underlying assumed levels of expenses will prove to be accurate. To the extent that such expenses do not result in the creation of appropriate revenues, the Company's business may be materially adversely affected.
It is not possible to forecast how the business of the Company will develop.

Permits and Licenses

The operations of the Company will require licenses and permits from various governmental authorities. There can be no assurance that the Company will be able to obtain all necessary licenses and permits which may be required to carry out
exploration and development of the Company's projects.

Additional Funding Requirements

Further development of the Company's properties will require additional capital. The Company currently does not have sufficient funds to fully develop the properties it holds. In addition, a positive production decision at these properties or any
other development projects acquired in the future would require significant capital for project engineering and construction. Accordingly, the continuing development of the Company's properties will depend upon the Company's ability to obtain
funding through debt or equity financings, the joint venturing of projects, or other means. It is possible that the financing required by the Company will not be available, or, if available, will not be available on acceptable terms. If the Company
issues treasury shares to finance its operations or expansion plans, control of the Company may change and shareholders may suffer dilution of their investment. If adequate funds are not available, or are not available on acceptable terms, the
Company may not be able to take advantage of opportunities, or otherwise respond to competitive pressures and remain in business.  In addition, a positive production decision at any of the Company’s current projects or any other development
projects acquired in the future would require significant resources/funding for project engineering and construction.  Accordingly, the
continuing development of the Company’s properties will depend upon the Company’s ability to obtain financing through debt financing, equity financing, the joint venturing of projects, or other means. There is no assurance that the
Company will be successful in obtaining the required financing for these or other purposes, including for general working capital.

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Going concern assumption

The Company's consolidated financial statements have been prepared assuming the Company will continue on a going concern basis. However, unless additional funding is obtained, this assumption will have to change. The Company has incurred losses
since inception.  Failure to continue as a going concern would require that Quartz Mountain's assets and liabilities be restated on a liquidation basis, which could differ significantly from the going concern basis.

Infrastructure Risk

The operations of the Company are carried out in geographical areas which may lack adequate infrastructure and are subject to various other risk factors.  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. Lack of such infrastructure or unusual or infrequent weather phenomena, government or other
interference in the maintenance or provision of such infrastructure could adversely affect the Company's operations, financial condition and results of operations.

Changes in Local Legislation or Regulation

The Company's mining and processing operations and exploration activities are subject to extensive laws and regulations governing the protection of the environment, exploration, development, production, exports, taxes, labour standards, occupational
health, waste disposal, toxic substances, mine and worker safety, protection of endangered and other special status species and other matters.  The Company's ability to obtain permits and approvals and to successfully operate in particular
communities may be adversely impacted by real or perceived detrimental events associated with the Company's activities or those of other mining companies affecting the environment, human health and safety of the surrounding communities. Delays in
obtaining or failure to obtain government permits and approvals may adversely affect the Company's operations, including its ability to explore or develop properties, commence production or continue operations. Failure to comply with applicable
environmental and health and safety laws and regulations may result in injunctions, fines, suspension or revocation of permits and other penalties. The costs and delays associated with compliance with these laws, regulations and permits could
prevent the Company from proceeding with the development of a project or the operation or further development of a mine or increase the costs of development or production and may materially adversely affect the Company's business, results of
operations or financial condition. The Company may also be held responsible for the costs of addressing contamination at the site of current or former activities or at third party sites. The Company could also be held liable for exposure to
hazardous substances.

Environmental Matters

All of the Company's operations are and will be subject to environmental laws and regulations, which can make operations expensive or prohibit them altogether. The Company may be subject to potential risks and liabilities associated with pollution
of the environment and the disposal of waste products that could occur as a result of its mineral exploration, development and production. In addition, environmental hazards may exist on a property in which the Company directly or indirectly holds
an interest, which are unknown to the Company at present and have been caused by previous or existing owners or operators of the Company’s projects.  Environmental legislation provides for restrictions and prohibitions on spills, releases or
emissions of various substances produced in association with certain mining industry operations which would result in environmental pollution.  A breach of such legislation may result in the imposition of fines and penalties, or the requirement to
remedy environmental pollution, which would reduce funds otherwise available to the Company and could have a material adverse effect on the Company.  If the Company is unable to fully remedy an environmental problem, it could be required to suspend
operations or undertake interim compliance measures pending completion of the required remedy, which could have a material adverse effect on the Company.

There is no assurance that future changes in environmental regulation, if any, will not adversely affect the Company’s operations. There is also a risk that the environmental laws and regulations may become more onerous, making the Company's
operations more expensive. Many of the environmental laws and regulations applicable to the Company’s operations will require the Company to obtain permits for its activities.  The Company will be required to update and review its permits from
time to time, and may be subject to environmental impact analyses and public review processes prior to approval of the additional activities.  It is possible that future changes in applicable laws, regulations and permits or changes in their
enforcement or regulatory interpretation could have a significant impact on some portion of the Company's business, causing those activities to be economically reevaluated at that time.

Groups Opposed to Mining May Interfere with the Company's Efforts to Explore and Develop its Properties

Organizations opposed to mining may be active in the regions in which the Company conducts its exploration activities. Although the Company intends to comply with all environmental laws and maintain good relations with local communities, there is
still the possibility that those opposed to mining will attempt to interfere with the development of the Company's properties. Such interference could have an impact on the Company's ability to explore and develop its properties in a manner that is
most efficient or appropriate, or at all, and any such impact could have a material adverse effect on the Company's financial condition and the results of its operations.

Market for Securities and Volatility of Share Price

There can be no assurance that active trading market in the Company's securities will be established or sustained. The market price for the Company's securities is subject to wide fluctuations. Factors such as announcements of
exploration results, as well as market conditions in the industry or the economy as a whole, may have a significant adverse impact on the market price of the securities of the Company.

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The stock market has from time to time experienced extreme price and volume fluctuations that have often been unrelated to the operating performance of particular companies.

Conflicts of Interest

The Company's directors and officers may serve as directors or officers of other companies, joint venture partners, or companies providing services to the Company or they may have significant shareholdings in other companies. Situations may arise
where the directors and/or officers of the Company may be in competition with the Company. Any conflicts of interest will be subject to and governed by the law applicable to directors' and officers' conflicts of interest. In the event that such a
conflict of interest arises at a meeting of the Company's directors, a director who has such a conflict will abstain from voting for or against the approval of such participation or such terms. In accordance with applicable laws, the directors of
the Company are required to act honestly, in good faith and in the best interests of the Company.

Lack of Revenue and a History of Operating Losses

The Company does not have any operational history or earnings and the Company has incurred net losses and negative cash flow from its operations since its incorporation. Although the management of the Company hopes to eventually generate revenues,
significant operating losses are to be anticipated for at least the next several years and possibly longer.  To the extent that such expenses do not result in the creation of appropriate revenues, the Company's business may be materially adversely
affected. It is not possible to forecast how the business of the Company will develop.

General Economic Conditions

Global financial markets have experienced a sharp increase in volatility during the last few years. Market conditions and unexpected volatility or illiquidity in financial markets may adversely affect the prospects of the Company and the value of
the Company's shares.

Reliance on Key Personnel

The Company is dependent on the continued services of its senior management team, and its ability to retain other key personnel. The loss of such key personnel could have a material adverse effect on the Company. There can be no assurance that any
of the Company's employees will remain with the Company or that, in the future, the employees will not organize competitive businesses or accept employment with companies competitive with the Company.  Furthermore, as part of the Company's growth
strategy, it must continue to hire highly qualified individuals. There can be no assurance that the Company will be able to attract, train or retain qualified personnel in the future, which would adversely affect its business.

Risks Related to Flow-Through Shares

Financing of the Company may involve the issuance of flow-through common shares
under the Income Tax Act (Canada). There is no guarantee that there will not be
any differences of opinion between the Canadian federal and British Columbia
provincial tax authorities with respect to the tax treatment of flow-through
common shares issued under a financing, if any, and the activities contemplated
by the Company's exploration and development programs.

If the Company does not expend an amount equal to the gross proceeds from the
sale of flow-through common shares so as to incur sufficient qualifying
expenditures within the relevant timeframe, subscribers in the flow-through
financing may be reassessed. The Company shall be obligated to indemnify any
subscribers of flow-through common shares for tax payable pursuant to any such
reassessment pursuant to the terms and conditions set out in the subscription
agreements that the Company will enter into with each subscriber in a
flow-through financing. There can be no assurances that the Company will have
sufficient funds to satisfy such obligations.

Competition

The resources industry is highly competitive in all its phases, and the Company will compete with other mining companies, many of which have greater financial, technical and other resources. Competition in the mining industry is primarily for:
attractive mineral rich properties capable of being developed and producing economically; the technical expertise to find, develop and operate such properties; the labour to operate the properties; and the capital for the purpose of funding such
properties. Many competitors not only explore for and mine certain minerals, but also conduct production and marketing operations on a worldwide basis.  Such competition may result in the Company being unable to acquire desired properties, to
recruit or retain qualified employees or to acquire the capital necessary to fund its operations and develop its properties. The Company's inability to compete with other mining companies for these resources could have a materially adverse effect on
the Company's results of operations and its business.

Uninsurable Risks

In the course of exploration, development and production of mineral properties, certain risks, and in particular, unexpected or unusual geological operating conditions including rock bursts, cave ins, fires, flooding and earthquakes may occur. It is
not always possible to fully insure against such risks and the Company may decide not to take out insurance against such risks as a result of high premiums or other reasons.

Land Claims

In Canada, aboriginal interests, rights (including treaty rights), claims and title may exist notwithstanding that they may be unregistered or overlap with other tenures and interests granted to third parties. Generally speaking, the scope and
content of such rights are not well defined and may be the subject of litigation or negotiation with the government. The government has a legal obligation to consult First Nations on proposed activities that may have an impact on asserted or proven
aboriginal interests, claims, rights or title. All of the mineral claims in the Company’s projects are identified by the Province of British Columbia as
overlapping with areas in which certain aboriginal groups have asserted
aboriginal interests, rights, claims or, title or undefined rights under
historic treaties. Nevertheless, potential overlaps between the Companys
properties and existing or asserted aboriginal interests, rights, claims or,
title, or undefined rights under historic treaties may exist notwithstanding
whether the Province of British Columbia has identified such interests, rights,
claims, title or undefined rights under historic treaties.

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Property Title

The acquisition of title to resource properties is a very
detailed and time-consuming process. Title to, and the area of, resource claims
may be disputed. Although the Company believes it has taken reasonable measures
to ensure that title to the mineral claims comprising part of its projects are
held as described, there is no guarantee that title to any of those claims will
not be challenged or impaired. There may be valid challenges to the title of any
of the mineral claims comprising the Companys projects that, if successful,
could impair development or operations or both.

The mineral property underlying the Company's net smelter
return royalty interest contains no known ore.

The Company holds a 1% net smelter return ("NSR") royalty
interest on the Quartz Mountain Property (recently renamed "Angel's Camp"), an
exploration stage prospect in Oregon. The Company's interest in the property
will be limited to any future NSR that would be forthcoming only if or when any
mining commences on the property. There is currently no known body of ore on the
property. Extensive additional exploration work will be required to ascertain if
any mineralization may be economic.

Likely PFIC status has consequences for United States
investors

Potential investors who are U.S. taxpayers should be aware that
the Company expects to be classified for U.S. tax purposes as a passive foreign
investment company ("PFIC") for the current fiscal year, and may also have been
a PFIC in prior years and may also be a PFIC in future years. If the Company is
a PFIC for any year during a U.S. taxpayer's holding period, then such U.S.
taxpayer generally will be required to treat any so-called "excess distribution"
on its common shares, or any gain realized upon a disposition of common shares,
as ordinary income which would be taxed at the shareholder's highest marginal
rates and to pay an interest charge on a portion of such distribution or gain,
unless the taxpayer has made a timely qualified electing fund ("QEF") election
or a mark-to-market election with respect to the shares of the Company. In
certain circumstances, the sum of the tax and the interest charge may exceed the
amount of the excess distribution received, or the amount of proceeds of
disposition realized, by the taxpayer. A U.S. taxpayer who makes a QEF election
generally must report on a current basis its share of the Company's net capital
gain and ordinary earnings for any year in which the Company is a PFIC, whether
or not the Company distributes any amounts to its shareholders. A U.S. taxpayer
who makes the mark-to-market election generally must include as ordinary income
each year the excess of the fair market value of the common shares over the
taxpayer's tax basis therein. See also Item 10E 
"Passive Foreign Investment Company".

Potential investors should also
note that recently enacted legislation may require U.S. shareholders to report
their interest in a PFIC on an annual basis. US shareholders of the Company
should consult their tax advisors as to these reporting requirements as well as
the consequences of investing in the Company.

Penny stock classification

Penny stock classification could affect the marketability of
the Company's common stock and shareholders could find it difficult to sell
their stock

The penny stock rules in the United States 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 also must 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.

Further, 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 additional broker-dealer practice and
disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for the Company's common shares in the U.S.,
and shareholders may find it more difficult to sell their shares.

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

|A. | HISTORY AND DEVELOPMENT OF THE
  COMPANY
|-- | ----------------------------------------

Incorporation

The legal name of the Company is "Quartz Mountain Resources
Ltd."

Quartz Mountain Resources Ltd. was incorporated on August 3,
1982, in British Columbia, Canada, and it continues to subsist under the laws of
the Province of British Columbia.

The Company was originally incorporated as Wavecrest Resources
Ltd., but changed its name to Quartz Mountain Gold Corp. on June 18, 1986. On
November 5, 1997, the name of the Company was changed from Quartz Mountain Gold
Corp. to Quartz Mountain Resources Ltd., and the common shares were consolidated
on a ten-old-for-one-new share basis.

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Market for the Company's Securities

The Company's common shares were quoted on NASDAQ SmallCap Market in the United States from September 17, 1987 until May 12, 1994, when the Company ceased to meet the SmallCap Market's minimum listing requirements. The Company's common shares were
also listed on the Toronto Stock Exchange until November 10, 1994, when it ceased to meet the Exchange's minimum listing requirements. Prior to November 15, 1989, the shares were also listed on the Vancouver Stock Exchange (a predecessor to the TSX
Venture Exchange). The Company voluntarily surrendered its listing on the Vancouver Stock Exchange at that time.

After delisting from the NASDAQ SmallCap Market and the Vancouver Stock Exchange, the Company's common shares continued to trade in Canada on the Canadian Dealer Network Inc. (the "CDN", colloquially known as the Canadian "unlisted" market). In
October 2000, as a result of an agreement between The Toronto Stock Exchange and the CDN, the Canadian unlisted market ceased to operate, and qualifying issuers that were formerly quoted on the CDN were invited to list on a newly created Tier 3 of
the Canadian Venture Exchange (now renamed the TSX Venture Exchange).

On December 23, 2003, the Company was reclassified as a Tier 2 company on the TSX Venture Exchange. On February 17, 2005, the Company transferred its listing to NEX, a separate board of the TSX Venture Exchange established in 2003 to provide a new
trading forum for listed companies that had fallen below the TSX Venture Exchange's continued listing standards, due to low levels of business activity.

The Company was relisted on the TSX Venture Exchange on December 30, 2011.

Currently, the Company's common shares trade on the TSX Venture Exchange under the symbol QZM, and certain broker-dealers in the United States make market in the Company's common shares on the OTC Grey Market under the symbol QZMRF.

Offices

The Company's business office is located at 15th Floor, 1040 West Georgia Street, Vancouver, British Columbia V6E 4H1; telephone (604) 684-6365. The Company's registered office is Suite 1500 – 1055 West Georgia Street, Vancouver, British
Columbia V6E 4N7; telephone (604) 689-9111.

|B. | BUSINESS OVERVIEW
|-- | -----------------

The Company's Business Strategy and Principal Activities

Quartz Mountain is in the business of exploring and developing mineral properties.  The Company’s current activities are primarily focused in British Columbia, Canada, where it has assembled a portfolio of projects through option or purchase
agreements and ground staking. Exploration activities on the properties are primarily focused on ascertaining whether the properties host commercially viable mineral deposits.

In the first three years of its existence, the Company was active in the exploration of small gold and silver prospects in Canada, but none of these prospects warranted further exploration or development.  In 1986, the Company acquired the Quartz
Mountain gold property, located in south central Oregon, and until January 2002 most of the Company's efforts were expended on the exploration and maintenance of these claims. The Company's interests in the Quartz Mountain gold property, and in its
other properties, were acquired by direct purchase, lease and option, or through joint ventures.

The Company sold the Quartz Mountain gold property during 2002, to Seabridge Resources Ltd. and Seabridge Resources Inc. (collectively "Seabridge").  Seabridge subsequently changed its name to Seabridge Gold Inc.  At closing, Quartz Mountain
received 300,000 Seabridge common shares, 200,000 Seabridge common share purchase warrants, US$100,000 and a 1% NSR from any future production on the Quartz Mountain gold property. The Seabridge warrants were exercised and all Seabridge common
shares held by the Company have been sold. The Company's interest in the Quartz Mountain gold property is limited to the 1% NSR royalty. The Company does not expect to generate any royalty revenue from the Quartz Mountain gold property (renamed
"Angel's Camp" by its subsequent owners) for several years, and it is not known at this time when any mining will commence, if at all, on that property.

Following the sale of the Quartz Mountain gold property, the Company continued in its efforts to find a suitable mineral property for potential acquisition and exploration during the period of 2002 to 2011.

In December 2011, the Company acquired an option to earn a 100% interest in the Buck gold-silver property near the town of Houston in central British Columbia (the “Buck Project”).  Concurrently with the Buck Project acquisition, the
Company completed a $4.2 million private placement financing and began trading on the TSX Venture Exchange. Exploration programs were carried out at Buck in 2011 and 2012, confirming targets. Difficult financing conditions for junior companies
in 2013 necessitated that the Company limit its exploration expenditures and prioritize its property holdings.  As a result, Quartz Mountain terminated its option on the Buck Project in July 2013.

In August 2012, the Company acquired 100% of the Galaxie copper-gold property in northwestern British Columbia (the “Galaxie Project”), and carried out exploration programs in 2012 at five new prospects within the property as well as at
the Gnat porphyry copper deposit.

Quartz Mountain acquired the ZNT Project by utilizing British Columbia’s on-line mineral tenure system in 2012. The ZNT Project is located 15 kilometers southeast of the town of Smithers, British Columbia. Exploration in 2012 and 2013 has
identified potential for the discovery of a bulk tonnage silver deposit at ZNT.

The Company also staked the Karma Project, located in central British Columbia, by the on-line mineral tenure system in 2012. The Company carried out an initial exploration program in 2012 and then allowed the claims to lapse.

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In November 2012, Quartz Mountain entered into an option and joint venture agreement with Amarc Resources Ltd. (“Amarc”) pursuant to which Amarc could earn a 40% ownership interest, with an option to acquire an additional 10% ownership
interest, in the Galaxie and ZNT Projects. Amarc gained an initial 40% interest in the Galaxie and ZNT Projects by funding a drilling program at Gnat porphyry copper deposit at the Galaxie Project in late 2012.

In June 2013, Quartz Mountain and Amarc entered into an amendment agreement through which Amarc had an option until October 31, 2013 to earn a 60% interest in each of the ZNT and Galaxie properties, by making certain property expenditures.  Amarc
earned a 60% interest in the ZNT Project but earned only a 40% interest in the Galaxie Project.

The Company does not have any operating revenue and anticipates that it will rely on sales of its equity securities in order to finance its acquisition and exploration activities.

British Columbia Mineral Tenure

On January 12, 2005, the Province of British Columbia adopted an on-line mineral tenure system that includes mineral tenure acquisition and tenure maintenance procedures, as well as a method of converting previous format claims (legacy claims) to
new format claims (cell claims).  All of the Company's mineral tenures have been converted to cell claims resulting in new tenure numbers and marginally larger claim boundaries.  The mineral claims are maintained through the completion of
exploration activities referred to as "Assessment Work". The financial requirements related to these exploration works defined by the Provincial Government. Currently the cost to stake a mineral claim is $1.75 per hectare and the cost of
maintaining a claim is $5.00 per hectare per year during the first two years following location of the mineral claim, $10.00 per hectare per year in the third and fourth years, $15.00 per hectare in the fifth and sixth years, and
$20.00 per hectare in the seventh and all succeeding years. If the assessment work is not completed the mineral claims may be maintained by a cash payment, but if this payment is not made before the forfeiture date, the tenure is relinquished.

Another type of mineral tenure exists, called crown-granted mineral claims, on which the perimeter has been physically surveyed. Crown-granted mineral claims are maintained by paying taxes on an annual basis.  Unlike mineral claims, the taxes can be
paid late with penalties and interest. If the taxes remain unpaid after a specified period of time, the claims will revert to the Crown and will be subsequently made available for acquisition by normal procedures.

Environmental Matters

Environmental matters related to mineral exploration companies in British Columbia are administered by the Ministry of Energy, Mines and Petroleum Resources.  The Company files notice of its work programs with the Ministry, and a reclamation
security is determined that will set aside sufficient monies to reclaim the exploration sites to their pre-exploration land use.  Typically, no reclamation security is required for non-mechanized exploration activities such as surface geological,
geochemical and geophysical surveys.  However, a reclamation security is generally required for mechanized activities such as machine work and drilling. The required level of reclamation usually involves leaving the sites in a geotechnically stable
condition, and grooming the sites to both prevent forest fire hazards and to ensure that natural regeneration of indigenous plant species can progress within a reasonable period of time.

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|C. | MINERAL PROPERTIES AND EXPLORATION ACTIVITIES AND PLANS
|-- | -------------------------------------------------------

The location of Quartz Mountain’s Galaxie and ZNT projects is shown on the map below.



Galaxie Project, Northwestern British Columbia

Agreements

Sale Agreement with Finsbury Exploration Ltd.

In August 2012, Quartz Mountain completed the acquisition of a 100% interest in the Galaxie Project from Finsbury Exploration Ltd (“Finsbury”), a Non-Arm’s Length Party, through a sale agreement (the “Sale Agreement”)
dated July 27, 2012. The Galaxie Project-area, acquired from Finsbury, included an area of 1,488 square kilometers, comprised of three mineral claims totalling 1,294.3 hectares (the “Gnat Pass Property”) and the surrounding mineral
claims staked by Finsbury to that time.

Pursuant to the terms of the Sale Agreement, Quartz Mountain issued 2,038,111 shares to Finsbury and assumed the rights and obligations of Finsbury under a mineral property purchase agreement (the “Bearclaw Agreement”) on the Gnat Pass
Property between Finsbury and Bearclaw Capital Corp. (“Bearclaw”). Quartz Mountain also assumed the rights and obligations under an NSR Royalty Agreement which requires the payment to Bearclaw of a 1% NSR royalty on the Gnat Pass
Property up to a maximum of $7,500,000.

The remaining payment obligations to Bearclaw for the Gnat Pass Property under the Bearclaw Agreement to be assumed by Quartz Mountain consisted of:

|1. | a payment, on or before August 20, 2012, to Bearclaw of $50,000 in cash (paid);                                                                                                                       
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                       
|2. | the issuance, on or before August 20, 2012, to Bearclaw of a convertible debenture note in the amount of $650,000 at a rate of 8% per annum and with a maturity date of October 31, 2013 (issued); and
|   |                                                                                                                                                                                                       
|3. | the issuance, following the closing date of the transactions contemplated in the Sale Agreement, to Bearclaw of 1,000,000 shares in the capital of Quartz Mountain (issued).                          

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Acquisition of Hotai Claims

Quartz Mountain acquired a 100% interest in nine mineral claims, totalling 3,846 hectares, that are adjacent and to the south of and the Galaxie Project from Crucible Resources Ltd. and Michael Rowley (together, the “Hotai Vendors”)
through a mineral property sale and purchase agreement (the “Hotai Agreement”) dated as of July 27, 2012.

Initial surveys were carried out at Hotai in 2012 and follow up work done in 2013. Following review of the results, the option on the Hotai claims was terminated in September 2013.

Quartz Mountain and Amarc Joint Venture on Galaxie and ZNT

Quartz Mountain and Amarc Resources Ltd. (“Amarc”) entered into a binding letter agreement (“Letter Agreement”) dated November 1, 2012, pursuant to which Quartz Mountain would grant to Amarc an initial 40% ownership interest
in the Galaxie and ZNT Projects, upon Amarc making a cash payment of $1 million to Quartz and funding $1 million in exploration expenditures to be incurred by Quartz Mountain relating to the Galaxie Project on or before December 31, 2012
(completed).

On June 27, 2013, the Company entered into an amendment agreement (the "Amendment") whereby, among other things, the Galaxie ZNT Project was divided into two separate joint ventures, named the "Galaxie Joint Venture" and the "ZNT Joint Venture".
Each joint venture will continue to be governed by the terms of the previously executed agreement. Under the Amendment, Amarc had an option, until October 31, 2013, to increase its interest in each of the ZNT Joint Venture and the Galaxie Joint
Venture from its current 40% interest to a 60% ownership interest by funding exploration expenditures of $210,000 and $235,000, respectively. Amarc was appointed manager of both joint ventures.

In November 2013, Amarc completed expenditures to earn a 60% interest in the ZNT Joint Venture. Amarc also advised that it expected to remain at a 40% interest in the Galaxie Joint Venture. Amarc returned operatorship of Galaxie and ZNT to Quartz
Mountain.

Quartz Mountain has also transferred to the Galaxie Joint Venture its obligation under the Debenture security issued to a former owner of the Gnat Pass Property. The Gnat Pass Property is subject to a 1% net smelter returns royalty, capped at
aggregate payments of $7.5 million, retained by an arm's length party.

In July 2013, Quartz Mountain and the holder of the Debenture entered into an agreement to amend the Debenture, whereby the Galaxie Joint Venture made a $50,000 payment toward the Debenture reducing the outstanding balance to $600,000. The
interest rate was increased to 10% per annum, and the maturity date was extended to October 31, 2014.

Location, Access and Local Resources

The Galaxie Project is located on Highway 37, approximately 24 kilometers south of Dease Lake, BC. The Project area currently consists of mineral claims covering an area of approximately 1,165 square kilometers.

Paved Highway 37 passes through the center of the Galaxie Project and provides year-round direct access to the adjacent project area, including the Gnat Pass Property. Other parts of the Galaxie Project can be accessed by helicopter.

The operating season for surface exploration is from early June through to early October. Because of its close proximity to Highway 37, diamond drilling activities at the Gnat deposit, within the Gnat Pass Property, can be carried out throughout the
year.

Dease Lake (population of about 600) offers an array of services, including motel accommodations, food, fuel, a variety of small equipment operators, post office, health clinic and government services. Mining and exploration make up the most
substantial industry.  Regional Power manages the off-grid Dease Lake Generating Station, located about 30 km west of Dease Lake. The facility supplies the entire energy load for the community of Dease Lake. A new 287-kilovolt transmission line,
extending 344 kilometers from the existing Skeena substation south of Terrace to a new substation near Bob Quinn Lake, about 180 kilometers by road south of Dease Lake, is currently being constructed. It will supply the new mine development under
construction at Red Chris by way of a spur line at Bob Quinn Lake.

Property Description

The Galaxie Project is comprised of claims acquired through the sale agreement described above and also some additional claims staked by Quartz Mountain. Some of the originally purchased claims were allowed to expire and new adjacent claims were
staked by Quartz Mountain.  Names and expiry dates for the claims, which currently comprise the 1,165 square kilometer project-area, are summarized below:

17

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Property
    Claim Name
    Expiry dateGnat Pass
    Tenure # 512878 (no name)
    Aug 17, 2016Gnat NorthGnat 3Galaxie Claims
    Hot 1-33, 34 (1014099), 34 (1014104)Stu 001-012, 13, 014-024, 050, 055-060, 063-064, 068-070,
      074, 077- 078, 080-089, 155, 157-158, 161-162, 168, 171-174, 178-181, 228-
      237, 240-241, 246-247, 250-260, 276-289 (880610), 300-302, 372 (942614),
      372 (983855), 373 (983863), 374 (983874), 373 (991847), 374 (991824), 374
      (983876), 375-388Stu 025-049, 051-054, 062, 066, 071, 075-076, 079,
      090-097, 136-154, 156, 159-160, 175, 182, 186-190, 223-227, 238-239,
      242-245, 248- 249, 262-273, 289 (880909)-299, 303, 308-312, 314-315, 317,
      319 (940641), 319 (940649), 320-341, 370
    July 28, 2015Stu 393
    Feb 27, 2014Stu 394-396
    May 4, 2014Stu 398-399
    Aug 29, 2014


Work done in 2013 can be applied to retain claims coming due
during the 2014 fiscal year.

Geological Setting

The Galaxie Project is underlain mainly by volcanic, intrusive
and lesser sedimentary rocks of the Middle Triassic to Lower Jurassic Stikine
Terrane which, elsewhere in northern British Columbia is known to host the large
Red-Chris, Schaft Creek, Galore and KSM and Snowfield porphyry deposits.

Upper Triassic Stuhini Group volcanic rocks and a quartz
feldspar porphyry dike complex host the Gnat copper deposit. The Gnat deposit is
located near to the northern contact of the Late Triassic to Middle Jurassic,
multiphase Hotailuh Batholith-Three Sisters Pluton intrusive complex, which
occupies most of the remainder of the Galaxie project-area and hosts a number of
base and/or precious metals prospects and showings.

Exploration and Development History

The first record of exploration in the Gnat Pass Property area
was in 1960 when prospecting work by Cassiar Asbestos Corporation discovered
copper mineralization in the vicinity of Lower Gnat Lake. Since that time, at
least nine companies have explored the property completing geological mapping,
rock, soil and stream sediment geochemical sampling, magnetic and induced
polarization (IP) geophysical surveys and diamond drilling during the periods of
1960-1971, 1990-1996 and in 2005. Most of the historical work focused on the
Gnat deposit, and occurrences in the vicinity.

During the period 1965-69, previous operators completed 18,390
meters of diamond drilling in 110 holes in this area. Most of this historical
drilling was carried out in the Gnat deposit over an area measuring about 600
meters by 600 meters, down to a maximum depth of about 300 meters below surface.
The result of a historical estimate of the indicated reserves in the Gnat
deposit was reported in 1972.

Past work on other mineral occurrences on the Galaxie Project
area includes:

- At Hu, during the period 1969 to 2007, several mining companies carried
  out: silt, soil and rock geochemical sampling; geological mapping; Induced
  Polarization (IP) and ground magnetic surveys; and 22 bulldozer trenches.
- At Disco, Stikine Moly and Stikine, during the period 1970-79, two
  companies carried out: silt, soil and rock geochemical sampling; geological
  mapping; IP, ground magnetic and VLF surveys; and limited hand trenching and
  test-pitting.
- At Nup, during the period 1970 to 2008, six mining companies and one
  individual carried out: silt, soil and rock geochemical sampling; geological
  mapping; IP and ground magnetic surveys; and limited hand trenching and
  test-pitting. Three diamond drilling programs (14 holes) tested porphyry
  molybdenum+/- copper showings and soil geochemical anomalies.
- At Pat, during the period 1971-76, two companies carried out: grid soil
surveys; IP and ground magnetic surveys; and a refraction seismic survey.

In September 2011, Finsbury completed a first-pass
reconnaissance prospecting and geochemical silt, soil and rock sampling program
within a number of target areas in the Galaxie Claims area. Much of the work was
outside of known areas of mineralization, but some work did overlap with known
mineral occurrences, including some of those listed above. A total of 486 silt,
912 soil and 35 rock grab samples were collected.

18

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Sample Preparation and Analyses for 2012-2013 Programs

Silt samples are comprised of fines material taken from the
active part of streams. Sample protocols for soil samples were similar to those
for silt samples. For soil samples, B horizon material was collected at most
sites; in disturbed areas, the top of the C horizon was the preferred sample
medium with surface material or buried organic materials avoided as well as
larger rock fragments, with an average sample size of about 500 grams. For both
soils and silts, sample material was placed into a standard kraft sample bag and
the location was marked by a survey ribbon. Rock samples were collected as a
composite or select grabs of variably mineralized, altered and/or iron-stained
rock chip material. About 2-3 kilograms of sample material was placed into a
plastic bag, identified by an assay ticket and secured with a nylon cable
tie.

Field notes were recorded for each sample including sampler
name; property name; target area and grid number; date and time; sample site
coordinates (UTM, NAD 83 - Zone 9); sample number and sample description. For
rock samples, the size of the occurrence, its orientation (strike and dip if
measurable), host rock, sulphides present and their amounts in percent, and any
other data that would aid in later interpretation after receipt of analytical
results were also recorded. All field notes were later compiled into a digital
file.

Silt and soil samples were hung to dry, then packed in a secure
container and shipped to the Acme Analytical Laboratories Ltd. (Acme)
preparation facility in Smithers, B.C where they were dried at 60° Celsius and
sieved to -80 mesh (0.18 mm or 180μm), then shipped to Acmes laboratory in
Vancouver where they were analyzed for gold and multi-elements by ICP
methods.

Rock samples were packed in a secure container and also shipped
to Acmes preparation lab in Smithers, B.C. Entire rock samples were crushed to
80% passing 10 mesh, from which a 250 gram split was taken, and shipped to
Acmes laboratory in Vancouver where the sub-samples were pulverized to 85%
passing 200 mesh (0.075 mm or 75 microns). Then 15 gram splits were analyzed for
gold and multi-elements by acid digestion ICP methods.

All soil, silt and rock samples in the 2013 program were
prepared at the Acme Laboratories in Smithers or Vancouver and analyzed using
their 36 element aqua regia digestion ICP/MS package at the Vancouver, Canada
facility. Rock chip samples >10,000 ppm Zn were also analyzed by 4 acid
digestion ICP-AES finish.

Acme is ISO 9001:2005 certified for the provision of assays and
geochemical analysis.

Quality assurance/quality control (QA/QC) samples were done
at the laboratory. QA/QC samples were inserted as flows: 1 blank for every 30
regular samples, 1 standard for every 30 regular samples and 1 duplicate for
every 20 regular samples.

Recent Work

Work in 2012

In 2012, Quartz Mountain completed extensive exploration work
on seven IP/soil grids and two target areas throughout the Galaxie Project-area
(see below). Totals of 182 silt, 6,155 soil and 498 rock samples were collected
and 308.5 line-km of IP surveys were completed on the grids. Additionally, two
holes were drilled at the Gnat deposit under the earn-in agreement with Amarc.



Gnat Deposit

In 2012, Quartz Mountain relogged historical drill holes and
carried out geological mapping in the Gnat deposit-area. The Company also
completed two deep diamond drill holes totaling 1,164 meters in the Gnat deposit
to test for continuation of copper mineralization beneath the
historical reserve estimate. Hole GT12001 intersected two intervals of
significant copper mineralization, including 56 meters grading 0.44% Cu, well
below the extent of the historical estimate, demonstrating that porphyry-style
copper mineralization in the Gnat deposit extends over a known vertical range of
about 500 meters. In their lower portions, both h holes encountered a major
thrust fault which has structurally superimposed older deposit host rocks over
younger, Hazelton Group sedimentary rocks.

19

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Geological mapping in the Gnat deposit area identified
porphyry-style hydrothermal alteration characterized by occurrences of
k-feldspar veining and flooding, tourmaline in veins or breccia bodies and
chalcopyrite mineralization over a west-northwest trending zone measuring about
3.5 kilometers long by 700 meters to 1,000 meters wide. Contained within this
large 'hydrothermal footprint' are the Creek Zone and Moss copper prospects, the
two main known mineralized zones outside of the Gnat deposit area (see figure
below).



There is considerable room to explore for new zones of copper
mineralization at moderate to greater depths in portions of the Gnat deposit, in
the Creek Zone and Moss prospect areas, and elsewhere along the 3.5
kilometer-long zone of porphyry-style hydrothermal alteration. Mineralization
may include porphyry-type deposits or more constrained, but possibly higher
grade, mineralized breccia bodies.

Other Targets

A review of the 2012 analytical data and the accompanying IP
survey results resulted in the identification of several early to mid-stage
target areas. Ground surveys were undertaken in 2013 to follow-up on the Hotai,
Hu and Lode targets (see Work in 2013).

Other high priority targets include:

Pallen North

The geological, geochemical and geophysical signature in the
grid area is suggestive of the presence of a calc-alkalic copper-molybdenum
mineralized center haloed by vein-style polymetallic mineralization or the
contact setting of the Pallen Creek Pluton intruding Stuhini Group country
rocks. The presence of strongly anomalous copper-in-rock values associated with
k-feldspar altered diorite and monzonite in the northern part of the target area
is encouraging and may be indicative of additional porphyry-type potential.

Dalvenie East

Preliminary prospecting of two gossans in the target-area was
successful in locating encouraging copper mineralization in chalcopyrite +/-
bornite veins up to 10 cm wide, hosted in chlorite-altered diorite to
monzodiorite wall rocks. Narrow k-feldspar alteration envelopes surrounding the
veins also contain chalcopyrite and bornite. Magnetic signatures at Dalvenie
East suggest that regional-scale faults, or subsidiary faults related to them,
could control vein-type or fault-controlled copper-gold mineralization similar
to that seen at the nearby Dalvenie prospect.

Work in 2013

Integrated exploration surveys completed in 2012 by Quartz
Mountain delineated four porphyry copper targets in the Hu and Hotai areas and a
silver skarn target at the Silver Lode play for ground follow-up.

Amarc completed programs at Hu, Hotai and Silver Lode in 2013
as part of its earn-in obligations under the amended joint venture agreement on
Galaxie. The 2013 programs included geological mapping, 10 line kilometersof IP ground geophysical surveying and collection of 96 rock
and 246 soil geochemical samples. No immediate drill targets were identified.

20

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A series of alkali intrusions which are known to be the
principal hosts in the Stikine-Iskut porphyry belt for porphyry copper-gold
deposits were observed during the 2013 program around the Hu target. Although
Amarc plans no further work, the potential at Hu and a number of other remaining
target-areas identified during Quartz Mountains 2012 program, warrant further
exploration.

ZNT Project

Location and Property Description

The ZNT Project is located in central British Columbia, some 15
kilometers southeast of the town of Smithers, BC. The property consists of
mineral claims owned 40% by Quartz Mountain and 60% by Amarc Resources Ltd. (for
additional details on ownership, see Agreement with Amarc Resources Ltd under
the Galaxie Project above).

Claim expiry dates are as follows:

Claim Name
    ExpiryZNT 01-21
    August
      06, 2016ZNT 81-84
    Nov 28, 2013


The claims coming due in the current year will be allowed to
lapse, with the remaining 21 claims covering an area of approximately 102 square
km.

History

The ZNT property was staked by Quartz Mountain in 2012 on the
basis of significant zinc and gold values in regional till samples, as well as
copper and silver mineral occurrences as reported by Geoscience BC and the
provincial government surveys, respectively.

Geological Setting

Lying within the Stikine Terrane of central British Columbia,
the regional geology is characterized by volcanic assemblages of the Upper
Triassic Takla Group and the Lower to Middle Jurassic Hazelton Group and
overlain by sedimentary assemblages of the Bowser Lake, Skeena and Sustut
groups. Late Jurassic, Cretaceous and Tertiary age belts of rocks formed as a
result of both arc volcanism (e.g. Ootsa Lake and Kasalka groups) and later
crustal extension (e.g. Endako, Kamloops, Buck Creek and Chilcotin groups),
overlie older Mesozoic rocks. In other areas of the Stikine Terrane, the
intrusive rocks associated with Cretaceous and Tertiary volcanic assemblages are
known to host significant copper and molybdenum deposits (e.g. Granisle, Endako
and Huckleberry porphyry deposits) and epithermal precious metal deposits, such
as Blackwater-Davidson, Chu and Sam Goosly (Equity Silver), are probably also
associated with Late Cretaceous and Tertiary intrusive events.

The project-area is dominated by Lower Jurassic calc-alkaline
volcanic rocks of the Hazelton Group (Telkwa Formation). A three kilometer wide
belt of coarse clastic sedimentary rocks of the Skeena Group (Red Rose
Formation) trends northwesterly across the eastern portion of the claim area.
Middle to Upper Cretaceous Bulkley Intrusions and coarse clastic sedimentary
rocks of the Skeena Group (Kitsuns Creek Formation) occur at the western edge of
the property.

Sample Preparation and Analyses for 2012-2013 Programs

For details on analytical procedures, see the Galaxie Project above.

Recent Work

Work in 2012

A successful initial reconnaissance 256-sample soil geochemical
program in 2012 was carried out by Quartz Mountain and followed by a detailed
2,223-sample soil geochemistry grid and a 20 line-kilometer IP geophysical
survey. A high-contrast, 1,800 meter by 1,200 meter silver-zinc anomaly was
defined within an open-ended anomalous trend. This significant silver anomaly
is, in part, coincident with an extensive IP chargeability anomaly indicating
the presence of a new large-scale mineralizing system.

Work in 2013

Programs in 2013 were carried out by Amarc under the ZNT Joint
Venture. Initially, a pitting and trenching program was done, designed to
further refine the target identified in 2012. Some 170 rock and 36 soil
geochemical samples were collected from 62 pits and trenches. Integration of the
data from these surface programs defined a sizable silver deposit-target hosted
by volcanogenic sandstones.

The silver deposit-target was tested by drilling. A 600-meter,
2-hole drill program was completed, which indicated a limited extent to the
prospective host rock package and did not encounter economic mineralization.

21

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Other Properties

Angel's Camp Property

The Company retains a 1% net smelter return royalty payable to
the Company on any production from the Angel's Camp property located in Lake
County, Oregon. The Angel's Camp property is currently held by Alamos Gold Inc.

During the year ended July 31, 2002, the Company sold 100% of its title, rights
and interest in the Angel's Camp property located in Lake County, Oregon to Seabridge Resources Inc. ("Seabridge"), which later changed its name to
Seabridge Gold Inc., for 300,000 common shares of Seabridge (sold in prior
years), 200,000 common share purchase warrants of Seabridge (exercised and sold
in prior years), cash of $100,000, and a 1% net smelter return royalty payable
to the Company on any production from the Angel's Camp property.

In 2003, Seabridge optioned a 50% interest in the property to
Quincy Gold Inc., which later changed its name to Golden Predator Mines Inc.,
then to Golden Predator Royalty & Development Corporation, then to Golden
Predator Corporation, and is now named Americas Bullion Royalty Corp
(TSX:AMB).

In April 2012, Orsa Ventures Corp. (Orsa) (TSX-V: ORN)
exercised its option to acquire all of Seabridge's remaining undivided 50%
beneficial joint venture interest in the Angel's Camp property. In March 2013,
Orsa announced it had entered into an agreement with Americas Bullion Royalty
Corp. to acquire, over a number of years, the 50% of Angels Camp that it did
not own. Additionally, in March 2013 Orsa announced that it had received
regulatory approval for, and fulfilled closing requirements for the joint
venture purchase agreement with Americas Bullion Royalty Corp. to acquire their
50% joint venture interest in the Angel's Camp Property.

After the reporting period, in September 2013, Alamos Gold Inc.
reported the completion of the acquisition of all of the issued and outstanding
common shares of Orsa Ventures Corp.

|D. | ORGANIZATIONAL STRUCTURE
|-- | ------------------------

The Company operates in a single reportable operating segment 
the acquisition, exploration and development of mineral property interests. The
Company is currently focused on the acquisition and exploration of mineral
property interests in Canada, and conducts most of its business affairs through
its Canadian parent entity.

The Company has one inactive wholly-owned subsidiary, Wavecrest
Resources Inc., a Delaware corporation.

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

The Company has no material tangible fixed assets, such as
mining equipment or plant facilities.

|F. | CURRENCY
|-- | --------

All currency amounts in this Annual Report are stated in
Canadian dollars unless otherwise indicated (see Item
3 for exchange rate information).

|ITEM 4A | UNRESOLVED STAFF COMMENTS
|------- | -------------------------

Not applicable.

|ITEM 5 | OPERATING AND FINANCIAL REVIEW AND
      PROSPECTS
|------ | --------------------------------------------------

OVERVIEW

The Company currently has two active exploration projects.
Accordingly, during the fiscal year ended July 31, 2013, the Company's
activities primarily involved the acquisition, planning and execution of initial
exploration activities of the Galaxie Project and also initiation of an
exploration program on the ZNT Project. As Quartz Mountain is an exploration
stage company, it does not have any revenues from its operations to offset its
expenditures. Accordingly, the Company's ability to continue its exploration
activities will be contingent upon receiving additional financing.

The Company's financial statements are prepared on the basis
that it will continue as a going concern. The Company has incurred losses since
inception, and the ability of the Company to continue as a going concern depends
upon its ability to continue to raise adequate financing and to develop
profitable operations. Quartz Mountain's financial statements do not reflect
adjustments, which could be material, to the carrying values of assets and
liabilities, which may be required should the Company be unable to continue as a
going concern.

The following discussion should be read in conjunction with the
audited annual consolidated financial statements for the years ended July 31,
2013 and 2012 and the related notes accompanying this Annual Report. The Company
prepares its financial statements in accordance with International Financial
Reporting Standards ("IFRS"). These financial statements are the Company's first
financial statements prepared in accordance with IFRS. The Company includes
selected financial data prepared in compliance with IFRS without reconciliation
to U.S. GAAP.

22

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|A. | OPERATING RESULTS
|-- | -----------------

Comprehensive loss for the year ended July 31, 2013 vs. 2012

The Company recorded a loss from operations of $3,459,000 in
the current year compared to a loss from operations of $3,588,000 in the prior
fiscal year.

Exploration costs increased in the current year as the Company
advanced exploration activities on the Galaxie Project (including Hotai Claims)
and the ZNT project independently beginning in August 2012 through December 2012
and from then on as a 60% partner in relation to the Letter Agreement (Section
1.2.1) . Additionally, the Company was required to make cash and share payments
in relation to acquisition of the Hotai and ZNT claims.

The following tables provide a breakdown of exploration costs
incurred during the year ended July 31, 2013 and 2012:

|Year Ended July 31, 2013         |  
|-------------------------------- | -
|Exploration and evaluation costs |  
|Assaying                         | $
|Drilling                         |  
|Environmental                    |  
|Engineering                      |  
|Geological                       |  
|Graphics                         |  
|Property fees                    |  
|Site activities                  |  
|Socioeconomic                    |  
|Helicopter                       |  
|Travel                           |  
|Total                            | $

|(i) | Recorded under geological expenses are cost recoveries
      pertaining to Mineral Exploration Tax Credits from the provincial
      government of British Columbia
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

The following table provides a breakdown of the administration
costs incurred:

|Administration costs        |   | 2013      |  |   | 2012      | 
|--------------------------- | - | --------- |  | - | --------- | 
|Legal, accounting and audit | $ | 61,634    |  | $ | 301,641   | 
|Office and administration   |   | 123,215   |  |   | 70,140    | 
|Salaries and benefits       |   | 1,038,364 |  |   | 686,358   | 
|Shareholder communication   |   | 50,541    |  |   | 28,097    | 
|Travel                      |   | 40,197    |  |   | 31,357    | 
|Trust and filing            |   | 45,371    |  |   | 48,659    | 
|Total                       | $ | 1,359,322 |  | $ | 1,166,252 | 

23

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In the prior year, legal and administrative costs related to
the reactivation of the Company, moving from the NEX Exchange to the TSX-V, and
legal costs related to acquiring the options on the Buck and Galaxie (including
the Hotai Claims) Projects resulted in higher administration costs.

In the current year, salaries and benefits increased in support
of exploration activities as the Company advanced work on the Galaxie and ZNT
Projects.

In the current fiscal year, the Company expensed stock options
to employees and directors for $211,000 compared to $381,000 in the same
comparative fiscal year.

Comprehensive loss for the year ended July 31, 2012 vs. 2011

The Company recorded a loss from operations of $3,588,000 in
the current year compared to a loss from operations of $175,000 in the prior
fiscal year due mainly to higher exploration and evaluation expenses incurred
(discussed below).

The increase was due to the commencement of exploration
activities.

In the fiscal year ended July 31, 2012, the Company made
payments of cash and shares pursuant to an option agreement to acquire the Buck
Property and Hotai Claims, claim staking costs for the Galaxie and Karma
properties, and geological and site activities for the Buck, Galaxie (including
the Hotai Claims) and Karma Properties. Prior to December 2011, the Company was
largely inactive and did not have any significant exploration activities during
fiscal 2011.

Year Ended July 31, 2012

|Exploration and 
    evaluation costs |   | Buck      |  |   | Galaxie |  |   | Hotai  |  |   | Karma   |  |   | Other  |  |   | Total     | 
|------------------------------------- | - | --------- |  | - | ------- |  | - | ------ |  | - | ------- |  | - | ------ |  | - | --------- | 
|Assaying                              | $ | 45,963    |  | $ | 2,696   |  | $ |       |  | $ | 1,998   |  | $ | 2,088  |  | $ | 52,745    | 
|Engineering                           |   | 8,400     |  |   |        |  |   |       |  |   |        |  |   |       |  |   | 8,400     | 
|Environmental                         |   | 1,375     |  |   |        |  |   |       |  |   |        |  |   |       |  |   | 1,375     | 
|Geological                            |   | 329,108   |  |   | 288,152 |  |   | 13,280 |  |   | 225,603 |  |   | 14,374 |  |   | 870,517   | 
|Graphics                              |   | 9,741     |  |   | 702     |  |   | 312    |  |   | 624     |  |   | 1,627  |  |   | 13,006    | 
|Helicopter                            |   |          |  |   | 100,914 |  |   |       |  |   |        |  |   |       |  |   | 100,914   | 
|Property fees                         |   | 889,044   |  |   | 1,518   |  |   |       |  |   | 16,944  |  |   | 3,313  |  |   | 910,819   | 
|Site activities                       |   | 31,595    |  |   | 89,928  |  |   | 6,200  |  |   | 14,201  |  |   | 1,620  |  |   | 143,544   | 
|Socio economics                       |   | 77,969    |  |   | 2,410   |  |   | 1,365  |  |   | 7,842   |  |   | 60     |  |   | 89,646    | 
|Travel                                |   | 13,978    |  |   | 31,210  |  |   |       |  |   | 9,943   |  |   | 553    |  |   | 55,684    | 
|Total                                 | $ | 1,407,173 |  | $ | 517,530 |  | $ | 21,157 |  | $ | 277,155 |  | $ | 23,635 |  | $ | 2,246,650 | 

During the fiscal year ended July 31, 2011 the operations of
the Company were mainly focused on activities of a property evaluation nature.

The increase in administration expenses was mainly due to the
legal and administrative costs related to the reactivation of the Company, and
moving from the NEX Exchange to the TSX-V, and legal costs related to acquiring
the options on the Buck Property and the Galaxie Property (including the Hotai
Claims).

The following table provides a breakdown of the administration
costs incurred:

24

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|Administration costs        |   | 2012      |  |   | 2011    | 
|--------------------------- | - | --------- |  | - | ------- | 
|Legal, accounting and audit | $ | 301,641   |  | $ | 55,125  | 
|Office and administration   |   | 70,140    |  |   | 19,784  | 
|Salaries and benefits       |   | 686,358   |  |   | 72,798  | 
|Shareholder communication   |   | 28,097    |  |   | 1,986   | 
|Travel                      |   | 31,357    |  |   |        | 
|Trust and filing            |   | 48,659    |  |   | 36,090  | 
|Total                       | $ | 1,166,252 |  | $ | 185,783 | 

In the fiscal year ended July 31, 2012, the Company expensed
stock options to employees and directors amounting to $381,000 compared to nil
in the same comparative fiscal year.

|B. | LIQUIDITY AND CAPITAL
RESOURCES
|-- | -------------------------------

Historically, the Company's source of funding has been the
issuance of equity securities for cash, primarily through private placements to
sophisticated investors and institutions. The Company is in the process of
acquiring and exploring mineral property interests. The Company's continuing
operations are entirely dependent upon the ability of the Company to obtain the
necessary financing to complete the exploration and development of its projects,
the existence of economically recoverable mineral reserves at its projects, the
ability of the Company to obtain the necessary permits to mine, on future
profitable production of any mine and the proceeds from the disposition of its
mineral property interests.

At July 31, 2013, the Company had cash and cash equivalents of
$0.7 million and a working capital deficit of $1.7 million. Of the total
short-term liabilities of $2.6 million at July 31, 2013, $2.4 million was
payable to Hunter Dickinson Services Inc. ("HDSI"), a related party.

To address its working capital deficit at July 31, 2013, the
Company has received a confirmation from HDSI that HDSI will continue to provide
services to the Company and will not demand repayment of amounts outstanding,
prior to December 31, 2014.

Management believes that its liquid assets at July 31, 2013 are
sufficient to meet its known obligations falling due in next 12 months and to
maintain its mineral rights in good standing for this next 12 month period.

Additional debt or equity financing will be required to fund
additional exploration or development programs. The Company has a reasonable
expectation that additional funds will be available to meet ongoing exploration
and development costs. However, there can be no assurance that the Company will
continue to obtain additional financial resources or that it will be able to
achieve positive cash flows. If the Company is unable to obtain adequate
additional financing, the Company will be required to re-evaluate its planned
expenditures and will rely on short term borrowings to finance its minimum
expenditure requirement until additional funds can be raised through financing
activities.

Recently, general market conditions for junior resource
companies have deteriorated and have resulted in depressed equity prices for
resource companies, despite higher commodity prices. Although the Company was
able to successfully complete private placements in each of December 2012 and
December 2011, the deterioration in market conditions could potentially increase
the cost of obtaining capital or limit the availability of funds in the future.
Accordingly, management is actively monitoring the effects of the current
economic and financing conditions on our business and reviewing our
discretionary spending, capital projects and operating expenditures, and
implementing appropriate cash and cash management strategies.

Debenture

In August 2012, pursuant to the Sale Agreement relating to the
Galaxie Project, the Company issued a convertible debenture (the "Debenture") in
the amount of $650,000 maturing on October 31, 2013, and bearing interest at a
rate of 8% per annum (payable quarterly in arrears) to Bearclaw. The Debenture
is convertible into the Company's common shares at a conversion price of $0.40
per share at any time before its expiry.

As part of the Galaxie and ZNT Letter Agreement (Section
1.2.1), the Company transferred into the joint arrangement, among other items,
40% of its obligations under the $650,000 convertible debenture.

In July 2013, Quartz Mountain and the holder of the Debenture
entered into an agreement to amend the Debenture, whereby among other things,
the Company made a $50,000 payment toward the Debenture reducing the outstanding
balance to $600,000, the interest rate was increased to 10% per annum from 8%
per annum, and the maturity date was extended to October 31, 2014 from October
31, 2013.

Interest payments for the Debenture are payable quarterly in
arrears and the Debenture is convertible into the Company's common shares at an
exercise price of $0.15 per share (previously $0.40 per share) on or before
maturity of the Debenture on October 31, 2014. Any interest accrued, but
unpaid, shall be converted at an exercise price of the higher of $0.15 per share
(previously $0.40 per share) and the market price at the time of conversion.

25

---

Capital Resources

In December 2012, the Company completed a non-brokered private
placement of 2,214,323 common shares, of which 1,752,409 were flow-through
common shares issued at a price of $0.30 per share and 461,914 were
non-flow-through common shares issued at a price of $0.25 per share, for
aggregate gross cash proceeds of $641,202. The Company incurred issuance costs
of approximately $25,422, for net cash proceeds of $615,780.

In accordance with the terms of the flow-through share
agreements, the Company is obligated to spend the proceeds of the flow-through
portion ($525,723) of the financing on CEE by December 31, 2013. As of October
31, 2013, substantially all of the required flow-through spending had been
incurred.

The Company had no material commitments for capital
expenditures as at July 31, 2013.

The Company has no lines of credit or other sources of
financing which have been arranged but are as of yet, unused.

At July 31, 2013, there were no externally imposed capital
requirements to which the Company is subject and with which the Company has not
complied.

The capital of the Company consists of items included in
shareholders equity and debt, net of cash and cash equivalent as follows:

|                                      |   | July
      31, 2013 |   |   | July
      31, 2012 |  
|------------------------------------- | - | ------------------- | - | - | ------------------- | -
|Shareholders equity                  | $ | (723,182            | ) | $ | 989,036             |  
|Less: Cash and
      cash equivalents |   | (706,393            | ) |   | (2,450,451          | )
|Total                                 | $ | (1,429,575          | ) | $ | (1,461,415          | )

As the Company continues to incur losses in support of the
advancement of exploration activities on its projects, shareholders equity has
come to be in a deficit position.

As a result of the Debenture, the Company's long-term debt
increased from $nil to $0.36 million, representing a change in the Companys
capital structure. Refer to section 1.6 Liquidity for cost of borrowings and
other details.

Requirement of Financing

The Company is in the process of acquiring and exploring
mineral property interests. The Company's continuing operations are entirely
dependent upon the existence of economically recoverable mineral reserves, the
ability of the Company to obtain the necessary financing to complete the
exploration and development of these projects, obtaining the necessary permits
to mine, on future profitable production of any mine and the proceeds from the
disposition of the mineral property interests.

Management believes that its current liquid assets, as of the
date of this Annual Report, are sufficient to meet all known obligations and to
maintain its mineral rights in good standing for the next 12 month period.
Additional debt or equity financing will be required to fund additional
exploration or development programs. The Company has a reasonable expectation
that additional funds will be available when necessary to meet ongoing
exploration and development costs. However, there can be no assurance that the
Company will continue to obtain additional financial resources and/or achieve
profitability or positive cash flows. If the Company is unable to obtain
adequate additional financing, the Company will be required to re-evaluate its
planned expenditures until additional funds can be raised through financing
activities.

The Company has no long-term debt, capital lease obligations,
operating leases or any other long-term obligations.

The Company has no "Purchase Obligations" defined as any
agreement to purchase goods or services that is enforceable and legally binding
on the Company that specifies all significant terms, including: fixed or minimum
quantities to be purchased; fixed, minimum or variable price provisions; and the
approximate timing of the transaction.

|C. | RESEARCH EXPENDITURES
|-- | ---------------------

Quartz Mountain does not carry out any research or development
activities. Please refer to Item 5A and
Item 5B above for a discussion of the
expenditures that the Company has incurred in connection with its business
activities.

|D. | TREND INFORMATION
|-- | -----------------

As a natural resource exploration company, Quartz Mountain's
activities reflect the traditional cyclical nature of metal prices.
Consequently, Quartz Mountain's business is primarily an "event-driven" business
based on exploration results.

Copper prices showed a significant increase between late 2003
and mid-2008, and after a steep decline in late 2008 and early 2009, steadily
increased until late 2011. The price of copper was variable in 2012. Following a downtrend early in 2013 that lasted until April, copper prices
have been more variable, ranging between US$3.01/lb and US$3.36/lb.

26

---

The gold price was on an uptrend for over the five years to
2012. Prices have been volatile since that time, and include a significant
downtrend in the first six months of 2013.

Silver prices were impacted by economic volatility in
2008-2009. An upward price trend began in 2010, and continued to late September
2011, with prices reaching as high as US$43/oz, and resulting in the average
price in 2011 being the highest since 2008. Prices ranged between US$26/oz and
US$35/oz between October 2011 and the end of 2012. Prices were on a downtrend
from February to August 2013, but have stabilized since that time.

Average annual prices through 2012 as well as the average
prices so far in 2013 for copper (Cu), gold (Au) and silver (Ag) are shown in
the table below:

Calendar Year
    
    Metal Prices (US$)Cu
    Au
    Ag2008
    $3.16/lb
    $871/oz
    $14.95/oz2009
    $2.34/lb
    $974/oz
    $14.70/oz2010
    $3.42/lb
    $1,228/oz
    $20.24/oz2011
    $4.00/lb
    $1,532/oz
    $36.58/oz2012
    $3.61/lb
    $1,669/oz
    $31.16/oz2013 to date of this Annual Report
    $3.35/lb
    $1,422/oz
$24.17/oz


|E. | OFF  BALANCE SHEET
ARRANGEMENTS
|-- | --------------------------------

Quartz Mountain has no off-balance sheet arrangements.

As used in this Item 5E, the
term "off-balance sheet arrangement" means any transaction, agreement or other
contractual arrangement to which an entity, unconsolidated with the Company, is
a party, under which the Company has:

|(a) | any obligation under a guarantee contract that has any of
      the characteristics identified in paragraph 3 of FASB Interpretation No.
      45, Guarantor's Accounting and Disclosure Requirements for Guarantees,
      Including Indirect Guarantees of Indebtedness of Others (November 2002)
      ("FIN 45"), as may be modified or supplemented, excluding the types of
      guarantee contracts described in paragraphs 6 and 7 of FIN 45;                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(b) | a retained or contingent interest in assets transferred
      to an unconsolidated entity or similar arrangement that serves as credit,
      liquidity or market risk support to such entity for such assets;                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(c) | any obligation under a derivative instrument that is both
      indexed to the Company's own stock and classified in stockholders' equity,
      or not reflected, in the Company's statement of financial position;
    or                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(d) | any obligation, including a contingent obligation,
      arising out of a variable interest (as referenced in FASB Interpretation
      No. 46, Consolidation of Variable Interest Entities (January 2003), as may
      be modified or supplemented) in an unconsolidated entity that is held by,
      and material to, the Company, where such entity provides financing,
      liquidity, market risk or credit risk support to, or engages in leasing,
      hedging or research and development services with, the
  Company.

|F. | TABULAR DISCLOSURE OF CONTRACTUAL
    OBLIGATIONS
|-- | -------------------------------------------------

The following obligations existed at July 31, 2013:

|                                            |   |           |  | Payments due by period |                 
|------------------------------------------- | - | --------- |  | ---------------------- | ----------------
|                                            |   | Total     |  |                        | Less than 1 year
|Amounts payable and other
      liabilities | $ | 136,137   |  | $                      | 136,137         
|Convertible debentures                      |   | 600,000   |  |                        |                
|Due to related parties                      |   | 2,421,220 |  |                        | 2,421,220       
|Total                                       | $ | 3,157,357 |  | $                      | 2,557,357       

27

---

At July 31, 2013, approximately $214,000 remained to be
incurred on eligible Canadian Exploration Expenses (CEE) prior to December 31,
2013.

The Company has no material capital lease or operating lease
obligations. The Company has no "Purchase Obligations", defined as any agreement
to purchase goods or services that is enforceable and legally binding on the
Company that specifies all significant terms, including: fixed or minimum
quantities to be purchased; fixed, minimum or variable price provisions; and the
approximate timing of the transaction.

|G. | SAFE HARBOR
|-- | -----------

The safe harbor provided in Section 27A of the Securities Act
and Section 21E of the Exchange Act applies to forward-looking information
provided pursuant to Item 5Eand Item 5F above.

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

|A. | DIRECTORS AND SENIOR
MANAGEMENT
|-- | -------------------------------

Ronald W. Thiessen (1952), President, Chief Executive
Officer and Director

Ronald Thiessen is a Chartered Accountant with professional
experience in finance, taxation, mergers, acquisitions and re-organizations.
Since 1986, Mr. Thiessen has been involved in the acquisition and financing of
mining and mineral exploration companies. Mr. Thiessen is a director of Hunter
Dickinson Inc. (HDI) and its wholly owned subsidiary, Hunter Dickinson
Services Inc. (HDSI), a company providing management and administrative
services to several publicly-traded companies and focuses on directing corporate
development and financing activities.

Mr. Thiessen is, or was within the past five years, an officer
and/or director of the following public companies:

Company
    Positions Held
    From
    ToAmarc Resources Ltd.
    Director
    September 1995
    PresentPresident and Chief Executive
      Officer
    September 2000
    PresentAtlatsa Resources Corporation
    Director
    April 1996
    June 2011Continental Minerals Corporation
    Director
    November 1995
    April 2011Co-Chairman
    January 2006
    April 2011Detour Gold Corporation
    Director
    July 2006
    May 2012Chairman
    July 2006
    March 2009Farallon Mining Ltd.
    Director
    August 1994
    January 2011Chairman
    December 2005
    January 2011Great Basin Gold Ltd.
    Director
    October 1993
    June 2013Chairman
    November 2006
    PresentNorthern Dynasty Minerals Ltd.
    Director
    November 1995
    June 2013President and Chief Executive
      Officer
    November 2001
    PresentQuartz Mountain Resources Ltd.
    Director
    December 2011
    PresentTaseko Mines Limited
    Director
    October 1993
    PresentChairman
    May 2006
Present


Scott D. Cousens (1964), Chairman and Director

Mr. Cousens provides management and financial services to a
number of publicly traded companies associated with Hunter Dickinson Inc. His
focus for the past 20 years has been the development of relationships within the international investment community. Substantial financings and
subsequent corporate success has established strong ties with North American,
European and Middle Eastern investors. Mr. Cousens is also the Director of
Capital Finance for Hunter Dickinson Inc.

28

---

Mr. Cousens is, or was within the past five years, an officer
and/or director of the following public companies:

Company
    Positions Held
    From
    ToAmarc Resources
      Ltd.
    Director
    September 1995
    PresentAtlatsa Resources
      Corporation
    Director
    September 1996
    June
      2009Continental
      Minerals Corporation
    Director
    June
      1994
    April
      2011Heatherdale
      Resources Ltd.
    Chairman and Director
    November 2009
    PresentNorthcliff
      Resources Ltd.
    Director
    June
      2011
    PresentNorthern Dynasty
      Minerals Ltd.
    Director
    June
      1996
    PresentQuartz Mountain
      Resources Ltd.
    Chairman and Director
    November 2012
    PresentRockwell Diamonds
      Ltd.
    Director
    November 2000
    November 2008Taseko Mines Limited
    Director
    October 1992
    Present


Robert A. Dickinson (1948), Director

Mr. Dickinson is an economic geologist who has been actively
involved in mineral exploration and mine development for over 40 years. He is
Chairman of HDI and HDSI, as well as a director and member of the management
team of a number of the public companies associated with HDI. He is also
President and Director of United Mineral Services Ltd., a private resource
company. He also serves as a Director of the Britannia Mine Museum and a Trustee
of the BC Mineral Resources Education Program.

Mr. Dickinson is, or was within the past five years, an officer
and/or director of the following public companies:

Company
    Positions Held
    From
    ToAmarc Resources Ltd.
    Director
    April 1993
    PresentChairman
    April 2004
    PresentAtlatsa
      Resources Corporation
    Director and Co-Chairman
    October 2004
    June 2009Continental Minerals Corporation
    Director
    June 2004
    April 2011Director
    November 2010
    November 2012Curis Resources Ltd.
    Chairman
    November 2010
    December 2010Detour
      Gold Corporation
    Director
    August 2006
    February 2009Heatherdale Resources Ltd.
    Director
    November 2009
    PresentNorthcliff Resources Ltd.
    Director
    June 2011
    PresentChairman
    June 2011
    January 2013Northern Dynasty Minerals Ltd.
    Director
    June 1994
    PresentChairman
    April 2004
    PresentQuartz Mountain Resources Ltd.
    Director
    December 2011
    PresentChairman
    December 2011
    November 2012Rathdowney Resources Ltd.
    Director & Chairman
    March 2011
    December 2011Taseko Mines Limited
    Director
    January 1991
Present


29

---

James Kerr (1945), Director

Mr. Kerr holds a B.A. degree and graduated from the University
of British Columbia in 1968. Mr. Kerr is a Chartered Accountant and was a
partner at KPMG, a national accounting firm, until his retirement in 2007. Mr.
Kerr has extensive experience in public practice, and actively involved with
audit committees of mining and energy companies, providing advice on accounting
and compliance issues based on a risk management approach.

Mr. Kerr is, or was within the past five years, a director of
the following public companies:

Company
    Positions Held
    From
    ToCuris Resources
      Ltd.
    Director
    November 2010
    PresentQuartz Mountain Resources Ltd.
    Director
    December 2011
    Present


David Mordant (1944), Director

Mr Mordant is the retired founder and CEO of an agricultural
commodities trading business that was sold to a listed company. He has focused
on commodity and stock market trading in local and international markets since
2002 and has been a guest commentator on CNBC on commodities and stocks.

Mr. Mordant has not, within the past five years, been a
director or officer of any public companies.

Gordon Fretwell (1953), Director

Mr. Fretwell holds a B.Comm, degree and graduated from the
University of British Columbia in 1979 with his Bachelor of Law degree. Formerly
a partner in a large Vancouver law firm, Mr. Fretwell has, since 1991, been a
self-employed solicitor (Gordon J. Fretwell Law Corporation) in Vancouver
practicing primarily in the areas of corporate and securities law.

Mr. Fretwell is, or was within the past five years, an officer
and/or director of the following public companies:

Company
    Positions Held
    From
    ToBell Copper Corporation
    Secretary
    March 2001
    May 2011Director
    June 2001
    April 2011Benton Resources Corp.
    Director
    July 2003
    PresentSecretary
    December 2003
    PresentContinental Minerals Corporation
    Director
    February 2001
    April 2011Copper
      Ridge Explorations Inc.
    Director/Secretary
    September 1999
    August 2009Coro
      Mining Corporation
    Director
    June 2009
    PresentCoro
      Resources Corp.
    Director
    January 2009
    PresentCuris
      Resources Ltd.
    Director
    January 2011
    PresentCVC
      Cayman Venture Corp.
    Director
    July 2010
    November 2010Frontera Copper Corporation
    Director
    February 2009
    June 2009Golden
      Dory Resources Corp.
    Secretary
    August 2008
    PresentICN Resources Ltd.
    VP of Legal Services
    December 2000
    March 2009Secretary
    March 2009
    August 2010Director
    July 2004
    March 2009International Royalty Corporation
    Director
    June 2003
    February 2010Secretary
    June 2003
    February 2010Asanko
      Gold Inc.
    Director
    February 2004
    PresentLignol Energy Corporation
    Director
    January 2007
Present


30

---

Company
    Positions Held
    From
    ToMeritus
      Minerals Ltd.
    Director
    June 2007
    PresentNorthern Dynasty Minerals Ltd.
    Director
    June 2004
    PresentQuartz Mountain Resources Ltd.
    Director
    January 2003
    PresentSecretary
    January 2003
    December 2011Rare Earth Metals Inc.
    Secretary
    December 2009
Present


Lena Brommeland, BSc (1967), Executive Vice President

Lena Brommeland has a BSc in geology and more than 20 years of
experience in mineral project evaluation and on-site management of large-scale
mineral projects, including the Pebble and Niblack projects both located in
Alaska and the Prosperity project in BC.

Ms. Brommeland is, or was within the past five years, a
director or officer of the following public companies:

Company
    Positions Held
    From
    ToRathdowney
      Resources Ltd.
    Director
    December 2011
    PresentQuartz Mountain Resources Ltd.
    Executive Vice President
    February 2013
    Present


Michael Lee, CA, CIA, CISA, CFE, PMP (1967), Chief Financial
Officer

Michael Lee is a Chartered Accountant and has over 15 years of
experience in the areas of governance, risk management and financial reporting,
working primarily with Canadian and US public corporations.

Mr. Lee is, or was within the past five years, a director or
officer of the following public companies:

Company
    Positions Held
    From
    ToQuartz Mountain Resources Ltd.
    Chief Financial Officer
    February 2013
    Present


Trevor Thomas, LLB (1967), Corporate Secretary

Trevor Thomas has practiced in the areas of corporate
commercial, corporate finance, securities and mining law since 1995, both in a
private practice environment as well as in-house positions and is currently
general counsel for Hunter Dickinson Inc. Prior to joining Hunter Dickinson Inc.
he served as in-house legal counsel with Placer Dome Inc.

Mr. Thomas is, or was within the past five years, an officer of
the following public companies:

Company
    Positions Held
    From
    ToNorthern Dynasty Minerals Ltd.
    Secretary
    February 2008
    PresentAmarc
      Resources Ltd.
    Secretary
    February 2008
    PresentAtlatsa
      Resources Corporation
    Assistant Secretary
    November 2007
    March 2011Continental Minerals Corporation
    Secretary
    February 2008
    April 2011Curis
      Resources Ltd.
    Secretary
    June 2013
    PresentFarallon Mining Ltd.
    Secretary
    December 2007
    January 2011Heatherdale Resources Ltd.
    Secretary
    November 2009
    September 2010June 2013
    PresentNorthcliff Resources Ltd.
    Secretary
    June 2011
    PresentQuartz
      Mountain Resources Ltd.
    Secretary
    June 2013
    PresentRathdowney Resources Ltd.
    Secretary
    March 2011
Present


31

---

Company
    Positions Held
    From
    ToRockwell Diamonds
      Inc.
    Secretary
    February 2008
    September 2012Taseko Mines Limited
    Secretary
    July 2008
    Present


|B. | COMPENSATION
|-- | ------------

During the Company's financial year ended July 31, 2013, the
aggregate cash compensation paid or payable by the Company to its directors and
senior officers was $224,597.

Ronald W. Thiessen, President, Michael Lee, Chief Financial
Officer, and Simon Beller, former Chief Financial Officer are each "Named
Executive Officers" of the Company for the purposes of the following disclosure.

The compensation paid to the Named Executive Officers during
the Company's most recently completed financial year is as set out below:

Name and principal position
    Fiscal year
    Salary ($)
    Share- based awards ($)
    Option- based awards ($)
    Pension value ($)
    All other compensation
      ($)
    Total compensation ($)Ronald W. Thiessen (1)
      President and Chief Executive Officer
    2013
    66,129
    Nil
    Nil
    Nil
    Nil
    66,1292012
    28,875
    Nil
    22,188
    Nil
    Nil
    51,063Michael Lee (2)
      Chief Financial Officer
    2013
    20,500
    Nil
    Nil
    Nil
    Nil
    20,5002012
    Nil
    Nil
    Nil
    Nil
    Nil
    NilSimon Beller (2)      Chief Financial Officer
    2013
    24,375
    Nil
    Nil
    Nil
    Nil
    24,3752012
    43,750
    Nil
    22,188
    Nil
    Nil
    65,938Lena Brommeland 
      Executive Vice President
    2013
    
    Nil
    Nil
    Nil
    Nil2012
    Nil
    Nil
    Nil
    Nil
    Nil
    Nil


|(1) | Mr. Thiessen was appointed as President and Chief
      Executive Officer on December 30, 2011.                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                     
|(2) | Mr. Beller resigned as Chief Financial Officer on
      February 22, 2013. Mr. Lee was appointed Chief Financial Officer on
      February 22, 2013.
|    |                                                                                                                                                     
|(3) | Ms. Brommeland was appointed as Executive Vice President
      on February 22, 2013.                                                                

During the fiscal year ended July 31, 2013, the above named
NEOs did not serve the Company solely on a full-time basis, and their
compensation from the Company is allocated based on the estimated amount of time
spent providing services to the Company.

Director Compensation

The compensation provided to the directors, excluding a
director who is already set out in disclosure for a NEO for the Company's most
recently completed financial year ended July 31, 2013 is as set out below:

32

---

Name
    Fees earned ($)
    Share- based awards ($)
    Option- based awards ($)
    Non-equity incentive plan
      compensation ($)
    Pension value ($)
    All other compensation
      ($)
    Total ($)Scott Cousens(2)(3)(5)
    59,567
    Nil
    Nil
    Nil
    Nil
    Nil
    59,567Robert A. Dickinson(2)(3)(4)
    36,963
    Nil
    Nil
    Nil
    Nil
    Nil
    36,963James Kerr (1)(4)(6)
    27,210
    Nil
    Nil
    Nil
    Nil
    Nil
    27,210David Mordant (1)(4)(7)
    22,210
    Nil
    Nil
    Nil
    Nil
    Nil
    22,210Gordon Fretwell (1)(8)
    27,210
    Nil
    Nil
    Nil
    Nil
    Nil
  27,210


Notes:

|(1) | On January 1, 2013 independent director fees were
      increased so that they would receive an annual fee of $16,450 for their
      services plus an additional $5,000 annually for holding the position of
      Committee Chair, and $3,000 annually for being a Committee Member. Prior
      to January 1, 2013, independent directors received an annual fee of
      $15,750 for their services plus an additional $5,000 annually for holding
      the position of Committee Chair, and $3,000 annually for being a Committee
      Member.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(2) | Mr. Dickinson resigned as Chairman (however remained as a
      Director) on November 22, 2012. Mr. Cousens was appointed as Chairman on
      November 22, 2012.                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(3) | Pursuant to the Corporate Services Agreement with HDSI,
      compensation for Messrs. Cousens and Dickinson is allocated to the Company
      on the basis of time spent in respect of the Company's business.                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(4) | Messrs. Dickinson, Kerr, and Mordant, were appointed
      Directors of the Company effective December 30, 2011. The former Directors
      (Rene G. Carrier, Brian Causey and Barry Coughlan) ceased to be Directors
      on December 30, 2011 and received no compensation in their roles as
      Directors in the year ended July 31, 2012.                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(5) | Mr. Cousens is the Chairman of the Compensation
      Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(6) | Mr. Kerr is the Chairman of the Audit and Risk Committee
      as well as a member of the Compensation Committee and Nominating and
      Governance Committee.                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(7) | Mr. Mordant is a member of the Audit and Risk Committee
      and Nominating and Governance Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|(8) | Mr. Fretwell is the Chairman of the Nominating and
      Governance Committee as well as a member of the Audit and Risk Committee
      and Compensation Committee.                                                                                                                                                                                                                                                                                                                                                                                  

Pension and Retirement Benefits

Neither the Company nor its subsidiary provides any pension,
retirement or similar benefits.

|C. | BOARD PRACTICES
|-- | ---------------

All directors were re-elected at the annual general meeting of
the Company's shareholders held on January 15, 2013. Mr. Cousens was appointed
as Chairman of the Board on November 22, 2012. All directors have a term of
office expiring at the next annual general meeting of the Company's
shareholders, which is expected to be held in early 2014. All officers have a
term of office lasting until their removal or replacement by the Board of
Directors.

Directors Service Contracts

There is no written employment contract between the Company and
any director.

There is no service contract between any director of the
Company and either the Company or its subsidiary, which provides for any
benefits upon termination of employment.

Audit and Risk Committee

Composition of Audit and Risk Committee

The members of the Audit and Risk Committee are James Kerr,
David Mordant and Gordon J. Fretwell. All Audit and Risk Committee members are
financially literate and no Audit and Risk Committee members are officers,
employees or Control Persons of the Company. Mr. Kerr is a Chartered Accountant,
and hence a financial expert.

Relevant Education and Experience

As a result of their education and experience, each member of
the Audit and Risk Committee has familiarity with, an understanding of, or
experience in the accounting principles used by the Company to prepare its
financial statements, and the ability to assess the general application of those
principles in connection with estimates, accruals and reserves; reviewing or
evaluating financial statements that present a breadth and level of complexity
of accounting issues that are generally comparable to the breadth and complexity
of issues that can reasonably be expected to be raised by the Company's
financial statements; and an understanding of internal controls and procedures
for financial reporting.

33

---

Mr. Kerr is a Chartered Accountant and was a partner at KPMG, a national accounting firm, until his retirement in 2007. He has extensive experience in public practice, and actively involved with audit committees of mining and energy companies,
providing advice on accounting and compliance issues based on a risk management approach. Mr. Fretwell is an experienced securities lawyer and Mr. Mordant is an experienced businessman with corporate finance experience. See disclosure under
“A. Directors and Senior Management” above.

Audit and Risk Committee’s Charter

The function of the Audit and Risk Committee is to oversee the employment and compensation of the Company’s independent auditor, and other matters under the authority of the Committee. The Committee also assists the Board of Directors in
carrying out its oversight responsibilities relating to the Company’s financial, accounting and reporting processes, the Company’s system of internal accounting and financial controls, the Company’s compliance with related legal
and regulatory requirements, and the fairness of transactions between the Company and related parties.

The Audit and Risk Committee has a charter that sets out its mandate and responsibilities, which is contained in Appendix 6 of the Corporate Governance Policies and Procedures Manual (available for download from the Company’s website under
Corporate Governance at www.quartzmountainresources.com).  The Audit and Risk Committee has the following responsibilities and authority:

Relationship with Independent Auditor

Subject to the law of British Columbia as to the role of the Shareholders in the appointment of independent auditors, the Committee shall have the sole authority to appoint or replace the independent auditor.

The Committee shall be directly responsible for the compensation and oversight of the work of the independent auditor (including resolution of disagreements between management and the independent auditor regarding financial reporting) for the
purpose of preparing or issuing an audit report or related work.

The independent auditor shall report directly to the Committee.

The Committee shall approve in advance all audit and permitted non-audit
services with the independent auditor, including the terms of the engagements
and the fees payable; provided that the Committee Chairman may approve services
to be performed by the independent auditor between Committee meetings if the
amount of the fee does not exceed $50,000, provided that any such approval shall
be reported to the Committee at the next meeting thereof.

The Committee may delegate to a subcommittee the authority to grant
pre-approvals of audit and permitted non-audit services, provided that the
decision of any such subcommittee shall be presented to the full Committee at
its next scheduled meeting.

At least annually, the Committee shall review and evaluate the experience and qualifications of the lead partner and senior members of the independent auditor team.

At least annually, the Committee shall obtain and review a report from the independent auditor regarding:

- the independent auditor’s internal quality-control procedures;
- any material issues raised by the most recent internal quality-control review, or peer review, of the auditor, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more
independent audits carried out by the firm;
- any steps taken to deal with any such issues; and
- all relationships between the independent auditor and the Company.

At least annually, the Committee shall evaluate the qualifications, performance and independence of the independent auditor, including considering whether the auditor’s quality controls are adequate and the provision of permitted non-audit
services is compatible with maintaining the auditor’s independence.

The Committee shall ensure the rotation of the lead (or coordinating) audit partner having primary responsibility for the audit, the concurring partner responsible for reviewing the audit, and other audit partners as required by law.

The Committee shall consider whether, in order to assure continuing auditor independence, it is appropriate to adopt a policy of rotating the independent auditing firm on a regular basis.

The Committee shall recommend to the Board policies for the Company’s hiring of employees or former employees of the independent auditor who were engaged on the Company’s account or participated in any capacity in the audit of the
Company.

The Committee shall oversee the implementation by management of appropriate information technology systems for the Company, including as required for proper financial reporting and compliance.

Financial Statement and Disclosure Review

The Committee shall review and discuss with management and the independent auditor the annual audited financial statements, including disclosures made in management’s discussion and analysis, and recommend to the Board whether the audited
financial statements should be filed with applicable securities regulatory authorities and included in the Company’s annual reports.

The Committee shall review and discuss with management (and, to the extent the Committee deems it necessary or appropriate, the independent auditor) the Company’s quarterly financial statements, including disclosures made in management’s
discussion and analysis, and recommend to the Board whether such financial statements should be filed with applicable securities regulatory authorities.

The Committee shall review and discuss with management and the independent auditor significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including the independent
auditor’s assessment of the quality of the Company’s accounting principles, any
significant changes in the Company’s selection or application of accounting principles, any major issues as to the adequacy of the Company’s internal controls over financial reporting, and any special steps adopted in light of material
control deficiencies.

34

---

At least annually and prior to the publication of annual audited financial statements, the Committee shall review and discuss with management and the independent auditor a report from the independent auditor on:

- all critical accounting policies and practices used by the Company;
- all alternative accounting treatments of financial information that have been discussed with management since the prior report, ramifications of the use of such alternative disclosures and treatments, the treatment preferred by the independent
auditor, and an explanation of why the independent auditor’s preferred method was not adopted; and,
- other material written communications between the independent auditor and management since the prior report, such as any management letter or schedule of unadjusted differences, the development, selection and disclosure of critical accounting
estimates, and analyses of the effect of alternative assumptions, estimates or GAAP methods on the Company’s financial statements.

Prior to their filing or issuance, the Committee shall review the Company’s Annual Information Form, quarterly and annual earnings press releases, and other financial press releases, including the use of “pro forma” or
“adjusted” non-GAAP information.

The Committee shall review and discuss with management the financial information and earnings guidance provided to analysts and rating agencies. Such discussion may be specific or it may be in general regarding the types of information to be
disclosed and the types of presentations to be made.

Conduct of the Annual Audit

The Committee shall oversee the annual audit, and in the course of such
oversight the Committee shall have the following responsibilities and authority:

The Committee shall meet with the independent auditor prior to the audit to
discuss the planning and conduct of the annual audit, and shall meet with the
independent auditor as may be necessary or appropriate in connection with the
audit.

The Committee shall ascertain that the independent auditor is registered and in
good standing with the Canadian Public Accounting Board and that the independent
auditor satisfies all applicable independence standards. The Committee shall
obtain from the auditor a written statement delineating all relationships
between the auditor and the Company as per applicable independence standards,
and review relationships that may impact the objectivity and independence of the
auditor.

The Committee shall discuss with the independent auditor the matters required to be discussed by Statement on Auditing Standards No. 61 relating to the conduct of the audit, including:

- the adoption of, or changes to, the Company’s significant auditing and accounting principles and practices as suggested by the independent auditor, internal auditors or management;
- the management letter provided by the independent auditor and the Company’s response to that letter; and
- any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to requested information, and any significant disagreements with management.

The Committee shall make such inquiries to the management and the independent auditor as the Committee members deem necessary or appropriate to satisfy themselves regarding the efficacy of the Company’s financial and internal controls and
procedures and the auditing process.

Compliance and Oversight

The Committee shall meet periodically with management and the independent auditor in separate executive sessions. The Committee may also, to the extent it deems necessary or appropriate, meet with the Company’s investment bankers and financial
analysts who follow the Company.

The Committee shall discuss with management and the independent auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Company’s financial statements.

The Committee shall discuss with management the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies, and
regularly review the top risks identified by management and the policies and practices adopted by the Company to mitigate those risks.

If required, the Committee shall annually review with management and the independent auditor the disclosure controls and procedures and confirm that the Company (with CEO and CFO participation) has evaluated the effectiveness of the design and
operation of the controls within 90 days prior to the date of filing of the AIF. The Committee also shall review with management and the independent auditor any deficiencies in the design and operation of internal controls and significant
deficiencies or material weaknesses therein, and any fraud involving management or other employees who have a significant role in the Company’s internal controls. As a part of that review, the Committee shall review the process followed in
preparing and verifying the accuracy of the required CEO and CFO annual certifications.

If required, the Committee shall annually, prior to the filing of the AIF, review management’s internal control report and the independent auditor’s assessment of the internal controls and procedures.

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

35

---

The Committee shall discuss with management and the independent auditor any correspondence with regulators or governmental agencies and any employee complaints or reports which raise material issues regarding the Company’s financial statements
or accounting policies.

At least annually, the Committee shall meet with the Company’s legal counsel and discuss any legal matters that may have a material impact on the financial statements or the Company’s compliance policies.

The Committee shall oversee the preparation of reports relating to the Audit and Risk Committee as required under applicable laws, regulations and stock exchange requirements.

The Committee shall exercise oversight with respect to anti-fraud programs and controls.

Related Party Transactions

The Committee shall review for fairness to the Company proposed transactions, contracts and other arrangements between the Company and its subsidiaries and any related party or affiliate, and make recommendations to the Board whether any such
transactions, contracts and other arrangements should be approved or continued.  The foregoing shall not include any compensation payable pursuant to any plan, program, contract or arrangement subject to the authority of the Company’s
Compensation Committee.

As used herein the term “related party” means any officer or director of the Company or any subsidiary, or any shareholder holding a greater than 10% direct or indirect financial or voting interest in the Company, and the term
“affiliate” means any person, whether acting alone or in concert with others, that has the power to exercise a controlling influence over the Company and its subsidiaries. "Related party" includes Hunter Dickinson Services Inc.

Compensation Committee

The Board’s Compensation Committee currently consists of Scott Cousens (Chairman), Gordon Fretwell and James Kerr.

The function of the Compensation Committee is to assist the Board in carrying out its responsibilities relating to executive and director compensation.  The Compensation Committee has a charter that sets out its mandate and responsibilities, which
is contained in Appendix 7 of the Corporate Governance Policies and Procedures Manual (available for download from the Company’s website under Corporate Governance at www.quartzmountainresources.com). In
furtherance of its purpose, the Compensation Committee has the following responsibilities and authority:

|(a) | The Compensation Committee shall recommend to the Board the form and amount of compensation to be paid by the Company to directors for service on the Board and on Board committees. The Compensation Committee shall review director
compensation at least annually.                                                                                                                                                                                                                                                                                                                                                                                          
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(b) | The Compensation Committee shall annually review the Company's base compensation structure and the Company's incentive compensation, stock option and other equity based compensation programs and recommend changes in or additions
in such structure and plans to Board as needed.                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(c) | The Compensation Committee shall recommend to the Board the annual base compensation of the Company's executive officers and senior managers (collectively the "Officers").                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(d) | The Compensation Committee shall recommend to the Board the range of increase or decrease in the annual base compensation for non-Officer personnel providing services to the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(e) | The Compensation Committee shall recommend to the Board annual corporate goals and objectives under any incentive compensation plan adopted by the Company for Officers and non-Officer personnel providing services to the Company,
and recommend incentive compensation participation levels for Officers and non-Officer personnel providing services to the Company under any such incentive compensation plan. In determining the incentive component of compensation, the Committee will
consider the Company's performance and relative shareholder return, the values of similar incentives at comparable companies and the awards given in past years.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(f) | The Compensation Committee shall evaluate the performance of Officers generally and in light of annual corporate goals and objectives under any incentive compensation plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(g) | The Compensation Committee shall periodically review with the Chairman and CEO their assessments of corporate officers and senior managers and succession plans, and make recommendations to the Board regarding appointment of
officers and senior managers.                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(h) | The Compensation Committee shall provide oversight of the performance evaluation and incentive compensation of non-Officer personnel providing services to the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(i) | The Compensation Committee shall administer the Company's stock option and other equity based compensation plans and determines the annual grants of stock options and other equity based compensation.                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(j) | The Compensation Committee shall recommend to the Nominating and Governance Committee the qualifications and criteria for membership on the Compensation Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

Other Board Committees

The Company has a Nominating and Corporate Governance Committee which is responsible for identifying new candidates for the Board of Directors as necessary, after considering what competencies and skills the directors as a group should possess and
assessing the competencies and skills the directors as a group should possess and assessing the competencies and skills of the existing and any proposed directors, and considering the appropriate size of the Board. The committee is also responsible
for developing and recommending to the Board a set of corporate governance principles applicable to the Chief Financial
Officer, and overseeing the evaluation of the Board and Senior Management. The
current members of the Nominating and Corporate Governance Committee are Gordon
Fretwell, James Kerr, and David Mordant.

36

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The Company has a Special Committee composed of independent
directors of the Company in order to consider the best interests of the Company
related to all matters in respect of any proposed transactions with members of
the Hunter Dickinson group of companies, including proposed transactions between
non-arms length parties, and to make recommendations to the Board in respect of
such matters. The current members of the Special Committee are Gordon Fretwell,
James Kerr, and David Mordant.

|D. | EMPLOYEES
|-- | ---------

At November 22, 2013 the Company has no employees and has
contracted staff on an as-needed basis in British Columbia, Canada. The
directors of the Company primarily administer the Company's functions through
the employees of HDSI, a private company with certain directors in common with
the Company (see Item 7  "Major Shareholders and Related Party Transactions").

The Company does, from time to time, directly hire local
resident workers for field activities, on engagements of a few weeks at a time.
In fiscal 2013, no such employees were hired; in fiscal 2012 three employees
worked for several weeks, and in fiscal 2011 no such employees were engaged.

|E. | SHARE OWNERSHIP
|-- | ---------------

Security Holdings of Directors and Senior Management

As at November 22, 2013, the directors and officers of Quartz
Mountain and their respective affiliates, directly and indirectly, own or
control as a group an aggregate of 4,809,755 common shares or 17.6% .

As at November 22, 2013, the Company's directors and officers
beneficially own the following number of the Company's common shares, options
and warrants:

|Name of Insider     | Securities Beneficially Owned
      (1)(3)          | As a % of outstanding common
      shares
|------------------- | --------------------------------------------------- | -----------------------------------------
|Lena Brommeland     | 215,334 common
      shares 19,500 options (4)      | 0.8%                                     
|Scott Cousens       | 147,177 common shares 
    60,000 options (3)       | 0.5%                                     
|Robert A. Dickinson | 2,171,730 common
      shares (2)60,000 options (3) | 8.0%                                     
|Gordon J. Fretwell  | nil common shares 
    60,000 options (3)           | n/a                                      
|James Kerr          | 88,000 common
      shares 60,000 options (3)       | 0.3%                                     
|Michael Lee         | nil common shares 
      11,100 options (4)         | n/a                                      
|David Mordant       | 107,000 common
      shares  60,000 options (3)     | 0.4%                                     
|Ronald W. Thiessen  | 2,080,514 common
      shares60,000 options  (3)    | 7.6%                                     
|Trevor Thomas       | nil common
      shares  19,500 options (4)         | n/a                                      

|(1) | This information has been provided by the individual
      directors as provided by them on www.sedi.ca    
|--- | -----------------------------------------------------------------------------------------------------------
|    |                                                                                                            
|(2) | Certain of these shares are beneficially owned through a
      private company controlled by Mr. Dickinson.
|    |                                                                                                            
|(3) | Options to purchase common shares at $0.45 per share
      expiring on January 18, 2017.                   
|    |                                                                                                            
|(4) | Options to purchase common shares at $0.45 per share
      expiring on January 18, 2015.                   

37

---

Share Option Plan

As at November 22, 2013, an aggregate of 1,638,300 options were
outstanding pursuant to the Company's share option plan (the "Plan"), described
below, and an aggregate of 1,091,651 common shares remained available for
issuance pursuant to the Plan, described below.

The Company adopted the Plan in order to advance the interests
of the Company by providing a means to encourage directors, officers, employees,
and others who provide services to the Company and its subsidiaries to acquire
shares of the Company, thereby increasing their proprietary interest in the
Company, encouraging them to remain associated with the Company and furnishing
them with additional incentive to advance the interests of the Company in the
conduct of their affairs.

The Plan is a "rolling" plan, whereby the maximum number of
shares that may be reserved for issuance pursuant to all option awards granted
under the Plan is 10% of the Company's outstanding common shares, as calculated
at the time that an award is granted. Under the policies of the TSX Venture
Exchange (the "TSX-V"), the continuation of the Plan required shareholder
approval by ordinary resolution at each annual general meeting of the Company's
shareholders. The Company's shareholders confirmed the Plan in accordance with
the policies of the TSX-V at the Company's last annual general meeting, held on
February 22, 2013.

Pursuant to the Plan, if outstanding options are exercised, or
expire, or the number of issued and outstanding common shares of the Company
increases, the number of options available to grant under the Plan increases
proportionately. The exercise price of each option is set by the Board of
Directors at the time of grant but cannot be less than the Discounted Market
Price (as defined in, and determined in accordance with, the policies of the
TSX-V).

Options can have a maximum term of five years (or 10 years if the
Company becomes a Tier 1 issuer on the TSX-V) and typically terminate 90 days
following the termination of the optionee's employment or engagement, except in
the case of retirement or death. Vesting of options is at the discretion of the
Board of Directors at the time the options are granted.

Eligible Optionees

Under the policies of the TSX-V, to be eligible for the
issuance of a stock option under the Plan, an optionee must either be a
director, officer or employee of the Company, or a consultant or an employee of
a company providing management or other services to the Company, or its
subsidiaries, at the time the option is granted.

Options may be granted only to an individual or to a company
that is wholly-owned by individuals eligible for an option grant. If the option
is granted to a non-individual, the company must provide the TSX-V with an
undertaking that it will not permit any transfer of its securities, nor issue
further securities, to any other individual or entity as long as the incentive
stock option remains in effect without the consent of TSX-V.

Limitations on Awards

No optionee can be granted an option or options to purchase
more than 5% of the outstanding listed shares of the Company in any one year
period.

|ITEM 7 | MAJOR SHAREHOLDERS AND RELATED PARTY
      TRANSACTIONS
|------ | -------------------------------------------------------

|A. | MAJOR SHAREHOLDERS
|-- | ------------------

Quartz Mountain is a publicly-held corporation, with its shares
held by residents of Canada, the United States of America and other countries.
To the best of Quartz Mountain's knowledge, other than as noted below, no
person, corporation or other entity beneficially owns, directly or indirectly,
or controls more than 5% of the common shares of Quartz Mountain, the only class
of securities with voting rights. For these purposes, "beneficial ownership"
means the sole or shared power to vote or direct the voting or to dispose or
direct the disposition of any security.

As of November 22, 2013, Quartz Mountain had authorized
unlimited common shares without par value, of which 27,299,513 were issued and
outstanding. The following table sets forth certain information with respect to
beneficial ownership of the Company's common stock as of November 22, 2013 by
each shareholder known to be the beneficial owner of more than 5% of the common
stock.

Identity of Person or Group
    Shares
    Percentage Beneficially Owned of
      ClassFinsbury Exploration Ltd.
    2,038,111
    7.5%Robert A. Dickinson
    2,171,730
    8.0%Ronald Thiessen
    2,080,514
  7.6%


All of the common shares have the same voting rights and no
major shareholders of the Company have different voting rights.

38

---

Geographic Breakdown of Shareholders

As of November 22, 2013, Quartz Mountain's register of
shareholders indicates that Quartz Mountain's common shares are held as
follows:

Location
    Number of registered
      shareholders of record
    Number of shares
    Percentage of total sharesCanada
    113
    25,722,242
    94.2%United States
    1,471
    1,538,721
    5.6%Other
    13
    38,550
    0.2%Total
    1,597
    27,299,513
100.0%


Shares registered in the names of intermediaries, were assumed
to be held by residents of the same country in which the intermediary was
located.

Transfer Agent

The Company's common shares are recorded on the books of its
transfer agent, Computershare Investor Services Inc., located at 4th Floor, 510
Burrard Street, Vancouver, B.C. V6C 3B9; telephone (604) 661-9400 in registered
form. However, the majority of the Company's common shares are registered in the
name of intermediaries such as brokerage houses and clearing houses (on behalf
of their respective brokerage clients). Quartz Mountain does not have knowledge
or access to the identities of the beneficial owners of such shares registered
through intermediaries.

Control

To the best of its knowledge, the Company is not owned or
controlled, directly or indirectly, by any other corporation, by any foreign
government or by any other natural or legal person, severally or jointly, other
than as noted above under Major Shareholders. There are no arrangements known to
Quartz Mountain which, at a subsequent date, may result in a change in control
of the Company.

Insider Reports under the Securities Acts of British
Columbia, Alberta and Ontario

Since the Company is a reporting issuer under the Securities
Acts of British Columbia, Alberta and Ontario, certain "insiders" of the Company
(including its directors, certain executive officers, and persons who directly
or indirectly beneficially own, control or direct more than 10% of its common
shares) are generally required to file insider reports of changes in their
ownership of Quartz Mountain's common shares within five days following the
trade under National Instrument 55-104  Insider Reporting Requirements and
Exemptions, as adopted by the CSA, and the Securities Act (Ontario). Copies of
such reports are available for public inspection at the offices of the British
Columbia Securities Commission, 9th Floor, 701 West Georgia Street, Vancouver,
British Columbia V7Y 1L2, (604) 899-6500 or at the British Columbia Securities
Commission web site, www.bcsc.bc.ca. In
British Columbia, all insider reports must be filed electronically five days
following the date of the trade at www.sedi.ca. The public is able to access these reports
at www.sedi.ca.

|B. | RELATED PARTY TRANSACTIONS
|-- | --------------------------

Except as disclosed herein, Quartz Mountain has not, since the
beginning of its last fiscal year ended July 31, 2013:

|(1) | entered into any transactions which are material to
      Quartz Mountain, or a related party or any transactions unusual in their
      nature or conditions involving goods, services or tangible or intangible
      assets to which Quartz Mountain or any of its former subsidiaries was a
      party;
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                             
|(2) | entered into any transactions or loans between the
      Company and:                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                             
|    | (a)                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                             
|    | (b)                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                             
|    | (c)                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                             
|    | (d)                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                             
|    | (e)                                                                                                                                                                                                                                                                                                         

39

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Hunter Dickinson Services Inc. ("HDSI")

As an umbrella organization, HDSI provides, both cost and
expertise advantages to the companies through access to a shared
multidisciplinary team of mining and financial professionals. This includes:
management capability, geological, engineering and environmental expertise,
financial acumen, and administrative and support services. In addition, HDSI
organizes and shares leased premises and office and technical equipment for
staff to perform their duties.

Quartz Mountain's business relationship with HDSI consists of
utilizing the services described above. HDSI provides these services to Quartz
Mountain which includes the services of Quartz Mountain's President, pursuant to
a standard (within the group) Geological Management and Administration Services
Agreement with HDSI, dated June 1, 2008 (the "Geological Management and
Administration Services Agreement") and amended July 2, 2010. Because of cross
membership of many of the boards of directors within the group, certain members
of management and the Board of Directors of Quartz Mountain are also members of
the board of directors or employees of HDSI.

HDSI's arrangements are also
flexible enough that it is able to defer collection of monthly service invoices
and on occasion, where surplus funds are available to HDSI, make short term
advances to members of the group. The Geological Management and Administration
Services Agreement can be terminated by either party on 30 days' notice.

During the fiscal year ended July 31, 2013, the Company had
transactions totaling $2,585,097 (2012 - $1,255,789; 2011  $nil) to HDSI for
services and reimbursements of third party disbursements pursuant to this
agreement.

Finsbury Exploration Ltd.

Finsbury Exploration Ltd. ("Finsbury") is a private company
which has certain directors in common with the Company. During the fiscal year
ended July 31, 2013, the Company had transactions totaling $nil (2012  $25,278;
2011 - $nil) to Finsbury relating to the Galaxie Project.

|C. | INTERESTS OF EXPERTS AND
COUNSEL
|-- | --------------------------------

Not applicable.

|ITEM 8 | FINANCIAL INFORMATION
|------ | ---------------------

|A. | CONSOLIDATED STATEMENTS AND OTHER FINANCIAL
      INFORMATION
|-- | -------------------------------------------------------------

Quartz Mountain's audited consolidated annual financial
statements as at and for the year ended July 31, 2013, 2012 and 2011.

Legal Proceedings

The Company is not, and has not been in the recent past,
involved in any legal or arbitration proceedings, including governmental
proceedings and those relating to bankruptcy, receivership, or similar
proceedings.

Dividend Policy

The Company has not paid any dividends on its outstanding
common shares since its incorporation and does not anticipate that it will do so
in the foreseeable future. All funds of the Company are being retained for
administration expenses and mineral property investigations.

|B. | SIGNIFICANT CHANGES
|-- | -------------------

There have been no significant changes to the accompanying
financial statements since July 31, 2012, except as disclosed in this Annual
Report on Form 20-F.

|ITEM 9 | THE OFFER AND LISTING
|------ | ---------------------

|A. | OFFER AND LISTING DETAILS
|-- | -------------------------

Trading Markets

The following tables set forth for the periods indicated the
price history of the Company's common shares on the TSX Venture Exchange (NEX
board from 2008 to 2011) and on the OTC Grey Market:

TSX Venture Exchange
    OTCFiscal year ended July 31
    High (Cdn$)
    Low (Cdn$)
    High (US$)
    Low (US$)2013
    0.35
    0.07
    0.28
    0.072012
    0.50
    0.20
    0.50
    0.202011
    0.49
    0.18
    0.42
    0.162010
    0.30
    0.15
    0.30
    0.132009
    0.50
    0.12
    0.43
    0.08


40

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TSX Venture Exchange
    OTCQuarter
    High (Cdn$)
    Low (Cdn$)
    High (US$)
    Low (US$)Q4, 2013
    0.13
    0.07
    0.23
    0.07Q3,
      2013
    0.28
    0.13
    0.28
    0.23Q2, 2013
    0.34
    0.23
    0.28
    0.25Q1,
      2013
    0.35
    0.24
    0.37
    0.28Q4, 2012
    0.45
    0.31
    0.38
    0.30Q3,
      2012
    0.50
    0.37
    0.50
    0.37Q2, 2012
    0.50
    0.20
    0.50
    0.20Q1, 2012
    0.30
    0.20
    0.32
0.20


TSX Venture Exchange
    OTCMonth
    High (Cdn$)
    Low (Cdn$)
    High (US$)
    Low (US$)to November 22, 2013
    0.09
    0.07
    0.08
    0.06October 2013
    0.10
    0.09
    0.09
    0.07September 2013
    0.10
    0.10
    0.09
    0.07August 2013
    0.10
    0.07
    0.07
    0.07July 2013
    0.10
    0.08
    0.07
    0.07June
      2013
    0.10
    0.07
    0.09
    0.07May 2013
    0.13
    0.10
    0.09
  0.09


|B. | PLAN OF DISTRIBUTION
|-- | --------------------

Not applicable.

|C. | MARKETS
|-- | -------

On December 30, 2011, the Company acquired a qualifying
property and was relisted on the main board of the TSX Venture Exchange, trading
under the symbol QZM. The Company continues to trade on the OTC Grey Market
under the symbol QZMRF.

On February 17, 2005, the Company transferred its listing to
NEX, a separate board of TSX Venture Exchange and the Company's common shares
traded on NEX under the symbol QZM.H.

Prior to February 17, 2005, the Company's common shares were
listed and traded in Canada on Tier 2 on the TSX Venture Exchange, under the
symbol QZM.V. The transition to Tier 2 became effective December 23, 2003. Prior
to this, the Company traded on Tier 3 on the TSX Venture Exchange.

41

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|D. | SELLING SHAREHOLDERS
|-- | --------------------

Not applicable.

|E. | DILUTION
|-- | --------

Not applicable.

|F. | EXPENSES OF THE ISSUE
|-- | ---------------------

Not applicable.

|ITEM 10 | ADDITIONAL INFORMATION
|------- | ----------------------

|A. | SHARE CAPITAL
|-- | -------------

Not applicable.

|B. | MEMORANDUM AND ARTICLES OF
  ASSOCIATION
|-- | ----------------------------------------

Articles of Association

Quartz Mountain's original corporate constituting documents
comprised of the Memorandum and Articles of Association were registered with the
British Columbia Registrar of Companies under Corporation No. BC0253743. The
Companys Memorandum and Articles have subsequently been replaced by a Notice of
Articles and Articles under the Business Corporations Act (British Columbia)
(BCA), and the Articles were last amended by shareholder resolution at the
Companys Annual General Meeting, held on March 15, 2012. The Company's articles
of incorporation do not contain a description or place any restrictions on the
Company's objects and purposes. For more information, see the Articles of
Amalgamation filed as Exhibit 10.1 to this Form 20-F.

Certain Powers of Directors

The Companys articles require that a director or senior
officer who holds any office or possesses any property, right or interest that
could result, directly or indirectly, in the creation of a duty or interest that
materially conflicts with that individuals duty or interest as a director or
senior officer, must disclose the nature and extent of the conflict as required
by the BCA.

The BCA requires that every director or senior officer who is a
party to, or who is a director or officer of, or has a material interest in, any
person who is a party to, a material contract or transaction or a proposed
material contract or transaction with the Company, must disclose in writing to
the Company or request to have entered in the minutes of a meeting or a consent
resolution of directors, the nature and extent of his or her interest, and must
refrain from voting in respect of the contract or transaction, unless the
contract or transaction is: (a) one relating primarily to his or her
remuneration as a director of the corporation or an affiliate; (b) one for
indemnity of or insurance for directors as contemplated under the BCA; or (c)
one with an affiliate of the Company. However, a director who is prohibited by
the BCA from voting on a material contract or proposed material contract may be
counted in determining whether a quorum is present for the purpose of the
resolution, if the director disclosed his or her interest in accordance with the
BCA and the contract or transaction was reasonable and fair to the corporation
at the time it was approved.

The Company's Articles provide that the Board will from time to
time determine the remuneration to be paid to the directors. The Company must
reimburse each director for the reasonable expenses that he or she may incur in
and about the business of the Company. The Board may also, by resolution, award
special remuneration to any director for undertaking any professional or other
services on the Company's behalf, outside than the ordinary duties of a director
of the Company.

The Company's Articles provide that the directors may: (a)
borrow money in the manner and amount, on the security, from the sources and on
the terms and conditions that they consider appropriate; (b) issue bonds,
debentures and other debt obligations either outright or as security for any
liability or obligation of the Company or any other person and at such discounts
or premiums and on such other terms as the directors consider appropriate; (c)
guarantee the repayment of money by any other person or the performance of any
obligation of any other person; and (d) mortgage, charge, whether by way of
specific or floating charge, grant a security interest in, or give other
security on, the whole or any part of the present and future assets and
undertaking of the Company.

The directors may, by resolution, amend or repeal any articles
that regulate the business or affairs of the Company. The BCA requires the
directors to submit any such amendment or repeal to the Company's shareholders
at the next meeting of shareholders, and the shareholders may confirm, reject or
amend the amendment or repeal.

The Board does not have a mandatory retirement policy for
directors based solely on age. The Company has a practice of conducting annual
Board, Committee and individual director evaluations, pursuant to which each
director's performance is evaluated annually. There is no minimum share
ownership requirement for directors qualification.

42

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Authorized Share Capital

The Company's authorized share capital consists of an unlimited number of common shares without par value, and an unlimited number of preferred shares without par value.

All outstanding common shares of the Company are fully paid and non-assessable. The holders of the common shares are entitled to one vote per share at meetings of shareholders and to receive dividends if, as and when declared by the directors of the
Company. In the event of voluntary or involuntary liquidation, dissolution or winding-up of the Company, after payment of all outstanding debts, the remaining assets of the Company available for distribution would be distributed rateably to the
holders of the common shares. Holders of the common shares of the Company have no pre-emptive, redemption, exchange or conversion rights.

The preferred shares may be issued in series on such terms as determined by the
Company's directors in accordance with the class rights and restrictions. The
special rights and restrictions attaching to the preferred shares are set forth
in Part 26 of the Articles, and provide the directors with wide latitude to
create a series of preferred shares which may be convertible into common shares,
and have attached to them rights that rank ahead of common shares in respect of
entitlement to dividends. The directors may, by resolution, create, define and
attach special rights and restrictions to the shares of each series, subject to
the special rights and restrictions attached to the preferred shares.

Except as described above, the Company may not create any class or series of
shares or make any modification to the provisions attaching to the Company's
shares without the affirmative vote of a majority of the votes cast by the
holders of the common shares.

Majority Voting Policy

Under the Company’s Corporate Governance Manual, in an uncontested director election, if the votes “for” the election of a director nominee at a meeting of shareholders are fewer than the number voted “withhold”, the
nominee is expected to submit his or her resignation promptly after the meeting for the consideration of the Nominating and Governance Committee. The Nominating and Governance Committee will make a recommendation to the Board of Directors after
reviewing the matter, and the Board of Directors will then decide whether to accept or reject the resignation. The Board’s decision to accept or reject the resignation will be disclosed to shareholders. The nominee will not participate in any
Nominating and Governance Committee deliberations whether to accept or reject the resignation.

Meetings of Shareholders

The BCA requires the Company to call an annual shareholders' meeting not later than 15 months after holding the last preceding annual meeting and permits the Company to call a special shareholders' meeting at any time. In addition, in accordance
with the BCA, the holders of not less than 5% of the Company's shares carrying the right to vote at a meeting sought to be held may requisition the directors to call a special shareholders' meeting for the purposes stated in the requisition.  The
Company is required to mail a notice of meeting and management information circular to registered shareholders not less than 21 days and not more than 2 months prior to the date of any annual or special shareholders' meeting.  These materials are
also filed with Canadian securities regulatory authorities and furnished to the SEC. The Company's articles provide that a quorum of two shareholders in person or represented by proxy holding or representing by proxy at least 10% of the Company's
issued shares carrying the right to vote at the meeting is required to transact business at a shareholders' meeting. In addition to shareholders and their duly appointed proxies and corporate representatives, the Company's directors, president,
secretary, lawyers, auditors, and invitees of the directors or chairperson, are entitled to be admitted to the Company's annual and special shareholders' meetings; provided that any such person is not to be counted in the quorum and is not entitled
to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at the meeting.

Disclosure of Share Ownership

The Securities Act (British Columbia) currently provides that the directors and certain officers of an issuer and its subsidiaries and any person or company that beneficially owns, directly or indirectly, voting securities of an issuer or that
exercises control or direction over voting securities of an issuer or a combination of both, carrying more than 10% of the voting rights attached to all the issuer's outstanding voting securities (a "significant shareholder"), as well as the
directors and officers of any significant shareholder, (each an "insider") must, within 10 days of becoming an insider, file a report in the required form effective the date on which the person became an insider, disclosing any direct or indirect
beneficial ownership of, or control or direction over, securities of the reporting issuer. The Securities Act (British Columbia) also provides for the filing of a report by an insider of a reporting issuer who acquires or transfers securities of the
issuer or who enters into, materially amends or terminates an arrangement the effect of which is to alter the insider's economic interest in a security of the issuer or the insider's economic exposure to the issuer. These reports must be filed
within five days after the reportable event. The Securities Act (British Columbia) also requires these reports to be filed by reporting insiders within five days after the applicable event, though are only required by the Chief Executive Officer,
Chief Financial Officer, Chief Operating Officer, directors, any person or company responsible for a principal business unit and significant shareholders of the Company.

The Securities Act (British Columbia) also provides that a person or company that acquires (whether or not by way of a take-over bid, offer to acquire or subscription from treasury) beneficial ownership of voting or equity securities or securities
convertible into voting or equity securities of a reporting issuer that, together with previously held securities brings the total holdings of such holder to 10% or more of the outstanding securities of that class, must (a) issue and file forthwith
a news release containing certain prescribed information and (b) file a report within two business days containing the same information set out in the news release. The acquiring person or company must also issue a news release and file a report
each time it acquires, in the aggregate, an additional 2% or more of the outstanding securities of the same class and every time there is a change to any material fact in the news release and report previously issued and filed.

43

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The rules in the United States governing the ownership
threshold above which shareholder ownership must be disclosed are more stringent
than those discussed above. Section 13(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), imposes reporting requirements on persons
who acquire beneficial ownership (as such term is defined in Rule 13d-3 under
the Exchange Act) of more than 5% of a class of an equity security registered
under Section 12 of the Exchange Act. In general, such persons must file, within
ten days after such acquisition, a report of beneficial ownership with the SEC
containing the information prescribed by the regulations under Section 13(d) of
the Exchange Act and promptly file an amendment to such report to disclose any
material change to the information reported, including any acquisition or
disposition of 1% or more of the outstanding securities of the registered class.
Certain institutional investors that acquire shares in the ordinary course of
business and not with the purpose or with the effect of changing or influencing
the control of the issuer, are subject to lesser disclosure obligations.

|C. | MATERIAL CONTRACTS
|-- | ------------------

Quartz Mountain's material contracts as of November 22, 2013
are:

- Corporate Services Agreement with HDSI, dated
for reference July 2, 2010. See Item 7B;
- Option
Agreement with Richard Billingsley, R.G. Lifeboat Holdings Ltd. and Dwayne Kress
dated June 28, 2011, as amended on October 19, 2011 and June 15, 201. See Item
4B;
- Sale Agreement with Finsbury Exploration Ltd.,
dated for reference July 27, 2012. See Item 4B;
- Convertible Debenture Agreement with Bearclaw Capital Corp., dated for reference
August 20, 2012. See Item 4B;
- Mineral Property Sale
and Purchase Agreement with Crucible Resources Ltd. and Michael Rowley dated as
of July 27, 2012. See Item 4B; and
- Letter Agreement
with Amarc Resources Ltd., dated November 1, 2012. See Item 4B.
- Amended Letter Agreement with Amarc Resources Ltd., dated June 27,
2013. See Item 4B.



|D. | EXCHANGE CONTROLS
|-- | -----------------

Quartz Mountain is incorporated pursuant to the laws of the
Province of British Columbia, Canada. There is no law or governmental decree or
regulation in Canada that restricts the export or import of capital, or affects
the remittance of dividends, interest or other payments to a non-resident holder
of common shares, other than withholding tax requirements. Any such remittances
to United States residents are generally subject to withholding tax, however no
such remittances are likely in the foreseeable future. See "Taxation", below.

There is no limitation imposed by Canadian law or by the
charter or other constituent documents of the Company on the right of a
non-resident to hold or vote Common Shares 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 permanent
resident of Canada, or a corporation, partnership, trust or joint venture that
is ultimately controlled by non-Canadians.

|E. | TAXATION
|-- | --------

Certain Canadian Federal Income Tax Information for United
States Residents

The following summarizes the principal Canadian federal income
tax considerations generally applicable to the holding and disposition of common
shares of the Company by a holder (a) who, for the purposes of the Income Tax
Act (Canada) the ("Tax Act"), is not resident in Canada or deemed to be resident
in Canada, deals at arm's length and is not affiliated with the Company, holds
the common shares as capital property and does not use or hold the common shares
in the course of carrying on, or otherwise in connection with, a business in
Canada, and (b) who, for the purposes of the Canada-United States Income Tax
Convention (the "Treaty"), is a resident of the United States, has never been a
resident of Canada, has not held or used (and does not hold or use) common
shares in connection with a permanent establishment or fixed base in Canada, and
who qualifies for the full benefits of the Treaty. The Canada Revenue Agency has
recently introduced special forms to be used in order to substantiate
eligibility for Treaty benefits, and affected holders should consult with their
own advisors with respect to these forms and all relevant compliance matters.

Holders who meet all such criteria in clauses (a) and (b) above
are referred to herein as a "U.S. Holder" or "U.S. Holders", and this summary
only addresses such U.S. Holders. The summary does not deal with special
situations, such as particular circumstances of traders or dealers, limited
liability companies, tax-exempt entities, insurers, financial institutions
(including those to which the mark-to-market provisions of the Tax Act apply),
or entities considered fiscally transparent under applicable law, or otherwise.

This summary is based on the current provisions of the Tax Act
and the regulations thereunder, all proposed amendments to the Tax Act and
regulations publicly announced by the Minister of Finance (Canada) to the date
hereof, the current provisions of the Treaty and our understanding of the
current administrative practices of the Canada Revenue Agency. It has been
assumed that all currently proposed amendments to the Tax Act and regulations
will be enacted as proposed and that there will be no other relevant change in
any governing law, the Treaty or administrative policy, although no assurance
can be given in these respects. This summary does not take
into account provincial, U.S. or other foreign income tax considerations, which may differ significantly from those discussed herein.

44

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This summary is not exhaustive of all possible Canadian income tax consequences. It is not intended as legal or tax advice to any particular U.S. Holder and should not be so construed. The tax consequences to a U.S. Holder will depend on that U.S.
Holder's particular circumstances. Accordingly, all U.S. Holders or prospective U.S. Holders should consult their own tax advisors with respect to the tax consequences applicable to them having regard to their own particular circumstances. The
discussion below is qualified accordingly.

Dividends

Dividends paid or deemed to be paid or credited by the Company to a U.S. Holder are subject to Canadian withholding tax. Under the Treaty, the rate of withholding tax on dividends paid to a U.S. Holder is generally limited to 15% of the gross
dividend (or 5% in the case of a U.S. holder that is a corporate shareholder owning at least 10% of the Company's voting shares), provided the U.S. Holder can establish entitlement to the benefits of the Treaty.

Disposition

A U.S. Holder is generally not subject to tax under the Tax Act in respect of a capital gain realized on the disposition of a common share in the open market, unless the share is "taxable Canadian property" to the holder thereof and the U.S. Holder
is not entitled to relief under the Treaty.

Provided that the Company's common shares are listed on a "designated stock exchange" for purposes of the Tax Act (which currently includes the TSX Venture) at the time of disposition, a common share will generally not constitute taxable Canadian
property to a U.S. Holder unless, at any time during the 60 month period ending at the time of disposition, (i) the U.S. Holder or persons with whom the U.S. Holder did not deal at arm's length (or the U.S. Holder together with such persons) owned
25% or more of the issued shares of any class or series of the Company AND (ii) more than 50% of the fair market value of the share was derived directly or indirectly from certain types of assets, including real or immoveable property situated in
Canada, Canadian resource properties or timber resource properties, and options, interests or rights in respect of any of the foregoing. Common shares may also be deemed to be taxable Canadian property under the Tax Act in certain specific
circumstances. A U.S. Holder holding Common shares as taxable Canadian property should consult with the U.S. Holder's own tax advisors in advance of any disposition of Common shares or deemed disposition under the Tax Act in order to determine
whether any relief from tax under the Tax Act may be available by virtue of the Treaty, and any related compliance procedures.

United States Federal Income Tax Consequences

The Company believes it is likely a "passive foreign investment company" which may have adverse U.S. federal income tax consequences for U.S. shareholders.

U.S. shareholders should be aware that the Company believes it was classified as a passive
foreign investment company ("PFIC") during the tax year ended March 31, 2013, and may be a PFIC in future tax years.  If the Company is a PFIC for any year during a U.S. shareholder's holding period, then such U.S. shareholder generally will be
required to treat any gain realized upon a disposition of common shares, or any so-called "excess distribution" received on its common shares, as ordinary income, and to pay an interest charge on a portion of such gain or distributions, unless the
shareholder makes a timely and effective "qualified electing fund" election ("QEF Election") or a "mark-to-market" election with respect to the common shares. A U.S. shareholder who makes a QEF Election generally must report on a current basis its
share of the Company's net capital gain and ordinary earnings for any year in which the Company is a PFIC, whether or not the Company distributes any amounts to its shareholders. However, U.S. shareholders should be aware that there can be no
assurance that the Company will satisfy record keeping requirements that apply to a qualified electing fund, or that the Company will supply U.S. shareholders with information that such U.S. shareholders require to report under the QEF Election
rules, in the event that the Company is a PFIC and a U.S. shareholder wishes to make a QEF Election. Thus, U.S. shareholders may not be able to make a QEF Election with respect to their common shares. A U.S. shareholder who makes the mark-to-market
election generally must include as ordinary income each year the excess of the fair market value of the common shares over the taxpayer's basis therein. This paragraph is qualified in its entirety by the discussion below under the heading "Certain
United States Federal Income Tax Considerations." Each U.S. shareholder should consult its own tax advisor regarding the PFIC rules and the U.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares.

Certain United States Federal Income Tax Considerations

The following is a general summary of certain material U.S. federal income tax considerations applicable to a U.S. Holder (as defined below) arising from and relating to the acquisition, ownership, and disposition of common shares.

This summary is for general information purposes only and does not purport to be a complete analysis or listing of all potential U.S. federal income tax considerations that may apply to a U.S. Holder arising from and relating to the acquisition,
ownership, and disposition of common shares. In addition, this summary does not take into account the individual facts and circumstances of any particular U.S. Holder that may affect the U.S. federal income tax consequences to such U.S. Holder,
including specific tax consequences to a U.S. Holder under an applicable tax treaty.  Accordingly, this summary is not intended to be, and should not be construed as, legal or U.S. federal income tax advice with respect to any U.S. Holder. This
summary does not address the U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and foreign tax consequences to U.S. Holders of the acquisition, ownership, and disposition of common shares. Each prospective U.S.
Holder should consult its own tax advisor regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S. state and local, and foreign tax consequences relating to the acquisition, ownership and disposition of common
shares.

45

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No legal opinion from U.S. legal counsel or ruling from the
Internal Revenue Service (the "IRS") has been requested, or will be obtained,
regarding the U.S. federal income tax consequences of the acquisition,
ownership, and disposition of common shares. This summary is not binding on the
IRS, and the IRS is not precluded from taking a position that is different from,
and contrary to, the positions taken in this summary. In addition, because the
authorities on which this summary is based are subject to various
interpretations, the IRS and the U.S. courts could disagree with one or more of
the conclusions described in this summary.

Scope of this Summary

Authorities

This summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury Regulations (whether final, temporary, or
proposed), published rulings of the IRS, published administrative positions of
the IRS, the Convention Between Canada and the United States of America with
Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended
(the "Canada-U.S. Tax Convention"), and U.S. court decisions that are applicable
and, in each case, as in effect and available, as of the date of this document.
Any of the authorities on which this summary is based could be changed in a
material and adverse manner at any time, and any such change could be applied on
a retroactive or prospective basis which could affect the U.S. federal income
tax considerations described in this summary. This summary does not discuss the
potential effects, whether adverse or beneficial, of any proposed legislation
that, if enacted, could be applied on a retroactive or prospective basis.

U.S. Holders

For purposes of this summary, the term "U.S. Holder" means a
beneficial owner of common shares that is for U.S. federal income tax purposes:

- an individual who is a
citizen or resident of the U.S.;
- a corporation (or other entity taxable as a
      corporation for U.S. federal income tax purposes) organized under the laws
      of the U.S., any state thereof or the District of Columbia;
- an
      estate whose income is subject to U.S. federal income taxation regardless
      of its source; or
- a trust that (1) is subject to the primary
      supervision of a court within the U.S. and the control of one or 
      more U.S. persons for all substantial decisions or (2) has a valid
      election in effect under applicable Treasury Regulations to be treated as
      a U.S. person.

Non-U.S. Holders

For purposes of this summary, a "non-U.S. Holder" is a
beneficial owner of common shares that is not a U.S. Holder. This summary does
not address the U.S. federal income tax consequences to non-U.S. Holders arising
from and relating to the acquisition, ownership, and disposition of common
shares. Accordingly, a non-U.S. Holder should consult its own tax advisor
regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal
estate and gift, U.S. state and local, and foreign tax consequences (including
the potential application of and operation of any income tax treaties) relating
to the acquisition, ownership, and disposition of common shares.

U.S. Holders Subject to Special U.S. Federal Income Tax
Rules Not Addressed

This summary does not address the U.S. federal income tax
considerations applicable to U.S. Holders that are subject to special provisions
under the Code, including, but not limited to, the following: (a) U.S. Holders
that are tax-exempt organizations, qualified retirement plans, individual
retirement accounts, or other tax-deferred accounts; (b) U.S. Holders that are
financial institutions, underwriters, insurance companies, real estate
investment trusts, or regulated investment companies; (c) U.S. Holders that are
broker-dealers, dealers, or traders in securities or currencies that elect to
apply a mark-to-market accounting method; (d) U.S. Holders that have a
"functional currency" other than the U.S. Dollar; (e) U.S. Holders that own
common shares as part of a straddle, hedging transaction, conversion
transaction, constructive sale, or other arrangement involving more than one
position; (f) U.S. Holders that acquired common shares in connection with the
exercise of employee stock options or otherwise as compensation for services;
(g) U.S. Holders that hold common shares other than as a capital asset within
the meaning of Section 1221 of the Code (generally, property held for investment
purposes); or (h) U.S. Holders that own or have owned (directly, indirectly, or
by attribution) 10% or more of the total combined voting power of the
outstanding shares of the Company. This summary also does not address the U.S.
federal income tax considerations applicable to U.S. Holders who are: (a) U.S.
expatriates or former long-term residents of the U.S.; (b) persons that have
been, are, or will be a resident or deemed to be a resident in Canada for
purposes of the Income Tax Act (Canada) (the "Tax Act"); (c) persons that use or
hold, will use or hold, or that are or will be deemed to use or hold common
shares in connection with carrying on a business in Canada; (d) persons whose
common shares constitute "taxable Canadian property" under the Tax Act; or (e)
persons that have a permanent establishment in Canada for the purposes of the
Canada-U.S. Tax Convention. U.S. Holders that are subject to special provisions
under the Code, including, but not limited to, U.S. Holders described
immediately above, should consult their own tax advisor regarding the U.S.
federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S.
state and local, and foreign tax consequences relating to the acquisition,
ownership and disposition of common shares.

If an entity or arrangement that is classified as a partnership
(or other "pass-through" entity) for U.S. federal income tax purposes holds
common shares, the U.S. federal income tax consequences to such entity and the
partners (or other owners) of such entity generally will depend on the
activities of the entity and the status of such partners (or owners). This
summary does not address the tax consequences to any such owner. Partners (or
other owners) of entities or arrangements that are classified as partnerships or
as "pass-through" entities for U.S. federal income tax purposes should consult
their own tax advisors regarding the U.S. federal income tax consequences
arising from and relating to the acquisition, ownership, and disposition of
common shares.

46

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Passive Foreign Investment Company Rules

If the Company were to constitute a "passive foreign investment company" under the meaning of Section 1297 of the Code (a "PFIC", as defined below) for any year during a U.S. Holder's holding period, then certain potentially adverse rules will
affect the U.S. federal income tax consequences to a U.S. Holder resulting from the acquisition, ownership and disposition of common shares. The Company believes that it was classified as a PFIC during the tax year ended March 31, 2013, and may be a
PFIC in future tax years. The determination of whether any corporation was, or will be, a PFIC for a tax year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to differing interpretations. In addition,
whether any corporation will be a PFIC for any tax year depends on the assets and income of such corporation over the course of each such tax year and, as a result, cannot be predicted with certainty as of the date of this document. Accordingly,
there can be no assurance that the IRS will not challenge any determination made by the Company (or any subsidiary of the Company) concerning its PFIC status. Each U.S. Holder should consult its own tax advisor regarding the PFIC status of the
Company and any subsidiary of the Company.

In addition, in any year in which the Company is classified as a PFIC, such holder would be required to file an annual report with the IRS containing such information as Treasury Regulations and/or other IRS guidance may require. U.S. Holders should
consult their own tax advisors regarding the requirements of filing such information returns under these rules, including the requirement to file a IRS Form 8621.

PFIC Status of the Company

The Company generally will be a PFIC if, for a tax year, (a) 75% or more of the gross income of the Company is passive income (the "income test") or (b) 50% or more of the value of the Company's assets either produce passive income or are held for
the production of passive income, based on the quarterly average of the fair market value of such assets (the "asset test"). "Gross income" generally includes all sales revenues less the cost of goods sold, plus income from investments and from
incidental or outside operations or sources, and "passive income" generally includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities
transactions.

Active business gains arising from the sale of commodities generally are excluded from passive income if substantially all (85% or more) of a foreign corporation's commodities are stock in trade or inventory, depreciable property used in a trade or
business, or supplies regularly used or consumed in a trade or business and certain other requirements are satisfied.

For purposes of the PFIC income test and asset test described above, if the Company owns, directly or indirectly, 25% or more of the total value of the outstanding shares of another corporation, the Company will be treated as if it (a) held a
proportionate share of the assets of such other corporation and (b) received directly a proportionate share of the income of such other corporation. In addition, for purposes of the PFIC income test and asset test described above, and assuming
certain other requirements are met, "passive income" does not include certain interest, dividends, rents, or royalties that are received or accrued by the Company from certain "related persons" (as defined in Section 954(d)(3) of the Code), to the
extent such items are properly allocable to the income of such related person that is not passive income.

Under certain attribution rules, if the Company is a PFIC, U.S. Holders will generally be deemed to own their proportionate share of the Company's direct or indirect equity interest in any company that is also a PFIC (a ''Subsidiary PFIC''), and
will be subject to U.S. federal income tax on their proportionate share of (a) any "excess distributions," as described below, on the stock of a Subsidiary PFIC and (b) a disposition or deemed disposition of the stock of a Subsidiary PFIC by the
Company or another Subsidiary PFIC, both as if such U.S. Holders directly held the shares of such Subsidiary PFIC. In addition, U.S. Holders may be subject to U.S. federal income tax on any indirect gain realized on the stock of a Subsidiary PFIC on
the sale or disposition of common shares. Accordingly, U.S. Holders should be aware that they could be subject to tax even if no distributions are received and no redemptions or other dispositions of common shares are made.

Default PFIC Rules Under Section 1291 of the Code

If the Company is a PFIC for any tax year during which a U.S. Holder owns common shares, the U.S. federal income tax consequences to such U.S. Holder of the acquisition, ownership, and disposition of common shares will depend on whether and when
such U.S. Holder makes an election to treat the Company and each Subsidiary PFIC, if any, as a "qualified electing fund" or "QEF" under Section 1295 of the Code (a "QEF Election") or makes a mark-to-market election under Section 1296 of the Code (a
"Mark-to-Market Election"). A U.S. Holder that does not make either a QEF
Election or a Mark-to-Market Election will be referred to in this summary as a
"Non-Electing U.S. Holder."

A Non-Electing U.S. Holder will be subject to the rules of Section 1291 of the
Code (described below) with respect to (a) any gain recognized on the sale or
other taxable disposition of common shares and (b) any excess distribution
received on the common shares. A distribution generally will be an "excess
distribution" to the extent that such distribution (together with all other
distributions received in the current tax year) exceeds 125% of the average
distributions received during the three preceding tax years (or during a U.S.
Holder's holding period for the common shares, if shorter).

Under Section 1291 of the Code, any gain recognized on the sale or other taxable disposition of common shares (including an indirect disposition of the stock of any Subsidiary PFIC), and any "excess distribution" received on common shares or with
respect to the stock of a Subsidiary PFIC, must be ratably allocated to each day in a Non-Electing U.S. Holder's holding period for the respective common shares. The amount of any such gain or excess distribution allocated to the tax year of
disposition or distribution of the excess distribution and to years before the entity became a PFIC, if any, would be taxed as ordinary income. The amounts allocated to any other tax year would be subject to U.S. federal income tax at the highest
tax rate applicable to ordinary income in each such year, and an interest charge would be imposed on the tax liability for each such year, calculated as if such tax liability had
been due in each such year. A Non-Electing U.S. Holder that is not a corporation must treat any such interest paid as "personal interest," which is not deductible.

47

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If the Company is a PFIC for any tax year during which a Non-Electing U.S. Holder holds common shares, the Company will continue to be treated as a PFIC with respect to such Non-Electing U.S. Holder, regardless of whether the Company ceases to be a
PFIC in one or more subsequent tax years. A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above), but not loss, as if such
common shares were sold on the last day of the last tax year for which the Company was a PFIC.

QEF Election

A U.S. Holder that makes a timely and effective QEF Election for the first tax year in which its holding period of its common shares begins generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to its
common shares. A U.S. Holder that makes a timely and effective QEF Election will be subject to U.S. federal income tax on such U.S. Holder's pro rata share of (a) the net capital gain of the Company, which will be taxed as long-term capital gain to
such U.S. Holder, and (b) the ordinary earnings of the Company, which will be taxed as ordinary income to such U.S. Holder. Generally, "net capital gain" is the excess of (a) net long-term capital gain over (b) net short-term capital loss, and
"ordinary earnings" are the excess of (a) "earnings and profits" over (b) net capital gain.  A U.S. Holder that makes a QEF Election will be subject to U.S. federal income tax on such amounts for each tax year in which the Company is a PFIC,
regardless of whether such amounts are actually distributed to such U.S. Holder by the Company. However, for any tax year in which the Company is a PFIC and has no net income or gain, U.S. Holders that have made a QEF Election would not have any
income inclusions as a result of the QEF Election. If a U.S. Holder that made a QEF Election has an income inclusion, such a U.S. Holder may, subject to certain limitations, elect to defer payment of current U.S. federal income tax on such amounts,
subject to an interest charge.  If such U.S. Holder is not a corporation, any such interest paid will be treated as "personal interest," which is not deductible.

A U.S. Holder that makes a timely and effective QEF Election with respect to the Company generally (a) may receive a tax-free distribution from the Company to the extent that such distribution represents "earnings and profits" of the Company that
were previously included in income by the U.S. Holder because of such QEF Election and (b) will adjust such U.S. Holder's tax basis in the common shares to reflect the amount included in income or allowed as a tax-free distribution because of such
QEF Election.  In addition, a U.S. Holder that makes a QEF Election generally will recognize capital gain or loss on the sale or other taxable disposition of common shares.

The procedure for making a QEF Election, and the U.S. federal income tax consequences of making a QEF Election, will depend on whether such QEF Election is timely.  A QEF Election will be treated as "timely" if such QEF Election is made for the
first year in the U.S. Holder's holding period for the common shares in which the Company was a PFIC. A U.S. Holder may make a timely QEF Election by filing the appropriate QEF Election documents at the time such U.S. Holder files a U.S. federal
income tax return for such year. If a U.S. Holder does not make a timely and effective QEF Election for the first year in the U.S. Holder's holding period for the common shares, the U.S. Holder may still be able to make a timely and effective QEF
Election in a subsequent year if such U.S. Holder meets certain requirements and makes a "purging" election to recognize gain (which will be taxed under the rules of Section 1291 of the Code discussed above) as if such common shares were sold for
their fair market value on the day the QEF Election is effective. If a U.S. Holder owns PFIC stock indirectly through another PFIC, separate QEF Elections must be made for the PFIC in which the U.S. Holder is a direct shareholder and the Subsidiary
PFIC for the QEF rules to apply to both PFICs.

A QEF Election will apply to the tax year for which such QEF Election is timely made and to all subsequent tax years, unless such QEF Election is invalidated or terminated or the IRS consents to revocation of such QEF Election. If a U.S. Holder
makes a QEF Election and, in a subsequent tax year, the Company ceases to be a PFIC, the QEF Election will remain in effect (although it will not be applicable) during those tax years in which the Company is not a PFIC. Accordingly, if the Company
becomes a PFIC in another subsequent tax year, the QEF Election will be effective and the U.S. Holder will be subject to the QEF rules described above during any subsequent tax year in which the Company qualifies as a PFIC.

U.S. Holders should be aware that there can be no assurances that the Company will satisfy the record keeping requirements that apply to a QEF, or that the Company will supply U.S. Holders with information that such U.S. Holders are required to
report under the QEF rules, in the event that the Company is a PFIC. Thus, U.S. Holders may not be able to make a QEF Election with respect to their common shares. Each U.S. Holder should consult its own tax advisor regarding the availability of,
and procedure for making, a QEF Election.

A U.S. Holder makes a QEF Election by attaching a completed IRS Form 8621, including a PFIC Annual Information Statement, to a timely filed United States federal income tax return. However, if the Company cannot provide the required information with
regard to the Company or any of its Subsidiary PFICs, U.S. Holders will not be able to make a QEF Election for such entity and will continue to be subject to the rules discussed above that apply to Non-Electing U.S. Holders with respect to the
taxation of gains and excess distributions.

Mark-to-Market Election

A U.S. Holder may make a Mark-to-Market Election only if the common shares are marketable stock. The common shares generally will be "marketable stock" if the common shares are regularly traded on (a) a national securities exchange that is
registered with the Securities and Exchange Commission, (b) the national market system established pursuant to section 11A of the Securities and Exchange Act of 1934, or (c) a foreign securities exchange that is regulated or supervised by a
governmental authority of the country in which the market is located, provided that (i) such foreign exchange has trading volume, listing, financial disclosure, and surveillance requirements, and meets other requirements and the laws of the country
in which such foreign exchange is located, together with the rules of such foreign exchange, ensure that such requirements are actually enforced and (ii) the rules of such foreign
exchange effectively promote active trading of listed stocks. If such stock is traded on such a qualified exchange or other market, such stock generally will be "regularly traded" for any calendar year during which such stock is traded, other than
in de minimis quantities, on at least 15 days during each calendar quarter.

48

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A U.S. Holder that makes a Mark-to-Market Election with respect to its common shares generally will not be subject to the rules of Section 1291 of the Code discussed above with respect to such common shares. However, if a U.S. Holder does not make a
Mark-to-Market Election beginning in the first tax year of such U.S. Holder's holding period for the common shares or such U.S. Holder has not made a timely QEF Election, the rules of Section 1291 of the Code discussed above will apply to certain
dispositions of, and distributions on, the common shares.

A U.S. Holder that makes a Mark-to-Market Election will include in ordinary income, for each tax year in which the Company is a PFIC, an amount equal to the excess, if any, of (a) the fair market value of the common shares, as of the close of such
tax year over (b) such U.S. Holder's tax basis in such common shares. A U.S. Holder that makes a Mark-to-Market Election will be allowed a deduction in an amount equal to the excess, if any, of (a) such U.S. Holder's adjusted tax basis in the common
shares, over (b) the fair market value of such common shares (but only to the extent of the net amount of previously included income as a result of the Mark-to-Market Election for prior tax years).

A U.S. Holder that makes a Mark-to-Market Election generally also will adjust
such U.S. Holder's tax basis in the common shares to reflect the amount included
in gross income or allowed as a deduction because of such Mark-to-Market
Election. In addition, upon a sale or other taxable disposition of common
shares, a U.S. Holder that makes a Mark-to-Market Election will recognize
ordinary income or ordinary loss (not to exceed the excess, if any, of (a) the
amount included in ordinary income because of such Mark-to-Market Election for
prior tax years over (b) the amount allowed as a deduction because of such
Mark-to-Market Election for prior tax years). Losses that exceed this limitation
are subject to the rules generally applicable to losses provided in the Code and
Treasury Regulations.

A Mark-to-Market Election applies to the tax year in which such Mark-to-Market
Election is made and to each subsequent tax year, unless the common shares cease
to be "marketable stock" or the IRS consents to revocation of such election.
Each U.S. Holder should consult its own tax advisor regarding the availability
of, and procedure for making, a Mark-to-Market Election.

Although a U.S. Holder may be eligible to make a Mark-to-Market Election with respect to the common shares, no such election may be made with respect to the stock of any Subsidiary PFIC that a U.S. Holder is treated as owning, because such stock is
not marketable. Hence, the Mark-to-Market Election will not be effective to eliminate the application of the default rules of Section 1291 of the Code described above with respect to deemed dispositions of Subsidiary PFIC stock or excess
distributions from a Subsidiary PFIC.

Other PFIC Rules

Under Section 1291(f) of the Code, the IRS has issued proposed Treasury Regulations that, subject to certain exceptions, would cause a U.S. Holder that had not made a timely QEF Election to recognize gain (but not loss) upon certain transfers of
common shares that would otherwise be tax-deferred (e.g., gifts and exchanges pursuant to corporate reorganizations). However, the specific U.S. federal income tax consequences to a U.S. Holder may vary based on the manner in which common shares are
transferred.

Certain additional adverse rules may apply with respect to a U.S. Holder if the Company is a PFIC, regardless of whether such U.S. Holder makes a QEF Election.  For example, under Section 1298(b)(6) of the Code, a U.S. Holder that uses common shares
as security for a loan will, except as may be provided in Treasury Regulations, be treated as having made a taxable disposition of such common shares.

Special rules also apply to the amount of foreign tax credit that a U.S. Holder may claim on a distribution from a PFIC. Subject to such special rules, foreign taxes paid with respect to any distribution in respect of stock in a PFIC are generally
eligible for the foreign tax credit. The rules relating to distributions by a PFIC and their eligibility for the foreign tax credit are complicated, and a U.S. Holder should consult with its own tax advisor regarding the availability of the foreign
tax credit with respect to distributions by a PFIC.

The PFIC rules are complex, and each U.S. Holder should consult its own tax advisor regarding the PFIC rules and how the PFIC rules may affect the U.S. federal income tax consequences of the acquisition, ownership, and disposition of common shares.

Ownership and Disposition of Common Shares

The following discussion is subject to the rules described above under the heading "Passive Foreign Investment Company Rules."

Distributions on Common Shares

A U.S. Holder that receives a distribution, including a constructive distribution, with respect to a common share will be required to include the amount of such distribution in gross income as a dividend (without reduction for any Canadian income
tax withheld from such distribution) to the extent of the current or accumulated "earnings and profits" of the Company, as computed for U.S. federal income tax purposes. A dividend generally will be taxed to a U.S. Holder at ordinary income tax
rates if the Company is a PFIC. To the extent that a distribution exceeds the current and accumulated "earnings and profits" of the Company, such distribution will be treated first as a tax-free return of capital to the extent of a U.S. Holder's tax
basis in the common shares and thereafter as gain from the sale or exchange of such common shares.  (See " Sale or Other Taxable Disposition of common shares" below). However, the Company may not maintain the calculations of earnings and profits in
accordance with U.S. federal income tax principles, and each U.S. Holder should therefore assume that any distribution by the Company with respect to the common shares will constitute ordinary dividend income.  Dividends received on common shares
generally will not be eligible for the "dividends received deduction". In addition, the Company does not anticipate that its distributions will constitute qualified dividend income eligible for the preferential tax rates applicable to long-term capital gains. The dividend rules are complex, and
each U.S. Holder should consult its own tax advisor regarding the application of
such rules.

49

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Sale or Other Taxable Disposition of Common Shares

Upon the sale or other taxable disposition of common shares, a
U.S. Holder generally will recognize capital gain or loss in an amount equal to
the difference between the U.S. Dollar value of cash received plus the fair
market value of any property received and such U.S. Holder's tax basis in such
common shares sold or otherwise disposed of. A U.S. Holder's tax basis in common
shares generally will be such holder's U.S. Dollar cost for such common shares.
Gain or loss recognized on such sale or other disposition generally will be
long-term capital gain or loss if, at the time of the sale or other disposition,
the common shares have been held for more than one year.

Preferential tax rates currently apply to long-term capital
gain of a U.S. Holder that is an individual, estate, or trust. There are
currently no preferential tax rates for long-term capital gain of a U.S. Holder
that is a corporation. Deductions for capital losses are subject to significant
limitations under the Code.

Additional Tax on Passive Income

For tax years beginning after December 31, 2012, certain
individuals, estates and trusts whose income exceeds certain thresholds will be
required to pay a 3.8% Medicare surtax on "net investment income" including,
among other things, dividends and net gain from dispositions of property (other
than property held in a trade or business). U.S. Holders should consult with
their own tax advisors regarding the effect, if any, of this tax on their
ownership and disposition of common shares.

Receipt of Foreign Currency

The amount of any distribution paid to a U.S. Holder in foreign
currency, or on the sale, exchange or other taxable disposition of common
shares, generally will be equal to the U.S. Dollar value of such foreign
currency based on the exchange rate applicable on the date of receipt
(regardless of whether such foreign currency is converted into U.S. Dollars at
that time). A U.S. Holder will have a basis in the foreign currency equal to its
U.S. Dollar value on the date of receipt. Any U.S. Holder who converts or
otherwise disposes of the foreign currency after the date of receipt may have a
foreign currency exchange gain or loss that would be treated as ordinary income
or loss, and generally will be U.S. source income or loss for foreign tax credit
purposes. Each U.S. Holder should consult its own U.S. tax advisor regarding the
U.S. federal income tax consequences of receiving, owning, and disposing of
foreign currency.

Foreign Tax Credit

Subject to the PFIC rules discussed above, a U.S. Holder that
pays (whether directly or through withholding) Canadian income tax with respect
to dividends paid on the common shares generally will be entitled, at the
election of such U.S. Holder, to receive either a deduction or a credit for such
Canadian income tax. Generally, a credit will reduce a U.S. Holder's U.S.
federal income tax liability on a Dollar-for-Dollar basis, whereas a deduction
will reduce a U.S. Holder's income subject to U.S. federal income tax. This
election is made on a year-by-year basis and applies to all foreign taxes paid
(whether directly or through withholding) by a U.S. Holder during a year.

Complex limitations apply to the foreign tax credit, including
the general limitation that the credit cannot exceed the proportionate share of
a U.S. Holder's U.S. federal income tax liability that such U.S. Holder's
"foreign source" taxable income bears to such U.S. Holder's worldwide taxable
income. In applying this limitation, a U.S. Holder's various items of income and
deduction must be classified, under complex rules, as either "foreign source" or
"U.S. source." Generally, dividends paid by a foreign corporation should be
treated as foreign source for this purpose, and gains recognized on the sale of
stock of a foreign corporation by a U.S. Holder should be treated as U.S. source
for this purpose, except as otherwise provided in an applicable income tax
treaty, and if an election is properly made under the Code. However, the amount
of a distribution with respect to the common shares that is treated as a
"dividend" may be lower for U.S. federal income tax purposes than it is for
Canadian federal income tax purposes, resulting in a reduced foreign tax credit
allowance to a U.S. Holder. In addition, this limitation is calculated
separately with respect to specific categories of income. The foreign tax credit
rules are complex, and each U.S. Holder should consult its own U.S. tax advisor
regarding the foreign tax credit rules.

Backup Withholding and Information Reporting

Under U.S. federal income tax law and Treasury Regulations,
certain categories of U.S. Holders must file information returns with respect to
their investment in, or involvement in, a foreign corporation. For example,
recently enacted legislation generally imposes new U.S. return disclosure
obligations (and related penalties) on individuals who are U.S. Holders that
hold certain specified foreign financial assets in excess of $50,000. The
definition of specified foreign financial assets includes not only financial
accounts maintained in foreign financial institutions, but also, unless held in
accounts maintained by a financial institution, any stock or security issued by
a non-U.S. person, any financial instrument or contract held for investment that
has an issuer or counterparty other than a U.S. person and any interest in a
foreign entity. U.S. Holders may be subject to these reporting requirements
unless their common shares are held in an account at a domestic financial
institution. Penalties for failure to file certain of these information returns
are substantial. U.S. Holders should consult with their own tax advisors
regarding the requirements of filing information returns, including the
requirement to file an IRS Form 8938.

Payments made within the U.S. or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from the sale or
other taxable disposition of, common shares will generally be subject to
information reporting and backup withholding tax, at the rate of 28% (and
increasing to 31% for payments made after December 31, 2012), if a U.S. Holder
(a) fails to furnish such U.S. Holder's correct U.S. taxpayer identification
number (generally on Form W-9), (b) furnishes an incorrect U.S. taxpayer
identification number, (c) is notified by the IRS that such U.S. Holder has
previously failed to properly report items subject to backup withholding tax, or
(d) fails to certify, under penalty of perjury, that such U.S. Holder has
furnished its correct U.S. taxpayer identification number and that the IRS has not notified such U.S. Holder that it is subject to backup
withholding tax. However, certain exempt persons generally are excluded from
these information reporting and backup withholding rules. Backup withholding is
not an additional tax. Any amounts withheld under the U.S. backup withholding
tax rules will be allowed as a credit against a U.S. Holder's U.S. federal
income tax liability, if any, or will be refunded, if such U.S. Holder furnishes
required information to the IRS in a timely manner. Each U.S. Holder should
consult its own tax advisor regarding the information reporting and backup
withholding rules.

50

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|   |                            
|-- | ---------------------------
|F. | DIVIDENDS AND PAYING
AGENTS

Not applicable.

|G. | STATEMENT BY EXPERTS
|-- | --------------------

Not applicable.

|H. | DOCUMENTS ON DISPLAY
|-- | --------------------

Exhibits attached to this Form 20-F are also available for
viewing on EDGAR at http://www.sec.gov/, or at
the offices of the Company, 15th Floor - 1040 West Georgia Street, Vancouver,
British Columbia V6E 4H1 or on request of the Company at 604-684-6365,
attention: Investor Relations Department. Copies of the Company's IFRS financial
statements and other continuous disclosure documents required under the British
Columbia Securities Act are available for viewing on the internet at www.sedar.com.

|I. | SUBSIDIARY INFORMATION
|-- | ----------------------

Not applicable.

|ITEM 11 | QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK
|------- | ----------------------------------------------------------------

|A. | TRANSACTION RISK AND CURRENCY RISK
    MANAGEMENT
|-- | -------------------------------------------------

The Company is exposed in varying degrees to a variety of
financial instrument related risks. The Board approves and monitors the risk
management processes, inclusive of documented treasury policies, counterparty
limits, and controlling and reporting structures.

|B. | EXCHANGE RATE SENSITIVITY
|-- | -------------------------

The Company incurs substantially all of its expenditures in
Canada and substantially all of its cash and cash equivalents held are
denominated in Canadian dollars. Consequently the Company is not subject to
material foreign exchange risk.

|C. | INTEREST RATE RISK AND EQUITY PRICE
  RISK
|-- | ------------------------------------------

The Company is subject to interest rate risk with respect to
its investments in cash and cash equivalents. The Company's policy is to invest
cash at fixed rates of interest and cash reserves are to be maintained in cash
and cash equivalents in order to maintain liquidity, while achieving a
satisfactory return for shareholders. Fluctuations in interest rates when the
cash and cash equivalents mature impact interest income earned.

As at July 31, 2013 the Company held cash and cash equivalents
in financial institutions in the amount of $706,393 (2012  $2,450,451; 2011 -
$78,652).

|D. | COMMODITY PRICE RISK
|-- | --------------------

While the value of the Company's resource properties, if any,
can always be said to relate to the price of precious metals and the outlook for
same, the Company does not have any resource properties or operating mines and
hence does not have any hedging or other commodity based operational risks
respecting to its business activities.

|ITEM 12 | DESCRIPTION OF SECURITIES OTHER THAN EQUITY
      SECURITIES
|------- | ------------------------------------------------------------

Not applicable.

51

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|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
|------- | -----------------------

|A. | DISCLOSURE CONTROLS AND
  PROCEDURES
|-- | ------------------------------------

At the end of the period covered by this annual report on Form
20-F, an evaluation was carried out with the participation of the Company's
management, including the President and Chief Executive Officer ("CEO") and the
Chief Financial Officer ("CFO"), of the effectiveness of the Company's
disclosure controls and procedures (as defined in Rules 13a  15(e) and 15d
15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")). Based on that evaluation, the President and CEO and the CFO have
concluded that as of the end of the period covered by this annual report on Form
20-F, the Company's disclosure controls and procedures were effective in
providing reasonable assurance that: (i) information required to be disclosed by
the Company in reports that it files or submits to the SEC under the Exchange
Act was recorded, processed, summarized and reported within the time periods
specified in applicable rules and forms, and (ii) material information required
to be disclosed in the Company's reports filed under the Exchange Act was
accumulated and communicated to the Company's management, including the
President and CEO and the CFO, as appropriate, to allow for accurate and timely
decisions regarding required disclosure.

|**B.** | **MANAGEMENT'S** ANNUAL REPORT
            ON INTERNAL CONTROL OVER FINANCIAL
          **REPORTING**
|------ | -----------------------------------------------------------------------------------------------------

The Company's management, including the President and CEO and
CFO, is responsible for establishing and maintaining adequate internal control
over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act. The Company's internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation and fair presentation of financial
statements for external purposes in accordance with IFRS. The Company's internal
control over financial reporting includes those policies and procedures
that:

- pertain to the maintenance of records that, in reasonable detail,
  accurately and fairly reflect the transactions and dispositions of the assets
  of the Company;
- provide reasonable assurance that transactions are recorded as necessary
  to permit preparation of financial statements in accordance with IFRS, and
  that receipts and expenditures of the Company are being made only in
  accordance with authorizations of management and directors of the Company; and
- provide reasonable assurance regarding prevention or timely detection of
  unauthorized acquisition, use or disposition of the Company's assets that
  could have a material effect on the financial statements.

With the participation of the President and CEO and CFO,
management conducted an evaluation of the design and operation of the Company's
internal control over financial reporting as of July 31, 2013, based on the
criteria set forth in Internal Control  Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission. This
evaluation included review of the documentation of controls, evaluation of the
design effectiveness of controls, testing of the operating effectiveness of
controls and a conclusion on this evaluation. Based on this evaluation,
management concluded in its report that the Company's internal control over
financial reporting was effective as of July 31, 2013.

This annual report does not include an attestation report of
the Company's registered public accounting firm regarding internal control over
financial reporting. Management's report was not subject to attestation by the
Company's registered public accounting firm pursuant to rules that permit the
Company to provide only management's report in this annual report.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

During the period covered by this Annual Report on Form 20-F,
no changes occurred in the Company's internal control over financial reporting
that have materially affected, or are reasonably likely to materially affect,
the Company's internal control over financial reporting.

LIMITATIONS OF CONTROLS AND PROCEDURES

The Company's management, including its President and CEO and
CFO, does not expect that its disclosure controls and procedures or internal
controls and procedures will prevent all errors and all fraud. A control system,
no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are
resource constraints, and the benefits of controls must be considered relative
to their costs. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within the Company have been detected. These
inherent limitations include the realities that judgments in decision-making can
be faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
controls. The design of any system of controls is also based in part upon
certain assumptions about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving its stated goals under all
potential future conditions; over time, controls may become inadequate because
of changes in conditions, or the degree of compliance with the policies or
procedures may deteriorate. Because of the inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur and
not be detected.

52

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|        |           
|------- | ----------
|ITEM 16 | [RESERVED]

|ITEM 16A | AUDIT COMMITTEE FINANCIAL EXPERT
|-------- | --------------------------------

The members of the Audit and Risk Committee are James Kerr,
David Mordant and Gordon J. Fretwell. The Board of Directors has determined that
Mr. Kerr qualifies as a "financial expert" under the rules of the Securities and
Exchange Commission, based on his education and experience. Messrs. Kerr,
Mordant and Fretwell are "independent", as that term is defined in section 803
of the NYSE MKT Company Guide. Mr. Kerr is an accredited Chartered Accountant in
Canada.

Each Audit and Risk Committee member is able to read and
understand fundamental financial statements.

|ITEM 16B | CODE OF ETHICS
|-------- | --------------

The Company's board of directors has adopted a written Code of
Ethics governing directors, officers and employees. The Code of Ethics sets
forth written standards that are designed to deter wrongdoing and to meet the
Company's core vision: to become a successful and innovative mining and mineral
exploration corporation.

In order to achieve the Company's vision the following values
are to be included in all activities:

- Responsibly explore for and develop mineral resources;
- Be respectful of the environment;
- Be an industry leader and participate in industry organizations devoted to
  improving the industry;
- Be a strong and honest competitor;
- Be a responsible corporate citizen and contribute to the community;
- Deal fairly with our customers, suppliers and joint venture participants;
- Provide a safe and rewarding work environment; and
- Deliver value to shareholders.

The board of directors monitors compliance with the Code of
Ethics by ensuring that all Company personnel have read and understood the Code
of Ethics, and by charging management with bringing to the attention of the
board of directors any issues that arise with respect to the Code of Ethics.

A copy of the Code of Ethics was filed with the Securities and
Exchange Commission as an exhibit to the Company's Annual Report filed on Form
20-F for the fiscal year ended July 31, 2005 and is available at www.sec.gov. The Company will also provide a copy of
the Code of Ethics to any person without charge, upon request. Requests can be
sent by mail to: 15th Floor, 1040 West Georgia Street, Vancouver, British
Columbia, Canada, V6E 4H8; or submitted by telephone at 604-684-6365, attention:
Investor Relations Department.

During the most recently completed fiscal year, the Company has
neither: (a) amended its Code of Ethics; nor (b) granted any waiver (including
any implicit waiver) form any provision of its Code of Ethics.

53

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|ITEM 16C | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|-------- | --------------------------------------

The following table discloses the aggregate fees billed for
each of the last two fiscal years for professional services rendered by the
Company's audit firm, Davidson & Company LLP for various services.

Services:
    
    Year endedJuly 31, 2013
    
    
    July 31, 2012Audit Fees (1)
    $
    32,750
    
    $
    32,750Audit Related Fees (2)
    
    
    
    
    Tax Fees (3)
    $
    4,700
    
    $
    10,000All
      Other Fees (4)
    
    
    
    
    Total
    $
    37,450
    
    $
    42,750


|(1) | "Audit Fees" include fees necessary to perform the annual
      audit and quarterly reviews of the Company's consolidated financial
      statements. Audit Fees include fees for review of tax provisions and for
      accounting consultations on matters reflected in the financial statements.
      Audit Fees also include audit or other attest services required by
      legislation or regulation, such as comfort letters, consents, reviews of
      securities filings and statutory audits.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(2) | "Audit-Related Fees" include services that are
      traditionally performed by the auditor. These audit-related services
      include employee benefit audits, due diligence assistance, accounting
      consultations on proposed transactions, internal control reviews and audit
      or attest services not required by legislation or regulation.                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(3) | "Tax Fees" include fees billed for professional services
      rendered by the principal accountant for tax compliance, tax advice, and
      tax planning.                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(4) | "All Other Fees" include fees billed for products and
      services provided by the principal accountant, other than the services
      reported in (1), (2) or (3) above.                                                                                                                                                                                                                                                                                                                               

From time to time, management of the Company recommends to and
requests approval from the Audit and Risk Committee for non-audit services to be
provided by the Company's auditors. The Audit and Risk Committee routinely
considers such requests at committee meetings, and if acceptable to a majority
of the Audit and Risk Committee members, pre-approves such non-audit services by
a resolution authorizing management to engage the Company's auditors for such
non-audit services, with set maximum dollar amounts for each itemized service.
During such deliberations, the Audit and Risk Committee assesses, among other
factors, whether the services requested would be considered "prohibited
services" as contemplated by the SEC, and whether the services requested and the
fees related to such services could impair the independence of the auditors. No
material non-audit services were provided by the Company's auditors during the
year ended July 31, 2013.

|ITEM 16D | EXEMPTIONS FROM LISTING STANDARDS FOR AUDIT
      COMMITTEES
|-------- | ------------------------------------------------------------

Not applicable.

|ITEM 16E | PURCHASES OF EQUITY SECURITIES BY THE ISSUER
      AND AFFILIATED **PURCHASERS**
|-------- | --------------------------------------------------------------------------------

During the year ended July 31, 2013, the Company did not
purchase any of its issued and outstanding common shares pursuant to any
repurchase program or otherwise.

|ITEM 16F | CHANGE IN REGISTRANT'S CERTIFYING
      ACCOUNTANT
|-------- | --------------------------------------------------

None.

|ITEM 16G | CORPORATE GOVERNANCE
|-------- | --------------------

Not applicable.

54

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|ITEM 17 | FINANCIAL STATEMENTS
|------- | --------------------

See exhibit 99.1.

ITEM 18 FINANCIAL STATEMENTS

|Not applicable. See Item
      17.
|----------------------------------

|ITEM 19 | EXHIBITS
|------- | --------

The following Exhibits have been filed with the Company's
Annual Report on Form 20-F in previous years:

Exhibit Number
    Description of Exhibit
    Note1.1
    Transition Application dated October 11,
      2005
    Incorporated by reference from our Annual
      Report on Form 20-F for the year ended July 31, 2005, filed on January 10,
      2006.1.2
    Notice of Articles dated October 11, 2005
    Incorporated by reference from our Annual Report on Form
      20-F for the year ended July 31, 2005, filed on January 10, 2006.1.3
    Notice of Alteration of Articles dated
      October 11, 2005
    Incorporated by reference from our Annual
      Report on Form 20-F for the year ended July 31, 2005, filed on January 10,
      2006.1.4
    Notice of Alteration dated February 17, 2006
    Incorporated by reference from our Annual Report on Form
      20-F for the year ended July 31, 2006, filed on January 29, 2007.1.5
    Notice of Articles dated February 17, 2006
    Incorporated by reference from our Annual
      Report on Form 20-F for the year ended July 31, 2006, filed on January 29,
      2007.1.6
    Articles
    Incorporated by reference from our Annual Report on Form
      20-F for the year ended July 31, 2010, filed on October 28, 2010.4.2
    Services Agreement between Hunter
      Dickinson Inc. and the Company dated July 2, 2010
    Incorporated by reference from our Annual
      Report on Form 20-F for the year ended July 31, 2010, filed on October 28,
      2010.4.1
    Sale Agreement between Finsbury Exploration
      Ltd. and the Company dated July 27, 2012
    Incorporated by reference from our Annual
      Report on Form 20-F for the year ended July 31, 2012, filed on November
      30, 2012.4.3
    Convertible Debenture Agreement between
      Bearclaw Capital Corp. and the Company dated August 20, 2012, and amended
      July 14, 2013.
    Incorporated by reference from our Annual
      Report on Form 20-F for the year ended July 31, 2012, filed on November
      30, 2012.4.4
    Letter Agreement between Amarc Resources Ltd. and the
      Company, dated November 1, 2012
    Incorporated by reference from our Annual Report on Form
      20-F for the year ended July 31, 2012, filed on November 30, 2012.6.1
    Stock Option Plan approved by Shareholders
      on March 15, 2012
    Incorporated by reference from our Annual
      Report on Form 20-F for the year ended July 31, 2012, filed on November
      30, 2012.6.2
    Audit and Risk Committee Charter
    Incorporated by reference from our Annual Report on Form
      20-F for the year ended July 31, 2012, filed on November 30, 2012.10.1
    Articles approved by
      Shareholders on March 15, 2012
    Incorporated by reference from
      our Annual Report on Form 20-F for the year ended July 31, 2012, filed on
      November 30, 2012.


55

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Exhibit Number
    Description of Exhibit
    Note16B.
    Code of Ethics and Trading Restrictions
    Incorporated by reference from our Annual
      Report on Form 20-F for the year ended July 31, 2012, filed on November
      30, 2012.


The following exhibits are filed with this Annual Report on
Form 20-F:

Exhibit Number
    Description of Exhibit4.4
    Amended Letter Agreement between Amarc Resources Ltd and
      the Company, dated June 27, 201312.1
    Section 302 Certification of the Chief Executive Officer12.2
    Section 302 Certification of the Chief Financial Officer13.1
    Section 906 Certification of the Chief Executive Officer13.2
    Section 906 Certification of the Chief Financial Officer99.1
    Independent Auditors Report,
      dated November 22, 2013; Statements of financial position as at July
      31, 2013, and July 31, 2012; Statements of comprehensive loss for the
      years ended July 31, 2013, July 31, 2012 and July 31, 2011;Statements of cash flows for
      the years ended July 31, 2013, July 31, 2012 and July 31, 2011;Statements of changes in equity
      for the years ended July 31, 2013, July 31, 2012 and July 31, 2011;Notes to audited annual
      financial statements


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.

QUARTZ MOUNTAIN RESOURCES LTD.

_______________________________________Ronald W. Thiessen
President and Chief Executive Officer

Dated: November 22, 2013

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