---

|QUARTZ MOUNTAIN RESOURCES LTD.      
|------------------------------------
|YEAR ENDED JULY 31, 2006            
|                                    
|MANAGEMENT'S DISCUSSION AND ANALYSIS
|                                    

T A B L E   O F   C O N T E N T S

|1.1    | Date                                                                        | 2
|------ | --------------------------------------------------------------------------- | -
|       |                                                                             |  
|1.2    | Overview                                                                    | 2
|       |                                                                             |  
|1.3    | Selected Annual Information                                                 | 3
|       |                                                                             |  
|1.4    | Summary of Quarterly Results                                                | 4
|       |                                                                             |  
|1.5    | Results of Operations                                                       | 5
|       |                                                                             |  
|1.6    | Liquidity                                                                   | 5
|       |                                                                             |  
|1.7    | Capital Resources                                                           | 6
|       |                                                                             |  
|1.8    | Off-Balance Sheet Arrangements                                              | 6
|       |                                                                             |  
|1.9    | Transactions with Related Parties                                           | 6
|       |                                                                             |  
|1.10   | Fourth Quarter                                                              | 6
|       |                                                                             |  
|1.11   | Proposed Transactions                                                       | 6
|       |                                                                             |  
|1.12   | Critical Accounting Estimates                                               | 6
|       |                                                                             |  
|1.13   | Changes in Accounting Policies including Initial Adoption                   | 7
|       |                                                                             |  
|1.14   | Financial Instruments and Other Instruments                                 | 7
|       |                                                                             |  
|1.15   | Other MD&A Requirements                                                     | 7
|       |                                                                             |  
|1.15.1 | Additional Disclosure for Venture Issuers Without Significant
      Revenue | 7
|       |                                                                             |  
|1.15.2 | Disclosure of Outstanding Share Data                                        | 8
|       |                                                                             |  
|1.15.3 | Disclosure Controls and Procedures                                          | 8

- 1 -

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|QUARTZ MOUNTAIN RESOURCES LTD.      
|------------------------------------
|YEAR ENDED JULY 31, 2006            
|                                    
|MANAGEMENT'S DISCUSSION AND ANALYSIS
|                                    

1.1      Date

This Management Discussion and Analysis (MD&A) should be
read in conjunction with the audited consolidated financial statements as at
July 31, 2006 of Quartz Mountain Resources Ltd. (Quartz Mountain or the
Company). All dollar amounts herein are expressed in United States Dollars
unless stated otherwise.

This MD&A is prepared as of November 8, 2006.

1.2     
Overview

Quartz Mountain Resources Ltd. is a mineral exploration
company. It does not currently have an active exploration project but, with the
assistance of Hunter Dickinson Inc. (HDI), reviews mineral properties to
determine whether there are any properties of merit that could be financed by
the Company.

The Companys objective is to acquire an exploration project
with significant upside potential. In assessing and rating projects, several key
criteria are considered. The known mineralization is viewed in accordance to the
geological setting and target model. An assessment is made of the projects
ultimate size potential. The projects location is evaluated with respect to
political, safety and investment risks, in addition to the ease of doing
business. The deal structure is also examined and rated for its potential
benefit to the Company's shareholders. High priority projects are evaluated in
follow-up field inspections.

The Company has access to the full resources of HDI, an
experienced exploration and development firm with in-house geologists, engineers
and environmental specialists, to assist in its technical review of the various
opportunities. However, the Company does not have the right to require HDI to
bring to the Company all corporate opportunities which come to HDI's attention.

Since February 2005, the Company has traded on the NEX
Exchange. The Companys trading symbol is QZM.H. In the United States, the
companys shares trade on the over the counter bulletin board under the symbol
QRMRF.PK.

- 2 -

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|QUARTZ MOUNTAIN RESOURCES LTD.      
|------------------------------------
|YEAR ENDED JULY 31, 2006            
|                                    
|MANAGEMENT'S DISCUSSION AND ANALYSIS
|                                    

1.3     
Selected Annual Information

The consolidated financial statements have been prepared in
accordance with Canadian generally accepted accounting principles, and are
expressed in United States dollars except number of common shares.

|Consolidated Balance Sheets                |   | As at July 31 |  |   | As at July 31 |  |   | As at July 31        | 
|------------------------------------------ | - | ------------- |  | - | ------------- |  | - | -------------------- | 
|                                           |   | 2006          |  |   | 2005          |  |   | 2004                 | 
|                                           |   |               |  |   |               |  |   | (restated due to     | 
|                                           |   |               |  |   |               |  |   | change in accounting | 
|                                           |   |               |  |   |               |  |   | policy)              | 
|                                           |   |               |  |   |               |  |   |                      | 
|Current assets                             | $ | 1,114,030     |  | $ | 687,280       |  | $ | 693,697              | 
|Mineral properties                         |   | 1             |  |   | 1             |  |   |                     | 
|Total assets                               |   | 1,114,031     |  |   | 687,281       |  |   | 693,697              | 
|                                           |   |               |  |   |               |  |   |                      | 
|Current liabilities                        |   | 16,664        |  |   | 12,659        |  |   | 22,849               | 
|Shareholders equity                       |   | 1,097,367     |  |   | 674,622       |  |   | 670,848              | 
|Total liabilities and shareholders equity | $ | 1,114,031     |  | $ | 687,281       |  | $ | 693,697              | 

|Operations                                                 |   | Year ended |   |   | Year ended           |   |   | Year ended           |  
|---------------------------------------------------------- | - | ---------- | - | - | -------------------- | - | - | -------------------- | -
|                                                           |   | July 31    |   |   | July 31              |   |   | July 31              |  
|                                                           |   | 2006       |   |   | 2005                 |   |   | 2004                 |  
|                                                           |   |            |   |   | (restated due to     |   |   | (restated due to     |  
|                                                           |   |            |   |   | change in accounting |   |   | change in accounting |  
|                                                           |   |            |   |   | policy)              |   |   | policy)              |  
|                                                           |   |            |   |   |                      |   |   |                      |  
|Legal, accounting and audit                                | $ | 40,290     |   | $ | 35,505               |   | $ | 16,637               |  
|Mineral property investigations                            |   |           |   |   | 27,125               |   |   | 44,848               |  
|Office and administration                                  |   | 82,247     |   |   | 66,864               |   |   | 62,963               |  
|Regulatory, trust and filing                               |   | 22,228     |   |   | 18,523               |   |   | 22,338               |  
|Write-down of mineral property interests                   |   |           |   |   |                     |   |   | 15,210               |  
|Subtotal                                                   |   | 144,765    |   |   | 148,017              |   |   | 161,996              |  
|Foreign exchange gain                                      |   | (53,106    | ) |   | (47,485              | ) |   | (22,225              | )
|Interest income                                            |   | (26,201    | ) |   | (15,127              | ) |   | (11,605              | )
|Loss for the year                                          | $ | 65,458     |   | $ | 85,405               |   | $ | 128,166              |  
|                                                           |   |            |   |   |                      |   |   |                      |  
|Basic and diluted loss per
      share                     | $ | 0.01       |   | $ | 0.01                 |   | $ | 0.01                 |  
|                                                           |   |            |   |   |                      |   |   |                      |  
|Weighted average number of
      common shares outstanding |   | 12,322,741 |   |   | 11,694,601           |   |   | 10,091,648           |  

- 3 -

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|QUARTZ MOUNTAIN RESOURCES LTD.      
|------------------------------------
|YEAR ENDED JULY 31, 2006            
|                                    
|MANAGEMENT'S DISCUSSION AND ANALYSIS
|                                    

1.4     
Summary of Quarterly Results

Expressed in United States dollars. Minor differences are due
to rounding.

|                                   |   | Jul 31    |   |   | Apr 30    |   |   | Jan 31  |   |   | Oct 31  |   |   | Jul 31  |   |   | Apr 30  |   |   | Jan 31  |   |   | Oct 31  |  
|---------------------------------- | - | --------- | - | - | --------- | - | - | ------- | - | - | ------- | - | - | ------- | - | - | ------- | - | - | ------- | - | - | ------- | -
|                                   |   | 2006      |   |   | 2006      |   |   | 2006    |   |   | 2005    |   |   | 2005    |   |   | 2005    |   |   | 2005    |   |   | 2004    |  
|                                   |   |           |   |   |           |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|                                   |   |           |   |   |           |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|Current assets                     | $ | 1,114,030 |   | $ | 1,133,713 |   | $ | 652,357 |   | $ | 693,187 |   | $ | 687,280 |   | $ | 687,643 |   | $ | 770,694 |   | $ | 721,880 |  
|Mineral properties                 |   | 1         |   |   | 1         |   |   | 1       |   |   | 1       |   |   | 1       |   |   |        |   |   |        |   |   |        |  
|Total assets                       |   | 1,114,031 |   |   | 1,133,714 |   |   | 652,358 |   |   | 693,188 |   |   | 687,281 |   |   | 687,643 |   |   | 770,694 |   |   | 721,880 |  
|                                   |   |           |   |   |           |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|Current liabilities                |   | 16,664    |   |   | 1,379     |   |   | 12,658  |   |   | 16,163  |   |   | 12,659  |   |   | 9,927   |   |   | 60,710  |   |   | 38,864  |  
|Shareholders
      equity         |   | 1,097,367 |   |   | 1,132,335 |   |   | 639,700 |   |   | 677,025 |   |   | 674,622 |   |   | 677,716 |   |   | 709,984 |   |   | 683,016 |  
|Total liabilities                  |   |           |   |   |           |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|and
      shareholders equity     |   | 1,114,031 |   |   | 1,133,714 |   |   | 652,358 |   |   | 693,188 |   |   | 687,281 |   |   | 687,643 |   |   | 770,694 |   |   | 721,880 |  
|                                   |   |           |   |   |           |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|Working capital                    |   | 1,097,366 |   |   | 1,132,334 |   |   | 639,699 |   |   | 677,024 |   |   | 674,621 |   |   | 677,716 |   |   | 709,984 |   |   | 683,016 |  
|                                   |   |           |   |   |           |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|Expenses                           |   |           |   |   |           |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|Foreign exchange loss (gain)       |   | 12,683    |   |   | (21,974   | ) |   | (21,820 | ) |   | (21,995 | ) |   | (16,999 | ) |   | 8,407   |   |   | 14,088  |   |   | (52,981 | )
|Interest income                    |   | (11,605   | ) |   | (5,003    | ) |   | (5,209  | ) |   | (4,384  | ) |   | (3,653  | ) |   | (5,516  | ) |   | (2,832  | ) |   | (3,126  | )
|Legal, accounting and audit        |   | 16,019    |   |   | 630       |   |   | 22,948  |   |   | 693     |   |   | 5,326   |   |   | 893     |   |   | 19,058  |   |   | 10,228  |  
|Mineral property                   |   |           |   |   |           |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|investigations                     |   |          |   |   |          |   |   |        |   |   |        |   |   |        |   |   | 6,005   |   |   |        |   |   | 21,120  |  
|Office and administration          |   | 14,637    |   |   | 17,404    |   |   | 28,351  |   |   | 21,855  |   |   | 17,206  |   |   | 16,797  |   |   | 21,189  |   |   | 11,672  |  
|Regulatory, trust and filing       |   | 3,234     |   |   | 4,511     |   |   | 13,055  |   |   | 1,428   |   |   | 1,214   |   |   | 5,682   |   |   | 10,708  |   |   | 919     |  
|Loss (income)
      for the period | $ | 34,968    |   | $ | ( 4,432   | ) | $ | 37,325  |   | $ | (2,403  | ) | $ | 3,094   |   | $ | 32,268  |   | $ | 62,211  |   | $ | (12,168 | )
|                                   |   |           |   |   |           |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|Basic and diluted                  |   |           |   |   |           |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|loss (income) per share            | $ | 0.00      |   | $ | 0.00      |   | $ | 0.00    |   | $ | (0.00   | ) | $ | 0.00    |   | $ | 0.00    |   | $ | 0.01    |   | $ | (0.00   | )
|                                   |   |           |   |   |           |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|Weighted average number            |   |           |   |   |           |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|of common shares                   |   |           |   |   |           |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |   |   |         |  
|outstanding (thousands)            |   | 12,323    |   |   | 11,960    |   |   | 11,889  |   |   | 11,889  |   |   | 11,889  |   |   | 11,889  |   |   | 11,828  |   |   | 11,178  |  

- 4 -

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|QUARTZ MOUNTAIN RESOURCES LTD.      
|------------------------------------
|YEAR ENDED JULY 31, 2006            
|                                    
|MANAGEMENT'S DISCUSSION AND ANALYSIS
|                                    

1.5     
Results of Operations

Loss for the year ended July 31, 2006 was $65,458. This
compares with a loss of $85,405 for the year ended July 31, 2005. The
improvement was mainly due to greater foreign exchange gains in fiscal 2006 and
a decrease in mineral property investigation expenditures.

The increase in foreign exchange gains for the year ended July
31, 2006 was due mainly to the strengthening of the Canadian dollar (in which
most of the Companys cash and cash equivalents are held) against the United
States dollar.

Interest income for the year ended July 31, 2006 was higher
than the comparative year due to higher cash balances on hand.

1.6     
Liquidity

At July 31, 2006, the Company had working capital of
approximately $1,097,000 which is sufficient to fund expected administrative
costs and mineral property investigations for the next twelve months. The
working capital for the year ended July 31, 2006 is approximately $423,000
greater than the previous year ended July 31, 2005. The increase was mainly due
to the proceeds from the exercise of warrants in April 2006.

Additional working capital will be required to fund any
significant mineral property acquisitions. The Company does not have the funding
at this time to acquire a major mineral property acquisition, but has sufficient
funding to investigate a potential acquisition. Any new mineral property
acquisition will require additional financing, likely through the issuance of
common shares.

The mining industry is capital intensive and there can be no
certainty that the Companys existing cash balances or that the proceeds from
the issuance of its common shares will provide sufficient funds for all of the
Companys cash requirements. Should the need arise, the Company may pursue other
financing options or rely on joint venture partners to supply some of the funds
required to explore and develop any acquisitions. There is no assurance that the
Company will be successful in obtaining the funds it may require for its
programs or that the terms of any financing obtained will be acceptable.

Historically, the Company's sole source of funding has been the
issuance of equity securities for cash, primarily through private placements.
The Company has issued common share capital in each of the past few years,
pursuant to such private placement financings and also upon the exercise of
warrants. The Company's access to exploration financing when the financing is
not transaction specific is always uncertain. There can be no assurance of
continued access to significant equity funding.

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.

- 5 -

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|QUARTZ MOUNTAIN RESOURCES LTD.      
|------------------------------------
|YEAR ENDED JULY 31, 2006            
|                                    
|MANAGEMENT'S DISCUSSION AND ANALYSIS
|                                    

1.7     
Capital Resources

The Company had no commitments for capital expenditures as at
July 31, 2006.

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

1.8     
Off-Balance Sheet Arrangements

None.

1.9     
Transactions with Related Parties

Hunter Dickinson Inc. ("HDI") is a private company with certain
directors in common with the Company. HDI provides geological, corporate
development, administrative and management services to, and incurs third party
costs on behalf of, the Company and its subsidiaries on a full cost recovery
basis pursuant to an agreement dated December 31, 1996. For the year ended July
31, 2006, the Company paid HDI $69,407 (2005  $57,732) for such services.

Exploration advances to and from HDI have occurred in the
normal course of business, due to in-progress and near-term planned project
investigation and administrative work. There are no specific terms of repayment.

Euro-American Capital Corporation (Euro-American) is a
private company controlled by a director of the Company that provides management
services to the Company. During the year ended July 31, 2006, nil was charged by
Euro-American compared to $571 in the corresponding period of fiscal 2005.

1.10     Fourth
Quarter

The loss for the quarter ended July 31, 2006 was $34,968
compared to $3,094 in the comparable quarter in fiscal 2005. The increase was
due primarily to the increase in foreign exchange loss for the quarter.

The increase in foreign exchange loss for the quarter was due
mainly to the weakening of the Canadian dollar (in which most of the Companys
cash and cash equivalents are held) against the United States dollar.

Higher interest income for the quarter was due to higher cash
balances on hand.

1.11     Proposed
Transactions

There are no proposed asset or business acquisitions or
dispositions, other than those in the ordinary course, before the board of
directors for consideration.

1.12     Critical
Accounting Estimates

Not applicable. The Company is a venture issuer.

- 6 -

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|QUARTZ MOUNTAIN RESOURCES LTD.      
|------------------------------------
|YEAR ENDED JULY 31, 2006            
|                                    
|MANAGEMENT'S DISCUSSION AND ANALYSIS
|                                    

1.13     Changes in
Accounting Policies including Initial Adoption

Mineral property interest

During the year ended July 31, 2005, the Company changed its
policy from capitalizing (deferring) mineral property expenditures to charging
these costs to earnings in the period incurred. This change in accounting policy
is applied retroactively and the amounts presented for prior periods have been
restated for this change. The effect of this change is to reduce loss for the
year ended July 31, 2004 by $8,086 and to reduce income for the year ended July
31, 2003 by $8,086. There was no impact to opening retained earnings for the
year ended July 31, 2005. The impact of this restatement on the July 31, 2004
consolidated financial statements is presented in note 4 thereof.

1.14     Financial
Instruments and Other Instruments

None.

1.15     Other
MD&A Requirements

Additional information relating to the Company, is available on
SEDAR at www.sedar.com.

1.15.1   Additional Disclosure
for Venture Issuers Without Significant Revenue

(a) capitalized or expensed exploration and development costs;

The required disclosure is presented in
note 3(d) and note 5 of the accompanying financial statements.

(b) expensed research and development costs;

Not applicable.

(c) deferred development costs;

Not applicable.

(d) general and administration expenses;

The required disclosure is presented in
the consolidated statements of operations.

(e) any material costs, whether capitalized, deferred or
expensed, not referred to in (a) through (d);

None.

- 7 -

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|QUARTZ MOUNTAIN RESOURCES LTD.      
|------------------------------------
|YEAR ENDED JULY 31, 2006            
|                                    
|MANAGEMENT'S DISCUSSION AND ANALYSIS
|                                    

1.15.2    Disclosure of
Outstanding Share Data

The following details the share capital structure as at
November 8, 2006, which is the date of this MD&A. These figures may be
subject to minor accounting adjustments prior to possible presentation in future
consolidated financial statements.

|              |             | Exercise |           
|------------- | ----------- | -------- | ----------
|              | Expiry date | price    | Number    
|Common shares |             |          | 13,399,426
|              |             |          |           
|Warrants      |             |          |          

1.15.3    Disclosure
Controls and Procedures

The Company has disclosure controls and procedures in place to
provide reasonable assurance that any information required to be disclosed by
the Company under securities legislation is recorded, processed, summarized and
reported within the applicable time periods and to ensure that required
information is gathered and communicated to the Companys management so that
decisions can be made about timely disclosure of that information. The Companys
Director and Principal Accounting Officer evaluated the Companys disclosure
controls and procedures for the year ended July 31, 2006 and have found those
disclosure controls and procedures to be adequate for the above purposes.

There have been no significant changes in the Company's
disclosure controls or in other factors that could significantly affect
disclosure controls subsequent to the date the Company carried out its
evaluation.

During the Company's most recently completed fiscal year ended
July 31, 2006, there were no changes in the Company's internal control over
financial reporting that have materially affected, or are reasonably likely to
affect, its internal control over financial reporting.

This discussion includes certain statements that may be
      deemed "forward-looking statements". All statements in this discussion,
      other than statements of historical facts, which address future property
      investigation, future production, exploration and exploitation activities
      and events or developments that the Company expects are forward-looking
      statements. Although the Company believes the expectations expressed in
      such forward-looking statements are based on reasonable assumptions, such
      statements are not guarantees of future performance and actual results or
      developments may differ materially from those in the forward-looking
      statements. Factors that could cause actual results to differ materially
      from those in forward-looking statements include market prices,
      exploitation and exploration successes, the availability of mineral
      properties for investigation, continued availability of capital and
      financing and general economic, market or business conditions. Investors
      are cautioned that any such statements are not guarantees of future
      performance and that actual results or developments may differ materially
      from those projected in the forward- looking statements.


- 8 -

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