---

**UNITED STATESSECURITIES AND EXCHANGE COMMISSION** Washington, 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, 2004**
  (with other information to December 31, 2004 except where noted)

OR

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

For the transition period from _______________ to _______________

Commission file number **0-15490**

QUARTZ MOUNTAIN RESOURCES LTD.
  
  (Exact name of Registrant specified in its charter)

Suite 1020 – 800 West
  Pender Street, Vancouver, British Columbia, Canada, V6C 2V6
  (Address of principal executive offices)

COMMON SHARES WITHOUT PAR VALUE
  (Title of Class)

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
|------------------- | -----------------------------------------
|None                | Not applicable                           

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

**Common Shares without Par Value** 
  (Title of Class)

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

Number of outstanding shares of the Company’s only class
  of capital stock as at December 31, 2004:

11,889,426 Common Shares Without Par Value

i

---

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 1934during 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

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

Item 17 x  
  Item 18  ̈



ii

---

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

|        |                                                                                    | Page
|------- | ---------------------------------------------------------------------------------- | ----
|        |                                                                                    |     
|ITEM 1  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT
      AND ADVISERS                        | 1   
|        |                                                                                    |     
|ITEM 2  | OFFER STATISTICS AND EXPECTED TIMETABLE                                            | 1   
|        |                                                                                    |     
|ITEM 3  | KEY INFORMATION                                                                    | 1   
|        |                                                                                    |     
|ITEM 4  | INFORMATION ON THE COMPANY                                                         | 5   
|        |                                                                                    |     
|ITEM 5  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                       | 9   
|        |                                                                                    |     
|ITEM 6  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                         | 13  
|        |                                                                                    |     
|ITEM 7  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                                  | 19  
|        |                                                                                    |     
|ITEM 8  | FINANCIAL INFORMATION                                                              | 21  
|        |                                                                                    |     
|ITEM 9  | THE OFFER AND LISTING                                                              | 21  
|        |                                                                                    |     
|ITEM 10 | ADDITIONAL INFORMATION                                                             | 23  
|        |                                                                                    |     
|ITEM 11 | QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK                   | 31  
|        |                                                                                    |     
|ITEM 12 | DESCRIPTION OF SECURITIES OTHER THAN EQUITY
      SECURITIES                       | 32  
|        |                                                                                    |     
|ITEM 13 | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                                    | 32  
|        |                                                                                    |     
|ITEM 14 | MATERIAL MODIFICATIONS TO THE RIGHTS OF
      SECURITY HOLDERS AND USE OF PROCEEDS | 32  
|        |                                                                                    |     
|ITEM 15 | CONTROLS AND PROCEDURES                                                            | 32  
|        |                                                                                    |     
|ITEM 16 | AUDIT COMMITTEE, CODE OF ETHICS, ACCOUNTANT
      FEES AND EXEMPTIONS              | 33  
|        |                                                                                    |     
|ITEM 17 | FINANCIAL STATEMENTS                                                               | 34  
|        |                                                                                    |     
|ITEM 18 | FINANCIAL STATEMENTS                                                               | 34  
|        |                                                                                    |     
|ITEM 19 | EXHIBITS                                                                           | 35  

iii

---

PART 1

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

Not applicable

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

Not applicable

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

A.           Selected
  Financial Data

The following constitutes selected financial data for Quartz
  Mountain Resources Ltd. (“Quartz” or the “Company”)
  for the last five fiscal years ended July 31, 2004, in United States dollars,
  presented in accordance with Canadian generally accepted accounting principles
  (“GAAP”) and US GAAP.

|(US$)                         | As at July 31       |  
|----------------------------- | ------------------- | -
|Balance Sheet                 | 2004                |  
|                              |                     |  
|Total Assets                  | 693,697             |  
|Total Liabilities             | 22,849              |  
|Working Capital (Deficiency)  | 670,848             |  
|Share Capital                 | 20,627,632          |  
|Contributed Surplus           | 64,032              |  
|Deficit                       | (20,020,816         | )
|Shareholders’ Equity          |                     |  
|(Deficiency) - Canadian GAAP  | 670,848             |  
|Shareholders’ Equity          |                     |  
|(Deficiency) - US GAAP        | 670,848             |  
|                              |                     |  
|(US$)                         | Years ended July 31 |  
|Operations                    | 2004                |  
|                              |                     |  
|Other Items                   | 11,605              |  
|Income (loss) – Canadian      |                     |  
|GAAP                          | (136,252            | )
|Income (loss) – US GAAP       | (115,251            | )
|Income (loss) from continuing |                     |  
|operations                    | (136,252            | )
|Income (loss) per common      |                     |  
|share – Canadian GAAP         | (0.01               | )
|Income (loss) per common      |                     |  
|share – US GAAP               | (0.01               | )
|Weighted average number of    |                     |  
|common shares outstanding (3) | 10,091,648          |  

1

---

Notes:

|(1) | The Company follows Canadian GAAP whereby mineral
        exploration expenditures can be deferred on prospective properties until
        such time as it is determined that further exploration is not warranted,
        at which time the property costs are written off. Under US GAAP exploration
        costs are generally written off unless there is a feasibility report which
        confirms the existence of economic ore making the recovery of costs likely.
        Note 10 in the notes to the audited consolidated financial statements
        details the material differences between Canadian GAAP and US GAAP for
        the fiscal years ended July 31, 2004, 2003 and 2002.                                                                                                                                                               
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(2) | Statement of Financial Accounting Standards No.
        128 Earnings per Share(“SFAS 128”), replaces the presentation
        of primary earnings per share (“EPS”) with a presentation
        of both basic and diluted EPS for all entities with complex capital structures,
        including a reconciliation of each numerator and denominator. Basic EPS
        excludes dilutive securities and is computed by dividing income available
        to common stockholders by the weighted-average number of common shares
        outstanding for the year. Diluted EPS reflects the potential dilution
        that could occur if dilutive securities were converted into common stock
        and is computed similarly to fully diluted EPS pursuant to previous accounting
        pronouncement. SFAS 128 applied equally to loss per share presentations.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(3) | The Company has never paid dividends on its common
        shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

All monetary amounts contained in this Annual Report are,
  unless otherwise indicated, expressed in United States (“US”) dollars.
  On December 31, 2004, the Bank of Canada closing rate for the conversion of
  US Dollars to Canadian Dollars was US$1.00: Cdn$1.2020.

The following table sets out the exchange rates, based on
  the noon buying rates as certified by the Bank of Canada, for the conversion
  of Canadian dollars into United States dollars in effect at the end of the following
  periods, and the average exchange rates (based on the average of the exchange
  rates on the last day of the month in such periods) and the range of high and
  low exchange rates for such periods.

| |                   |         | Annual Rates |        | July 31 |       
| | ----------------- | ------- | ------------ | ------ | ------- | ------
| | Period Ended      | Average | High         | Low    | Rate    |       
| | December 31, 2004 | 1.2191  | 1.3968       | 1.1774 | 1.3295  | (2004)
| | December 31, 2003 | 1.4013  | 1.5645       | 1.2822 | 1.3821  | (2003)
| | December 31, 2002 | 1.5704  | 1.6132       | 1.5110 | 1.5845  | (2002)
| | December 31, 2001 | 1.5487  | 1.6023       | 1.4933 | 1.5325  | (2001)
| | December 31, 2000 | 1.4855  | 1.5583       | 1.4353 | 1.4880  | (2000)

The following table sets out the high and low exchange rates,
  based on the noon buying rates as posted by the Bank of Canada (www.bankofcanada.ca),
  for the conversion of Canadian dollars into United States dollars in effect
  for the following months:

|Month          | Low    | High  
|-------------- | ------ | ------
|December 2004  | 1.1858 | 1.2413
|November 2004  | 1.1774 | 1.2270
|October 2004   | 1.2197 | 1.2725
|September 2004 | 1.2639 | 1.3068
|August 2004    | 1.2963 | 1.3326

See Item 17 of the accompanying audited year-end financial statements for further details.

2

---

B.           Capitalization
  and Indebtedness

Not applicable

C.           Reasons
  for the Offer and Use of Proceeds

Not applicable

D.           Risk
  Factors

No Assurance That A Prospective Property Of Merit Will
  Be Identified. There is no assurance that a prospective property of
  merit will be identified, will be available if identified or that the Company
  will be able to enter into an acquisition agreement. Further, any acquisition
  will most likely be subject to the Company obtaining additional financing, of
  which there is assurance. Even if a property is acquired, further funds will
  be required to fund exploration efforts.

The Company’s Mineral Property Interests Contain
  No Known Ore.The Company does not currently have an active exploration
  project, but is actively searching for a new acquisition. The Company holds
  a 1% net smelter returns royalty on the Quartz Mountain Property, an exploration
  stage prospect in Oregon. The Company’s interest in the property will
  be limited to any future NSR that would be forthcoming if or when any mining
  commences on the property. There is currently no known body of commercially
  viable ore on the property. Extensive additional exploration work will be required
  to ascertain if any mineralization may be economic. Exploration for minerals
  is a speculative venture necessarily involving substantial risk. There is no
  certainty that the expenditures to be made by the Company on any of its mineral
  properties will result in discoveries of commercial quantities of ore.

The Company Has No History of Earnings and No Foreseeable
  Earnings.The Company has no history of earnings and, due to the nature
  of its business, there can be no assurance that the Company will ever be profitable.
  The Company has paid no dividends on its shares since incorporation and does
  not anticipate paying dividends or being profitable in the foreseeable future.

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
  (deficit at July 31, 2004 is $20.0 million), which casts substantial doubt
  on the ability of the Company to continue as a going concern.

General Mining Risks.If the Company should
  ever determine ore exists on a property it acquires, then it notes that the
  mining industry in general is intensely competitive and there is no assurance
  that, even if commercial quantities of ore are discovered, a profitable market
  may exist for the sale of minerals produced by the Company. Factors beyond the
  control of the Company may affect the marketability of any substances discovered.
  Mineral prices, in particular gold and silver prices, have fluctuated widely
  in recent years. The marketability of minerals is also affected by numerous
  other factors beyond the control of the Company. These other factors include
  government regulations relating to price, royalties, and allowable production
  and importing and exporting of minerals. The operations of the Company may require
  licences and permits from various governmental authorities. There can be no
  assurances that the Company will be able to obtain all necessary licences and
  permits that may be required to carry out exploration, development and eventually
  operations at its projects. The mineral industry is intensely competitive in
  all its phases. The Company competes with many companies possessing far greater
  financial resources and technical facilities than itself for the acquisition
  of mineral concessions, claims, leases and other mineral interests as well as
  for the recruitment and retention of qualified employees.

The Company’s Share Price is Volatile.The
  market price of a publicly traded stock, especially a junior resource issuer
  like the Company, is affected by many variables not directly related to the
  exploration success of the Company, including the market in which it is traded,
  the strength of the economy generally, the availability and attractiveness of
  alternative investments, and the breadth of the public market for the stock.
  The effect of these and other factors on the market price of the common shares
  on the TSX Venture Exchange suggests that the Company’s

3

---

shares will continue to be volatile. The ability of the Company
  to maintain its active status as a Tier 2 Issuer on the TSX Venture Exchange
  is dependent on its ability to acquire a mineral project for active exploration.

The Company’s Directors and Officers are Part-Time
  and Serve as Directors and Officers of Other Companies.All of the directors
  and officers of the Company serve as officers and/or directors of other resource
  exploration companies and are engaged in and will continue to be engaged in
  the search for additional resource opportunities on their own behalf and on
  behalf of other companies. Situations may arise where these directors and officers
  will be in direct competition with the Company. Such conflicts, if any, will
  be dealt with in accordance with the relevant provisions of British Columbia
  corporate and common law. In order to avoid the possible conflict of interest
  which may arise between the directors’ duties to the Company and their
  duties to the other companies on whose boards they serve, the directors and
  officers of the Company expect that participation in exploration prospects offered
  to the directors will be allocated between the various companies that they serve
  on the basis of prudent business judgement and on the relative financial abilities
  and needs of the companies to participate. The success of the Company and its
  ability to continue to carry on operations is dependent upon its ability to
  retain the services of certain key employees and members of its board of directors.

Foreign Jurisdiction Risks.The Company’s
  activities could be subject not only to risks common to operations in the mining
  industry, but also the political and economic uncertainties of operating in
  a foreign jurisdiction. All laws may result in risk such as possible misinterpretation
  of laws, unilateral modification of mining or exploration rights, operating
  restrictions, increased taxes, environmental regulation, mine safety and other
  risks arising out of sovereignty over mining, any or all of which could have
  an adverse impact upon the Company. The Company’s operations may also
  be affected in varying degrees by political and economic instability, terrorism,
  crime, extreme fluctuations in currency exchange rates and inflation. The Company’s
  operations and exploration activities are subject to federal and state laws
  and regulations governing protection of the environment. These laws are continually
  changing and, as a general matter, are becoming more restrictive.

Likely PFIC Status Has Consequences for United States
  Investors. Potential investors who are United States (“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 and may also
  be a PFIC in subsequent 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” received
  on its common shares, or any gain realized upon a disposition of common shares,
  as ordinary income and to pay an interest charge on a portion of such distribution
  or gain, unless the taxpayer makes a 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.

Shares of the Company may be Affected Adversely by Penny
  Stock Rules.The Company’s stock may be subject to U.S. “penny
  stock” rules which may make the stock more difficult to trade on the open
  market. The Company’s common shares currently trade on the TSX Venture
  Exchange. For further details on the market performance of the Company’s
  common stock, see “Item 9 The Offer and Listing.” Although the Company’s
  common stock trades on the TSX Venture Exchange or “TSX Venture”,
  the Company’s stock may be subject to U.S. “penny stock” rules.
  A “penny stock” is defined by regulations of the U.S. Securities
  and Exchange Commission (“SEC”) as an equity security with a market
  price of less than $5 per share. However, an equity security with a market
  price under $5 will not be considered a penny stock if it fits within any
  of the following exceptions:

|(i)  | the equity security is listed on Nasdaq or a national
        securities exchange;                                                                                                                                                           
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                              
|(ii) | the issuer of the equity security has been in continuous
        operation for LESS than three years, and either has (a) net tangible assets
        of at least $5,000,000, or (b) average annual revenue of at least
        $6,000,000; or

4

---

|(iii) | the issuer of the equity security has been in continuous
        operation for MORE than three years, and has net tangible assets of at
        least $2,000,000.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

If an investor buys or sells a penny stock, SEC regulations
  require that the investor receive, prior to the transaction, a disclosure explaining
  the penny stock market and associated risks. Furthermore, trading in the Company’s
  common stock is currently subject to Rule 15g-9 of the Exchange Act, which relates
  to non-Nasdaq and non-exchange listed securities. Under this rule, broker/dealers
  who recommend the Company’s securities to persons other than established
  customers and accredited investors must make a special written suitability determination
  for the purchaser and receive the purchaser’s written agreement to a transaction
  prior to sale. Securities are exempt from this rule if their market price is
  at least $5 per share.

Penny stock regulations will tend to reduce market liquidity
  of the Company’s common stock, because they limit the broker/dealers’
  ability to trade, and a purchaser’s ability to sell, the stock in the
  secondary market. The low price of the Company’s common stock has a negative
  effect on the amount and percentage of transaction costs paid by individual
  shareholders. The low price of the Company’s common stock also limits
  the Company’s ability to raise additional capital by issuing additional
  shares. There are several reasons for these effects. First, the internal policies
  of certain institutional investors prohibit the purchase of low-priced stocks.
  Second, many brokerage houses do not permit low-priced stocks to be used as
  collateral for margin accounts or to be purchased on margin. Third, some brokerage
  house policies and practices tend to discourage individual brokers from dealing
  in low-priced stocks. Finally, broker’s commissions on low-priced stocks
  usually represent a higher percentage of the stock price than commissions on
  higher priced stocks. As a result, the Company’s shareholders pay transaction
  costs that are a higher percentage of their total share value than if the Company’s
  share price were substantially higher.

The rules described above concerning penny stocks may adversely
  affect the market liquidity of the Company’s common shares. The Company
  can provide no assurances concerning the market liquidity of its stock or that
  its stock will not be subject to “penny stock” rules. For more information
  about penny stocks, contact the Office of Filings, Information and Consumer
  Services of the U.S. Securities and Exchange Commission, 450 Fifth Street, N.W.,
  Washington, D.C. 20549, or by telephone at (202) 272-7440.

Potential Equity Dilution. A summary of the
  Company’s diluted share capital is as follows:

At December 31, 2004, the Company has no outstanding stock
  options and has a total of 1,510,000 share purchase warrants which are exercisable
  at a price of Cdn$0.37 until April 19, 2006. These warrants are in-the-money
  at December 31, 2004 and could be exercised in the future which will likely
  act as an upside damper on the trading range of the Company’s shares.
  As a consequence of the passage of time since the date of their original sale
  and issuance, no shares of the Company remain subject to any hold period restrictions
  in Canada or the United States as at December 31, 2004. The resale of outstanding
  shares from the exercise of dilutive securities would have a depressing effect
  on the market for the Company’s shares. Dilutive securities represent
  approximately 12.7% of the Company’s currently issued shares.

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

A.           History and
  Development of the Company

| | 1. | The legal name of the Company, which is the subject
        of this 20-F is “Quartz Mountain Resources Ltd.”                                                                                                                                                                                                                                                                                                                                                                                       
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | 2. | Quartz Mountain Resources Ltd. was incorporated
        on August 3, 1982, in British Columbia, Canada. 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 shares were consolidated on a reverse ten old for
        one new share basis.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | 3. | The Company’s business office is located at
        Suite 1020 – 800 West Pender Street, Vancouver, British Columbia
        V6C 2V6; telephone (604) 684-6365. The Company was incorporated under
        and continues                                                                                                                                                                                                                                                                           

5

---

| |  | to subsist under the laws of the Province
        of British Columbia. The Company’s registered office is  Suite
        1500 – 1055 West Georgia Street, Vancouver, British Columbia V6E
        4N7 (604) 689-9111.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Unless the context requires otherwise, references herein to
  the “Company” or “Quartz” includes its subsidiaries.
  The Company’s common shares were quoted on the United States NASDAQ Small-Cap
  Issuers Market until May 12, 1994 when it no longer met the minimum listing
  requirements for this market. The Company’s common shares were listed
  on The Toronto Stock Exchange, until November 10, 1994, when it no longer met
  the minimum listing requirements for listing on The Toronto Stock Exchange.
  Prior to November 15, 1989, the shares were also listed on the Vancouver Stock
  Exchange. The Company voluntarily removed its share listing from the Vancouver
  Stock Exchange (now the TSX Venture Exchange) at that time. The Company then
  traded in Canada on the Canadian Unlisted market. In October 2000 the Canadian
  Unlisted market was amalgamated into the TSX Venture Exchange. On December 23,
  2003, the Company was reclassified as a Tier 2 company and its trading symbol
  was changed to QZM.V. Currently, the Company’s shares trade on Tier 2
  on the TSX Venture Exchange under the symbol QZM.V and the over the counter
  market and on the Other OTC or “Pink Sheets” in the United States
  under the symbol QZMRF.

The Company is engaged in the acquisition and exploration
  of mineral properties, with a principal concentration on gold and silver. 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 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 effort was expended on the exploration and maintenance of these
  claims. Interests in this property and other properties were acquired by direct
  purchase, lease, and option or through joint ventures. The Company sold the
  Quartz Mountain property during the fiscal year ended July 31, 2002.

B.           Business
  Overview

1.The
  Company’s Business Strategy and Principal Activities

The Company is a junior resource exploration issuer, and is
  in the business of acquiring interests in (usually by option) and the exploration
  of these mineral property interests. During the year ended July 31, 2002, the
  Company sold its 100% interest in the Quartz Mountain Gold Property (the “Property”),
  in Lake County, Oregon, to Seabridge Resources Ltd. and Seabridge Resources
  Inc. (collectively “Seabridge”).

At closing, Seabridge issued 300,000 Seabridge common shares,
  200,000 Seabridge common share purchase warrants, US$100,000 and a 1% net
  smelter return (“NSR”) royalty from any future production on the
  Property. This transaction was approved by consent of the majority of the Company
  shareholders.

During fiscal 2002, the Company sold the 300,000 common shares
  of Seabridge that it received in the disposition of its interest in the Quartz
  Mountain property in Oregon and also exercised the 200,000 common share purchase
  warrants to acquire 200,000 common shares that it received pursuant to that
  transaction. The Company subsequently sold the common shares.

The Company does not expect to generate any royalty revenue
  from operations for several years from the Property, and it is not known at
  this time when any mining will commence, if at all, on this Property by its
  current owners. The Company maintained an interest in 67 unpatented mining claims
  essential to the property and leased land contiguous to these claims. Seabridge
  or any future owner of the Property will be responsible for all costs relating
  to the Property and the Company’s interest in the Property is limited
  to any future NSR that would be forthcoming if or when any mining commences
  on the Property.

In fiscal 2003, Quartz entered into a Letter Option Agreement
  to acquire a 100% interest in the Ample-Goldmax Mineral Claims located in the
  Lillooet Mining Division, British Columbia. Quartz paid the optionors Cdn$10,000
  at the time of signing and issued 25,000 common shares on the date of regulatory
  approval, and every three months thereafter for a period of three years (100,000
  were issued), at the discretion of the Company. Cash payments of Cdn$25,000
  were due on the first anniversary and Cdn$50,000 on the second anniversary
  of the approval date. A Cdn$100,000 work program within 24 months was also
  required. During the nine months ended April 30, 2004, the

6

---

Company did not make the first anniversary payment of Cdn$25,000,
  and as a result, the property was written off by $23,296, and the property
  was returned to the vendor of the property.

The Company does not currently have an active exploration
  project, but is actively searching for a new acquisition. During the last quarter
  of fiscal 2004, the Company conducted several property investigations of mineral
  property interests, for a total cost of approximately $42,000. Property
  investigation costs include geological consulting and travel related to examination
  of mineral properties. To date, mineral property investigations have not resulted
  in an acquisition.

The Company continues to review mineral properties to determine
  whether there are any properties of merit that could be financed by the Company.

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.

C.           Organizational
  Structure

The Company conducts its business affairs through its wholly-owned
  subsidiaries: Quartz Mountain Gold Inc., a Nevada corporation, and the latter
  company’s wholly-owned subsidiary Wavecrest Resources Inc., a Delaware
  corporation.

D.           Property,
  Plants and Equipment

The Company has no mining or plant equipment.

E.           Glossary
  of Mining Terms

In this Form 20 F, the following terms have the meanings set
  forth herein:

1.           Geological
  Terms

|Alteration         | Any change in the mineralogic composition
        of a rock that is brought about by  physical or chemical means.                        
|------------------ | -----------------------------------------------------------------------------------------------------------------------------------------
|Bedrock            | Solid rock exposed at the surface of
        the earth, or overlain by surficial deposits.                                               
|Breccia            | Rock made up of angular fragments.                                                                                                       
|Contact            | The place or surface where two different
        kinds of rocks come together.                                                           
|Deposit            | A natural occurrence of a useful mineral
        or ore in sufficient extent and degree of  concentrating to invite
        exploitation.
|Disseminated       | Fine particles of mineral dispersed through
        the enclosing rock.                                                                  
|Fault              | A fracture in a rock along which there
        has been relative movement either  vertically or horizontally.                            
|Feasibility study  | Engineering study to determine if a mineral
        property can be developed at a profit,  and the methods to develop
        it.       
|Geological mapping | Surveys defining the surface distribution
        of rock varieties, age relationships and  structural features.                         

7

---

|Grade                      | The quality of an ore; in
        effect, the metal content.                                                                             
|-------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------
|Hectare                    | A square of 100 metres on
        each side.                                                                                             
|Intrusive                  | Said of an igneous rock
        which invades older rocks.                                                                               
|Lode                       | See “vein”.                                                                                                                              
|Mineralization             | The concentration of metals
        and their chemical compounds within a body of rock.                                                  
|Outcrop                    | An exposure of bedrock at
        the surface.                                                                                           
|Pyrite                     | Iron sulfide (FeS2).                                                                                                                     
|Replacement mineralization | Mineral deposit formed by
        replacement of previous rock.                                                                          
|Rhyolite                   | A siliceous volcanic rock
        with a high potassium in feldspar component.                                                           
|Siliceous                  | Said of a rock rich in silica.                                                                                                           
|Sulfide                    | A group of minerals in which
        one or more metals are found in combination with  sulfur.                                           
|Vein                       | A tabular or sheet-like
        body of minerals, which has been intruded into a joint  fissure,
        or system of fissures, in rocks.

2.Element
  Symbols

The following mineral symbols may be used in the following
  technical discussion.

|Au – gold   | O – oxygen    
|----------- | --------------
|Ag – silver | Pd – palladium
|Cu – copper | Pt – platinum 
|Fe – iron   | Pb – lead     
|Na – sodium | S – sulphur   
|Ni - nickel | Zn - zinc     

F.           Currency
  and Measurement

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

The following measurements may be used.

| | Ton   | Imperial measure equal to 2,000 pounds.                                 
| | ----- | ------------------------------------------------------------------------
| |       |                                                                         
| | Tonne | Metric measure of mass equal to 1,000 kilograms or 2,204.6
      pounds.

8

---

Conversion of metric units into imperial equivalents is as follows:

|Metric Units | Multiply by | Imperial Units          
|------------ | ----------- | ------------------------
|hectares     | 2.471       | = acres                 
|metres       | 3.281       | = feet                  
|kilometres   | 0.621       | = miles (5,280 feet)    
|grams        | 0.032       | = troy ounces           
|tonnes       | 1.102       | = short tons (2,000 lbs)
|grams/tonne  | 0.029       | = troy ounces per ton   

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

The following discussion and analysis should be read in conjunction
  with the audited consolidated financial statements of the Company for the years
  ended July 31, 2004 and 2003, and related notes thereto. The Company’s
  consolidated financial statements have been prepared in accordance with Canadian
  generally accepted accounting principles. The material differences in generally
  accepted accounting principles in Canada and the United States are detailed
  in note 10 of the audited consolidated financial statements.

A.           Operating
  Results Overview Results of Operations

|                                         |   | Year ended    |   |   | Year ended    |   |   | Year ended    |  
|---------------------------------------- | - | ------------- | - | - | ------------- | - | - | ------------- | -
|                                         |   | July 31, 2004 |   |   | July 31, 2003 |   |   | July 31, 2002 |  
|Expenses (Income)                        |   |               |   |   |               |   |   |               |  
|Administrative expenses                  | $ | 62,963        |   | $ | 10,434        |   | $ | 11,155        |  
|Regulatory and transfer agent            |   | 22,338        |   |   | 17,023        |   |   | 8,076         |  
|Professional fees                        |   | 16,637        |   |   | 7,550         |   |   | 5,769         |  
|Land maintenance fees                    |   | -             |   |   | -             |   |   | 6,700         |  
|Foreign exchange loss (gain)             |   | (22,225       | ) |   | (40,487       | ) |   | 9,258         |  
|Mineral property investigations          |   | 44,848        |   |   | -             |   |   | -             |  
|Gain on sale of mineral property         |   | -             |   |   | -             |   |   | (195,505      | )
|Write-off of mineral property            |   | 23,296        |   |   | 1,271         |   |   | -             |  
|                                         |   | (147,857      | ) |   | (4,209        | ) |   | (154,547      | )
|Other Items                              |   |               |   |   |               |   |   |               |  
|Interest and other income                |   | 11,605        |   |   | 11,762        |   |   | 2,354         |  
|Gain on disposal of investment in shares |   | -             |   |   | -             |   |   | 302,942       |  
|                                         |   |               |   |   |               |   |   |               |  
|Income (loss) for the year               | $ | (136,252      | ) | $ | 15,971        |   | $ | 459,843       |  

Years ended July 31, 2004 and July 31, 2003

The principal factors contributing to the difference between
  the loss of $136,252 for the year ended July 31, 2004, and the earnings
  of $15,971 for the year ended July 31, 2003 include:

9

---

|- | An increase in office and
        administrative costs from $10,434 in fiscal 2003 to $62,963, due
        to payment of consulting fees and reimbursement of costs incurred of $40,580,
        with no comparative expense in fiscal  2003;                       
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|- | An increase in mineral property
        investigation costs from $nil in fiscal 2003 to $44,848 in fiscal
        2004, as a  result of new investigations undertaken by the Company
        in its efforts to acquire a new mineral property;                      
|- | An increase in regulatory
        and transfer agent costs from $17,023 in fiscal 2003 to $22,338,
        due to the fees  related to mineral property interests and/or investigation
        activities, stock exchange fees and other securities  fees;          
|- | The write off of the Company’s
        interest in the Ample-Goldmax mineral property (Newton Hill) amounting 
        to $23,296 during the year ended July 31, 2004; and                                                                                          
|- | A decrease in foreign exchange
        gain from $40,487 in fiscal 2003 to $22,225 due primarily 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.

Years ended July 31, 2003 and July 31, 2002

The principal factors contributing to the difference between
  the earnings of $15,971 for the year ended July 31, 2003, and the earnings
  of $459,843 for the year ended July 31, 2002, include:

|- | An increase in regulatory and
        transfer agent expense from $8,076 in fiscal 2002 to $17,023,
        due to the fees related to mineral property interests, stock exchange
        fees and other securities fees;
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|- | A decrease in land maintenance
        fees from $6,700 in fiscal 2002 to $ Nil in fiscal 2003 due to
        the sale of the  Quartz Mountain property in Oregon;                                                       
|- | Foreign exchange gains on accounts
        payable of $40,487 during the year;                                                                                                                                           
|- | A gain on disposal of $195,505
        of the Quartz Mountain property in Oregon in fiscal 2002 compared to a 
        write-down of the Newton Hill property of $1,271 in fiscal 2003, and                              
|- | A gain on disposal of investment
        in shares of $302,942, with no comparative gain in fiscal 2003.                                                                                                                 

B.           Liquidity
  and Capital Resources

At July 31, 2004, the Company’s cash equivalents amounted to $686,386 an increase of $196,033 from the previous year end. The major contributors to the change in net cash position during the year ended July 31, 2004 were:

|- | Operating expenses, which utilized cash of $117,219; and                                                                                          
|- | --------------------------------------------------------------------------------------------------------------------------------------------------
|- | A financing of 1,510,000 common shares
        at a price of Cdn$0.28 per share to provide $313,252 to the 
        treasury (net of issue costs).

The Company currently has sufficient working capital to fund
  administrative costs for the next twelve months and to conduct property acquisition
  investigation activities. Additional working capital will be required to fund
  any major acquisition undertaken. The Company does not have sufficient funding
  at this time to conclude a major acquisition.

At July 32, 2003, the Company’s cash equivalents amounted
  to $490,353, an increase of $16,166 from the prior year end. The major
  contributors to the change in net cash position during the year ended July 31,
  2003, were operating expenses, which utilized cash of $39,054; and a financing,
  consisting of 711,111 common shares at a price of Cdn$0.1125 per share,
  which provided $69,652 to the treasury (net of issue costs).

The Company retains a 1% net smelter returns royalty (“NSR”)
  in the Quartz Mountain Property which it sold during the year ended July 31,
  2002. The Company does not expect to generate royalty revenue from operations
  for several years from the Quartz Mountain Property, and it is not known at
  this time when any mining will commence, if at all, on this property. The size
  of the property is limited to 67 unpatented mining claims essential to the property
  and leased land contiguous to these claims. Seabridge Resources Ltd, the purchaser,
  is responsible for all costs relating to the Quartz Mountain Property and the
  Company’s interest in the property will be limited to any future NSR that
  would be forthcoming if or when any mining commences on the Quartz Mountain
  Property.

10

---

The inactive status of the Company was removed effective at
  the opening on January 29, 2003. Effective at the opening on January 29, 2003,
  the Company’s trading symbol changed from YQZ.T to YZQ. With effect from
  December 23, 2003 the Company’s trading symbol changed to QZM.

During the year ended July 31, 2003, the Company entered into
  a non-brokered private placement of 711,111 units at Cdn$0.1125 per unit
  with Hunter Dickinson Inc., a private company with certain directors in common
  with the Company. Each unit consisted of one common share and one share purchase
  warrant, with one warrant entitling the holder to purchase one common share
  of the Company at Cdn$0.15 per share during the 24 months subsequent to
  closing of the placement. On November 8, 2004, these warrants were exercised
  and 711,111 shares were issued.

On April 19, 2004, the Company issued 1,510,000 units at a
  price of Cdn$0.28 for gross proceeds of Cdn$422,800. Each unit is comprised
  of one common share and one share purchase warrant. Each warrant entitles the
  holder to purchase a further common share exercisable until April 19, 2006,
  at a price of Cdn$0.37 per common share.

The mining industry is capital intensive and there can be
  no certainty that the Company’s existing cash balances or the proceeds
  from the sale of its common shares will provide sufficient funds for all of
  its 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 its properties. 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.

As at January 31, 2005, the Company does not have any unused
  banking commitments or lines of credit, which could provide additional working
  capital. Any new acquisition must rely financing such as the sale of common
  shares to provide sufficient working capital.

The Company is in the exploration and development stage and
  has not earned any revenue from mining operations and no revenue is expected
  to be generated in the foreseeable future.

Financial Instruments

The Company holds its financial instruments predominantly
  denominated in Canadian dollars and does not engage in any hedging operations
  with respect to currency or in-situ minerals. Funds which are currently in excess
  of the Company’s current expenditures are invested in Government of Canada
  or like debt obligations and other short term near-cash investments pending
  the use of those funds.

The Company does not have any material commitments for capital
  expenditures and, accordingly, can remain relatively flexible in gearing its
  activities to the availability of funds.

The Company estimates that the cost of maintaining its corporate
  administrative activities is approximately $100,000 per year, if the Company
  does not commence any exploration programs on any property which it acquires.
  This is an estimated minimum annual cost to maintain the Company. Any exploration
  program would require funds above these minimum administration costs which include
  office, legal, audit, filing, and transfer agent fees.

C.           Research
  Expenditures

The Company does not have a program of intellectual property
  development or patenting or licensing issues as its primarily activity is the
  acquisition and exploration of mineral properties.

D.           Trend
  Information

The Company’s only property interest is a net smelter
  royalty in an exploration property which is a gold prospect. Average prices
  for precious metals have increased significantly from 2003. The average gold
  price for the year-to-date is US$399/oz, compared to US$364/oz in 2003.

11

---

E.           Off
  – Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements
  that have or are reasonably likely to have a current or future effect on its
  financial condition, changes in financial condition, revenues or expenses, results
  of operations, liquidity, capital expenditures or capital resources that is
  material to investors.

As used in this Item 5.E., 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

|                                                                                                                                    | Payments due by period
|----------------------------------------------------------------------------------------------------------------------------------- | ----------------------
|Contractual Obligations                                                                                                             | Total                 
|Long-Term Debt Obligations                                                                                                          | Nil                   
|Capital Finance/Lease                                                                                                               | Nil                   
|Operating Lease                                                                                                                     | Nil                   
|Purchase Obligations                                                                                                                | Nil                   
|Other long-term liabilities   reflected on the Company’s 
       balance sheet under the GAAP of   the primary financial statements | Nil                   
|Total                                                                                                                               | Nil                   

12

---

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 5.E and F above.

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

A.Directors
  and Senior Management

The names, positions, offices with the Company, business experience,
  and periods of service of all directors and executive officers are stated below.
  As at December 31, 2004, there were five directors of the Company.

|Name, Position with the Company and Province  and Country of Residence                                                    | Period as a Director of the  Company | Shares Beneficially Owned or
      Controlled(1)
|------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | ------------------------------------------------
|David S. Jennings, Ph.D.   President, Chief Executive
      Officer and Director   Bowen Island, British Columbia, Canada | Since August l, 1986                 | 3,962,424                                       
|Rene G. Carrier   Director   North Vancouver,
      British Columbia, Canada                                              | Since January 19, 2000               | 110,000                                         
|Brian F. Causey   Director   Tsawwassen,
      British Columbia, Canada                                                   | Since January 30, 2003               | Nil                                             
|Shannon M. Ross   Vice President and Director 
       Burnaby, British Columbia, Canada                                   | Since January 31, 1997               | 253,353                                         
|Gordon J. Fretwell   Director   West Vancouver,
      British Columbia, Canada                                            | Since January 30, 2003               | Nil                                             

Notes:

|1. | This information has been provided by the individual
        directors as provided by them on www.sedi.ca.
        The Company cannot and has not verified these figures.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Directors are elected to serve until the next annual meeting
  of shareholders. Executive officers are appointed by the Board of Directors
  to serve until terminated by the Board of Directors or until their successors
  are appointed.

There are no family relationships between any director, executive
  officer or any nominee to be a director or executive officer.

There is no arrangement or understanding with major shareholders
  or others pursuant to which any director or officer was selected as a director
  or member of senior management.

13

---

David S. Jennings, Ph.D. – President, Chief Executive
  Officer and Director

Dr. Jennings is a mineral deposits geologist
  holding a B.Sc. (Hons.) degree in geology from Lehigh University and a Ph.D.
  degree in geology from McMaster University. He has 29 years of major and junior
  company experience focusing on major project acquisitions, evaluations and explorations
  discovery. Dr. Jennings is employed by and a director of Hunter Dickinson Inc.,
  a company providing management and administrative services to publicly traded
  companies focusing on major project acquisitions, evaluations and explorations
  discovery. He is a member of management of several exploration companies.

Dr. Jennings is, or was within the past
  years, an officer and/or director of the following public companies: Anooraq
  Resources Corporation, Director (September 1996 to present); Farallon
  Resources Ltd., Director (July 1991 to present), President (July 1991 to
  September 2000), Chief Financial Officer (June 1996 to December 1997);Great
  Basin Gold Ltd., Director (June 2001 to present); Quartz Mountain Resources
  Ltd., President, Chief Executive Officer (May 1988 to present), Director
  (August 1986 to present); Cornucopia Resources Ltd.,Vice-President Exploration
  (September 1991 to March 1996), Director (June 1986 to January 1999); Continental
  Minerals Corporation,Director (June 1998 to February 2001); and Taseko
  Mines Limited, Director (November 4, 1998 to February 2001).

Rene G. Carrier – Director

Mr. Carrier is a past Vice-President
  of Pacific International Securities Inc. where he worked from 1981 to 1991.
  Since that time he has been President of Euro-American Capital Corporation,
  a private company which specializes in restructuring and raising venture capital
  funds for junior companies. Mr. Carrier is an officer and/or director of the
  following public companies: Acrex Ventures Ltd. (September 2000 to present);
  Chartwell Technology Inc., Director (June 1991 to present); Continental
  Minerals Corporation, Director (February 2001 to present); Quartz Mountain
  Resources Ltd., Director (January 2000 to present); Rockwell Ventures
  Inc., Director (April 1993 to present) and President (April 1993 to November
  2000).

Brian Causey, B.Comm., C.A. - Director

Mr. Causey holds a B.Comm. degree and
  was admitted to the Institute of Charted Accountants of British Columbia in
  1971. Formerly a partner Peat Marwick Thorne (now KPMG LLP) (1969-1977), Mr.
  Causey is currently the Director of Project Finance for Hunter Dickinson
  Inc., a position he was appointed to in 2001.

Mr. Causey was within the past years,
  an officer of the following companies: B.C. Packers Ltd. (George Weston Group),
  Vice-President, Finance (1977-1981) and Zenith Transport Ltd., President
  and Chief Executive Officer (1981-2001).

Shannon M. Ross, C.A. – Vice President, Principal
  Accounting Officer, Secretary and Director

Ms. Ross is a Chartered Accountant and
  has been Vice President, Corporate Affairs of the Company since February 1990.
  She is also Secretary to the Company.

Ms. Ross was in the past, Controller
  of Dia Met Minerals Ltd(January 1999 to July 1999) and Corporate Secretary
  (March 1999 to July 1999) to same; and Controller of Hunter Dickinson Inc.
  (July 1996 to January 1999).

Since June 2001, Ms. Ross has been Chief
  Financial Officer of Northern Orion Explorations Ltd, since January 2000, Chief
  Financial Officer and Secretary for Sultan Minerals Inc., Valerie
  Gold Resources Ltd., Emgold Mining Corporation and Cream Minerals
  Ltd.

14

---




Gordon J. Fretwell, B.Comm., L.L.B. – 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 Fretwell Law Corporation)
  in Vancouver practicing primarily in the areas of corporate and securities law.

Mr. Fretwell is, or was within the past
  years, an officer and/or director of the following public companies: Bell
  Resources Corporation, Director and Secretary (September 1998 to present);
  Copper Ridge Explorations Inc., Director and Secretary (August 1999 to
  present); International Antarex Metals Ltd., Director (December 2000
  to September 2002); Continental Minerals Corporation(formerly Continental
  Mountain Gold Limited), Director (February 2001 to present); Rockwell Ventures
  Inc., Director (March 1998 to present); Tri-Alpha Investments Ltd.,
  Director and Secretary (July 2001 to present), Foran Mining Corp., Director
  (February 1998 to March 2000), Merit Industries Inc., Director (October
  1999 to February 2000), La Teko Resources Ltd., Director (November 1995
  to February 1999) and Icon Industries Limited (December 2000 to present).

T. Barry Coughlan, B.A. – Nominee at December 31, 2004,
  who was elected to the Board on January 21, 2005

T. Barry Coughlan is a self-employed
  businessman and financier, who over the past 23 years has been involved in the
  financing of publicly traded companies. His principal occupation is President
  and Director of TBC Investments Ltd., a private investment company.

Mr. Coughlan is, or was within the past
  5 years, an officer and or a director of the following companies: Farallon
  Resources Ltd., Director (March 1998 to present); Great Basin Gold Ltd.,
  Director (February 1998 to present); Taseko Mines Limited, Director (February
  2001 to present); AMS Homecare Inc., Director (November 2001 to present);
  Casamiro Resource Corp., Director (February 1995 to August 2002); Tri-Alpha
  Investments Ltd., President, Chief Executive Officer and Director (June
  1986 to present); and Icon Industries Ltd., President, Chief Executive
  Officer and Director (September 1991 to present).

B.Compensation

During fiscal 2004, there were two executive officers of the
  Company - David S. Jennings and Shannon M. Ross. A total of C$50,000 in
  cash compensation was paid for services provided by the executive officers in
  all capacities to the Company during the year ended July 31, 2004.

Directors of the Company do not receive any fee or other compensation
  for attending meetings of the Board of Directors. The Directors are however
  reimbursed for actual expenses incurred in connection with attending such meetings.
  Directors are eligible to receive options to purchase common shares of the Company.

The Company has not set aside or accrued any funds during
  the last fiscal year to provide pension, retirement or similar benefits for
  any director, officer, consultant, or employee. The Company has instituted no
  pension or retirement benefits and none are proposed at this time.

The Company has a formalized stock option plan for the granting
  of incentive stock options to the officers, employees and directors, but which
  was formalized under the rules of the Toronto Stock Exchange. The Company presented
  an amendment to the plan which was approved by shareholders at the Company’s
  annual general meeting held in January 2004 pursuant to the rules of the TSX
  Venture Exchange. There are no options outstanding under the current plan at
  this time. The purpose of granting such options is to assist the Company in
  compensating, attracting, retaining and motivating the directors of the Company
  and to closely align the personal interests of such persons to that of the shareholders.

Stock options are a significant component of the compensation
  received by directors and serve to provide incentive to such individuals to
  act in the best interests of the Company and its shareholders.

15

---




“Named Executive Officer” means each the Chief
  Executive Officer, the Chief Financial Officer and each of the three most highly
  compensated executive officers (other than each Chief Executive Officer and
  Chief Financial Officer) who were serving as executive officers at the end of
  the most recently completed fiscal year and whose total salary and bonus exceeds
  $150,000 and any additional individuals for whom disclosure would have been
  provided except that the individual was not serving as an officer of the Company
  at the end of the most recently completed financial year end.

David S. Jennings, the Company’s President and Chief
  Executive Officer, and Shannon M. Ross, the Company’s Vice-President,
  Chief Financial Officer and Secretary, are the “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 three most recently
  completed financial years is as set out below:

The Company paid C$50,000 (US$40,580) for consulting
  services and reimbursement of expenses to a private company controlled by Shannon
  Ross and US$606 for consulting services to a private company controlled
  by Rene Carrier in the year ended July 31, 2004.

The Company paid US$19,776 for rent and administrative
  services, professional fees and geological costs to Hunter Dickinson Inc, a
  private company with certain directors in common with the Company.

These transactions were in the normal course of operations
  and were measured at the exchange value which represents the amount of consideration
  established and agreed to by the related parties.

There are no other arrangements under which directors are
  or were compensated by the Company and its subsidiaries during the most recently
  completed financial year for their services in their capacity as directors or
  consultants.

16

---

|Summary Compensation Table
|--------------------------

|NAMED EXECUTIVE   OFFICERS  
      Name and Principal  
      Position            | Year           | Annual Compensation             | Long Term Compensation                     | All Other Compensation ($)                              
|--------------------------------------------------------------------------------- | -------------- | ------------------------------- | ------------------------------------------ | --------------------------------------------------------
|Awards                                                                            | Payouts       
|Salary ($)                                                                        | Bonus ($)      | Other Annual Compen- sation ($) | Securities Under Options Granted
      (#) | Shares or Units Subject to Resale
      Restrictions ($)
|David S. Jennings, Ph D   President and Chief 
       Executive Officer           | 2004 2003 2002 | Nil Nil Nil                     | Nil
      Nil
      Nil                    | Nil
      Nil
      Nil                                 
|Shannon M. Ross   Vice-President, Chief  
      Financial Officer and   Secretary | 2004 2003 2002 | Nil Nil
      Nil               | Nil
      Nil
      Nil                    | US$40,580(1) Nil Nil                                    

Notes:

1. This
  amount was paid to 583559 B.C. Ltd., a private company controlled by Shannon
  Ross, for consulting services.

The Company does not have a long-term incentive plan pursuant
  to which cash or non-cash compensation intended to serve as an incentive for
  performance (whereby performance is measured by reference to financial performance
  or the price of the Company’s securities) was paid.

There were no options granted during the most recently completed
  financial year.

The Named Executive Officers did not exercise any options
  during the most recently completed financial year.

The Company and its subsidiaries have no employment contracts
  with any Named Executive Officer.

The Company and its subsidiaries have no compensatory plan
  or arrangement in respect of compensation received or that may be received by
  the Named Executive Officers in the Company’s most recently completed
  or current financial year to compensate such executive officers in the event
  of the termination of employment (resignation, retirement, change of control)
  or in the event of a change in responsibilities following a change in control.

C.           Board
  Practices

All directors, other than Shannon Ross (who did not stand
  for re-election), were re-elected at the last annual and extraordinary general
  meeting held on January 21, 2005 and have a term of office expiring at the next
  annual general meeting of the Company expected to be held in January 2006. All
  officers have a term of office lasting until their removal or replacement by
  the Board of Directors.

The Company or any of its subsidiaries have no directors’
  service contracts providing for benefits upon termination of employment.

The Company does not have an Executive Committee of its directors.
  The Company is required to have an Audit Committee and the current members of
  that committee are David S. Jennings, Brian F. Causey and Rene G. Carrier.

The audit committee is elected annually by the directors of
  the Company at the first meeting of the board held after the Company’s
  annual general meeting. Its primary function is to review the financial statements
  of the Company before they are submitted to the board for approval. The audit
  committee is also available to assist the board if

17

---




required with matters relating to the appointment of the Company’s
  auditor and the overall scope and results of the audit, internal financial controls,
  and financial information for publication for various purposes.

The Company has no remuneration committee.

D.           Employees

At July 31, 2004, and each of the past three years, the Company
  has had no employees and has contracted staff on an as-needed basis. The directors
  of the Company primarily administer the Company’s functions through the
  employees of Hunter Dickinson Inc., a private company with certain directors
  in common with the Company.

E.           Share
  Ownership

(a) Share
  Ownership

At December 31, 2004 directors and officers of the Company
  held an aggregate of 4,325,777 shares (36.4% of the then issued and outstanding
  shares). See Item 6(A) above. There are no stock options outstanding which have
  been granted to directors and officers of the Company.

(b)
  Share Purchase Plan and Share Option Plan

A stock option plan pursuant to the rules of the TSX Venture
  Exchange (the “TSXV”) was presented to and approved by shareholders
  at the Company’s Annual General Meeting held on January 21, 2004. Details
  of the plan are presented below.

Share Option Plan

In order to provide incentive to directors, officers, employees,
  management and others who provide services to the Company to act in the best
  interests of the Company, management of the Company proposed, and shareholders
  adopted a new share option plan (the “Plan”). Under the Plan, a
  total of up to 1,900,000 shares of the Company (which represent approximately
  20% of the Company’s outstanding shares) have been reserved for share
  incentive options to be granted at the discretion of the Company’s board
  of directors to eligible optionees (the "Optionees"). At the date of this Form
  20-F there are no options outstanding pursuant to this plan.

Eligible Optionees

Under the policies of TSXV, to be eligible for the issuance
  of a stock option under the Plan an Optionee must either be a director, officer,
  employee, consultant or an employee of a company providing management or other
  services to the Company or its subsidiary 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 company, the company must provide TSXV with an undertaking that
  it will not permit any transfer of its Shares, nor issue further Shares, to
  any other individual or entity as long as the incentive stock option remains
  in effect without the consent of TSXV.

Material Terms of the Plan

The following is a summary of the material terms of the Plan:

|(a) | all options granted under the Plan are non-assignable
        and non-transferrable and for a period of up to 5 years;                                                                                                                                                                                                                                              
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                     
|(b) | for stock options granted to employees or service
        providers (inclusive of management company employees), the Company is
        required to represent that the proposed Optionee is a bona fide employee
        or service provider (inclusive of a management company employee), as the
        case may be, of the Company or of any of its subsidiaries;

18

---

|(c) | if an Optionee ceases to be employed by the Company
        (other than as a result of termination with cause) or ceases to act as
        a director or officer of the Company or a subsidiary of the Company, any
        option held by such Optionee may be exercised within 90 days after the
        date such Optionee ceases to be employed as an officer or director or,
        as the case may be, or within 30 days if the Optionee is engaged in investor
        relations activities and ceases to be employed to provide investor relations
        activities;
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(d) | the minimum exercise price of an option granted
        under the Plan must not be less than the Discounted Market Price (as defined
        in the policies of TSXV); and                                                                                                                                                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|(e) | no Optionee can be granted an option or options
        to purchase more than 5% of the outstanding listed Shares of the Company
        in a one year period.                                                                                                                                                                                                                                                                                                                                                                                                                 

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

A.           Major Shareholders

The Company’s securities are recorded on the books of
  its transfer agent in registered form, however, the majority of such shares
  are registered in the name of intermediaries such as brokerage houses and clearing
  houses on behalf of their respective brokerage clients, and the Company does
  not have knowledge or access to information about of the beneficial owners thereof.
  To the best of its knowledge, the Company is not directly or indirectly owned
  or controlled by a corporation or foreign government. As of December 31, 2004,
  the Company had authorized 60,000,000 common shares without par value of which
  11,889,426 were issued and outstanding.

The following table sets forth certain information with respect
  to beneficial ownership of the Company’s common stock as of December31,
  2004, by (i) each shareholder known to be the beneficial owner of more than
  5% of the common stock and (ii) the officers and directors as a group indirectly,
  by any other corporation or by any foreign government.

|                               |           | Percentage Beneficially
|------------------------------ | --------- | -----------------------
|Identity of Person or Group    | Shares    | Owned of Class         
|David S. Jennings (1)          |           |                        
|Bowen Island, British Columbia | 3,962,424 | 33.3%                  
|                               |           |                        
|Hunter Dickinson Inc.(2)       |           |                        
|Vancouver, British Columbia    | 711,111   | 6.0%                   

| | Notes:
| | ------
| |       
| | 1.    
| | 2.    

The Company’s major shareholders do not have any different
  voting rights than other shareholders.

To its knowledge, the Company is not owned or controlled,
  directly or indirectly, by any other corporation or foreign government, and
  there are no other arrangements which may, at a subsequent date, result in a
  change in control of the Company.

All other known shareholders with greater than 5% are brokerage
  clearinghouses.

As of December 31, 2004, directors and officers of the Company
  as a group (five persons) owned or controlled an aggregate of 4,325,777 common
  shares (36.4%) of the Company.

Under the British Columbia Securities Actinsiders
  (generally officers, directors, holders of 10% or more of the Company's shares)
  are required to file insider reports of changes in their ownership within 10
  days of a trade in the

19

---

Company's securities. Copies of such reports are available
  for public inspection at the offices of the British Columbia Securities Commission,
  P.O. Box 10142 Pacific Centre, 701 West Georgia Street, Vancouver, British Columbia
  Canada V7Y 1L2 (phone (604) 899-6500) or at the British Columbia Securities
  Commission web site (www.bcsc.bc.ca).

The following lists the geographical distribution of shareholders
  at December 31, 2004:

|              | Number of registered |                 
|------------- | -------------------- | ----------------
|Location      | shareholders         | Number of shares
|              |                      |                 
|Canada        | 34                   | 10,213,751      
|              |                      |                 
|United States | 1,547                | 1,437,121       
|              |                      |                 
|Other         | 14                   | 238,554         
|              |                      |                 
|Total         | 1,595                | 11,889,426      

Shares registered in intermediaries were assumed to be held
  by residents of the same country in which the clearing-house was located.

B.           Related
  Party Transactions

During the year, the Company entered into the following transactions
  with related parties:

(a)
      The Company has paid $19,776 (2003 - $17,010;
          2002 - $11,004) to Hunter Dickinson Inc. (“HDI”), a
          private company with certain directors in common with the Company, for
          rent and administrative services, professional fees and geological costs.
          During the year ended July 31, 2003, the Company completed a private
          placement with this private company of 711,111 units comprised of one
          common share and one share purchase warrant at a price of Cdn$0.1125
          per unit.In November 2004, HDI exercised its warrants and
          purchased 711,111 common shares at a price of Cdn$0.15 per share.(b)
      The Company has paid $606 (2003 - $2,065;
          2002 - $Nil) for consulting services to a director and $Nil
          (2002 - $3,863; 2002 - $4,423) in legal fees to a law firm in
          which a director is a partner.(c)
      The Company paid $40,580 (2003 - $Nil;
          2002 - $Nil) in consulting fees and reimbursement of expenses to
          a private company controlled by a director and officer of the Company,
          which is included in administration expenses.(d)
      During the year ended July 31, 2004, 710,000 units
          of a private placement completed during the year were subscribed to
          by directors of the Company or to directors of a private company performing
          administrative and other services to the Company.


The amounts charged to the Company for the services provided
  have been determined by negotiation among the parties and, in certain cases,
  are covered by signed agreements. These transactions were in the normal course
  of operations and were measured at the exchange value, which represented the
  amount of consideration established and agreed to by the related parties.

Other than disclosed herein, no director or senior officer,
  and no associate or affiliate of the foregoing persons, and no insider has or
  has had any material interest, direct or indirect, in any transactions, or in
  any other proposed transaction, during the year ended July 31, 2004.

C.           Interests
  of Experts and Counsel

Not applicable.

20

---

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

A.           Consolidated
  Statements and Other Financial Information

See “Item 17 Financial Statements”.

Legal Proceedings

The Company is not involved in any litigation or legal proceedings
  and to the Company’s knowledge; no material legal proceedings involving
  the Company or its subsidiaries are to be initiated against the Company.

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

The Company had no significant changes in its activities during
  the year ended July 31, 2004.

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

A.           Offer and
  Listing Details

1.Trading
  Markets

|Fiscal | Period ended   | High               | Low    |       
|------ | -------------- | ------------------ | ------ | ------
|Year   |                |                    | (Cdn$) | (Cdn$)
|       | Annual         |                    |        |       
|2002   | Twelve months  | To July 31, 2004   | 0.55   | 0.145 
|2003   | Twelve months  | To July 31, 2003   | 0.28   | 0.10  
|2002   | Twelve months  | To July 31, 2002   | 0.20   | 0.04  
|2001   | Twelve months  | To July 31, 2001   | 0.25   | 0.10  
|2000   | Three months   | To July 31, 2000   | 0.40   | 0.30  
|       |                |                    |        |       
|       | By Quarter     |                    |        |       
|2005   | Second quarter | To January 5, 2005 | 0.51   | 0.38  
|       | First quarter  | October 31, 2004   | 0.68   | 0.36  
|       |                |                    |        |       
|2004   | Fourth quarter | July 31, 2004      | 0.55   | 0.45  
|       | Third quarter  | April 30, 2004     | 0.50   | 0.365 
|       | Second quarter | January 31, 2004   | 0.40   | 0.21  
|       | First quarter  | October 31, 2003   | 0.25   | 0.145 

21

---

|Fiscal |                | Period ended     | High   | Low    | 
|------ | -------------- | ---------------- | ------ | ------ | 
|Year   |                |                  | (Cdn$) | (Cdn$) | 
|2003   | Fourth quarter | July 31, 2003    | 0.13   | 0.12   | 
|       | Third quarter  | April 30, 2003   | 0.15   | 0.12   | 
|       | Second quarter | January 31, 2003 | 0.20   | 0.10   | 
|       | First quarter  | October 31, 2002 | 0.28   | 0.11   | 
|       |                |                  |        |        | 
|       | Monthly        |                  |        |        | 
|       | December 2004  |                  | 0.47   | 0.38   | 
|       | November 2004  |                  | 0.51   | 0.41   | 
|       | October 2004   |                  | 0.68   | 0.41   | 
|       | September 2004 |                  | 0.50   | 0.37   | 
|       | August 2004    |                  | 0.50   | 0.36   | 
|       | July 2004      |                  | 0.45   | 0.45   | 

The Company’s share trading information is also available
  through free Internet search services (eg– http://finance.yahoo.com,
  enter QZM.V). The trading prices on the Other OTC or Pink Sheets market are
  similar to the Canadian prices allowing for a currency exchange factor. Trading
  on the Other OTC had a 52 week high to December 31, 2004, of US$0.489 and
  a 52 week low of US$0.195. The close price on December 31, 2004, was US$0.32.
  The 52-week trading range ending on December 31, 2004, on the TSX Venture Exchange
  ranges from $0.29 to $0.68.

B.           Plan
  of Distribution

Not applicable

C.           Markets

The Common Shares are 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, under the symbol YQZT.V on the TSX Venture Exchange. The shares are quoted
  under the symbol QZMRF.PK on the Over-The-Counter market in the United States.

There are currently no limitations imposed by Canadian federal
  or provincial laws on the rights of non-resident or foreign owners of Canadian
  securities to hold or vote the securities held. There are no such limitations
  imposed by the Company’s Memorandum, Articles or contracts of which the
  management of the Company is aware.

D.           Selling
  Shareholders

Not applicable

E.           Dilution

Not applicable

F.           Expenses
  of the Issue

Not applicable

22

---

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

A.           Share
  Capital

Not applicable

B.           Memorandum
  and Articles of Association

This information has been previously disclosed in the Company’s
  Annual Report on Form 20-F dated January 28, 2003.

C.           Material
  Contracts

Hunter Dickinson Inc. ("HDI") is a private company with certain
  directors in common with the Company that provides geological, technical, corporate
  development, administrative and management services to, and incur third party
  costs on behalf of, the Company on a full cost recovery basis pursuant to an
  agreement dated December 31, 1996.

D.           Exchange
  Controls

The Company is a Province of British Columbia, Canada corporation.
  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 the laws of Canada or by
  the charter or other constituent documents of the Company on the right of a
  non-resident to hold or vote the Common Shares, other than as provided in the
  Investment Canada Act (Canada) (the “Investment Act”). The
  following discussion summarizes the material features of the Investment Act
  for a non-resident who proposes to acquire a controlling number of the Company’s
  Common Shares. It is general only, it is not a substitute for independent advice
  from an investor’s own advisor, and it does not anticipate statutory or
  regulatory amendments. The Company does not believe the Investment Act will
  have any affect on it or on its non-Canadian shareholders due to a number of
  factors including the nature of its operations and the Company’s relatively
  small capitalization.

The Investment Act generally prohibits implementation of a
  “reviewable” investment by an individual, government or agency thereof,
  corporation, partnership, trust or joint venture (each an “entity”)
  that is not a “Canadian” as defined in the Investment Act (a “non-Canadian”),
  unless after review the Director of Investments appointed by the minister responsible
  for the Investment Act is satisfied that the investment is likely to be of net
  benefit to Canada. The size and nature of a proposed transaction may give rise
  to an obligation to notify the Director to seek an advance ruling. An investment
  in the Common Shares by a non-Canadian (other than a “WTO Investor”
  as that term is defined in the Investment Act and which term includes entities
  which are nationals of or are controlled by nationals of member states of the
  World Trade Organization) when the Company was not controlled by a WTO Investor,
  would be reviewable under the Investment Act if it was an investment to acquire
  control of the Company and the value of the assets of the Company, as determined
  in accordance with the regulations promulgated under the Investment Act, was
  over a certain figure, or if an order for review was made by the federal cabinet
  on the grounds that the investment related to Canada’s cultural heritage
  or national identity, regardless of the value of the assets of the Company.
  An investment in the Common Shares by a WTO Investor, or by a non-Canadian when
  the Company was controlled by a WTO Investor, would be reviewable under the
  Investment Act if it was an investment to acquire control of the Company and
  the value of the assets of the Company, as determined in accordance with the
  regulations promulgated under the Investment Act, was not less than a specified
  amount, which for 2004 exceeds Cdn$237 million. A non-Canadian would acquire
  control of the Company for the purposes of the Investment Act if the non-Canadian
  acquired a majority of the Common Shares. The acquisition of less than a majority
  but one-third or more of the Common Shares would be presumed to be an acquisition
  of control of the Company unless it could be

23

---

established that, on the acquisition, the Company was not
  controlled in fact by the acquiror through the ownership of the Common Shares.

The foregoing assumes the Company will not engage in the production
  of uranium or own an interest in a producing uranium property in Canada, or
  provide any financial service or transportation service, as the rules governing
  these businesses are different.

Certain transactions relating to the Common Shares would be
  exempt from the Investment Act, including:

| | (a) | an acquisition of the Common Shares by a person
        in the ordinary course of that person’s business as a trader or
        dealer in securities,                                                                                                                                           
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                 
| | (b) | an acquisition of control of the Company in connection
        with the realization of security granted for a loan or other financial
        assistance and not for a purpose related to the provisions of the Investment
        Act, and                                                     
| |     |                                                                                                                                                                                                                                                                                                 
| | (c) | an acquisition of control of the Company by reason
        of an amalgamation, merger, consolidation or corporate reorganization
        following which the ultimate direct or indirect control in fact of the
        Company, through the ownership of the Common Shares, remained unchanged.

E.           Taxation

1.           Material
  Canadian Federal Income Tax Consequences for United States Residents

The following discussion summarizes the material Canadian
  federal income tax consequences which are generally applicable to the holding
  and disposition of Common Shares by a holder (in this summary, a “U.S.
  Holder”) who, (a) for the purposes of the Income Tax Act (Canada) (the
  “Tax Act”), is not resident in Canada, deals at arm’s length
  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) for the purposes of the Canada-United States
  Income Tax Convention, 1980 (the “Treaty”), is a resident solely
  of the United States, has never been a resident of Canada, and has not held
  or used (and does not hold or use) Common Shares in connection with a permanent
  establishment or fixed base in Canada. This summary does not apply to traders
  or dealers in securities, limited liability companies, tax-exempt entities,
  insurers, financial institutions (including those to which the mark-to-market
  provisions of the Tax Act apply), or any other U.S. Holder to which special
  considerations apply.

This summary is based on the current provisions of the Tax
  Act including all regulations thereunder, the Treaty, all proposed amendments
  to the Tax Act, the regulations and the Treaty publicly announced by the Government
  of Canada to the date hereof, and the current administrative practices of the
  Canada Customs and Revenue Agency. It has been assumed that all currently proposed
  amendments will be enacted as proposed and that there will be no other relevant
  change in any governing law or administrative practice, although no assurances
  can be given in these respects. This summary does not take into account provincial,
  U.S., state or other foreign income tax law or practice. The tax consequences
  to any particular U.S. Holder will vary according to the status of that holder
  as an individual, trust, corporation, partnership or other entity, the jurisdictions
  in which that holder is subject to taxation, and generally according to that
  holder’s particular circumstances. Accordingly, this summary is not, and
  is not to be construed as, Canadian tax advice to any particular U.S. Holder.

2.           Dividends

Dividends paid or deemed to be paid to a U.S. Holder by the
  Company will be 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 amount of the dividend (or 5% if the U.S. Holder is a corporation
  and beneficially owns at least 10% of the Company’s voting shares). The
  Company will be required to withhold the applicable withholding tax from any
  such dividend and remit it to the Canadian government for the U.S. Holder’s
  account.

24

---

3.           Disposition

A U.S. Holder is 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. A Common
  Share will be taxable Canadian property to a U.S. Holder if, at any time during
  the 60 months preceding the disposition, the U.S. Holder or persons with whom
  the U.S. Holder did not deal at arm’s length alone or together owned,
  or had rights to acquire, 25% or more of the Company’s issued shares of
  any class or series.

A U.S. Holder whose Common Shares do constitute taxable Canadian
  property, and who might therefore be liable for Canadian income tax under the
  Tax Act, will generally be relieved from such liability under the Treaty unless
  the value of such shares at the time of disposition is derived principally from
  real property situated in Canada.

4.           United
  States Tax Consequences

a. United
  States Federal Income Tax Consequences

The following is a discussion of all material United States
  federal income tax consequences, under current law, generally applicable to
  a U.S. Holder (as hereinafter defined) of common shares of the Company. This
  discussion does not address all potentially relevant federal income tax matters
  and it does not address consequences peculiar to persons subject to special
  provisions of federal income tax law, such as those described below as excluded
  from the definition of a U.S. Holder. In addition, this discussion does not
  cover any state, local or foreign tax consequences. (see “Taxation –
  Canadian Federal Income Tax Consequences” above). Accordingly, we urge
  holders and prospective holders of common shares of the Company should consult
  their own tax advisors about the specific federal, state, local, and foreign
  tax consequences to them of purchasing, owning and disposing of common shares
  of the Company, based upon their individual circumstances.

The following discussion is based upon the sections of the
  Internal Revenue Code of 1986, as amended (the “Code”), Treasury
  Regulations, published Internal Revenue Service (“IRS”) rulings,
  published administrative positions of the IRS and court decisions that are currently
  applicable, any or all of which could be materially and adversely changed, possibly
  on a retroactive basis, at any time and which are subject to differing interpretations.
  This discussion does not consider the potential effects, both adverse and beneficial,
  of any proposed legislation which, if enacted, could be applied, possibly on
  a retroactive basis, at any time.

b. U.S.
  Holders

As used herein, a “U.S. Holder” means a holder
  of common shares of the Company who is a citizen or individual resident of the
  United States, a corporation or partnership created or organized in or under
  the laws of the United States or of any political subdivision thereof, an estate
  whose income is taxable in the United States irrespective of source or a trust
  subject to the primary supervision of a court within the United States and control
  of a United States fiduciary as described Section 7701(a)(30) of the Code. This
  summary does not address the tax consequences to, and U.S. Holder does not include,
  persons subject to specific provisions of federal income tax law, such as tax-exempt
  organizations, qualified retirement plans, individual retirement accounts and
  other tax-deferred accounts, financial institutions, insurance companies, real
  estate investment trusts, regulated investment companies, broker-dealers, non-resident
  alien individuals, persons or entities that have a “functional currency”
  other than the U.S. dollar, shareholders subject to the alternative minimum
  tax, shareholders who hold common shares as part of a straddle, hedging or conversion
  transaction, and shareholders who acquired their common shares through the exercise
  of employee stock options or otherwise as compensation for services. This summary
  is limited to U.S. Holders who own common shares as capital assets and who own
  (directly and indirectly, pursuant to applicable rules of constructive ownership)
  no more than 5% of the value of the total outstanding stock of the Company.
  This summary does not address the consequences to a person or entity holding
  an interest in a shareholder or the consequences to a person of the ownership,
  exercise or disposition of any options, warrants or other rights to acquire
  common shares. In addition, this summary does not address special rules applicable
  to United States persons (as defined in Section 7701(a)(30) of the Code) holding
  common shares through a foreign partnership or to foreign persons holding common
  shares through a domestic partnership.

25

---

c. Distribution
  on Common Shares of the Company

In general, U.S. Holders receiving dividend distributions
  (including constructive dividends) with respect to common shares of the Company
  are required to include in gross income for United States federal income tax
  purposes the gross amount of such distributions, equal to the U.S. dollar value
  of such distributions on the date of receipt (based on the exchange rate on
  such date), to the extent that the Company has current or accumulated earnings
  and profits, without reduction for any Canadian income tax withheld from such
  distributions. Such Canadian tax withheld may be credited, subject to certain
  limitations, against the U.S. Holder’s federal income tax liability or,
  alternatively, may be deducted in computing the U.S. Holder’s federal
  taxable income by those who itemize deductions. (See more detailed discussion
  at “Foreign Tax Credit” below). The dividend distributions are not
  currently expected to be "Qualified Dividends" subject to reduced U.S. tax rates.
  To the extent that distributions exceed current or accumulated earnings and
  profits of the Company, they will be treated first as a return of capital up
  to the U.S. Holder’s adjusted basis in the common shares and thereafter
  as gain from the sale or exchange of property. Preferential tax rates for long-term
  capital gains are applicable to a U.S. Holder which is an individual, estate
  or trust. There are currently no preferential tax rates for long-term capital
  gains for a U.S. Holder which is a corporation.

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

Dividends paid on the common shares of the Company generally
  will not be eligible for the dividends received deduction provided to corporations
  receiving dividends from certain United States corporations. A U.S. Holder which
  is a corporation and which owns shares representing at least 10% of the voting
  power and value of the Company may, under certain circumstances, be entitled
  to a 70% (or 80% if the U.S. Holder owns shares representing at least 20% of
  the voting power and value of the Company) deduction of the United States source
  portion of dividends received from the Company (unless the Company qualifies
  as a “foreign personal holding company” or a “passive foreign
  investment company,” as defined below). The Company does not anticipate
  that it will earn any United States income, however, and therefore does not
  anticipate that any U.S. Holder will be eligible for the dividends received
  deduction.

Under current Treasury Regulations, dividends paid on the
  Company’s common shares, if any, generally will not be subject to information
  reporting and generally will not be subject to U.S. backup withholding tax.
  However, dividends and the proceeds from a sale of the Company’s common
  shares paid in the U.S. through a U.S. or U.S. related paying agent (including
  a broker) will be subject to U.S. information reporting requirements and may
  also be subject to the 31% U.S. backup withholding tax, unless the paying agent
  is furnished with a duly completed and signed Form W-9. Any amounts withheld
  under the U.S. backup withholding tax rules will be allowed as a refund or a
  credit against the U.S. Holder’s U.S. federal income tax liability, provided
  the required information is furnished to the IRS.

d. Foreign
  Tax Credit

A U.S. Holder who pays (or has withheld from distributions)
  Canadian income tax with respect to the ownership of common shares of the Company
  may be entitled, at the option of the U.S. Holder, to either receive a deduction
  or a tax credit for such foreign tax paid or withheld. Generally, it will be
  more advantageous to claim a credit because a credit reduces United States federal
  income taxes on a dollar-for-dollar basis, while a deduction merely reduces
  the taxpayer’s income subject to tax. This election is made on a year-by-year
  basis and generally applies to all foreign taxes paid by (or withheld from)
  the U.S. Holder during that year. There are significant and complex limitations
  which apply to the credit; among which is the general limitation that the credit
  cannot exceed the proportionate share of the U.S. Holder’s United States
  income tax liability that the U.S. Holder’s foreign source income bears
  to his or its worldwide taxable income. In the determination of the application
  of this limitation, the various items of income and deduction must be classified
  into foreign and domestic sources. Complex rules govern this classification

26

---

process. In addition, this limitation is calculated separately
  with respect to specific classes of income such as “passive income”,
  “high withholding tax interest,” “financial services income,”
  “shipping income,” and certain other classifications of income.
  Dividends distributed by the Company will generally constitute “passive
  income” or, in the case of certain U.S. Holders, “financial services
  income” for these purposes. The availability of the foreign tax credit
  and the application of the limitations on the credit are fact specific, and
  U.S. Holders of common shares of the Company are urged to consult their own
  tax advisors regarding their individual circumstances.

e. Disposition
  of Common Shares of the Company

In general, U.S. Holders will recognize gain or loss upon
  the sale of common shares of the Company equal to the difference, if any, between
  (i) the amount of cash plus the fair market value of any property received,
  and (ii) the shareholder’s tax basis in the common shares of the Company.
  Preferential tax rates apply to long-term capital gains of U.S. Holders which
  are individuals, estates or trusts. In general, gain or loss on the sale of
  common shares of the Company will be long-term capital gain or loss if the common
  shares are a capital asset in the hands of the U.S. Holder and are held for
  more than one year. Deductions for net capital losses are subject to significant
  limitations. For U.S. Holders which are not corporations, any unused portion
  of such net capital loss may be carried over to be used in later tax years until
  such net capital loss is thereby exhausted. For U.S. Holders that are corporations
  (other than corporations subject to Subchapter S of the Code), an unused net
  capital loss may be carried back three years and carried forward five years
  from the loss year to be offset against capital gains until such net capital
  loss is thereby exhausted.

f. Other
  Considerations

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

g. Foreign
  Personal Holding Company

If at any time during a taxable year more than 50% of the
  total combined voting power or the total value of the Company’s outstanding
  shares is owned, directly or indirectly (pursuant to applicable rules of constructive
  ownership), by five or fewer individuals who are citizens or residents of the
  United States and 60% or more of the Company’s gross income for such year
  is derived from certain passive sources (e.g., from certain interest and dividends),
  the Company may be treated as a “foreign personal holding company.”
  In that event, U.S. Holders that hold common shares would be required to include
  in gross income for such year their allocable portions of such passive income
  to the extent the Company does not actually distribute such income. The Company
  does not believe that it currently qualifies as a foreign personal holding company.
  However, there can be no assurance that the Company will not be considered a
  foreign personal holding company for the current or any future taxable year.

h. Foreign
  Investment Company

If 50% or more of the combined voting power or total value
  of the Company’s outstanding shares is held, directly or indirectly, by
  citizens or residents of the United States, United States domestic partnerships
  or corporations, or estates or trusts other than foreign estates or trusts (as
  defined by the Code Section 7701(a)(31)), and the Company is found to be engaged
  primarily in the business of investing, reinvesting, or trading in securities,
  commodities, or any interest therein, it is possible that the Company may be
  treated as a “foreign investment company” as defined in Section
  1246 of the Code, causing all or part of any gain realized by a U.S. Holder
  selling or exchanging common shares to be treated as ordinary income rather
  than capital gain. The Company does not believe that it currently qualifies
  as a foreign investment company. However, there can be no assurance that the
  Company will not be considered a foreign investment company for the current
  or any future taxable year.

i. Passive
  Foreign Investment Company

United States income tax law contains rules governing “passive
  foreign investment companies” (“PFIC”) which can have significant
  tax effects on U.S. Holders of foreign corporations. These rules do not apply
  to non-U.S. Holders. Section 1297 of the Code defines a PFIC as a corporation
  that is not formed in the United States if, for any taxable

27

---

year, either (i) 75% or more of its gross income is “passive
  income,” which includes interest, dividends and certain rents and royalties
  or (ii) the average percentage, by fair market value (or, if the corporation
  is not publicly traded and either is a controlled foreign corporation or makes
  an election, by adjusted tax basis), of its assets that produce or are held
  for the production of “passive income” is 50% or more. The Company
  appears to have been a PFIC for the fiscal year ended July 31, 2001, and at
  least certain prior fiscal years. In addition, the Company expects to qualify
  as a PFIC for the fiscal year ending July 31, 2003, and may also qualify as
  a PFIC in future fiscal years. Each U.S. Holder of the Company is urged to consult
  a tax advisor with respect to how the PFIC rules affect such U.S. Holder’s
  tax situation.

Each U.S. Holder who holds stock in a foreign corporation
  during any year in which such corporation qualifies as a PFIC is subject to
  United States federal income taxation under one of three alternative tax regimes
  at the election of such U.S. Holder. The following is a discussion of such alternative
  tax regimes applied to such U.S. Holders of the Company. In addition, special
  rules apply if a foreign corporation qualifies as both a PFIC and a “controlled
  foreign corporation” (as defined below) and a U.S. Holder owns, actually
  or constructively, 10% or more of the total combined voting power of all classes
  of stock entitled to vote of such foreign corporation (See more detailed discussion
  at “Controlled Foreign Corporation” below).

A U.S. Holder who elects to treat the Company as a qualified
  electing fund (“QEF”) will be subject, under Section 1293 of the
  Code, to current federal income tax for any taxable year to which the election
  applies in which the Company qualifies as a PFIC on his pro rata share of the
  Company’s (i) “net capital gain” (the excess of net long-term
  capital gain over net short-term capital loss), which will be taxed as long-term
  capital gain, and (ii) “ordinary earnings” (the excess of earnings
  and profits over net capital gain), which will be taxed as ordinary income,
  in each case, for the shareholder’s taxable year in which (or with which)
  the Company’s taxable year ends, regardless of whether such amounts are
  actually distributed. A U.S. Holder’s tax basis in the common shares will
  be increased by any such amount that is included in income but not distributed.

The procedure a U.S. Holder must comply with in making an
  effective QEF election, and the consequences of such election, will depend on
  whether the year of the election is the first year in the U.S. Holder’s
  holding period in which the Company is a PFIC. If the U.S. Holder makes a QEF
  election in such first year, i.e., a “timely” QEF election, then
  the U.S. Holder may make the QEF election by simply filing the appropriate documents
  at the time the U.S. Holder files his tax return for such first year. If, however,
  the Company qualified as a PFIC in a prior year during the U.S. Holder’s
  holding period, then, in order to avoid the Section 1291 rules discussed below,
  in addition to filing documents, the U.S. Holder must elect to recognize under
  the rules of Section 1291 of the Code (discussed herein), (i) any gain that
  he would otherwise recognize if the U.S. Holder sold his stock on the qualification
  date or (ii) if the Company is a controlled foreign corporation, the U.S. Holder’s
  pro rata share of the Company’s post-1986 earnings and profits as of the
  qualification date. The qualification date is the first day of the Company’s
  first tax year in which the Company qualified as a QEF with respect to such
  U.S. Holder. For purposes of this discussion, a U.S. Holder who makes (i) a
  timely QEF election, or (ii) an untimely QEF election and either of the above-described
  gain-recognition elections under Section 1291 is referred to herein as an “Electing
  U.S. Holder.” A U.S. Holder who holds common shares at any time during
  a year of the Company in which the Company is a PFIC and who is not an Electing
  U.S. Holder (including a U.S. Holder who makes an untimely QEF election and
  makes neither of the above-described gain-recognition elections) is referred
  to herein as a “Non-Electing U.S. Holder.” An Electing U.S. Holder
  (i) generally treats any gain realized on the disposition of his Registrant
  common shares as capital gain; and (ii) may either avoid interest charges resulting
  from PFIC status altogether, or make an annual election, subject to certain
  limitations, to defer payment of current taxes on his share of the Company’s
  annual realized net capital gain and ordinary earnings subject, however, to
  an interest charge. If the U.S. Holder is not a corporation, any interest charge
  imposed under the PFIC regime would be treated as “personal interest”
  that is not deductible.

In order for a U.S. Holder to make (or maintain) a valid QEF
  election, the Company must provide certain information regarding its net capital
  gains and ordinary earnings and permit its books and records to be examined
  to verify such information. The Company intends to make the necessary information
  available to U.S. Holders to permit them to make (and maintain) QEF elections
  with respect to the Company. The Company urges each U.S. Holder to consult a
  tax advisor regarding the availability of, and procedure for making, the QEF
  election.

A QEF election, once made with respect to the Company, applies
  to the tax year for which it was made and to all subsequent tax years, unless
  the election is invalidated or terminated, or the IRS consents to revocation
  of the

28

---

election. If a U.S. Holder makes a QEF election and the Company
  ceases to qualify as a PFIC in a subsequent tax year, the QEF election will
  remain in effect, although not applicable, during those tax years in which the
  Company does not qualify as a PFIC. Therefore, if the Company again qualifies
  as a PFIC in a subsequent tax year, the QEF election will be effective and the
  U.S. Holder will be subject to the rules described above for Electing U.S. Holders
  in such tax year and any subsequent tax years in which the Company qualifies
  as a PFIC. In addition, the QEF election remains in effect, although not applicable,
  with respect to an Electing U.S. Holder even after such U.S. Holder disposes
  of all of his or its direct and indirect interest in the shares of the Company.
  Therefore, if such U.S. Holder reacquires an interest in the Company, that U.S.
  Holder will be subject to the rules described above for Electing U.S. Holders
  for each tax year in which the Company qualifies as a PFIC.

In the case of a Non-Electing U.S. Holder, special taxation
  rules under Section 1291 of the Code will apply to (i) gains realized on the
  disposition (or deemed to be realized by reasons of a pledge) of his Registrant
  common shares and (ii) certain “excess distributions,” as defined
  in Section 1291(b), by the Company.

A Non-Electing U.S. Holder generally would be required to
  pro rate all gains realized on the disposition of his Registrant common shares
  and all excess distributions on his Registrant common shares over the entire
  holding period for the common shares. All gains or excess distributions allocated
  to prior years of the U.S. Holder (excluding any portion of the holder’s
  period prior to the first day of the first year of the Company (i) which began
  after December 31, 1986, and (ii) for which the Company was a PFIC) would be
  taxed at the highest tax rate for each such prior year applicable to ordinary
  income. The Non-Electing U.S. Holder also would be liable for interest on the
  foregoing tax liability for each such prior year calculated as if such liability
  had been due with respect to each such prior year. A Non-Electing U.S. Holder
  that is not a corporation must treat this interest charge as “personal
  interest” which, as discussed above, is wholly non-deductible. The balance,
  if any, of the gain or the excess distribution will be treated as ordinary income
  in the year of the disposition or distribution, and no interest charge will
  be incurred with respect to such balance. In certain circumstances, the sum
  of the tax and the PFIC interest charge may exceed the amount of the excess
  distribution received, or the amount of proceeds of disposition realized, by
  the U.S. Holder.

If the Company is a PFIC for any taxable year during which
  a Non-Electing U.S. Holder holds Registrant common shares, then the Company
  will continue to be treated as a PFIC with respect to such Registrant common
  shares, even if it is no longer definitionally a PFIC. A Non-Electing U.S. Holder
  may terminate this deemed PFIC status by electing to recognize gain (which will
  be taxed under the rules discussed above for Non-Electing U.S. Holders) as if
  such Registrant common shares had been sold on the last day of the last taxable
  year for which it was a PFIC.

Effective for tax years of U.S. Holders beginning after December
  31, 1997, U.S. Holders who hold (actually or constructively) marketable stock
  of a foreign corporation that qualifies as a PFIC may elect to mark such stock
  to the market annually (a “mark-to-market election”). If such an
  election is made, such U.S. Holder will generally not be subject to the special
  taxation rules of Section 1291 discussed above. However, if the mark-to-market
  election is made by a Non-Electing U.S. Holder after the beginning of the holding
  period for the PFIC stock, then the Section 1291 rules will apply to certain
  dispositions of, distributions on and other amounts taxable with respect to
  the Company common shares. A U.S. Holder who makes the mark-to market election
  will include in income for each taxable year for which the election is in effect
  an amount equal to the excess, if any, of the fair market value of the common
  shares of the Company as of the close of such tax year over such U.S. Holder’s
  adjusted basis in such common shares. In addition, the U.S. Holder is allowed
  a deduction for the lesser of (i) the excess, if any, of such U.S. Holder’s
  adjusted tax basis in the common shares over the fair market value of such shares
  as of the close of the tax year, or (ii) the excess, if any, of (A) the mark-to-market
  gains for the common shares in the Company included by such U.S. Holder for
  prior tax years, including any amount which would have been treated as a mark-to-market
  gain for any prior tax year but for the Section 1291 rules discussed above with
  respect to Non-Electing U.S. Holders, over (B) the mark-to-market losses for
  shares that were allowed as deductions for prior tax years. A U.S. Holder’s
  adjusted tax basis in the common shares of the Company will be adjusted to reflect
  the amount included in or deducted from income as a result of a mark-to-market
  election. A mark-to-market election applies to the taxable year in which the
  election is made and to each subsequent taxable year, unless the Company common
  shares cease to be marketable, as specifically defined, or the IRS consents
  to revocation of the election. Because the IRS has not established procedures
  for making a mark-to-market election, U.S. Holders are urged to consult their
  tax advisor regarding the manner of making such an election. No view is expressed
  regarding whether common shares of the Company are marketable for these purposes
  or whether the election will be available.

29

---

Under Section 1291(f) of the Code, the IRS has issued Proposed
  Treasury Regulations that, subject to certain exceptions, would treat as taxable
  certain transfers of PFIC stock by Non-Electing U.S. Holders that are generally
  not otherwise taxed, such as gifts, exchanges pursuant to corporate reorganizations,
  and transfers at death. Generally, in such cases the basis of the Company common
  shares in the hands of the transferee and the basis of any property received
  in the exchange for those common shares would be increased by the amount of
  gain recognized. Under the Proposed Treasury Regulations, an Electing U.S. Holder
  would not be taxed on certain transfers of PFIC stock, such as gifts, exchanges
  pursuant to corporate reorganizations, and transfers at death. The transferee’s
  basis in this case will depend on the manner of the transfer. In the case of
  a transfer by an Electing U.S. Holder upon death, for example, the transferee’s
  basis is generally equal to the fair market value of the Electing U.S. Holder’s
  common shares as of the date of death under Section 1014 of the Code. The specific
  tax effect to the U.S. Holder and the transferee may vary based on the manner
  in which the common shares are transferred. Each U.S. Holder of the Company
  is urged to consult a tax advisor with respect to how the PFIC rules affect
  his or its tax situation.

Whether or not a U.S. Holder makes a timely QEF election with
  respect to common shares of the Company, certain adverse rules may apply in
  the event that both the Company and any foreign corporation in which the Company
  directly or indirectly holds shares is a PFIC (a “lower-tier PFIC”).
  Pursuant to certain Proposed Treasury Regulations, a U.S. Holder would be treated
  as owning his or its proportionate amount of any lower-tier PFIC shares, and
  generally would be subject to the PFIC rules with respect to such indirectly-held
  PFIC shares unless such U.S. Holder makes a timely QEF election with respect
  thereto. The Company intends to make the necessary information available to
  U.S. Holders to permit them to make (and maintain) QEF elections with respect
  to each subsidiary of the Company that is a PFIC.

Under the Proposed Treasury Regulations, a U.S. Holder who
  does not make a timely QEF election with respect to a lower-tier PFIC generally
  would be subject to tax (and the PFIC interest charge) on (i) any excess distribution
  deemed to have been received with respect to his or its lower-tier PFIC shares
  and (ii) any gain deemed to arise from a so-called “indirect disposition”
  of such shares. For this purpose, an indirect disposition of lower-tier PFIC
  shares would generally include (i) a disposition by the Company (or an intermediate
  entity) of lower-tier PFIC shares, and (ii) any other transaction resulting
  in a diminution of the U.S. Holder’s proportionate ownership of the lower-tier
  PFIC, including an issuance of additional common shares by the Company (or an
  intermediate entity). Accordingly, each prospective U.S. Holder should be aware
  that he or it could be subject to tax even if such U.S. Holder receives no distributions
  from the Company and does not dispose of its common shares. The Company strongly
  urges each prospective U.S. Holder to consult a tax advisor with respect to
  the adverse rules applicable, under the Proposed Treasury Regulations, to U.S.
  Holders of lower-tier PFIC shares.

Certain special, generally adverse, rules will apply with
  respect to Registrant common shares while the Company is a PFIC unless the U.S.
  Holder makes a timely QEF election. For example under Section 1298(b)(6) of
  the Code, a U.S. Holder who uses PFIC stock as security for a loan (including
  a margin loan) will, except as may be provided in regulations, be treated as
  having made a taxable disposition of such shares.

j. Controlled
  Foreign Corporation

If more than 50% of the total combined voting power of all
  classes of shares entitled to vote or the total value of the shares of the Company
  is owned, actually or constructively, by citizens or residents of the United
  States, United States domestic partnerships or corporation, or estates or trusts
  other than foreign estates or trusts (as defined by the Code Section 7701(a)(31)),
  each of which own, actually or constructively, 10% or more of the total combined
  voting power of all classes of shares entitled to vote of the Company (“United
  States Shareholder”), the Company could be treated as a controlled foreign
  corporation (“CFC”) under Subpart F of the Code. This classification
  would effect many complex results, one of which is the inclusion of certain
  income of a CFC which is subject to current U.S. tax. The United States generally
  taxes United States Shareholders of a CFC currently on their pro rata shares
  of the Subpart F income of the CFC. Such United States Shareholders are generally
  treated as having received a current distribution out of the CFC’s Subpart
  F income and are also subject to current U.S. tax on their pro rata shares of
  increases in the CFC’s earnings invested in U.S. property. The foreign
  tax credit described above may reduce the U.S. tax on these amounts. In addition,
  under Section 1248 of the Code, gain from the sale or exchange of shares by
  a U.S. Holder of common shares of the Company which is or was a United States
  Shareholder at any time during the five-year period ending on the date of the
  sale or exchange is treated as ordinary income to the extent of earnings and
  profits of the Company attributable to the shares sold or exchanged. If a foreign
  corporation is both a PFIC and

30

---

a CFC, the foreign corporation generally will not be treated
  as a PFIC with respect to United States Shareholders of the CFC. This rule generally
  will be effective for taxable years of United States Shareholders beginning
  after 1997 and for taxable years of foreign corporations ending with or within
  such taxable years of United States Shareholders. Special rules apply to United
  States Shareholders who are subject to the special taxation rules under Section
  1291 discussed above with respect to a PFIC. Because of the complexity of Subpart
  F, a more detailed review of these rules is outside of the scope of this discussion.
  The Company does not believe that it currently qualifies as a CFC. However,
  there can be no assurance that the Company will not be considered a CFC for
  the current or any future taxable year.

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 at the offices of the Company, Suite 1020, 800 West Pender Street, Vancouver,
  British Columbia V6C 2V6 or on request of the Company. Copies of the Company’s
  financial statements and other continuous disclosure documents required under
  the British Columbia Securities Act are available for viewing 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’s operations do not employ financial instruments
  or derivatives and given that the Company keeps its excess funds in high-grade
  short-term instruments it does not have significant or unusual financial market
  risks.

B.           Exchange
  Rate Sensitivity

The majority of the Company’s operations are in Canada
  and hence it is not significantly affected by exchange rate risk. Its liabilities
  are all denominated in Canadian dollars. The Company does not hedge this risk,
  and it does not consider this exposure to be material in the context of its
  operations.

C.           Interest
  Rate Risk and Equity Price Risk

The Company is equity financed and does not have any debt.

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 operating mines and hence does
  not have any hedging or other commodity based operations risks respecting its
  business activities.

31

---

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

A.           Debt
  Securities

Not applicable

B.           Warrants
  and Rights

Not applicable

C.          
  Other Securities

Not applicable

D.           American
  Depositary Shares

Not applicable

PART II

|ITEM 13 | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|------- | -----------------------------------------------

Not applicable.

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

Not applicable.

|ITEM 15 | CONTROLS AND PROCEDURES
|------- | -----------------------

As a consequence of the Sarbanes-Oxley Act of 2002, the Company’s
  principal executive and financial officers are required to review the Company’s
  internal controls and corporate disclosure controls and procedures based on
  their evaluation as of a date within 90 days prior to the filing of the Annual
  Report. As of the date of filing of this Annual Report the executive and financial
  officers are currently reviewing the Company’s controls and procedures
  and establishing policies in regard to them. It is not currently possible to
  provide a conclusion; however the Company notes that its relatively modest asset
  base and limited number of transactions suggests that sophisticated financial
  and disclosure controls and procedures will not be warranted for the Company.
  The Company’s financial procedures require that two officers or directors
  sign all payments and other banking documents and the executive officers are
  able to personally review all material payments made by the Company. Exploration
  results are reviewed by the Company’s consulting geologists and its Chief
  Executive Officer and other board members on a need-to-know basis and are otherwise
  kept confidential prior to any dissemination of these results.

There have not been any significant changes in the Company’s
  internal controls or other factors that could significantly affect these controls
  over the last several years.

32

---

The Company expects to further formalize and document controls
  and procedures in the ensuing fiscal year as a consequence of the executive
  review.

|ITEM 15 | AUDIT COMMITTEE, CODE OF ETHICS, ACCOUNTANT FEES
      AND EXEMPTIONS
|------- | ---------------------------------------------------------------------

A.           Audit
  Committee Financial Expert

The board of directors has determined that Mr. Brian Causey
  is a member of the audit committee of the Company who qualifies as a "financial
  expert” based on his education and experience. Mr. Causey is "independent",
  as the term is defined by the American Stock Exchange, which is a national securities
  exchange.

B.           Code
  of Ethics

The Company has adopted a code of ethics that applies to the
  Company's chief executive officer, the chief financial officer, and other members
  of senior management. The Code of Ethics is appended as an exhibit to this Form
  20-F.

C.           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 for various services. The figures in the table below are
  expressed in Canadian Dollars.

|Services:          |    | Year ended    | 
|------------------ | -- | ------------- | 
|                   |    | July 31, 2004 | 
|Audit Fees         | C$ | 20,500        | 
|Audit Related Fees |    | —             | 
|Tax Fees           |    | 2,300         | 
|All Other Fees     |    | —             | 
|                   | C$ | 22,800        | 

Audit related fees comprise of fees billed for assurance and
  advisory services related to the annual audit.

From time to time, management of the Company recommends to
  and requests approval from the audit committee for non-audit services to be
  provided by the Company's auditors. The audit committee routinely considers
  such requests at committee meetings, and if acceptable to a majority of the
  audit 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 committee assesses, among other factors, whether the services requested
  would be considered "prohibited services" as contemplated by the US Securities
  and Exchange Commission, and whether the services requested and the fees related
  to such services could impair the independence of the auditors.

D.           Exemptions
  from Listing Standards for Audit Committees

Not applicable

E.           Purchases
  Of Equity Securities by the Issuer and Affiliated Purchasers

None

33

---

PART III

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

The following attached financial statements are incorporated herein:

|(1) | Independent Auditors’ Report on the consolidated
      balance sheets as at July 31, 2004 and 2003, and the consolidated statements
      of operations, cash flows and shareholders’ equity (deficiency) for
      the years ended July 31, 2004, 2003 and 2002;
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                  
|(2) | Consolidated balance sheets as at July 31, 2004 and
      2003;                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                  
|(3) | Consolidated statements of operations for the years
      ended July 31, 2004, 2003 and 2002;                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                  
|(4) | Consolidated statements of cash flows for the years
      ended July 31, 2004, 2003 and 2002;                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                  
|(5) | Consolidated statement of shareholders’ equity
      (deficiency) for the years ended July 31, 2004, 2003 and 2002; and                                                                                                                                          
|    |                                                                                                                                                                                                                                                                  
|(6) | Notes to the consolidated financial statements.                                                                                                                                                                                                                  

A reconciliation to Unites States generally accepted accounting
  principles has been presented in note 10 of the financial statements.

|ITEM 18 | FINANCIAL STATEMENTS
|------- | --------------------

NOT APPLICABLE    . See Item 17.

34

---

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

Key to the following document types:

|1.      | Articles of Incorporation and Memorandum
        of the Company.                          
|------- | ------------------------------------------------------------------------------------------
|       
|2.      | Other Instruments defining the rights
        of the holders of equity or debt securities.
|       
|3.      | Voting trust agreements.                                                                  
|       
|4       |                                                                                           
|       
|        | a.                                                                                        
|       
|        | b.                                                                                        
|       
|        |                                                                                           
|       
|        |                                                                                           
|       
|        |                                                                                           
|       
|        |                                                                                           
|       
|        | c.                                                                                        
|       
|5. - 9. | Not applicable.                                                                           
|       
|10.     | Other                                                                                     

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

|Type of  |                                                                                                                                                                                                            
|-------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Document | Description                                                                                                                                                                                                
|         |                                                                                                                                                                                                            
|1        | Certificate
        of Incorporation and Memorandum, as amended, June 5, 1986, (incorporated
        by reference to Exhibit 3 to the Company’s Statement of Form 10,
        Commission File No. 0-15490).
|         |                                                                                                                                                                                                            
|1        | Articles July
        28, 1982, (incorporated by reference to Exhibit 3 to the Company’s
        Statement on Form 10, Commission File No. 0-15490).                                                       
|         |                                                                                                                                                                                                            
|1        | Certificate
        of Change of Name, November 5, 1997.                                                                                                                                                   
|         |                                                                                                                                                                                                            
|1        | Articles,
        July 28, 1982 (incorporated by reference to Exhibit 4 to the Company’s
        Registration Statement on Form 10, Commission file No. 0-15490).                                          

35

---

|Type of  |                                                                                                                                                                                                                                                              
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Document | Description                                                                                                                                                                                                                                                  
|         |                                                                                                                                                                                                                                                              
|10       | Quartz Mountain Resources
        Ltd. Stock Incentive Plan, as amended, (incorporated by reference to Exhibit
        4 to the Company’s Form S-8 Registration Statement dated November
        27, 1989, Commission File No. 33-32388).                    
|         |                                                                                                                                                                                                                                                              
|10       | Indemnity Agreement dated
        February 1989, between the Company and David S. Jennings (incorporated
        by reference to Exhibit 10(a) to the Company’s Form S-8 Registration
        No. 33-32388).                                                 
|         |                                                                                                                                                                                                                                                              
|10       | Letter Agreement dated August
        21, 1995, between Wavecrest Resources, Inc. and Newmont Exploration Limited.
        (Incorporated by Reference to Exhibit 10.1 on the Company’s Form
        8-K dated August 21, 1995).                              
|         |                                                                                                                                                                                                                                                              
|10       | Exploration, Development
        and Mining Operations Agreement dated December 31, 1995, between Newmont
        Exploration Limited and the Company. (Incorporated by Reference to Exhibit
        10.1 on the Company’s Form 10-QSB dated April 30, 1996.)

Exhibits included as part of this Form 20-F are as follows:

|Type of  |                                                                                                        |                                                                                                                                                                                                                                                                  
|-------- | ------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Document | Description                                                                                           
|         |                                                                                                       
|99.1     | Audited
      financial statements of the Company                                                     
|         |                                                                                                        |                                                                                                                                                                                                                                                                  
|         | (1)                                                                                                    | Independent Auditors’ Report on the consolidated
      balance sheets as at July 31, 2004 and 2003, and the consolidated statements
      of operations, cash flows and shareholders’ equity (deficiency) for
      the years ended July 31, 2004, 2003 and 2002;
|         |                                                                                                        |                                                                                                                                                                                                                                                                  
|         | (2)                                                                                                    | Consolidated balance sheets as at July 31, 2004
      and 2003;                                                                                                                                                                                                  
|         |                                                                                                        |                                                                                                                                                                                                                                                                  
|         | (3)                                                                                                    | Consolidated statements of operations for the
      years ended July 31, 2004, 2003 and 2002;                                                                                                                                                                    
|         |                                                                                                        |                                                                                                                                                                                                                                                                  
|         | (4)                                                                                                    | Consolidated statements of cash flows for the
      years ended July 31, 2004, 2003 and 2002;                                                                                                                                                                    
|         |                                                                                                        |                                                                                                                                                                                                                                                                  
|         | (5)                                                                                                    | Consolidated statement of shareholders’
      equity (deficiency) for the years ended July 31, 2004, 2003 and 2002; and                                                                                                                                          
|         |                                                                                                        |                                                                                                                                                                                                                                                                  
|         | (6)                                                                                                    | Notes to the consolidated financial statements.                                                                                                                                                                                                                  
|         |                                                                                                       
|11.1     | Code of
      Ethics                                                                                  
|         |                                                                                                       
|10.1     | Audit Committee
      Charter                                                                         
|         |                                                                                                       
|10.2     | Geological
      and Management Services Agreement between Hunter Dickinson Inc. and the
      Company

36

---

Certification documents included as part of this Form 20-F are as follows:

|Type of  |                                                                                                                                                                                                                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Document | Description                                                                                                                                                                                                                                                                                       
|         |                                                                                                                                                                                                                                                                                                   
|12.1     | 302
        Certification of the Chief Executive Officer of the Corporation pursuant
        to Rule 13a-14(a) of the Securities Exchange Act of 1934 dated January
        21, 2005                                                                                                              
|         |                                                                                                                                                                                                                                                                                                   
|12.2     | 302
        Certification of the Principal Accounting Officer of the Corporation pursuant
        to Rule 13a-14(a) of the Securities Exchange Act of 1934 dated January
        21, 2005                                                                                                         
|         |                                                                                                                                                                                                                                                                                                   
|13.1     | 906
        Certification of the Chief Executive Officer and Principal Accounting
        Officer of the Corporation pursuant to Rule 13a-14(b) of the Securities
        Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the
        United States Code dated January 21, 2005

The Company 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.

Per:

“Shannon M. Ross”
  Shannon M. Ross 
  Principal Accounting Officer

Dated: January 21, 2005

37

---