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QUARTZ MOUNTAIN RESOURCES LTD.

AUDIT COMMITTEE CHARTER

This Charter shall govern the activities of the Audit Committee
of the Board of Directors of Quartz Mountain Resources Ltd., when and to the
extent that said Committee is carrying out its audit and financial review
functions.

I. COMMITTEE PURPOSES

The essential functions of the Audit Committee (the
Committee) in assisting the Board of Directors in fulfilling its oversight
responsibilities are to review:

|1. | the financial reports and other financial information
      provided by the Company to governmental entities and the public; the
      Companys systems of internal controls regarding finance, accounting,
      legal compliance and ethics that the Companys management and the Board
      have established; and the Companys auditing, accounting and financial
      reporting processes generally,
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|2. | the procedures of the Company and its subsidiaries
      regarding the appointment of the independent public auditors, and the
      scope of and fees for their audits, and                                                                                                                                                                                                                                
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|3. | any and all related party agreements and arrangements
      between the Company and its affiliates and any disputes that may arise
      thereunder.                                                                                                                                                                                                                                                        

The Committees primary duties and responsibilities are to:

|1. | serve as an independent and objective party to monitor
      the Companys financial reporting process and internal control
    system,                           
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|2. | review and appraise the audit efforts of the Companys
      independent auditors,                                                                                
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|3. | provide an open avenue of communication among the
      independent auditors, the Companys financial and senior management, and
      the Board of Directors, and
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|4. | review and appraise the fairness of related party
      transactions.                                                                                             

II. COMPOSITION

The Committee shall be comprised of three or more directors as
determined by the Board, whereby a minimum of one director shall be an
Independent Director, as described in Section V of this Charter. The composition
of the Committee shall comply with all independence standards established by the
applicable legal requirements and stock exchange regulations.

All members of the Committee shall have a working familiarity
with basic finance and accounting practices including the ability to read and
understand fundamental financial statements, including the balance sheet, income
statement, and statement of cash flows.

At least one member of the Committee shall have accounting or
related financial expertise. Financial expertise includes past employment
experience in finance, banking, or accounting; requisite professional
certification in accounting; or prior comparable experience, such as being or
having been charged with financial oversight responsibilities, which results in
the members financial sophistication.

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The Members of the Committee shall be appointed by the Board at
the annual organizational meeting of the Board or until their successors shall
be duly elected and qualified. A Chair of the Audit Committee shall be elected
by majority vote of the full Committee membership.

III. MEETINGS

The Committee shall meet at least each fiscal quarter, or more
frequently as circumstances dictate. As part of its job to foster open
communication, the Committee should meet at least annually with management and
with the independent auditors in separate executive sessions to discuss any
matters that the Committee or each of these groups believe should be discussed
privately.

In addition, the Committee or its Chair should meet with
management quarterly to review the Companys financial statements as described
in Section IV.3, below, and the Committee or a designated member of the
Committee should meet or discuss the interim financial statements with the Chief
Financial Officer and/or the Controller of the Company on a regular and periodic
basis as the Committee may deem appropriate.

IV. RESPONSIBILITIES AND DUTIES

To fulfill its responsibilities and duties the Committee
shall:

Documents/Reports Review

|1. | Review this Charter at least annually for adequacy and
      update its provisions, as conditions dictate.                                                                                                                                                                                                                                                                                                                   
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|2. | Review with the Companys financial management and the
      independent auditors the Companys annual financial statements, and the
      financial statements included in the Form 20F, AIF, and any other annual
      reports or other financial information submitted to any governmental body,
      or the public, including any certification, report, opinion, or review
      rendered by the independent auditors.
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|3. | Review with the Companys financial management and, if
      deemed appropriate by the Committee, with the independent auditors, the
      Companys interim financial statements, prior to its filing with any
      governmental body and prior to the release of earnings. One member
      designated by the Committee may represent the entire Committee for the
      purposes of this review.                         

Independent Auditors

|4. | Recommend to the Board on the nomination of the
      independent auditors for the Companys shareholders approval, considering
      independence and effectiveness and approve the fees and other compensation
      to be paid to the independent auditors. The Committee is to require the
      independent auditors to submit to the Committee on a periodic basis (at
      least annually) a formal written statement delineating all relationships
      between themselves and the Company. On an annual basis, the Committee
      should review and discuss with the independent auditors all relationships
      the auditors have with the Company that might affect their objectivity and
      independence. The Committee shall recommend to the Board any action to
      take to ensure the independence of the independent auditors. The Committee
      is to advise the independent auditors that they ultimately accountable to
      the Board and the Committee, as representatives of the shareholders of the
      Company.
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|5. | Review, evaluate, and report to the Board on the
      performance of the independent auditors, and when circumstances warrant,
      any proposed discharge of the independent
auditors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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|6. | Periodically consult with the independent auditors out of the presence of the Companys management about internal controls and the completeness and accuracy of the financial statements.
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Financial Reporting Process

|7. | In consultation with the independent auditors, review the integrity of the Companys financial reporting processes, both internal and external.                  
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|8. | Consider the independent auditors judgements about the quality and appropriateness of the Companys accounting principles as applied in its financial reporting.
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|9. | Consider and approve, if appropriate, major changes to the Companys accounting principles and practices as suggested by the independent auditors or management. 

Process Improvement

|10. | Establish regular and separate systems of reporting to the Committee by each of management and the independent auditors regarding any significant judgements made in managements preparation of the financial statements and the
view of each as to appropriateness of such judgements.                                               
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|11. | Following completion of the annual audit, review separately with each of management and the independent auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of
work or access to required information.                                                           
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|12. | Review any significant disagreement among management and the independent auditors in connection with the preparation of the financial statements.                                                                                                                                                                                      
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|13. | Review with the independent auditors and management the extent to which changes or improvements in financial or accounting practices, as approved by the Committee, have been implemented. This review should be conducted at an
appropriate time subsequent to implementation of changes or improvements, as decided by the Committee.

Legal Compliance

|14. | Confirm that the Companys management has the proper review system in place to ensure that Companys financial statements, reports and other financial information disseminated to governmental organizations and the public
satisfy legal requirements.        
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|15. | Review financial reporting compliance matters with the Companys general counsel.                                                                                                                                                                               
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|16. | Review with the Companys general counsel any legal matter that the Committee understands could have a significant impact on the Companys financial statements.                                                                                                
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|17. | Conduct or authorize investigations into matters within the Committees scope of responsibilities. The Committee is authorized to retain independent counsel, accountants, auditors, or others to assist the Committee in the
conduct of any such investigation.
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|18. | Perform any other activities, consistent with this Charter, the Companys By-laws and governing law, as the Committee or the Board deem necessary or appropriate.                                                                                               

Related Party Transactions

|19. | Review for fairness to the Company and its subsidiaries, as applicable, proposed transactions or other arrangements between any affiliated or related party and either the Company or any of its subsidiaries, and recommend to the
Board whether the transactions or other arrangements should be approved. As used herein, the term related party means any officer, director or shareholder
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|    | holding a greater than 5% interest in the Company, or any
      entity in which any such person has a financial interest.                                                  
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|20. | Review and make recommendations to the Board regarding
      any dispute between any affiliated or related party and either or both the
      Company and its subsidiaries.

Limitation of Responsibility

|21. | While the Audit Committee has the responsibilities and
      powers provided by this Charter, it is not the duty of the Committee to
      plan or conduct audits or to determine whether the Companys financial
      statements are complete and accurate and are in accordance with generally
      accepted accounting principles. This is the responsibility of management
      and the independent auditors. Similarly, it is not the duty of the
      Committee to conduct investigations, to resolve disagreements, between
      management and the independent auditors, or to assure compliance with
      laws, regulations or the Companys Code of Professional
  Conduct.
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V. INDEPENDENCE OF DIRECTORS

For purposes of this Charter, a director is deemed not to be an
Independent Director according to the following:

|1. | a director who is an employee (including non-employee
      executive officers) of the Company, its subsidiaries, or any of its
      affiliates may not serve on the Committee until three years following
      termination of employment. Affiliate includes a subsidiary, sibling
      company, predecessor, parent company, or former parent company,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
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|2. | a director who is a partner, controlling shareholder, or
      executive officer of a for-profit business organization to which the
      Company made, or from which the Company received, payments (other than
      those arising solely from investments in the Companys securities) that
      exceed $60,000 in any of the past three years is not considered to be
      independent. This restriction does not apply if the director has
      terminated his or her relationship with the organization more then three
      years preceding appointment to the Committee. Business relationships can
      include commercial, industrial, banking, consulting, legal, accounting,
      and other relationships. A director can have this relationship directly
      with the company, or the director can be a partner, officer, or employee
      of an organization that has such a relationship,
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|3. | a director who has, or within the preceding three years
      has had, a direct business relationship with the Company may serve on the
      Committee only if the Board of Directors determines in its business
      judgment that the relationship does not interfere with the directors
      exercise of independent judgment, and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
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|4. | a director who is employed as an executive of another
      Company where any of the Companys executives serves on that Companys
      compensation committee may not serve on the
Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

A director who is an immediate family member of an individual
who is, or who was during the preceding three years an executive officer of the
Company or any of its affiliates, may not serve on the Committee. Immediate
family includes a persons spouse, common law spouse, parent, child, sibling,
and in-law.

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